Bio carbon Fund Portfolio Models LULUCF for smallholder and community forestry livelihoods

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Saima Qadir

Presentation for the conference on
Taking stock of smallholders and community forestry
Montpellier France
March 24-26, 2010

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  • http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTSDNET/0,,contentMDK:22499557~menuPK:64885113~pagePK:64885161~piPK:64884432~theSitePK:5929282,00.html Deforestation around Humbo has threatened ground water reserves providing potable water to 65,000 people & severe sediment runoff into Lake AbayaExpected to provide an important habitat for many local species and to enrich local biodiversity. Major environmental benefits will stem from the reduction of soil erosion and flooding. In particular, sediment runoff currently threatening the fragile ecosystem of Lake Abaya - located 30 km downstream from the project site - should be reduced. In the meantime, the restored forest would also contribute to protecting springs and streams originating in the project area. New growth from tree stumps previously felled but still living. By using this method, the cooperatives have unearthed a vast ‘underground forest’. Many important native forest species, some of which are endangered, have been restored to the region, and in areas where no living tree stumps remained seedlings were used to restore the forest. In areas devoid of tree cover, existing vegetation will be enriched by endemic species, including Acacia spp., Aningeriaadolfifericii, Podocarpusfacutus, Oleaafricana, and Cordia Africana
  • 75% Pinuscaribaea, which has been already introduced and tested in the area. In addition 20% Maesopsiseminii and 5% Prunusafricana will be planted. From the latter species the bark and the timber will be used. Pine and Maesopsis will be managed on a 20 year rotation cycle or until the target diameter, 45 cm, is reached. Prunus will be managed for bark production in a 22 year rotation period. 420 km south east of Addis Ababa Plantation will be established in 64 blocks of 25 ha each, grouped in 5 small-scale CDM projects. Around each block a fire line will be maintained. This cluster design allows for potential involvement of private and community based investors, since the project area can be split into a portfolio of small-scale projects or different investor shares.The Rwoho Environmental Conservation and Protection Association (RECPA) will manage 17% of the project area within the framework of a collaborative forest management agreement. The agreements will be signed with the National Forest Authority (NFA). The NFA implementing the project will provide seedlings and technical advice to RECPA, which will in return be in charge of protecting the plantations from fire and the remaining patches of natural forest. RECPA will also link the project with communities in the area. The NFA will be managing the plantation according to international standards. Apart from Maesopsis and Prunus no other native species with a commercial value proved to be successful under the prevailing site conditions in Rwoho. The learning experiences from planting native tree species will decrease this technological barrier in future projects.
  • Fast growing forest plantations (Eucalyptus urophylla, various species of Acacia and local species), on grass savannas with few scattered shrubs This plateau is composed of 90% herbaceous or shrubby savanna, burnt many times per year, and of 10 % of forest gallery deforested by local populations for their subsistence farming (maize, cassava) and to produce charcoal. The project is developed by NOVACEL, whose founders are natives of the Bateke region and have been present on the plateau for several generations. The IBCSP project is part of an integrated rural development pilot program carried out by NOVACEL since 1985. Through a strategy of integrated development, the project promoter NOVACEL wishes to integrate agricultural, livestock and forest productions with the agro-industrial production of commodities such as cassava flour, corn flour or charcoal and build a strong involvement of the local communities. UMICORE, SUEZ and the AFD (French Development Agency) are financing part of the investment needs for the project. UNEP’s CASCADe program is providing technical assistance.
  • Bio carbon Fund Portfolio Models LULUCF for smallholder and community forestry livelihoods

