Tag: Geographic Latin America

10 September 2013 | Brazilian cosmetics giant Natura Cosméticos has purchased 120,000 tons of carbon offsets from the Paiter-Suruí­, an indigenous people of the Amazon who in June became the first indigenous people to generate credits by saving endangered rainforest using the Verified Carbon Standard’s (VCS) for “REDD” (Reduced greenhouse gas Emissions from Deforestation and forest Degradation). The transaction is also the first of its kind, and is being watched by indigenous people across the Amazon as well as by companies looking to meet their Corporate Social Responsibility (CSR) requirements.

“REDD+ is a bridge between the indigenous world and the non-indigenous world, so it’s an appropriate way to begin this process” says Chief Almir Narayamoga Surui, who spearheaded the effort. “It creates a vehicle through which the capitalist system can recognize the value of standing forests, and indigenous people can be rewarded for preserving them.”

Natura is Latin America’s largest cosmetics maker and has committed to reduce its greenhouse gas emissions by one-third from 2006 levels by the end of 2013. A cornerstone of this effort is the Natura Carbon Neutral initiative, a public commitment to offset those emissions that cannot be reduced internally by investing in emission-reduction projects from other institutions whose values and beliefs are aligned with their own.

“Since we made a commitment to be a carbon neutral company in 2007, Natura offsets 100% of its emissions,” says Denise Alves, Director of Sustainability.

The Suruí­ will use the proceeds to jumpstart their 50-year “Life Plan”, which is designed to create a sustainable economy that blends traditional land-use practices, ecotourism, and the harvesting of non-timber forest products with modern scientific methods and procedures.

Until 1969, the Surui were an isolated people living in harmony with the forest. After losing much of their territory to illegal logging, they have become leading proponents of rainforest preservation.

“Until now, companies have looked at rainforest preservation as something they do to be nice, or as philanthropy,” says Chief Almir. “Natura recognizes that carbon neutrality isn’t just a gesture, it’s an obligation, and it’s one we all have. REDD+ makes it possible for companies to meet that obligation, and for us to become providers of an ecosystem service.”

The Surui Forest Carbon Project is designed to prevent at least five million tons of carbon dioxide from being emitted over 30 years while protecting critical rainforest habitat, and its credits have been certified under both the Verified Carbon Standard (VCS) and the Climate, Community, and Biodiversity (CCB) Alliance. The VCS employs a rigorous set of criteria to ensure that actions taken by project proponents actually did preserve the forest, and CCB provides further tests to ensure the project doesn’t harm people or habitat. The project generated its first credits in June, 2013, after an audit by Imaflora (Instituto de Manejo e Certificaçí£o Florestal e Agrí­cola/Institute for the Management and Certification of Forests and Farms) and the Rainforest Alliance confirmed that protective actions taken by the Surui had been successful.

It began in 2007, when Chief Almir Surui first approached the Washington, DC-based environmental nonprofit organization Forest Trends (publisher of Ecosystem Marketplace) for help in reforesting his people’s territory after decades of invasion by loggers. There, he learned of REDD. To lay the foundation of a carbon project being able to be developed, Forest Trends commissioned a precedent-setting legal review that concluded that not only the Surui but all indigenous peoples in Brazil with demarcated territories have carbon ownership rights.

In 2009, the four clans and 25 villages of the Suruí­ voted to impose and enforce a logging moratorium and to work with Idesam (Instituto de Conservaçí£o e Desenvolvimento Sustentavel do Amazonas/Institute for the Conservation and Sustainable Development of Amazonas) to ensure that the impacts of the Suruí­ actions were measurable, reportable, and verifiable. In 2010, Funbio (Fundo Brasileiro da Biodiversidade/Brazilian Biodiversity Fund) joined the partnership to create the Suruí­ Trust Fund and ensure that income from the project is managed responsibly and transparently. Local authorities, including Funai (Fundaçí£o Nacional do índio/National Indian Foundation), have since endorsed the Suruí­ effort as a model project and are supportive of their deal with Natura.

In addition to Forest Trends, Chief Almir credits several partner organizations with bringing the project to fruition. Brazilian nonprofit organization Idesam provided technical support to determine which portions of the 248,147-hectare territory were in danger and estimate the carbon content. Longstanding Suruí­ partners Kanindé (Associaçí£o de Defesa Etnoambiental Kanindé) and ECAM (Equipe de Conservaçí£o da Amazí´nia/Amazon Conservation Team Brazil) helped members of the Suruí­ understand the project in accordance with the principles of Free, Prior, and Informed Consent (FPIC) as articulated in Convention 169 of the International Labor Organization (ILO).

Additional resources

Following the landmark use of political risk insurance on a REDD+ project in Cambodia, project developers elsewhere have also tapped into the insurance – most recently on a bamboo reforestation project in Nicaragua. Despite these examples of early mover activity, awareness of political risk coverage and how it can help finance carbon offset projects is still very limited.

27 August 2013 | In 2011, a few years after US-based land-use carbon consultant Terra Global Capital (TGC) launched its Oddar Meanchey REDD Project in Cambodia, it asked the Overseas Private Investment Corporation  (OPIC)  to shield its investment from political risk.

More specifically, the project helps Buddhist monks and other community members reduce greenhouse gas emissions from deforestation and forest degradation (REDD), and it does so in a way that could serve as a template for community-based REDD projects around the world. But it’s located in a country that most investors don’t understand. So TGC asked OPIC, the US government’s primary development finance agency, to provide protection against the risks of expropriation, war, and civil unrest – risks familiar not only to Cambodia, but to countries around the world. In the very first instance of political risk insurance for a forest carbon offset project, OPIC came through with $900,000 in political risk insurance – a service that the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) also offers.

Between the two of them, OPIC and MIGA have so far insured several carbon offset projects around the world designed to promote sustainable forestry, wind farms, and solar energy, allowing them to move forward in some of the world’s riskiest political and economic environments.

Nicaragua’s bamboo kingdom

In 2012, MIGA provided its first political risk insurance to a carbon offset project on the Atlantic Coast of Nicaragua, where EcoPlanet Bamboo (EPB) has been developing a forest carbon offset project to support its work reforesting degraded pasture land with guadua aculeate, a native bamboo species. The project is just one piece of the company’s growing efforts to provide timber manufacturing industries with a sustainable alternative fiber in order to reduce pressure on natural forests.

The production of palm oil is expanding and threatening forests in  Nicaragua’s coastal region, not far from EcoPlanet Bamboo’s sustainable bamboo plantations. For the land to be primed for palm oil, the forests are being burned, sometimes without removing the timber.

While EPB hopes to use carbon finance to meet debt repayments and support bamboo-processing activities and social programs in the area, MIGA’s $27-million guarantee backs the company’s investment in the purchase and conversion of degraded land into commercial bamboo plantations for the sale and export of bamboo fiber.  

Troy Wiseman, CEO and Co-Founder of EPB, says he was initially attracted to MIGA’s political risk coverage due to the perception of Nicaragua as a high-risk environment, especially in Europe, where EPB had the opportunity to raise debt finance for the project. Despite Nicaragua’s recent economic turnaround, the country still has a reputation among investors as one of Latin America’s least-developed countries, with high poverty rates following decades of political instability. Political risk insurance, he reasoned, could help overcome that hurdle and lower the interest rate at which EPB could access capital.

In April 2011, land preparation began at EcoPlanet Bamboo Central America’s Rio Siquia Plantation.

“Once we had political risk insurance, you could take the risk argument away because the cost of capital  would come down,” says Wiseman. “It came down for us by about 40%.”

As for the insurance itself, aside from the potential payoff in case an insurance claim is triggered, Wiseman notes that having MIGA on the contract reduces the risk that expropriation even occurs in the first place. MIGA underwriter Gloriana Echeverria says that’s partly because the Nicaraguan government is a shareholder in MIGA, which means it’s literally invested in its performance.

“This reduces the chance of expropriation because the government is unlikely to interfere with a project that has MIGA – and therefore the World Bank – as its partner,” she says. “We’ve gotten involved in over 100 cases where the investor has a certain problem with the government interfering. MIGA can mediate between the government and the investor to arrive at a solution that will make both parties happy.”

Political risk aside, the decision to invest in the project using carbon finance required taking on a significant amount of risk in its own right. “No one really had a proven bamboo methodology at a commercial level that could be duplicated,” says Wiseman. Indeed, EPB is the first organization to use a bamboo-based carbon offset methodology on a project validated under the Verified Carbon Standard (VCS) and the Climate, Community, and Biodiversity Alliance (CCBA), and is also certified under the Forest Stewardship Council for sustainable forest management.

