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Mexican Indigenous Community Road Tests Forest Carbon Offset Project, With Help From Disney

Gloria Gonzalez

The community of San Juan Lachao in Oaxaca, Mexico has developed the first pilot carbon offset project under the Climate Action Reserve’s Mexico Forest Protocol. The project is being launched with the financial support of the Walt Disney Company, already a major player in the voluntary carbon market.

21 November, 2014 |When Climate Action Reserve (CAR) President Gary Gero started thinking about the perfect corporation to partner with the Chatina indigenous community of San Juan Lachao in Oaxaca, Mexico for the first forest carbon offset project under CAR’s Mexico protocol, he knew exactly who to call.

Gero dialed the folks at the Walt Disney Company’s Climate Solutions Fund, an active buyer in the voluntary carbon markets. “The CAR folks thought we would like this project and they were absolutely right, said Bob Antonoplis, Disney’s assistant general counsel.

The community of San Juan Lachao has launched the first pilot project under CAR’s Mexico forest protocol approved in October 2013 with the assistance of Mexican environmental nonprofit Pronatura and financial support from Disney to get the project off the ground. The project is currently estimated to generate 20,000 tonnes of offsets per year. The size of the area is about 25,000 hectares.

The forests of San Juan Lachao have been grazed and left in poor conditions with an increased risk of wildfire and reduced water quality. Hundreds of thousands of people from the state of Oaxaca, Mexico have migrated from their homes to the US state of California in search of better economic opportunities.“They immigrate because they have no income and no alternatives and they haven’t really figured out how to get resources out of forests, said Carlos Sada, Mexico Consul General in Los Angeles.

However, the community will receive financial revenues from the sale of the offsets to support forest management and protection, provide clean water and improve the standard of living of its people. The project will provide about 30 direct jobs and 150 indirect jobs to the local community, at an average salary of $15 per day for each person, which is well above the $10 per day minimum wage in the area, said Adolfo Alaniz, General Director of Pronatura.

The Chatina community consists of 4,531 people. And for the project proponents, one of the key highlights is that the community members themselves are doing the work rather than outside consultants. CAR and Pronatura conducted a general training session on global warming and then focused on teaching community members the technically complex tasks of measuring trees and installing plots. They just finished putting in 300 plots for the project.

“It’s creating an employment opportunity for them, said CAR Director of Forestry John Nickerson. The young men and women are getting a lot of technical expertise that will stay with them for a long time and are demonstrating a “strong willingness to succeed and a lot of local pride, he said.

It is exactly those clean water and employment and economic benefits that made the project so attractive to Disney, as well as the partnership with and participation of the local community, Antonoplis said. “This project just has a fantastic story to tell, he said.

In Mexico, about 80% of the forests belong to the local or indigenous communities so it is crucial to understand how they feel about and interact with their forests through projects such as this one, according to the project proponents, who are looking to expand the pilot activities elsewhere in the country.

“This project will have a very direct impact on the communities all over Mexico, Sada said.

The First Test

This community-led project is the first test of CAR’s Mexico forest protocol, which provides standardized guidance for carbon enhancement projects within a reduced emissions from deforestation and forest degradation (REDD+) framework and addresses eligibility, baseline, inventory, permanence, social and environmental safeguards, and measurement, reporting and verification requirements.

The project involves improved forest management activities, with uneven-aged management of native species the most popular management strategy among project developers in 2013, according to the State of the Forest Carbon Markets 2014 report, to be released later this afternoon. It is also flexible to include urban forestry and agroforestry activities.

The project is more akin to the domestic forestry projects allowed into California’s cap-and-trade program than an avoided deforestation project, but CAR sees this as the type of project activity that could be nested under a jurisdictional REDD program and potentially eligible for a compliance program such as California’s.

“We developed it to be adaptable to Mexico’s REDD+ program as a nested project in the future, Nickerson said.

“I would love to see (the Mexico protocol) built into the California program and other regulatory programs, Antonoplis added.

A Broader Impact

Disney is no stranger to investments in Latin America-based forest carbon projects. With the help of a $3.5 million donation from the company, Conservation International was able to develop a REDD+ project in the dwindling Alto Mayo Protected Forest in Peru. The project has generated at least three million tonnes of emissions reductions so far, and delivered a host of benefits for the local populations.

Disney’s operations do not subject it to compliance obligations under California’s cap-and-trade program, meaning it purchases offsets for strictly voluntary reasons.

“But that didn’t stop us obviously, Antonoplis said. “We felt we had an obligation, irrespective of what (California’s GHG reduction law) was going to require, to do something about our own greenhouse gas (GHG) emissions and to encourage others to do the same.

The company has generated more than $48 million for these types of projects by charging an internal carbon price to its business units for their GHG emissions and has openly discussed its carbon pricing program in its corporate social responsibility reports and public events.

“It’s very powerful tool, he said. “So when the private sector does something like that and tells its story, it encourages other companies to do the same.

The project comes after a historic agreement between the governments of Mexico and the US state of California to cooperate on climate issues in July and could pave the way for more international cooperation ahead of the upcoming United Nations negotiations in Lima, Peru in December and Paris in 2015.

“While we’re waiting for national governments to come together, to take the broader action they will hopefully take, it’s these actions that demonstrate real and positive benefits in the community and that we can address climate change on a broader scale, Gero said.

For their part, private companies such as Disney can provide critical seed funding and partnership expertise to allow these voluntary projects to flourish, which will demonstrate to governments that carbon projects can be successful and should be a part of regulatory carbon pricing programs.

“We think the private sector, even if you’re not subject to a compliance program, plays a vital role in advancing the cause of greenhouse gas emissions reductions, Antonoplis said.

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Gloria Gonzalez is a Senior Associate in Ecosystem Marketplace’s Carbon Program. She can be reached at ggonzalez@ecosystemmarketplace.com.

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