    1. 1. BioCarbon Fund Portfolio ModelsLULUCF for Smallholder & Community Forestry Livelihoods<br />Taking Stock of Smallholder & Community Forestry<br />SaimaQadir<br />Montpellier, France<br />March 24-26 2010<br />
    2. 2. World Bank Carbon Funds & Facilities<br />Total funds pledged = US$ 2.3 billion (22 governments, 66 firms)<br /><ul><li>Prototype Carbon Fund. $180 million (closed). Multi-shareholder. Multi-purpose.
    3. 3. Netherlands Clean Development Mechanism Facility -$ N.A.- (closed). Netherlands Ministry of Environment. CDM energy, infrastructure and industry projects.
    4. 4. Community Development Carbon Fund. $128.6 million (closed). Multi-shareholder. Small-scale CDM energy projects.
    5. 5. BioCarbon Fund. $89.9 million (Tranche One closed totaling $53.8 million). Multi-shareholder. CDM and JI LULUCF projects. Tranche 2 operationalized March 2007 with total capital of $36.6 million
    6. 6. Italian Carbon Fund. $155.6 million (closed). Multi-shareholder (from Italy only). Multipurpose.
    7. 7. Netherlands European Carbon Facility- $ N.A.- (closed). Netherlands Ministry of Economic affairs. JI projects.
    8. 8. Spanish Carbon Fund. $308 million (closed). Multi-shareholder (from Spain only). Multipurpose.
    9. 9. Danish Carbon Fund. $81.2 million (closed). Multi-shareholder (from Denmark only). Multipurpose.
    10. 10. Umbrella Carbon Facility. $737.6 million (Tranche One closed). 2 HFC-23 projects in China.
    11. 11. Carbon Fund for Europe. $70 million. Multi-shareholder. Multi-purpose.
    12. 12. Forest Carbon Partnership Facility. $300 million target. Multi-participants. For national REDD</li></li></ul><li>BioCarbon Fund: Rationale<br /><ul><li>Improved land use is part of the solution to climate change (deforestation causes 20% of CO2emissions)
    13. 13. Open carbon market to rural communities (excluded if CDM restricted to energy & infrastructure)
    14. 14. Inform debate (so far too ideological, not enough based on facts)
    15. 15. Create synergies among Conventions (money channeled through UNFCCC can foster sister conventions)
    16. 16. PES Approach (carbon sequestration is just one service provided within PES)</li></ul>UNCCD<br />
    17. 17. GoalsLearning by Doing<br />Atmospheric: Reduce GHG concentrations over baseline<br />Cost-effective: Buy low-cost climate change mitigation opportunities <br />Social: Improve livelihoods (employment, income, know-how)<br />Environmental: Conserve biodiversity, rehabilitate land<br />Adaptation: Increase social and ecological resilience of local communities<br />Climate change will affect communities<br />
    18. 18. How the Fund WorksGlobal Portfolio<br />Technology<br />Technology<br />$<br />$<br />Finance<br />Finance<br />Industrialized Governments and Companies<br />EITs and Developing Countries<br />CO Equivalent<br />CO Equivalent<br />2<br />2<br />Emission Reductions<br />Emission Reductions<br />- Work with smallholder, community owned , & public lands in a variety of landscapes<br />- Concept of “pacific possession”<br />
    19. 19. Based on Today’s Rules – Two WindowsForestry is Not Just REDD<br />Second Window<br /><ul><li>No Kyoto credits
    20. 20. Exploration & demonstration. Rules may change after 2012
    21. 21. Non-CDM: AD/REDD, Revegetation, Forest management, Agriculture & Soil management</li></ul>First Window<br /><ul><li>Meet Kyoto obligations
    22. 22. “Kyoto-grade” credits (tCERs, lCERs, ERUs)
    23. 23. CDM: Afforestation & Reforestation
    24. 24. JI: All LULUCF</li></li></ul><li>African BioCF projects<br />ES= Environmental Services other than carbon<br />FW= Fuel wood<br />NTPs = Non timber products<br />
    25. 25. EthiopiaHumbo Assisted Natural Regeneration Project<br />Carbon supporting an innovative Assisted Natural Regeneration technique (ANR) for re-sprouting native species in partnership with World Vision<br />“Forest Management Natural Regeneration” (FMNR) system: <br />Community owned land overgrazed & cleared for fuel wood use until bushes<br />Project activity promoting discontinuation of grazing, fuel wood collection and charcoal production in degraded areas for a period of time<br />Short-term forest restoration involving poor rural communities in southwestern Ethiopia<br />Farmers organized in seven cooperatives which include men & women<br />People accessing forest to cut & carry the fodder growing under trees<br />Will help with effects of severe flooding & erosion exacerbated by high altitude & rainfall<br />Joint implementation World Vision Australia/Ethiopia, Ethiopian Agriculture Rural Development & Forestry Coordination Office, & Forest Cooperatives<br />Compensation for farmers<br />Timber (from designated woodlots) & non timber products incomes like honey & fruit<br />Fuel wood from energy plantations<br />Carbon revenue will be invested in local infrastructure & food security activities as per needs of community as well as carbon incomes<br />Carbon triggering land tenure securitization of community owned land<br />First large scale forestry project Registered for Africa<br />
    26. 26. UgandaNile Basin Reforestation<br />Carbon contributing to stabilize land use in agriculture frontier areas through Reforestation<br />Communities partnering with the state to reforest national grasslands previously used illegally by communities (deforestation & erosion)<br />Plantation of pine & mixed native species in grassland areas within Rwoho Central Forest Reserve – learning from native species expected to reduce technological barrier for future<br />Cluster design & aggregation for potential investment from private & community investors<br />Community Forest Management Agreements in place <br />Partners sharing costs and revenues<br />Rwoho Environmental Conservation and Protection Association (RECPA) & the National Forest Authority (NFA)<br />Communities earning incomes for planting<br />500 people for establishment<br />Afterwards 200 people for nursery work, weeding, fire protection, thinning, pruning, etc<br />Availability of wood fuel<br />State giving technical support to communities<br />Environmental benefits<br />Reduction of erosion induced discharge into Lake Victoria<br />Increase of dry season flows<br />Mitigation of ongoing land degradation<br />
