20130207 forest carbon obstacles and possible solutions andrew steel

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Presentation from the World Teak Conference 2013 in Bangkok: Forest Carbon: Obstacles & possible Solutions:

An introduction/overview of the market and situations prompting discussion from a project developers perspective on the difficulties faced on the ground in setting up a Carbon project based on experiences of the groups work in the sector.

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  • Government bureaucracy (its not like building a hotel)
  • Government bureaucracy (its not like building a hotel)
  • Government bureaucracy (its not like building a hotel)
  • Government bureaucracy (its not like building a hotel)
  • Cash has to be on site every day (security) – Lahu/Mon/Musa /Bridge – nature did that for them - as work finished, local people did not want to lose salaries - Drugs - Everyone carrying guns
  • Generally supportive of project – Harmony affitnity to the project bridge repair
  • Government bureaucracy (its not like building a hotel)
  • 20130207 forest carbon obstacles and possible solutions andrew steel

    1. 1. Symposium II:Environment & Carbon TradeForest carbon trading: ANDREW G . STEELObstacles and possible solutions Chief Executive Officer The TREEDOM Group andrew.steel@treedom.com
    2. 2. The Treedom Group Investment Advisor to the Asia Renewable Resources Fund Forestry Consultancy & Project Management Plantation Management & Luxury Aromatic Oil Producer Charitable Objectives; Reforestation & Environmental Education
    3. 3. Introduction• Forest Carbon: Milestones• Project Experience• Survey Results• Where are we now?• The way forward? – Into discussions – Obstacles – Measurement/Reporting/Verification (MRV) – Market – Solutions
    4. 4. Forest Carbon: Milestones  2003 – 2010 CCX Operational  2007 – The Bali Road Map (REDD+)  2008 – Carbon Fix launched  2010 – First Forestry VCS Credits issued  2012 – The Gold Standard acquires The Carbon Fix Standard & ‘MOU’ with FSC
    5. 5. *Forest Carbon:Top Ten - 2010 Milestones i. The US Cap-and-Trade Meltdown ii. REDD+s Time to Shine at the UN iii. California Stays in Front of the Pack iv. Standards Set the Mark v. An Explosion in Project Development vi. Emerging National Conservation Strategies vii. Public Pledges Outpace Private Purse for REDD+ viii. Beyond Project Scale Intervention ix. Growing Pains for the REDD+ Partnership x. Growing the Money for US Forest Conservation *Ecosystem Marketplace Forest Carbon Portal
    6. 6. Project Experience 2009-12:Soneva/PATT Reforestation Project Carbon Offset Project – create VER’s to fund additional projects 300,000 Seedlings per year Community Nurseries 3 Hill tribe groups 10 year project Project Partners: Framework species restoration Donor: Soneva Resorts & Spa Project Developer: PATT Foundation Government Agency: DNP Technical Support: FORRU
    7. 7. PROBLEMATIC ……EDUCATION  Educating the client DOCUMENTATION  Long lead time  Translation (500 pages)  Educating Govt departments on  Removal of key sentences from carbon offsetting our documentation  Procedures  Pioneering - No Govt policy  Story changing  Speaking Swahili  Equipment LOGISTICS  Storage  Seedlings  10,000 a day from nursery  Villagers  Door to Door service!  Walk 700m up the hill……..  No Bathrooms
    8. 8. WEATHER …. FLOODING 21st Sept 2011 Water level started to rise ……………. 28th Sept 2011 - Only 7 Days later  Adverse climate conditions (persistent rainfall)  Access to Areas  Flooding of roads restricted area access (Mae Wa)  Bridge taken out (Doi Pa Ma)
    9. 9. VILLAGERS…. ISSUES &CONFLICTS Payments  No ATM – Cash! Working with hill tribe groups Lack of lead time to conduct Participatory Resource Assessments (PRA)  Knife threats  Threats to take out the bridge  Threats to burn down the site
    10. 10. COMMUNITY…. positivesSupportiveEmployment OpportunityEducationalHelping the EnvironmentHarmony
    11. 11. CONCLUSIONNot for the faint hearted or people with high blood pressure!
    12. 12. Survey & Results1. What is your industry profession?2. Did you attempt to create an afforestation/reforestation project with the sole aim of trading carbon? If not, what was the project scope?3. Was the price of carbon a major decision in putting the project together?4. Was the project put together under a voluntary market system or UNFCCC CDM A/R?5. If the project was aimed at the Voluntary Market – which standard did you follow?6. What were the major obstacles that you faced?7. What improvements would you like to see?8. Have you sold or are you still attempting to sell carbon from your project?9. How do you see the future market for forestry with regards to the sale of carbon credits?
    13. 13. Where are we now?• In 2011, forest carbon project developers reported the highest overall value ever attributed to the global marketplace for forestry off-sets – totaling $237 million. Put it into context: 237/215 projects surveyed = $1.1M per project• In 2011, projects managed to obtain prices that were double the 2010 average, seeing a market-wide average price of $9.2/tCO2e. Overall, this price is the aggregation of hundreds of diverse prices that vary greatly by project standard, location and other environmental and social co-benefits – ranging from less than $1/tCO2e to over $100/tCO2e in 2011 *State of the Forest Carbon Markets 2012
    14. 14. The way forward? – Obstacles – Monitoring/Reporting/Verification (MRV) – Market – Solutions
    15. 15. OBSTACLES OVERALL COSTS EDUCATION BUREAUCRACY LACK OF EXPERTS TRANSPARENCY EXPERIENCE FINANCE CORRUPTION
    16. 16. M - measurement R - reporting V - verification OVERALL COSTS EDUCATIONBUREAUCRACY LACK OF EXPERTS TRANSPARENCY • NEED TO ENSURE TRANSPARENCY AND EXPERIENCE ENSURE THAT OFFSET IS ACTUALLY DELIVERED • TRANSPARENCYCORRUPTION • COSTS ……………MONOPOLY • REMOTE SENSING
    17. 17. Market Share - Motivation
    18. 18. Historical Transacted Volumes
    19. 19. Market Share (Price & Type)
    20. 20. Market Share for Standards
    21. 21. Project developer - Predications
    22. 22. POSSIBLE SOLUTIONS OVERALL COSTS• Support early stage project development EDUCATION BUREAUCRACY• Lower cost of accreditation & verification LACK OF EXPERTS TRANSPARENCY• Education – increase market expertise EXPERIENCE• Simpler system or simpler legislation• Capacity building - PINS & PDD CORRUPTION http://www.conservationfinance.org/
    23. 23. THANK YOU ANDREW G . STEEL Chief Executive Officer The TREEDOM Group andrew.steel@treedom.com

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