Triple Bottom Line Investing www.icebv.net
Bangkok, Thailand 25 MAY 2007
Carbon Sales to Sustain Biodiversity Conservation
Question 1 - What is the carbon value of preserving biodiversity?
Question 2 - How to utilize this value to sustainably fund biodiversity conservation?
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1. Biodiversity Conservation
• A Pressing Global Issue
• Threats Faced: i) illegal logging, ii) slash-and-burn farming, iii) land
encroachment, iv) mono-crop plantations, v)poaching
• Protected Area (PA) Programs
• PA Funding Challenge
2. Carbon Values
• Biodiversity conservation impact to GHG mitigation
• Global mechanisms: i) Shortcomings of Kyoto Protocol, ii) Voluntary Market
• Potential carbon values of biodiversity conservation (biocarbon)
3. Vision for a Future Conservation Mechanism
• How to combine Biodiversity Conservation and Carbon Values for a sustainable
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1. Global context
2. Market driven solutions
3. Not a scientific debate – contextual ballpark figures
4. Demonstrative example
5. Integrated sustainable mechanism
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Biodiversity Conservation I
Despite containing extremely rich and diverse repositories of biodiversity, tropical
rainforests in South America, Africa and Asia experience among the fastest rate of
degradation and destruction due to human activity.
Tropical Rainforests of the World
WE NEED TO ACT NOW TO CURB TROPICAL RAINFOREST DEFORESTATION
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Biodiversity Conservation II
• The world’s rainforest coverage of about 1.6 billion ha, in mainly poor countries with limited
resources, is being destroyed at a rate exceeding 10 million ha/year (~30,000 ha/day).
• Globally, only 12% of tropical rainforests are conserved within protected areas.
• Costs of implementing an effective PA program can range from $2 – $5 per hectare per year.
Threats Protected Area (PA)
• Illegal logging
farming Tropical • Forest Protection
• Land encroachment Rainforest • Alternative Livelihoods
• Mono-crop plantations • Eco-tourism
• Poaching • Institutional Development
CONSERVATION PROGRAMS ADDRESS DIRECT FOREST THREATS - BUT
FACE CRITICAL FUNDING, CAPACITY AND SUSTAINABILITY ISSUES
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Biodiversity Conservation III
Economic Values of Rainforests
(A) Economics NOT to conserve (B) Economics TO conserve
• Timber value • Carbon value
• Farming / ranching value • Tourism user fees (TUFs)
• Poaching value • Watershed value
• Biofuel plantation value • Bio-prospecting value
• Subsistence livelihoods • Biodiversity offsets / Sponsorship
• Rainforests are cut mainly for economic reasons. Currently, (A) holds a greater
realized value than (B) – resulting in continued deforestation worldwide.
• Existing PAs are mostly funded through private donations supplemented by state
budgets – not adequate enough to be completely effective and complete.
• The CARBON VALUE of rainforests (Biocarbon) is the major unrealized X-factor with
the potential to tip the economic balance in favor of (B).
NEW, CREATIVE FUNDING MECHANISMS REQUIRED FOR
CONSERVATION EFFORTS TO BE SUCCESSFUL
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Carbon – Importance of Conservation
• Tropical rainforests sequester carbon via photosynthesis equivalent to an
average net amount of 250 tons/ha.
• The clearing and burning of forests contributes to more than 2 billion tons
of carbon dioxide emissions annually as this sequestered carbon is released
into the atmosphere.
• Amounts to 25% of total greenhouse gas emissions – 2nd only to fossil
fuels burned for electricity production.
CONSERVATION OF NATURAL STANDING FORESTS CAN REDUCE
SIGNIFICANTLY GLOBAL GREENHOUSE GAS EMISSIONS
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Carbon – Existing Mechanisms
Kyoto Protocol Voluntary Market – Biocarbon
• Parties can meet targets through LULUCF • As conservation of standing forests is not
activities under the CDM mechanism, including eligible for carbon credits (CERs) under the Kyoto
forestry and agricultural projects (e.g. Protocol, the voluntary carbon market (VERs) can
reforestation, afforestation). help fill the gap.
• Most LULUCF projects are not designed with • Carbon sequestration and biodiversity goals can
biodiversity in mind, e.g. mono-crop plantations be achieved together.
such as palm oil.
• Critical issues for voluntary market are: i)
• Kyoto rules do not include protection of sensitivity of private buyers to a biodiversity
natural standing forests. premium, ii) appropriate standards,
measurements and indicators to demonstrate
• LULUCF projects accounted for only 1% of
biocarbon value of conservation efforts, and iii)
2005 traded volumes – reflecting the absence of
conservation programs robust and continuous.
avoided deforestation from the mechanism.