EPB’s project is not a pure carbon offset project insofar as it derives revenues from bamboo sales. MIGA’s financial analysis of the project takes into account all revenue streams. For projects that are strictly dependent on carbon finance, Echeverria says MIGA’s financial analysis could differ in accounting for the financial sustainability of the project. A project relying solely on carbon revenues could be seen as a riskier project to insure.

Navigating the kitchen sink

For project developers trying to distinguish between OPIC and MIGA insurance, the primary difference is that OPIC requires majority US participation in an investment, whereas MIGA is open to nationals of any of its 179 member countries as long as the coverage is for a cross-border investment. MIGA is usually competitive in the riskier countries where investors are more concerned about getting the World Bank umbrella effect of deterrence, whereas OPIC tends to focus its activities in countries where a strong bilateral relationship might exist with the US. There is also a private political risk insurance market, but arguably without the deterrence effect. It is unclear whether carbon offset project developers have used this market.

Guada aculeate bamboo growing wild in their native habitat on EcoPlanet Bamboo’s Rio Kama Plantation. November 2011.

Ultimately, MIGA can provide up to $220 million in insurance coverage per project, whereas OPIC can provide up to $250 million  – both agencies able to provide additional coverage through reinsurance. But how affordable is political risk insurance at the end of the day? And what incentives exist to help project developers invest in poor and risky countries where capital is hard to come by?  

The cost of the policy depends on the country, with insurance premiums rising significantly for particularly high-risk environments. For countries in the middle tier, the insurance itself may not be prohibitively expensive, but cash-strapped project developers looking to tap into political risk insurance can ultimately face additional upfront costs if—unlike EPB or TGC—they aren’t already in compliance with the prerequisite environmental, anti-corruption, and other policies required to land MIGA and OPIC insurance.

“There is already significant environmental work that project developers have to deal with in order to register with VCS and CCBA, which may be costly,” says Ruth Ann Nicastri, Managing Director of Political Risk Insurance at OPIC. “Terra Global Capital had already started those processes before they sought political risk insurance from us, so those costs were already taken into account in their budget. For project developers working on projects that haven’t taken the steps to obtain that kind of rigorous certification, it might be onerous to suddenly have to meet OPIC’s environmental requirements.”

For smaller projects that cannot afford certain evaluations, OPIC sometimes undertakes these evaluations as part of its own due diligence process, she notes. OPIC also provides discounted rates for small businesses, while MIGA provides subsidized rates for investments of $10 million or less with an average 25% discount, with specific rates depending on the country.

Beyond that, some have floated the idea of having public entities, possibly domestic, help subsidize insurance fees. “Depending on the country, it may be possible to provide additional layers of subsidy or premium pricing in a way that could offset political risk insurance premiums,” says Cameron Prell, Senior Counsel at US-based law firm McGuireWoods.

Project developers also have the option to apply to grants from donor agencies such as FMO, the Dutch development bank, that have strong stated interests in sectors relevant to carbon offset projects such as agribusiness, energy, food, and water to underwrite the cost of the insurance premium instead of provide a traditional grant or donation, Wiseman notes.

If a tree falls in the forest…

In spite of early-mover activity, there is still relatively low awareness that political risk insurance is available for forest carbon offset projects through MIGA and OPIC. The default risk management tool remains the buffer pool approach, which requires that project developers set aside carbon credits as reserves in order to cover unforeseen losses in carbon stocks.

“I don’t see the buffer pool approach as having a necessarily conflicting goal as these new emerging products, but the purpose of the buffer pool is definitely not to encourage financing,” says Stephen Matzie, Investment Officer at the US Agency for International Development (USAID), the US federal government’s principal aid agency. “It does require a significant amount of credits over the project’s lifetime, but I think it’s one of those things that can be tweaked to encourage private financing.”

While reportedly cheaper than the buffer pool approach, political risk insurance does not cover the broad set of risks that are technically covered by the buffer pool approach.

“OPIC and MIGA political risk insurance are advisable in many emerging markets that lack a robust regulatory regime for forest carbon,” Prell says. “However, the riskier markets are going to potentially result in higher premiums. Regardless, the insurance products should not be viewed as a sufficient instrument able to cover the current market demand and price risks inherent in forest carbon projects.”

There has been some push to expand the offering of products that can cover exposure to political risk alongside other risks. “The private sector and willing development finance institutions are developing additional guarantees that may address some measure of market risk, including project performance and valuation,” he notes. “The coverage is not 100%, but such mechanisms could provide some measure of risk mitigation for investors.”

USAID’s Development Credit Authority has been a prime innovator in this space, having been approached in early 2012 to develop a special loan guarantee for REDD activities. The agency is now working on several transactions simultaneously, with the one furthest along covering the Choco region in Colombia where it’s helping local communities pull together a REDD project. USAID’s guarantee covers a broad range of risks in addition to political risk, including those associated with verification, weather, and the production of carbon credits.

The path forward

Carbon offset projects continue to enter the pipeline to tap into political risk insurance on a case-by-case basis, including new prospects in Colombia, Brazil, and Indonesia. However, whether the market can see scaled-up adoption is hard to say.

While the use of MIGA’s political risk insurance for carbon offset projects is limited thus far, Prell notes that there has been some discussion about the potential for a new political risk insurance product for forest carbon to be modeled after the index-backed agricultural insurance programs offered by the World Bank’s Global Index Insurance Facility.

On OPIC’s end, Nicastri says, “As far as we can tell, we’re still the only ones willing to cover regulatory risk for forest carbon. However, OPIC is happy to work with other insurers to provide the product to a broader range of investors.”

As for EcoPlanet Bamboo? “We plan to use political risk insurance in every country where we plant bamboo as we embark on a new goal of reforesting 1 million acres of degraded land in Southeast Asia and Brazil, while expanding our current footprint in Africa,” says Wiseman. Some of this work could potentially include a carbon offset element.

10 September 2013 | Brazilian cosmetics giant Natura Cosméticos has purchased 120,000 tons of carbon offsets from the Paiter-Suruí­, an indigenous people of the Amazon who in June became the first indigenous people to generate credits by saving endangered rainforest using the Verified Carbon Standard’s (VCS) for “REDD” (Reduced greenhouse gas Emissions from Deforestation and forest Degradation). The transaction is also the first of its kind, and is being watched by indigenous people across the Amazon as well as by companies looking to meet their Corporate Social Responsibility (CSR) requirements.

“REDD+ is a bridge between the indigenous world and the non-indigenous world, so it’s an appropriate way to begin this process” says Chief Almir Narayamoga Surui, who spearheaded the effort. “It creates a vehicle through which the capitalist system can recognize the value of standing forests, and indigenous people can be rewarded for preserving them.”

Natura is Latin America’s largest cosmetics maker and has committed to reduce its greenhouse gas emissions by one-third from 2006 levels by the end of 2013. A cornerstone of this effort is the Natura Carbon Neutral initiative, a public commitment to offset those emissions that cannot be reduced internally by investing in emission-reduction projects from other institutions whose values and beliefs are aligned with their own.

“Since we made a commitment to be a carbon neutral company in 2007, Natura offsets 100% of its emissions,” says Denise Alves, Director of Sustainability.

The Suruí­ will use the proceeds to jumpstart their 50-year “Life Plan”, which is designed to create a sustainable economy that blends traditional land-use practices, ecotourism, and the harvesting of non-timber forest products with modern scientific methods and procedures.

Until 1969, the Surui were an isolated people living in harmony with the forest. After losing much of their territory to illegal logging, they have become leading proponents of rainforest preservation.

“Until now, companies have looked at rainforest preservation as something they do to be nice, or as philanthropy,” says Chief Almir. “Natura recognizes that carbon neutrality isn’t just a gesture, it’s an obligation, and it’s one we all have. REDD+ makes it possible for companies to meet that obligation, and for us to become providers of an ecosystem service.”

The Surui Forest Carbon Project is designed to prevent at least five million tons of carbon dioxide from being emitted over 30 years while protecting critical rainforest habitat, and its credits have been certified under both the Verified Carbon Standard (VCS) and the Climate, Community, and Biodiversity (CCB) Alliance. The VCS employs a rigorous set of criteria to ensure that actions taken by project proponents actually did preserve the forest, and CCB provides further tests to ensure the project doesn’t harm people or habitat. The project generated its first credits in June, 2013, after an audit by Imaflora (Instituto de Manejo e Certificaçí£o Florestal e Agrí­cola/Institute for the Management and Certification of Forests and Farms) and the Rainforest Alliance confirmed that protective actions taken by the Surui had been successful.

