Big Oil's Climate Bargain in Mexico's Rural Villages

Oil giant BP found a climate bargain paying a fraction of market rate for carbon offsets to rural Mexican villagers working to protect their forests.

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The oil giant has found a climate bargain in some of Mexico’s poorest areas, paying a fraction of market rate for carbon offsets to rural villagers working to protect their forests.

In the coldest months of the year, thick fog blankets the mountain village of Coatitila in eastern Mexico, hiding the bulging, pine-covered hills that cradle it. At midday, the sun pulls back the fog to expose patches of blight where trees have been axed for logging or farm work.

In 2019, Coatitila’s leaders thought they’d found a way to protect the dwindling forests and bring a serious change to a local economy where the average person earns only $6.40 a day when they can find work. One of the world’s most prestigious climate nonprofits, the World Resources Institute, was helping run a program that pays villages to reforest their communally owned woods and improve forestry management. Participation would bring in cash from oil giant BP Plc, which would ultimately purchase carbon credits that the villagers generated, along with further funding from a US government agency.

After two years of work, the village got its first annual payment in late 2021. The pay, split among 133 members of the community, amounted to about $40 each, a fraction of what the village’s then-leader, Álvaro Tepetla, expected. He’d hoped they could earn as much as $44,000 in total per year, or at least match the $8,100 paid by a recently canceled government conservation program. The final sum was 30% lower and worth little more than a week’s work per person.

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