• Number of biodiversity-related carbon projects
• “Coalition of Rainforest Nations” pioneered by
already established and benefiting from funding
PNG and Costa Rica seeking a mandate in any
through private voluntary initiatives.
post-Kyoto agreement for the inclusion of
avoided deforestation of standing forests in
future climate protocols.
KYOTO INSUFFICIENT, YET VOLUNTARY MARKET NEEDS ASSURANCES
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Carbon - Cost of Waiting: Failure of Kyoto (?!)
Market Vintage Last +/-
EU ETS (€) 2008 17.75 +0.02
EU ETS (€) 2009 18.37 +0.25
CCX (US$) 2008 3.65 0.00 All prices per tonne of CO2-e
CO2 CO2 avoided avoided CO2 voluntary Kyoto
Deforestation emission Deforestation emission deforestation emission value Value
in in million in in million in in million in million
million HA tonnes million HA tonnes million HA in million tonnes USD EURO
2007 10 2,500 9 2,250 1.00 250 913 3,000
2008 10 2,500 8 2,025 1.90 475 1,734 5,700
2009 10 2,500 7 1,823 2.71 678 2,473 8,130
2010 10 2,500 7 1,640 3.44 860 3,138 10,317
2011 10 2,500 6 1,476 4.10 1,024 3,737 12,285
2012 10 2,500 5 1,329 4.69 1,171 4,276 14,057
Total 60 15,000 42 10,543 18 4,457 16,270 53,489
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Vision - Market Drivers
The world’s forests have many functions on a national and global level, these
include (potential) Market Drivers :
– Climate Regulators
– Carbon Sequestration & Sinks
– Conservation of Biological Diversity
– Protecting of Soil
– Water resources
– Recreational / Eco Tourism
– Timber and Non-Timber Forest Products
– Habitat of Indigenous people
– Pharmaceutical products
– Protection from (wind) erosion
– Coastal protection (mangroves)
– Air-pollution filters (in urban areas)
Only a few of these drivers are currently being utilized, therefore the potential in
forests is present and enabling carbon to be traded from forest protection, it would
stimulate visionary entrepreneurs to invest in their protection.
Carbon trade can therefore make conservation projects (financially) sustainable and
should be used as the catalyst to attract investors to work and trade in a market
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Vision – Currently Not Market Driven
Bilateral Tourism NGO University/ National
Multilateral User Fees support Zoo-support Government
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Vision – Market Based Future
Operation Area National Research Dividends
&Maintenance conservation Government and to
cost fund . development investors
Carbon Tourism Watershed Biodiversity Pharma
Credits User Fees protection credits credits
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Vision - Kyoto Period: 2008-2012
Action is needed NOW so we have to make use of the existing tradable mitigation
• Trading of credits from avoided deforestation on the voluntary market.
• Trading of credits from sequestration by increasing the size of protected forests through Afforestation or
Reforestation on the voluntary market or CDM (LULUCF).
• LULUCF only 1% of volume traded in 2005
• Kyoto I supports afforestation projects of monocrop plantations with no ‘real’ Biodiversity Conservation
benefits, but with market driven (biofuel, food, paper demand) aspects.
• The voluntary market is small, but growing due to shift in public perspective
• Businesses need assurance that the way they offset is actually making a difference
• Goverments are hesitant to act now and are looking at 2012+
In order to avoid deforestation of 60 million HA of forest and to assist the
protection of a 18 million HA in the next 5 years we need to:
• Stop supporting Mono-crop CDM projects, they are one of the main reasons of tropical deforestation!
• Immediately support and allow the voluntary verified trading of avoided deforestation VERS.
• Support the initiatives of the Coalition of Rainforest Nations and the Brazilian initiative
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Vision – Post Kyoto: 2012+
• Forest carbon conservation (conservation of existing carbon pools)
• Sequestration by increasing the size of the carbon pools through Afforestation and/or Reforestation
• Brasilian style or Coalition of Rainforest Nations style avoided deforestation credits
• Reversibility due to vulnerability of the carbon pools
• Risk of carbon mitigation programs being discontinued
So we need to:
• Assure the conservation of existing carbon pools through a global accepted, scientifically proven, market
driven financial mechanism.
• Promote the increase of carbon pools through regional/national reforestation programs of protected (rain)
forests, not being monoculture plantations, with the aim of conserving the Biodiversity.
• Promote watershed reforestation programs and enable the water utilities in trading/selling carbon rights
to finance these reforestation programs.
• Evaluate the possibility of introducing a carbon classification system and creating a “Biodiversity
Conservation Premium Carbon“ which would be of a higher value than other carbon offsets and target large
polluters to buy the premium offset
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Triple Bottom Line Investing www.icebv.net
Bangkok, Thailand 25 MAY 2007
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