It began in 2007, when Chief Almir Surui first approached the Washington, DC-based environmental nonprofit organization Forest Trends (publisher of Ecosystem Marketplace) for help in reforesting his people’s territory after decades of invasion by loggers. There, he learned of REDD. To lay the foundation of a carbon project being able to be developed, Forest Trends commissioned a precedent-setting legal review that concluded that not only the Surui but all indigenous peoples in Brazil with demarcated territories have carbon ownership rights.

In 2009, the four clans and 25 villages of the Suruí­ voted to impose and enforce a logging moratorium and to work with Idesam (Instituto de Conservaçí£o e Desenvolvimento Sustentavel do Amazonas/Institute for the Conservation and Sustainable Development of Amazonas) to ensure that the impacts of the Suruí­ actions were measurable, reportable, and verifiable. In 2010, Funbio (Fundo Brasileiro da Biodiversidade/Brazilian Biodiversity Fund) joined the partnership to create the Suruí­ Trust Fund and ensure that income from the project is managed responsibly and transparently. Local authorities, including Funai (Fundaçí£o Nacional do índio/National Indian Foundation), have since endorsed the Suruí­ effort as a model project and are supportive of their deal with Natura.

In addition to Forest Trends, Chief Almir credits several partner organizations with bringing the project to fruition. Brazilian nonprofit organization Idesam provided technical support to determine which portions of the 248,147-hectare territory were in danger and estimate the carbon content. Longstanding Suruí­ partners Kanindé (Associaçí£o de Defesa Etnoambiental Kanindé) and ECAM (Equipe de Conservaçí£o da Amazí´nia/Amazon Conservation Team Brazil) helped members of the Suruí­ understand the project in accordance with the principles of Free, Prior, and Informed Consent (FPIC) as articulated in Convention 169 of the International Labor Organization (ILO).

Additional resources

Already a major player in the voluntary carbon market, the Walt Disney Company is planning to expand its offset purchasing program to cover indirect emissions related to its operations. Disney has pledged to continue supporting new offset projects, particularly in the forestry sector, and has used the funds generated from its double-digit internal carbon prices to pay above-average prices for the credits.

13 September 2013 | The entertainment giant that runs the “Happiest Place On Earth” is wild about carbon offsets, so much so that the Walt Disney Company will expand its already substantial voluntary offset purchasing program to account for indirect emissions generated by its operations, an effort to be financed by a $11-14 per-tonne internal carbon price the company charges its business units, according to sources close to the program.

In 2009, Disney announced a series of long-term goals to reduce its environmental impact, including a goal of zero net direct greenhouse gas (GHG) emissions, a target that will likely be updated in the next year, says Bob Antonoplis, assistant general counsel for The Walt Disney Company. The multi-media company challenged its business units to reduce their direct emissions through energy efficiency, fuel savings and fuel substitution initiatives and turns to the voluntary carbon markets to offset what it cannot reduce internally.

Disney’s voluntary offset program has covered these Scope 1 direct emissions and the company is planning to expand its offset purchasing in the “near future” to include its Scope 2 emissions, which cover indirect emissions from consumption of purchased electricity, heat or stream, Antonoplis says.

“We’re going to be expanding our program as we fold in our Scope 2 emissions, which will obviously increase the amount of projects that we’ll be involved in,” he told participants in a Climate Action Reserve (CAR) webinar on Thursday.

Since establishing its environmental goals, Disney has since become a major buyer in the voluntary carbon markets. “It was clearly driven by the overall goal that we set for ourselves,” he says. “That’s why we are participating at the scale that we are and then when we fold in our Scope 2 emissions, we’ll be at an even higher scale.”

As part of this effort, Disney established its Climate Solutions Fund, the name given to its internal carbon pricing program. The costs of carbon offset projects are charged back to individual business units at a rate proportional to their contributions to the company’s overall direct emissions footprint. Charging the business units for their GHG emissions raises the capital that is used to invest in third-party emission reduction projects.

When the internal carbon pricing mechanism was first pitched to Disney management, the then European price of $15 per tonne (/tCO2e) was used as the benchmark, Antonoplis says. But the price charged to the company’s internal units has been much lower in practice, varying in the US $11-14/tCO2e range, he says.

By comparison, the average price for voluntary offsets on a global basis was $5.9/tCO2e in 2012, with an average price of $6.7/tCO2e in North America last year, according to Forest Trends’ Ecosystem Marketplace’s 2013 State of the Voluntary Carbon Markets report.

Disney’s four cruise ships pay “a significant chunk” into the fund, while its less energy-intensive movie studio and television divisions are responsible for lower payments, according to Antonoplis.

Forest Lovers

The folks who choose offset projects for Disney have a particular affection for forestry projects.

“We like projects that have co-benefits and side benefits in addition to just pure GHG benefits,” he says. “We’re really drawn to forestry projects and we’re really drawn to reforestation projects in particular that have watershed protection, habitat rehabilitation as well as a GHG component. A bulk of our money is spent on forestry projects.”

With the help of a $3.5 million donation from Disney, Conservation International was able to develop a reduced emissions from deforestation and forest degradation (REDD+) project in the dwindling Alto Mayo Protected Forest in Peru. The project, which Antonoplis calls “fantastic,” has generated 3 million tonnes of emissions reductions (MtCO2e) so far, and delivered a host of benefits for the local populations.

“We’re big supporters of REDD and we’re active in both California and Washington, DC on trying to get REDD into our regulatory programs,” he says.

In 2012, Disney’s direct GHG emissions footprint was 867,353 tCO2e and the company retired 433,677 tCO2e in carbon credits generated by the Peru project to help meet its indirect GHG emissions goal.

Antonoplis is particularly proud of the Cuyamaca Rancho State Park project, for which Disney helped finance the reforestation of 1,075 acres of forest land, which was decimated by the Cedar Fire of October 2003. This was a particularly pricey endeavor compared to other offset projects such as dairy methane, livestock or ozone-depleting substances projects, he notes.

“Even though it was ‘expensive,’ it was just a wonderful project,” he says.

The company has purchased a smaller percentage of carbon offsets from other projects such as energy efficiency, livestock gas capture and landfill gas, with landfill projects in particular an extremely cost effective way to capture methane, which has a much higher global warming potential than carbon dioxide.

“You get a lot of bang for the buck in engineering costs,” Antonoplis says. “It’s cheaper to do them and it keeps the price down.”

Demand will likely continue for lower-priced landfill methane projects via the Chicago Climate Exchange’s offset registry program because of the significant price differential that exists between CCX projects and the higher-priced CAR credits, says Molly Peters-Stanley, associate director of Ecosystem Marketplace.

“Not everybody pays as much for voluntary offsets as Disney does,” she says.

Disney’s preference is to fund new projects rather than purchasing older offsets and to work with long-time NGO partners such as Conservation International, the Nature Conservancy, the Conservation Fund and World Wildlife Fund, with 80-90% of its credits acquired through these relationships.

“They’re friendly contracts to negotiate and we each have kind of a reputational stake in the project working,” Antonoplis says. “It enables us to easily enter into agreements to fund these projects.”

Location of the projects is often a consideration for the company in choosing offset projects. Disney has financed several reforestation projects with the Nature Conservancy in China because of major construction on the upcoming Shanghai Disneyland and its existing theme park in Hong Kong, he says. The company also wanted to engage in projects in California because it is headquartered in the state. But Disney also has projects in Peru and the Lower Mississippi Valley, where it does not have operations.

“We don’t only pick projects based on geography,” he says. “But all things equal, we do like projects in our neighborhood.”

Voluntary Buying Going Strong

The entertainment giant’s offset purchasing strategy assumes that a vibrant voluntary market exists, Antonoplis says. “Obviously that is the case and it’s worked very well to our benefit,” he says. “It’s been a successful program for us.”

In 2012, voluntary actors contracted 101 MtCO2e for immediate or future delivery, a 4% increase over 2011, while the volume purchased domestically in North America increased by 1% to about 30 MtCO2e, according to the Ecosystem Marketplace report.

Ninety percent of offset volumes were contracted by the private sector, where corporate social responsibility (CSR) and industry leadership were the primary motivators, Peters-Stanley says.

For Disney, CSR was “clearly our motivation,” Antonoplis says.

Despite being based in California, the company’s offset purchasing is not motivated by compliance mandates because its operations in the state fall well below the 25,000 tCO2e threshold to be covered under California’s cap-and-trade program. “That kind of frees us up from not having to worry about the offset component of the cap-and-trade program,” he says.

CAR was the most popular offset standard in North America in 2012, with a 30% share of the market, in large part due to preparations for California’s compliance program, which officially launched in January 2013, Peters-Stanley says. Removing compliance-related transactions from the equation, the Verified Carbon Standard (VCS) was hands-down the leading standard for voluntary activities in North America, she says.

