Triple Bottom Line Investing                          www.icebv.net



                          Bangkok, Thailand        ...
Approach



 1. Global context

 2. Market driven solutions

 3. Not a scientific debate – contextual ballpark figures

 4...
Biodiversity Conservation II

    Conservation Coverage
    • The world’s rainforest coverage of about 1.6 billion ha, in ...
Carbon – Importance of Conservation


        • Tropical rainforests sequester carbon via photosynthesis equivalent to an
...
Carbon - Cost of Waiting: Failure of Kyoto (?!)

           Market                         Vintage         Last           ...
Vision – Currently Not Market Driven


                                      Operation                              Nation...
Vision - Kyoto Period: 2008-2012

 Action is needed NOW so we have to make use of the existing tradable mitigation
 option...
Triple Bottom Line Investing                      www.icebv.net



                Bangkok, Thailand                      ...
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Carbon Sales to Sustain Biodiversity Conservation

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Dwight Crabtree, Investment Officer - Capital Verde - Thailand

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Carbon Sales to Sustain Biodiversity Conservation

  1. 1. Triple Bottom Line Investing www.icebv.net Bangkok, Thailand 25 MAY 2007 Carbon Sales to Sustain Biodiversity Conservation Dwight Crabtree Question 1 - What is the carbon value of preserving biodiversity? Question 2 - How to utilize this value to sustainably fund biodiversity conservation? www.icebv.net TBLI Conference, May 24-25, 2007 1 Introduction 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 way forward www.icebv.net TBLI Conference, May 24-25, 2007 2
  2. 2. Approach 1. Global context 2. Market driven solutions 3. Not a scientific debate – contextual ballpark figures 4. Demonstrative example 5. Integrated sustainable mechanism www.icebv.net TBLI Conference, May 24-25, 2007 3 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 www.icebv.net TBLI Conference, May 24-25, 2007 4
  3. 3. Biodiversity Conservation II Conservation Coverage • 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) Conservation • Illegal logging Programs • Slash-and-burn 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 www.icebv.net TBLI Conference, May 24-25, 2007 5 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 • Other • 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 www.icebv.net TBLI Conference, May 24-25, 2007 6
  4. 4. 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 www.icebv.net TBLI Conference, May 24-25, 2007 7 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 www.icebv.net TBLI Conference, May 24-25, 2007 8
  5. 5. 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 WITHOUT WITH 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 www.icebv.net TBLI Conference, May 24-25, 2007 9 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 mechanism. www.icebv.net TBLI Conference, May 24-25, 2007 10
  6. 6. Vision – Currently Not Market Driven Operation National &Maintenance Government cost . OUTFLOW Biodiversity Conservation NGO or National Government . IN FLOW Bilateral Tourism NGO University/ National Multilateral User Fees support Zoo-support Government www.icebv.net TBLI Conference, May 24-25, 2007 11 Vision – Market Based Future Operation Area National Research Dividends &Maintenance conservation Government and to cost fund . development investors OUT FLOW Biodiversity Conservation Public Private Participation . IN FLOW Carbon Tourism Watershed Biodiversity Pharma Credits User Fees protection credits credits www.icebv.net TBLI Conference, May 24-25, 2007 12
  7. 7. Vision - Kyoto Period: 2008-2012 Action is needed NOW so we have to make use of the existing tradable mitigation options, being: • 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). However: • 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 www.icebv.net TBLI Conference, May 24-25, 2007 13 Vision – Post Kyoto: 2012+ Mitigation options: • 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 However: • 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 www.icebv.net TBLI Conference, May 24-25, 2007 14
  8. 8. Triple Bottom Line Investing www.icebv.net Bangkok, Thailand 25 MAY 2007 THANK YOU www.icebv.net TBLI Conference, May 24-25, 2007 15

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