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Impacts Of Forest Carbon Markets Oct 2008


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Gary Bull, Professor, Department of Forest Resources Management, University of British Columbia

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Impacts Of Forest Carbon Markets Oct 2008

  1. 1. IMPACTS OF FOREST CARBON MARKETS ON LOCAL LIVELIHOODS: CHINA, MOZAMBIQUE AND AFGHANISTAN Gary Q. Bull, Ravi Hegde, Yazhen Gong and Kijoo Han University of British Columbia, Vancouver, Canada October 16th, 2008 Forests, Rights and Climate Change Oslo, Norway
  2. 2. 10/15/2008 ALTERNATIVE TITLE  RAD  REDD  ROGUE What did we learn? 2
  3. 3. 10/15/2008 OBJECTIVES 1. What are some key elements in contract design and revenue distribution from forest carbon projects? 2. What is the influence of social capital on successful project implementation? 3. Are property rights and governance systems sufficiently in place that can adapt to payments for ecosystems services such as carbon? 3
  4. 4. 10/15/2008 MOZAMBIQUE • Voluntary market • Enviro-trade • Stern report • CIFOR - PEN project • Part of our work connects to a long term World Bank project • Household study • Equity issues with carbon contracts 4
  5. 5. 10/15/2008 VILLAGE PROFILE - MOZAMBIQUE Characteristics Nhambita Mbalawa Pungue Location Within buffer zone Outside park On the park boundary Main forest Own use: wild food, Own use & sale: wild Own use & sale: wild products grass, fuel, poles & food, fuel, bamboo, food, fuel, bamboo, limited use of clay for charcoal,poles, poles, fish & gold pottery & timber timber & gold panning panning Farming Mainly subsistence; Mainly subsistence; Both subsistence & commercial (tobacco; vegetables) Major Poles, wild food, clay Poles, wild food, Fish, poles, wild food, environmental for pottery bamboo, charcoal, gold panning resource gold panning collected Households 58 131 141 Sampled 5
  6. 6. 10/15/2008 RESULTS - MOZAMBIQUE  Age, income and education matters  Vulnerable households see fewer benefits  Larger land holders more likely to engage  Poorer tend to use miombo woodlands for subsistence, while richer households use them for cash.  Forests act as a crucial safety net against income shocks 6
  7. 7. Result – Carbon Income 10/15/2008 Cash income composition (MTS) crop sale, 6.56 PES income, 3.7 livestock sale, 7.62 Unprocessed forest products Other sources, 10.22 sale, 0.09 Processed forest products crop sale Business, 5.65 sale, 7.25 livestock sale Unprocessed forest products sale Processed forest products sale Fish sale, 5.89 Fish sale Other environmental products sale Wage Business Other sources PES income Wage, 44.51 Other environmental products sale, 8.48 7
  9. 9. 10/15/2008 SURVEY TEAM AND NURISTAN 9
  10. 10. 10/15/2008 PRELIMINARY RESULTS  The Bari caste rely on income from timber products  The Atrojan caste rely on livestock production 10
  11. 11. 10/15/2008 CHINA CDM FOREST PROJECT 11
  12. 12. 10/15/2008 GUANGXI STATISTICS County Land area Land tenure type Number of (ha) villages Communal Individual lands lands (ha) (ha) Cangwu 2000 901.6 1098.4 15 Huanjiang 2000 2000 0 12 Total 4000 2901.6 1098.4 27 12
  13. 13. 10/15/2008 GUANGXI SHAREHOLDING SYSTEM Local forest companies Shared income Carbon Capital& techniques credits Timber Output Input Land Pine resins Shared income Local communities 13
  14. 14. 10/15/2008 POSITIVE RESULTS - GUANGXI  Villages were able to effectively organize themselves  Unique share-holding system of 27 villages and 3 local forest companies was developed  Creative combination of native tree species, (3000 ha) and exotic tree species (1000ha)  Internal rate of return is acceptable 14
  15. 15. 10/15/2008 NEGATIVE RESULTS - GUANGXI  Up to September 2007, only 55% implemented.  Regenerating degenerated and remote lands is difficult and costly.  Income-sharing ratios between the communities and the local forest companies not accepted  Unresolved property rights disputes  Low levels of trust in some of the villages which resulted in poor participation rates. 15
  16. 16. 10/15/2008 NEGATIVE RESULTS - GUANGXI  In 2008, it was determined that at least 14% of the area slated for reforestation will not be regenerated – infertility.  Farmers and reforestation companies have not received any payment from the buyers. 16
  17. 17. 10/15/2008 CONCLUSIONS What are some key elements in contract design and revenue distribution from forest carbon projects?  Contract design  Adjust to unique community structures  Recognize biophysical limitation  Work with acceptable shareholder systems  Make payments at the appropriate time  Ensure that potential income is accessible to those with lower income, lower education levels, older people and women.  Revenue distribution  Ensure local people understand the nature of the benefits  Sometimes indirect compensation, such as building a school, is more appropriate. 17
  18. 18. 10/15/2008 CONCLUSIONS (CONT’D) What is the influence of social capital on successful project implementation?  Social capital  Analyze trust. Trust among households can greatly increase the probability of success for a project. There are ways to measure trust and the means to develop trust .  Create appropriate shareholder systems 18
  19. 19. 10/15/2008 CONCLUSIONS (CONT’D) Are property rights and governance structure in place that can adapt to payment for ecosystems services such as carbon? Property right allocation  It has been largely sorted out, in surprising places (Nuristan)  It has impacts on the success of project implementation (China) Governance structure  The distribution of carbon payments will have to recognize well functioning governance structure and adapt to them. - In Nuristan it seems people are most comfortable with village level decisions being made by elders, not an elective process with one vote per household. The structure also seems to work for different castes in the villages. - In China, the development of a shareholder system was critical to project establishment. - In Mozambique the interplay between a shareholder system and traditional governance needs further analysis. 19
  20. 20. 10/15/2008 SKILL TESTING QUESTION  Which country represented:  RAD  REDD  ROGUE ? 20