“If it weren’t for the voluntary market, the vibrancy of the standards such as VCS and [the American Carbon Registry] and CAR of course, we wouldn’t be comfortable playing in this area,” Antonoplis says. “The vibrancy of the market and the verification standards and the ability to get these projects off the ground and going has really worked well for us.”

Additional resources

Following the landmark use of political risk insurance on a REDD+ project in Cambodia, project developers elsewhere have also tapped into the insurance – most recently on a bamboo reforestation project in Nicaragua. Despite these examples of early mover activity, awareness of political risk coverage and how it can help finance carbon offset projects is still very limited.

27 August 2013 | In 2011, a few years after US-based land-use carbon consultant Terra Global Capital (TGC) launched its Oddar Meanchey REDD Project in Cambodia, it asked the Overseas Private Investment Corporation  (OPIC)  to shield its investment from political risk.

More specifically, the project helps Buddhist monks and other community members reduce greenhouse gas emissions from deforestation and forest degradation (REDD), and it does so in a way that could serve as a template for community-based REDD projects around the world. But it’s located in a country that most investors don’t understand. So TGC asked OPIC, the US government’s primary development finance agency, to provide protection against the risks of expropriation, war, and civil unrest – risks familiar not only to Cambodia, but to countries around the world. In the very first instance of political risk insurance for a forest carbon offset project, OPIC came through with $900,000 in political risk insurance – a service that the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) also offers.

Between the two of them, OPIC and MIGA have so far insured several carbon offset projects around the world designed to promote sustainable forestry, wind farms, and solar energy, allowing them to move forward in some of the world’s riskiest political and economic environments.

Nicaragua’s bamboo kingdom

In 2012, MIGA provided its first political risk insurance to a carbon offset project on the Atlantic Coast of Nicaragua, where EcoPlanet Bamboo (EPB) has been developing a forest carbon offset project to support its work reforesting degraded pasture land with guadua aculeate, a native bamboo species. The project is just one piece of the company’s growing efforts to provide timber manufacturing industries with a sustainable alternative fiber in order to reduce pressure on natural forests.

The production of palm oil is expanding and threatening forests in  Nicaragua’s coastal region, not far from EcoPlanet Bamboo’s sustainable bamboo plantations. For the land to be primed for palm oil, the forests are being burned, sometimes without removing the timber.

While EPB hopes to use carbon finance to meet debt repayments and support bamboo-processing activities and social programs in the area, MIGA’s $27-million guarantee backs the company’s investment in the purchase and conversion of degraded land into commercial bamboo plantations for the sale and export of bamboo fiber.  

Troy Wiseman, CEO and Co-Founder of EPB, says he was initially attracted to MIGA’s political risk coverage due to the perception of Nicaragua as a high-risk environment, especially in Europe, where EPB had the opportunity to raise debt finance for the project. Despite Nicaragua’s recent economic turnaround, the country still has a reputation among investors as one of Latin America’s least-developed countries, with high poverty rates following decades of political instability. Political risk insurance, he reasoned, could help overcome that hurdle and lower the interest rate at which EPB could access capital.

In April 2011, land preparation began at EcoPlanet Bamboo Central America’s Rio Siquia Plantation.

“Once we had political risk insurance, you could take the risk argument away because the cost of capital  would come down,” says Wiseman. “It came down for us by about 40%.”

As for the insurance itself, aside from the potential payoff in case an insurance claim is triggered, Wiseman notes that having MIGA on the contract reduces the risk that expropriation even occurs in the first place. MIGA underwriter Gloriana Echeverria says that’s partly because the Nicaraguan government is a shareholder in MIGA, which means it’s literally invested in its performance.

“This reduces the chance of expropriation because the government is unlikely to interfere with a project that has MIGA – and therefore the World Bank – as its partner,” she says. “We’ve gotten involved in over 100 cases where the investor has a certain problem with the government interfering. MIGA can mediate between the government and the investor to arrive at a solution that will make both parties happy.”

Political risk aside, the decision to invest in the project using carbon finance required taking on a significant amount of risk in its own right. “No one really had a proven bamboo methodology at a commercial level that could be duplicated,” says Wiseman. Indeed, EPB is the first organization to use a bamboo-based carbon offset methodology on a project validated under the Verified Carbon Standard (VCS) and the Climate, Community, and Biodiversity Alliance (CCBA), and is also certified under the Forest Stewardship Council for sustainable forest management.

EPB’s project is not a pure carbon offset project insofar as it derives revenues from bamboo sales. MIGA’s financial analysis of the project takes into account all revenue streams. For projects that are strictly dependent on carbon finance, Echeverria says MIGA’s financial analysis could differ in accounting for the financial sustainability of the project. A project relying solely on carbon revenues could be seen as a riskier project to insure.

Navigating the kitchen sink

For project developers trying to distinguish between OPIC and MIGA insurance, the primary difference is that OPIC requires majority US participation in an investment, whereas MIGA is open to nationals of any of its 179 member countries as long as the coverage is for a cross-border investment. MIGA is usually competitive in the riskier countries where investors are more concerned about getting the World Bank umbrella effect of deterrence, whereas OPIC tends to focus its activities in countries where a strong bilateral relationship might exist with the US. There is also a private political risk insurance market, but arguably without the deterrence effect. It is unclear whether carbon offset project developers have used this market.

Guada aculeate bamboo growing wild in their native habitat on EcoPlanet Bamboo’s Rio Kama Plantation. November 2011.

Ultimately, MIGA can provide up to $220 million in insurance coverage per project, whereas OPIC can provide up to $250 million  – both agencies able to provide additional coverage through reinsurance. But how affordable is political risk insurance at the end of the day? And what incentives exist to help project developers invest in poor and risky countries where capital is hard to come by?  

The cost of the policy depends on the country, with insurance premiums rising significantly for particularly high-risk environments. For countries in the middle tier, the insurance itself may not be prohibitively expensive, but cash-strapped project developers looking to tap into political risk insurance can ultimately face additional upfront costs if—unlike EPB or TGC—they aren’t already in compliance with the prerequisite environmental, anti-corruption, and other policies required to land MIGA and OPIC insurance.

“There is already significant environmental work that project developers have to deal with in order to register with VCS and CCBA, which may be costly,” says Ruth Ann Nicastri, Managing Director of Political Risk Insurance at OPIC. “Terra Global Capital had already started those processes before they sought political risk insurance from us, so those costs were already taken into account in their budget. For project developers working on projects that haven’t taken the steps to obtain that kind of rigorous certification, it might be onerous to suddenly have to meet OPIC’s environmental requirements.”

For smaller projects that cannot afford certain evaluations, OPIC sometimes undertakes these evaluations as part of its own due diligence process, she notes. OPIC also provides discounted rates for small businesses, while MIGA provides subsidized rates for investments of $10 million or less with an average 25% discount, with specific rates depending on the country.

Beyond that, some have floated the idea of having public entities, possibly domestic, help subsidize insurance fees. “Depending on the country, it may be possible to provide additional layers of subsidy or premium pricing in a way that could offset political risk insurance premiums,” says Cameron Prell, Senior Counsel at US-based law firm McGuireWoods.

Project developers also have the option to apply to grants from donor agencies such as FMO, the Dutch development bank, that have strong stated interests in sectors relevant to carbon offset projects such as agribusiness, energy, food, and water to underwrite the cost of the insurance premium instead of provide a traditional grant or donation, Wiseman notes.

If a tree falls in the forest…

In spite of early-mover activity, there is still relatively low awareness that political risk insurance is available for forest carbon offset projects through MIGA and OPIC. The default risk management tool remains the buffer pool approach, which requires that project developers set aside carbon credits as reserves in order to cover unforeseen losses in carbon stocks.

“I don’t see the buffer pool approach as having a necessarily conflicting goal as these new emerging products, but the purpose of the buffer pool is definitely not to encourage financing,” says Stephen Matzie, Investment Officer at the US Agency for International Development (USAID), the US federal government’s principal aid agency. “It does require a significant amount of credits over the project’s lifetime, but I think it’s one of those things that can be tweaked to encourage private financing.”

While reportedly cheaper than the buffer pool approach, political risk insurance does not cover the broad set of risks that are technically covered by the buffer pool approach.

“OPIC and MIGA political risk insurance are advisable in many emerging markets that lack a robust regulatory regime for forest carbon,” Prell says. “However, the riskier markets are going to potentially result in higher premiums. Regardless, the insurance products should not be viewed as a sufficient instrument able to cover the current market demand and price risks inherent in forest carbon projects.”