    27. 27. IndiaAlternative Rural Livelihoods<br />Carbon supporting alternative livelihoods for indigenous communities<br />Marginal degraded lands that are privately owned being used for subsistence to be reforested (3,500 ha) in Andhra Pradesh & Orissa<br />JK paper factory is reforesting in exchange for sustainably harvested wood that it currently has to source from 800 km away<br />Inclusion of small farmers allows them to reap benefits of carbon revenue and timber sales that they otherwise could not participate in<br />80% of carbon revenue will go directly to community<br />Importance of revenue distribution mechanism<br />Carbon triggering access to clonal technology and farmer outreach education program for farmers<br />Communities earning incomes from planting in addition to carbon revenues<br />Carbon triggering long-term quality supply of wood for JKPL<br />Illustration of DNA forestry definition & colonial legacy of demarcation of land in India as forest land <br />
    28. 28. Other Africa Models for Alternative Livelihoods<br />
    29. 29. Democratic Republic of CongoIbiBateke Carbon Sink Plantation<br />Carbon contributing to solve fuel wood shortage and environmental degradation in Kinshasa, where only 5% of the population enjoy electricity<br />A multipurpose project in degraded lands to produce:<br />carbon, agricultural products and fuel wood (charcoal)<br />Grassy savannah disturbed by man-initiated fires<br />Producing charcoal from plantation will reduce will reduce deforestation of remaining forest galleries<br />Substantial indirect socio-economic benefits to communities<br />One implementer (Novocel), but investing a fixed amount of revenues in:<br />Health and education services to support surrounding communities<br />Permanent jobs (50) during the total crediting period and temporary jobs (500 equivalent full-time positions)<br />Capacity building on silviculture<br />Carbon revenue will be used to finance expansion of project, health, education, & agroforestry activities in local community<br />
    30. 30. KenyaGreen Belt Movement<br />Carbon supporting a reforestation program focused on women development<br />Communities organized in 7 Community Forest Associations (CFAs) to reforest lands & manage new forest (including management plans)<br />Reforest public & private degraded lands with community access in Aberdare Range & Mount Kenya watersheds (targeting deep denuded slopes in water catchments)<br />Reserve lands deforested for charcoal production or conversion to illegal agriculture/cattle grazing. Also illegal logging.<br />Long term goal to use re-grown forest in sustainable manner for variety of products including fuel wood, charcoal, timber, medicinal & other uses<br />Reintroduction of wide range of natural tree species<br />Carbon triggering land tenure securitization<br />Communities receiving technical assistance from government and GBM<br />Communities earning incomes from planting and tending seedlings – women particularly involved<br />
    31. 31. MadagascarAnkeniheny–Zahamena – Mantadia Biodiversity Conservation Corridor and Restoration <br />Carbon supporting biodiversity conservation <br />Degraded lands to be reforested with 120 native species<br />Reduce forest fragmentation & reconnect corridors to reserves<br />114 individuals planting over 80 native species in exchange of<br />Land tenure securitization<br />Access to Agroforestry programs<br />Partnership with Conservation International, ANAE (local NGO) & Ministry of Environment<br />Communities earning incomes from planting in addition to carbon revenues<br />Establish wood & fruit gardens & sell sustainable fuel wood to provide alternative livelihoods to local communities versus slash & burn for tavvy rice<br />Also REDD component<br />
    32. 32. Project Entities Have to Establish Many Types of Relationships for Developing & Implementing a Project<br />Environmental Impact Assessment<br />Requirements<br />Exchange of good,<br />Services or money <br />Forest management <br />plan<br />Harvesting licenses<br />Carbon buyers<br />Farmers<br />CDM rules and processes<br />Project investors (public & private)<br />Timber/NTFP buyers<br />Project Entity<br />Approval of project’s contribution to SD<br />Land tenure clarification / securitization <br />Ministry of Env & WB<br />Forestry <br />service<br />Forestry <br />service<br />CDM-EB<br />Land admin. entity<br />DNA<br />
    33. 33. Global Lessons Learned & Requisites for Success<br />Capacity, capacity, capacity…<br />Land tenure is key issue for agro-forestry/REDD projects & ownership can often prove difficult in developing countries<br />Carbon rights unbundling is specific to each individual country<br />Carbon can help trigger obtaining land tenure rights<br />Private investors require secure land tenure<br />Concept of “pacific possession” pioneered in Latin America when overlapping rights<br />LULUCF is a way to ensure community benefits go to local communities<br />Revenue sharing mechanism for communities must be carefully defined<br />Community investment versus individual farmer income<br />Intercropping for managing cash flows over time<br />Minimum transaction size is needed<br />High fixed costs<br />Agro-forestry & providing technical advice to communities is expensive<br />
    34. 34. Lesson Learned & Requisites for Success Cont…<br />Multiple small community plots have higher transaction costs & each plot must be taken into account separately for 1990 rule<br />LULUCF rules evolving to favor monoculture plantations<br />Community buy-in is key for ensuring protection of trees & for enforcement/protection<br />Remote access increases costs<br />Demand needs to be created for certified native wood species<br />Carbon revenue does not replace need for sound project design<br />Full PES approach requires downstream demand<br />Economic opportunity cost of community/land users must be covered in order to change behavior<br />Communities need to be paid when they plant<br />Waiting for Validation is too long for small communities<br />Need for upfront financing<br />Intercropping & agroforestry can help fill gaps<br />
    35. 35. Thank You!<br />sqadir@worldbank.org<br />www.carbonfinance.org<br />

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