The big question that currently hangs over climate talks in Durban is whether or not the politicians will agree to sign a legally binding treaty by 2015 with mandatory emissions cuts. But the devil will be in the details, and management consultants pushing bad advice could have a big impact on our climate and rainforests.
This time last year, we had some good news coming out of the Cancun climate talks – there was an agreement to provide money to preserve the enormous amounts of carbon stored in forests and forest lands, while protecting biodiversity and respecting the rights of people living in them.
Progress has been made on that agreement over the past year, but there are still some details due to be hammered out during the two weeks of talks in South Africa. As with so many of the topics being discussed in Durban, it could all go horribly wrong if McKinsey’s bad influence affects these decisions.
The basic agreement is that developing countries should receive financial support if they leave their forests standing, rather than cutting them down and developing the land which releases the stored carbon. To get those funds, countries need plans laying out how they would use this money to stop deforestation.
This is where McKinsey saw their opportunity and since then they have been very busy advising rainforest nations on their plans.
Earlier this year, we took a closer look at the plans McKinsey had come up with. What we found was very disturbing. In none of the examples we looked at would advice provided by McKinsey end deforestation or forest degradation. Even worse, in many cases their recommendations would actually lead to an increase in the destruction of the rainforests.
There are two main reasons. First, McKinsey systematically underestimates the impacts of some of the main causes of deforestation like logging or plantations. Others, such as mining, are not even mentioned in their work. Why would they do this? One journalist has alleged that there might be a conflict of interest at work here. McKinsey has long-established ties to all of those industries and continues to work very closely with them.
Second, McKinsey’s method is flawed. For example, McKinsey assumes that deforestation will greatly increase. This assumption, in many cases, is misleading and isn’t supported by current and past deforestation rates. This might seem a minor detail, but McKinsey use these inflated deforestation rates to pass off future increases in deforestation resulting from their advice as a decrease.
McKinsey’s advice also neglects the rights and needs of people living in the forests, and they do not include any measures to protect the diversity of animal and plant life of the forests.
Unfortunately the story doesn’t end there. McKinsey is selling this deeply flawed advice at a hefty price. They usually try to keep the astronomical rates they charge confidential, but a whistle blower website PNG Exposed published leaked internal McKinsey documents that show some astounding numbers for their consultancy on forests.
In Papua New Guinea, for example, the company was paid $2.2 million dollars for four months work. On another occasion they charged about $500,000 dollars to produce a 44 page report – that’s more than $10,000 dollars a page. All this comes from public funds in either the donor countries or rainforest nations and could be much better spent on actual forest protection.
Since we launched our report, we found out we weren’t the only ones worried about the quality of McKinsey’s advice and what it might do to the rainforests. Some countries have already distanced themselves from a McKinsey-style approach and even the World Bank has voiced its criticism.
We’re looking for three things from Durban to protect the world’s last remaining rainforests and reduce emissions:
- Respect for the rights and needs of people who live in and depend on the forests
- Protection for the diversity of animal and plant life; and
- only plans that lead to a real decrease in emissions from deforestation.
And as it stands McKinsey’s advice delivers none of that.
Download the full report Bad Influence: How McKinsey inspired plans lead to rainforest destruction