There has been some push to expand the offering of products that can cover exposure to political risk alongside other risks. “The private sector and willing development finance institutions are developing additional guarantees that may address some measure of market risk, including project performance and valuation,” he notes. “The coverage is not 100%, but such mechanisms could provide some measure of risk mitigation for investors.”

USAID’s Development Credit Authority has been a prime innovator in this space, having been approached in early 2012 to develop a special loan guarantee for REDD activities. The agency is now working on several transactions simultaneously, with the one furthest along covering the Choco region in Colombia where it’s helping local communities pull together a REDD project. USAID’s guarantee covers a broad range of risks in addition to political risk, including those associated with verification, weather, and the production of carbon credits.

The path forward

Carbon offset projects continue to enter the pipeline to tap into political risk insurance on a case-by-case basis, including new prospects in Colombia, Brazil, and Indonesia. However, whether the market can see scaled-up adoption is hard to say.

While the use of MIGA’s political risk insurance for carbon offset projects is limited thus far, Prell notes that there has been some discussion about the potential for a new political risk insurance product for forest carbon to be modeled after the index-backed agricultural insurance programs offered by the World Bank’s Global Index Insurance Facility.

On OPIC’s end, Nicastri says, “As far as we can tell, we’re still the only ones willing to cover regulatory risk for forest carbon. However, OPIC is happy to work with other insurers to provide the product to a broader range of investors.”

As for EcoPlanet Bamboo? “We plan to use political risk insurance in every country where we plant bamboo as we embark on a new goal of reforesting 1 million acres of degraded land in Southeast Asia and Brazil, while expanding our current footprint in Africa,” says Wiseman. Some of this work could potentially include a carbon offset element.

The Peru Carbon Fund’s new PCF Standard aims to generate something it calls “Carbon Capture Certificates” for people who plant native trees on previously deforested land. It’s a novel approach that allows for landowners to reforest and harvest while accessing carbon payments.

12 September 2013 | Most carbon standards aim to serve either regional compliance programs or global voluntary models. The Peru Carbon Fund (PCF) has carved out a third niche: one designed for the voluntary market and the Peruvian legal landscape.

The PCF Standard aims to promote the planting of fast-growing native trees on lands that are currently being used for farming and ranching. It allows for harvesting so long as the carbon isn’t being dissipated into the air. Wood for construction, for instance, is permitted. Katherine Hamilton, a Strategic Advisor with Ecosystem Marketplace, recently sat down in Lima, Peru with PCF Executive Director Alessandro Riva to chat about the new organization’s work within the region.

KH What is the Peru Carbon Fund?

AR The Peru Carbon Fund is a privately-owned Peruvian company created to gather funds from investors, both corporate and individual, that in return seek carbon-neutral certification, using Carbon Capture Certificates (CCCs). The funds are fully invested in subsidizing reforestation projects in the Amazon.

You are developing an internal standard for these projects. How does it work?

PCF has created a robust internal standard called the PCF Forestry Standard with the objective of issuing Carbon Capture Certificates (CCC). These CCC’s come exclusively from reforestation projects dedicated to produce timber from native, fast-growing species in the Amazon, which will reduce deforestation and aid climate change through the creation of jobs.

We think we have identified the legal and silvicultural characteristics that plantations must possess to be ecologically and economically successful. Legal aspects pertain to specific property and land use regulations to avoid improper reforestation activities; the silvicultural regulation establishes that native species solely are a way to minimize effects, as various successful species have already been identified.

Each CCC is issued for a specific investor in order to compensate its carbon footprint. The certificates are not resalable to other companies; they are not tradable credits. PCF works as a direct and unique link between companies and farmers, reducing significantly the transaction and certification costs.

In general, the PCF Forestry Standard is a mechanism with specific requirements that correspond to a Peruvian reality and legal frame; therefore it’s a standard that most Amazon inhabitants or corporate investors can relate to, allowing for a fast spread of the program nationwide.

Why is PCF creating its own internal standard?

We believe it’s impossible to target a problem as large as deforestation in Peru with a standard that was not made specifically for the Peruvian reality. Additionally, we believe that the extremely high costs of implementing international standards in the Peruvian jungle are the main reason why they haven’t succeeded in turning around this dramatic situation.

The PCF Forestry Standard was created with the goal of simplicity, massive applicability, local knowledge, and zero cost – taking into account what international standards don’t provide. We can say that it’s 100% free for any farmer to apply for the standard; obviously they have to fulfill the requirements, but we see it as the only way to promote properly done reforestations in Peru in order to end deforestation.

You and your colleague, Claudio Mosi, often cite job creation as one of the most important goals of the PCF.

Deforestation in Peru is a socioeconomic problem due to lack of jobs and formal opportunities in the jungle. The slash and burn cycle is responsible for over 80% of deforestation in Peru and is done by locals and immigrants as a way of sustenance for their families.

The only way to halt this cycle is to provide a significant amount of jobs, and the only industry that has the size and characteristics to be successful and easily applied in our jungle is forestry, specifically reforestation for sawn wood.

In this context, the PCF Forestry Standards have established clear guidelines of how reforestation must be done, through the ordered use of lands and the protection of forests.

How does PCF manage transaction costs?

If landowners comply with the PCF Standard, we will proceed with the certification free of charge. All the costs related to the assessment and certification of each landowner will be covered by PCF with the sales of the resulting Carbon Capture Certificate of its plantations.

From the total proceedings, 60% go directly to the landowner to cover all the maintenance and silvicultural costs that must be done.

PCF acknowledges reforestation as an expensive process, and that plantation management costs must be covered in order to produce significant volumes of timber. These costs related activities must be covered by selling CCCs at a price that covers the price of processing.

What is your experience in working on reforestation?

The Peru Carbon Fund team has over ten years of experience in the Amazon jungle, working with reforestation projects. We promote fast-growing, native species for the production of sawn wood and its derivates. Over time, we have worked to collect an immense amount of information, and closed a full growth-commercial-cycle from collection of seeds to the commercialization of the harvest, thus offering tree farmers realistic information on their future proceedings.

All this experience, which includes a full recognition of the local social and economic conditions, is captured in the PCF Standard.

Tell about your recent offset transaction with the company Packing and Plastics.

It is part of Peru Carbon Fund services to measure carbon footprints in order to compensate emissions with our Carbon Capture Certificates. Packing and Plastics Peru contacted us last year to do this. They were being required by their local clients, mostly exporters, to obtain a “green” certificate in order for them to better compete with their products abroad. We measured their carbon footprint and they turned into 100% Carbon Neutral, the first plastic company in Peru to obtain this certificate.

Developing your own standard, not to mention facilitating reforestation projects, is not an easy task. . .

There are several challenges, but the most important ones we are facing is the promotion of PCF throughout the Peruvian Amazon – that our reforestation programs are designed to create sustainable development and wealth through the creation of jobs and ultimately, to end deforestation.

Secondly, to change the mindset of companies in our country which find no value in these issues. By taking action through our business model, companies could realize the benefits inherited by promoting this process.

Ultimately, our main goal is to end the large scale deforestation of the Amazon jungle. The Peruvian Amazon jungle has its own idiosyncrasies and characteristics and it is necessary to recognize those in order to provide a viable solution to this large scale problem.

Katherine Hamilton is an independent consultant and Strategic Adviosr for Ecosystem Marketplace. She can be reached at [email protected].

With the help of a $3.5 million donation from Disney, Conservation International has been able to develop a REDD+ project in the dwindling Alto Mayo Protected Forest in Peru. The project has generated 3 million tons of emissions reductions so far, and delivered a host of benefits for the local populations.

3 July 2013 | Segundo Guevara’s wooden cabin sits near the top of the lush mountain, surrounded by massive trees, sweet mist, and – of course – coffee plantations, which emit a familiar sweet scent that seems exotic here on these steep hills.

Guevara moved to this pristine patch of Peruvian Amazon rainforest-the Alto Mayo Protected Forest (Bosque de Proteccion de Alto Mayo, alternately abbreviated as “BPAM” or “AMPF”) from the neighboring region of Cajamarca. What he didn’t know is that he was moving into a protected area, and that the unsustainable farming methods he was using – like burning and clearing the forest to plant crops – was destroying a critically-important ecosystem.

The world needs these dense tropical forests to absorb carbon dioxide and emit oxygen, which is one of the many reasons environmental NGO Conservation International, (CI) launched a REDD (reducing emissions from deforestation and degradation) project here nearly five years ago.

Last year, the Alto Mayo REDD+ project was validated under the Verified Carbon Standard (VCS) as well as the Climate, Community and Biodiversity Standard (CCB).

Prior to the project’s validation, Disney, in a landmark move, donated $3.5 million to CI’s work in Alto Mayo contributing significantly to what the project has been able to achieve thus far.

The Arc of Deforestation

The story of the Alto Mayo REDD+ project began around 2008 and it involves 419 farmers and their families as much as it does CI and Disney. At the time, Disney was looking to offset the environmental impact of their resorts by preserving a forest or ecosystem and had reached out to CI for suggestions. CI presented them with two nations containing endangered rainforest that needed saving- the Democratic Republic of Congo and Peru. Disney decided to start with Alto Mayo in Peru.

“In recent years, the protected areas had been violated,” says Luis Espinel, director of CI in Peru.

It had been violated by people like Guevara moving into the region, chopping down trees and planting coffee plants. CI estimates that since Alto Mayo’s creation in 1987, 3,000 families have moved into the 182,000 hectares of forest.

At first, the Peruvian government, preoccupied with successive economic crises and security challenges, failed to enforce the law of a protected area, allowing shifting cultivation and logging activities to penetrate the buffer zone.

People were settled on the land by the time the government attempted to respond. In an effort not to make matters difficult for the settlers, the state permitted that they remain in the protected area so long as they practice sustainable agroecology, which applies ecology to agricultural systems, and sign Conservation Agreements or CA’s – an accord with land owners that defines a concrete conservation outcome.

“The idea was to give them instruments to continue farming, but without violating the Forest of Alto Mayo”, says engineer Maximo Arcos, who advises the project.

Agree and Maintain

As part of the CA, Arcos says, each farmer was offered a technical package containing instructions for planting. The package discouraged using herbicides and included training on how to sow coffee in a way that’s compatible with the growth of native trees. The CA benefited the local people as much as it did the ecosystem. Their unsustainable farming practices had been depleting the soil, which forced farmers to relocate and cut down trees constantly in order to reach healthy soil.

Espinel also pointed out that because the farmers practiced sustainable agriculture, they avoided the devastating disease known as coffee rust that decimated 20% of Peru’s total coffee production one year, according to the Ministry of Agriculture.

Guevara and other farmers were able to improve production and avoid pests thanks to CI’s REDD project. Along with the agricultural training the project provided, CI offered the local populations medical equipment, educational materials and jobs patrolling the forests. In return, the locals promised to participate in reforestation and not cut down the forest anymore.

Carbon Truth

While VCS verified the carbon impacts, CCB also measures the project’s effects on communities as well as on the local plant and animal life. The standard confirmed the local life had improved with the REDD project and the CAs. This means 420 species of birds and 50 species of mammals, including the yellow-tailed woolly monkey that is found only in the Peruvian Andes, benefitted.

So far, the project has generated 3 million tons of emissions reductions, which is the equivalent of taking 500,000 cars off the roads for one year, according to Espinel. Disney’s contribution resulted in a 400,000 ton reduction of carbon emissions helping to shrink the giant companies’ ecological footprint.

Disney’s cruise and resorts generate a significant amount of emissions which is why it is becoming involved in projects that mitigate GHG emissions. Working with CI to curb high deforestation rates is a key front in combating climate change. Deforestation generates more emissions than the transportation sector especially when linked to the livestock sector in South America.

Disney has agreed, as part of its environmental commitments, to another grant of $3.5 million to CI’s work in Alto Mayo. Disney is also considering showing films about Alto Mayo on their cruise ships.

Caring for the green and water

What else can be done for this wonderful place? At nearly 5pm, before the forest is hidden in fog, a person can see to the ends of the forest. But there are still dozens of families who unknowingly destroy the forest by felling trees to grow coffee. Alto Mayo has a variety of orchids species, as well, that are put in jeopardy by poor land-use practices.

CI is aware of this and has partnered with SERNANP (National Service of Protected Natural Areas by the State or Servicio Nacional de íreas Naturales Protegidas por el Estado) to improve management of the forest. They now have 26 rangers patrolling the area opposed to the 10 they had before CI’s project.

Patrolling the forest is essential. On the way to Guevara’s farm, for instance, there are trees down and logs stacked together waiting to be burned. Conservation rangers, in addition to more and more residents signing CAs, could help mitigate this deforestation.

It may not be the perfect setting (the ideal situation would have been for Alto Mayo to have been protected since its founding) but at least today Alto Mayo has achieved some system of conservation and has regained some of what has been lost over the years. The future looks far more promising than it did a few years ago. And as Espinel points out, the forest is useful as well as beautiful.

“It supplies water to many communities living in the vicinity,” he says.

The Alto Mayo ecosystem supplies the 200,000 people living in this vicinity with clean water that they use in their homes as well as to water their crops. The area is replenished with rainwater that runs over trees and through the grooves of lush hills to fill the entire ecosystem. Cutting down the trees deprives the forest and perhaps those who live around it, of a full life.

Dispel the Mist

Trees also create a home for those 420 bird species and 50 mammal types as well as amphibians, reptiles and insects. As in many of Disney’s well-known films, man and animal should care for the Earth responsibly.

As for Guevara, the changes still seem exciting and he is eager to discuss how his way of life and farming techniques have been transformed.

The fog suddenly lifts around Guevara’s farm allowing the sun to shine through. Below, the chopped logs still lie on the ground, but here you can breathe the smell of coffee and perhaps the smell of hope.

With the help of a $3.5 million donation from Disney, Conservation International has been able to develop a REDD+ project in the dwindling Alto Mayo Protected Forest in Peru. The project has generated 3 million tons of emissions reductions so far, and delivered a host of benefits for the local populations.

3 July 2013 | Segundo Guevara’s wooden cabin sits near the top of the lush mountain, surrounded by massive trees, sweet mist, and – of course – coffee plantations, which emit a familiar sweet scent that seems exotic here on these steep hills.

Guevara moved to this pristine patch of Peruvian Amazon rainforest-the Alto Mayo Protected Forest (Bosque de Proteccion de Alto Mayo, alternately abbreviated as “BPAM” or “AMPF”) from the neighboring region of Cajamarca. What he didn’t know is that he was moving into a protected area, and that the unsustainable farming methods he was using – like burning and clearing the forest to plant crops – was destroying a critically-important ecosystem.

The world needs these dense tropical forests to absorb carbon dioxide and emit oxygen, which is one of the many reasons environmental NGO Conservation International, (CI) launched a REDD (reducing emissions from deforestation and degradation) project here nearly five years ago.

Last year, the Alto Mayo REDD+ project was validated under the Verified Carbon Standard (VCS) as well as the Climate, Community and Biodiversity Standard (CCB).

Prior to the project’s validation, Disney, in a landmark move, donated $3.5 million to CI’s work in Alto Mayo contributing significantly to what the project has been able to achieve thus far.

The Arc of Deforestation

The story of the Alto Mayo REDD+ project began around 2008 and it involves 419 farmers and their families as much as it does CI and Disney. At the time, Disney was looking to offset the environmental impact of their resorts by preserving a forest or ecosystem and had reached out to CI for suggestions. CI presented them with two nations containing endangered rainforest that needed saving- the Democratic Republic of Congo and Peru. Disney decided to start with Alto Mayo in Peru.

“In recent years, the protected areas had been violated,” says Luis Espinel, director of CI in Peru.

It had been violated by people like Guevara moving into the region, chopping down trees and planting coffee plants. CI estimates that since Alto Mayo’s creation in 1987, 3,000 families have moved into the 182,000 hectares of forest.

At first, the Peruvian government, preoccupied with successive economic crises and security challenges, failed to enforce the law of a protected area, allowing shifting cultivation and logging activities to penetrate the buffer zone.

People were settled on the land by the time the government attempted to respond. In an effort not to make matters difficult for the settlers, the state permitted that they remain in the protected area so long as they practice sustainable agroecology, which applies ecology to agricultural systems, and sign Conservation Agreements or CA’s – an accord with land owners that defines a concrete conservation outcome.

“The idea was to give them instruments to continue farming, but without violating the Forest of Alto Mayo”, says engineer Maximo Arcos, who advises the project.

Agree and Maintain

As part of the CA, Arcos says, each farmer was offered a technical package containing instructions for planting. The package discouraged using herbicides and included training on how to sow coffee in a way that’s compatible with the growth of native trees. The CA benefited the local people as much as it did the ecosystem. Their unsustainable farming practices had been depleting the soil, which forced farmers to relocate and cut down trees constantly in order to reach healthy soil.

Espinel also pointed out that because the farmers practiced sustainable agriculture, they avoided the devastating disease known as coffee rust that decimated 20% of Peru’s total coffee production one year, according to the Ministry of Agriculture.

Guevara and other farmers were able to improve production and avoid pests thanks to CI’s REDD project. Along with the agricultural training the project provided, CI offered the local populations medical equipment, educational materials and jobs patrolling the forests. In return, the locals promised to participate in reforestation and not cut down the forest anymore.

Carbon Truth

While VCS verified the carbon impacts, CCB also measures the project’s effects on communities as well as on the local plant and animal life. The standard confirmed the local life had improved with the REDD project and the CAs. This means 420 species of birds and 50 species of mammals, including the yellow-tailed woolly monkey that is found only in the Peruvian Andes, benefitted.

So far, the project has generated 3 million tons of emissions reductions, which is the equivalent of taking 500,000 cars off the roads for one year, according to Espinel. Disney’s contribution resulted in a 400,000 ton reduction of carbon emissions helping to shrink the giant companies’ ecological footprint.

Disney’s cruise and resorts generate a significant amount of emissions which is why it is becoming involved in projects that mitigate GHG emissions. Working with CI to curb high deforestation rates is a key front in combating climate change. Deforestation generates more emissions than the transportation sector especially when linked to the livestock sector in South America.

Disney has agreed, as part of its environmental commitments, to another grant of $3.5 million to CI’s work in Alto Mayo. Disney is also considering showing films about Alto Mayo on their cruise ships.

Caring for the green and water

What else can be done for this wonderful place? At nearly 5pm, before the forest is hidden in fog, a person can see to the ends of the forest. But there are still dozens of families who unknowingly destroy the forest by felling trees to grow coffee. Alto Mayo has a variety of orchids species, as well, that are put in jeopardy by poor land-use practices.

CI is aware of this and has partnered with SERNANP (National Service of Protected Natural Areas by the State or Servicio Nacional de íreas Naturales Protegidas por el Estado) to improve management of the forest. They now have 26 rangers patrolling the area opposed to the 10 they had before CI’s project.

Patrolling the forest is essential. On the way to Guevara’s farm, for instance, there are trees down and logs stacked together waiting to be burned. Conservation rangers, in addition to more and more residents signing CAs, could help mitigate this deforestation.

It may not be the perfect setting (the ideal situation would have been for Alto Mayo to have been protected since its founding) but at least today Alto Mayo has achieved some system of conservation and has regained some of what has been lost over the years. The future looks far more promising than it did a few years ago. And as Espinel points out, the forest is useful as well as beautiful.

“It supplies water to many communities living in the vicinity,” he says.

The Alto Mayo ecosystem supplies the 200,000 people living in this vicinity with clean water that they use in their homes as well as to water their crops. The area is replenished with rainwater that runs over trees and through the grooves of lush hills to fill the entire ecosystem. Cutting down the trees deprives the forest and perhaps those who live around it, of a full life.

Dispel the Mist

Trees also create a home for those 420 bird species and 50 mammal types as well as amphibians, reptiles and insects. As in many of Disney’s well-known films, man and animal should care for the Earth responsibly.

As for Guevara, the changes still seem exciting and he is eager to discuss how his way of life and farming techniques have been transformed.

The fog suddenly lifts around Guevara’s farm allowing the sun to shine through. Below, the chopped logs still lie on the ground, but here you can breathe the smell of coffee and perhaps the smell of hope.

The REDD Offset Working Group or ROW is the group tasked with finding best practices to incorporating REDD+ into California’s emerging carbon market. This week, the group held its second of three workshops. The event heard from Indigenous leaders and policy experts on safeguards and the importance of stakeholder engagement.

28 March 2013 | Using the REDD+ mechanism to fight deforestation and climate change involves a complicated and lengthy process that crosses over several sectors. Because of its complex nature, Valentino Shal of the Mopan Maya Indigenous people says multi-stakeholder engagement is key to REDD’s success.

Shal is an Indigenous Social Development Consultant for the Mopan Maya community in southern Belize-a region offering pristine rainforest, mountains and rivers. It’s an area that could easily work for a REDD (reducing emissions from deforestation and degradation) project and many of the locals want it to. But before they can move forward, Shal says, certain safeguards must be in place to ensure that the rights of the Indigenous tribe regarding their land and culture won’t be violated and their way of life remains intact.

Shal’s concerns are commonplace among Indigenous groups worldwide contemplating participating in REDD projects. To address these concerns, the ROW-REDD Offset Working Group initiated an in-depth panel event made up of environment and social policy experts as well as Indigenous leaders to discuss how to build a sufficient safeguard system in the context of linking these jurisdictional-national or subnational- REDD+ programs to California’s carbon market.

The ROW was established to examine and offer recommendations on how states and countries can develop REDD+ programs and generate credits through California’s cap-and-trade system. Their event, “Benefits Sharing and Safeguards” also looked at how California should recognize existing safeguard policies as well as how the monitoring and reporting of these safeguards should take place.

Cross-Sector Engagement

“Indigenous people need to have access to information,” says Tashka Yawanawa, Chief of the Yawanawa People in Acre, Brazil. “We need information to make decisions that will reflect on our future and the planet.”

The Indigenous leaders agreed that without transparent information regarding REDD, they would be unable to make decisions. Access to information was one of several reasons policy leaders recognized the need to involve every area of stakeholders in the REDD process.

Jill Blockhus, a Senior Policy Advisor at The Nature Conservancy discussed the REDD+ SES (Social and Environmental Standards) initiative which aims to secure the necessary safeguards in place when building a government-led national, state or local level REDD program. REDD+ SES generates social benefits by protecting the rights of the local and Indigenous populations. All stakeholders-NGOs, financing agencies, governments and others-can use the standards.

“Following the standards is a multi-stakeholder process and very interactive,” says Blockhus. “It goes above and beyond the do no harm idea of safeguards.”

Complying with these standards is purely on a voluntary basis. State or country governments agree and sign up to participate.

“Governments agree because they see that there is value in planning a REDD process which engages a lot of stakeholders, gets their input and help in the design phase so the program ends up with good environmental and social performance,” says Blockhus.

Acre, Brazil is one state applying the standards to their REDD program, which is being developed under the System of Incentives for Environmental Services (SISA). REDD+SES will be used to assess the social and environmental quality of the program in its early days.

“REDD+ SES is an instrument that can report and communicate the impacts and results of the SISA and also to monitor the Brazilian safeguards,” says Monica Julissa of the Acre government’s Institute of Climate Change and Environmental Services.

SES can help engage stakeholders that are often hard to reach. Despite the many attempts at outreach, reaching key actors is a challenge, says Felicia Line, the Director of Climate Change in the Chiapas Ministry of Environment. Chiapas, Mexico is a region heavily inhabited by Indigenous groups. Line says engaging with people from crucial sectors like agriculture, livestock and forestry is necessary and so Line is looking at further capacity building and other ways to engage.

Reaching out to different sectors inside communities, like the young and elderly, and also to women is a challenge as well. In many societies, women aren’t involved in these issues.

In Belize, Shal says they intend to create special measures to ensure women are engaging.

“We don’t see our communities as static,” Shal says. “If we feel women need to be involved, then we will find those measures needed for their participation.”

Line also suggested educational activities about climate change and REDD may help involve women and other sectors that aren’t traditionally involved.

Land Rights and Benefits Sharing

Chief Almir Narayamoga Suruí­, the head of the Amazonian Surui people, has developed a 50 year sustainable management plan that includes a forest carbon project that protects 240,000 hectares of rainforest and ensures a greater livelihood for his people through the generation of carbon credits the project offers.

REDD can be done in a transparent manner and can help provide a great future, he says.

But other indigenous leaders are still unsure about REDD and say they need more information.

“Those that are against REDD+ do not have sufficient information and those that support REDD+ do not have sufficient information,” says Juan Reategui, the Technical Coordinator for COICA (Coordination of the Indigenous Organizations of the Amazon Basin).

Indigenous people fear relocation and losing or being tricked out of their land rights by project developers and others. But Steve Schwartzman of the EDF (Environmental Defense Fund) says a primary difference of a jurisdictional REDD+ program-which is the program type that would be accepted in California’s carbon market-is that the government has more authority in the form of enforcing contracts or implementing policies that protect Indigenous peoples’ rights.

“Jurisdictions can do things that project developers and NGOs can’t,” says Schwartzman. For example, in Brazil, each state is constitutionally responsible for protecting the environment and the rights of Indigenous people. And Brazil’s Federal Public Ministry enforces these public interest laws, he says.

“It’s a forum that deals with these issues directly,” says Schwartzman.

Also at the jurisdictional level, relocating indigenous people to earn carbon credits won’t work, according to Schwartzman. In order to earn credits, there has to be a statewide or nationwide reduction of emissions which won’t be achieved by relocating an Indigenous community off of one piece of land.

Julissa of Acre and Line of Mexico both said relocation isn’t part of their government’s strategies.

In order to maintain low deforestation rates, Julissa says, we have to use the forests’ services sustainably. Relocating people out of a single area isn’t a sustainable method, she says.

“I don’t ever see relocation happening in Belize. I don’t think it’s something that is being considered by Indigenous communities, governments or NGOs. ” says Shal.

Nations agree that Indigenous communities are often good stewards of the land. And as a valuable part of REDD programs, the question of what benefits sharing will look like for these communities has been raised.

Because Indigenous communities are collective, Reategui of COICA believes the benefits should be collective as well. Improvements to a community’s education and health are possibilities. Reategui did point out also that the benefits should maintain the traditional culture and way of life. A benefit, for instance, could be an education program in their native language.

Elsa Esquivel , Director of Cooperativa AMBIO, a NGO located in Chiapas that works with Indigenous people in developing REDD projects, says there are many unknowns about benefits sharing.

“Where should the benefits be applied,” says Esquivel. “Is it going to be direct resources or compensatory programs for improving health or productivity? These are the things that are still unclear.”

Outlook

Overall the opportunity for California to accept REDD credits from jurisdictions like Acre and Chiapas at some point in the future sends a message to business leaders that a market value has been put on stopping deforestation, Schwartzman says.

The panelists agreed that REDD+ programs created to participate in California’s market must be at the jurisdictional level and designed with the local and Indigenous populations in mind. So although California can’t force any jurisdiction to implement safeguards, it can require that certain protection measures are taken in order to participate.

Schwartzman also notes the importance of protected areas recognized for the ecosystem services they provide and to become part of a developmental policy that is sustainable. Otherwise the area will be difficult to maintain. He mentions that 20% of Amazon rainforest is recognized as a protected area for Indigenous populations and another 20% is under strict sustainable usage.

“If these lands could gain revenue for their ecosystem services, then that is a huge gain for the Amazon,” says Schwartzman. “And an enormous gain for the atmosphere and for the world.”

The REDD Offset Working Group or ROW is the group tasked with finding best practices to incorporating REDD+ into California’s emerging carbon market. This week, the group held its second of three workshops. The event heard from Indigenous leaders and policy experts on safeguards and the importance of stakeholder engagement.

28 March 2013 | Using the REDD+ mechanism to fight deforestation and climate change involves a complicated and lengthy process that crosses over several sectors. Because of its complex nature, Valentino Shal of the Mopan Maya Indigenous people says multi-stakeholder engagement is key to REDD’s success.

Shal is an Indigenous Social Development Consultant for the Mopan Maya community in southern Belize-a region offering pristine rainforest, mountains and rivers. It’s an area that could easily work for a REDD (reducing emissions from deforestation and degradation) project and many of the locals want it to. But before they can move forward, Shal says, certain safeguards must be in place to ensure that the rights of the Indigenous tribe regarding their land and culture won’t be violated and their way of life remains intact.

Shal’s concerns are commonplace among Indigenous groups worldwide contemplating participating in REDD projects. To address these concerns, the ROW-REDD Offset Working Group initiated an in-depth panel event made up of environment and social policy experts as well as Indigenous leaders to discuss how to build a sufficient safeguard system in the context of linking these jurisdictional-national or subnational- REDD+ programs to California’s carbon market.

The ROW was established to examine and offer recommendations on how states and countries can develop REDD+ programs and generate credits through California’s cap-and-trade system. Their event, “Benefits Sharing and Safeguards” also looked at how California should recognize existing safeguard policies as well as how the monitoring and reporting of these safeguards should take place.

Cross-Sector Engagement

“Indigenous people need to have access to information,” says Tashka Yawanawa, Chief of the Yawanawa People in Acre, Brazil. “We need information to make decisions that will reflect on our future and the planet.”

The Indigenous leaders agreed that without transparent information regarding REDD, they would be unable to make decisions. Access to information was one of several reasons policy leaders recognized the need to involve every area of stakeholders in the REDD process.

Jill Blockhus, a Senior Policy Advisor at The Nature Conservancy discussed the REDD+ SES (Social and Environmental Standards) initiative which aims to secure the necessary safeguards in place when building a government-led national, state or local level REDD program. REDD+ SES generates social benefits by protecting the rights of the local and Indigenous populations. All stakeholders-NGOs, financing agencies, governments and others-can use the standards.

“Following the standards is a multi-stakeholder process and very interactive,” says Blockhus. “It goes above and beyond the do no harm idea of safeguards.”

Complying with these standards is purely on a voluntary basis. State or country governments agree and sign up to participate.

“Governments agree because they see that there is value in planning a REDD process which engages a lot of stakeholders, gets their input and help in the design phase so the program ends up with good environmental and social performance,” says Blockhus.

Acre, Brazil is one state applying the standards to their REDD program, which is being developed under the System of Incentives for Environmental Services (SISA). REDD+SES will be used to assess the social and environmental quality of the program in its early days.

“REDD+ SES is an instrument that can report and communicate the impacts and results of the SISA and also to monitor the Brazilian safeguards,” says Monica Julissa of the Acre government’s Institute of Climate Change and Environmental Services.

SES can help engage stakeholders that are often hard to reach. Despite the many attempts at outreach, reaching key actors is a challenge, says Felicia Line, the Director of Climate Change in the Chiapas Ministry of Environment. Chiapas, Mexico is a region heavily inhabited by Indigenous groups. Line says engaging with people from crucial sectors like agriculture, livestock and forestry is necessary and so Line is looking at further capacity building and other ways to engage.

Reaching out to different sectors inside communities, like the young and elderly, and also to women is a challenge as well. In many societies, women aren’t involved in these issues.

In Belize, Shal says they intend to create special measures to ensure women are engaging.

“We don’t see our communities as static,” Shal says. “If we feel women need to be involved, then we will find those measures needed for their participation.”

Line also suggested educational activities about climate change and REDD may help involve women and other sectors that aren’t traditionally involved.

Land Rights and Benefits Sharing

Chief Almir Narayamoga Suruí­, the head of the Amazonian Surui people, has developed a 50 year sustainable management plan that includes a forest carbon project that protects 240,000 hectares of rainforest and ensures a greater livelihood for his people through the generation of carbon credits the project offers.

REDD can be done in a transparent manner and can help provide a great future, he says.

But other indigenous leaders are still unsure about REDD and say they need more information.

“Those that are against REDD+ do not have sufficient information and those that support REDD+ do not have sufficient information,” says Juan Reategui, the Technical Coordinator for COICA (Coordination of the Indigenous Organizations of the Amazon Basin).

Indigenous people fear relocation and losing or being tricked out of their land rights by project developers and others. But Steve Schwartzman of the EDF (Environmental Defense Fund) says a primary difference of a jurisdictional REDD+ program-which is the program type that would be accepted in California’s carbon market-is that the government has more authority in the form of enforcing contracts or implementing policies that protect Indigenous peoples’ rights.

“Jurisdictions can do things that project developers and NGOs can’t,” says Schwartzman. For example, in Brazil, each state is constitutionally responsible for protecting the environment and the rights of Indigenous people. And Brazil’s Federal Public Ministry enforces these public interest laws, he says.

“It’s a forum that deals with these issues directly,” says Schwartzman.

Also at the jurisdictional level, relocating indigenous people to earn carbon credits won’t work, according to Schwartzman. In order to earn credits, there has to be a statewide or nationwide reduction of emissions which won’t be achieved by relocating an Indigenous community off of one piece of land.

Julissa of Acre and Line of Mexico both said relocation isn’t part of their government’s strategies.

In order to maintain low deforestation rates, Julissa says, we have to use the forests’ services sustainably. Relocating people out of a single area isn’t a sustainable method, she says.

“I don’t ever see relocation happening in Belize. I don’t think it’s something that is being considered by Indigenous communities, governments or NGOs. ” says Shal.

Nations agree that Indigenous communities are often good stewards of the land. And as a valuable part of REDD programs, the question of what benefits sharing will look like for these communities has been raised.

Because Indigenous communities are collective, Reategui of COICA believes the benefits should be collective as well. Improvements to a community’s education and health are possibilities. Reategui did point out also that the benefits should maintain the traditional culture and way of life. A benefit, for instance, could be an education program in their native language.

Elsa Esquivel , Director of Cooperativa AMBIO, a NGO located in Chiapas that works with Indigenous people in developing REDD projects, says there are many unknowns about benefits sharing.

“Where should the benefits be applied,” says Esquivel. “Is it going to be direct resources or compensatory programs for improving health or productivity? These are the things that are still unclear.”

Outlook

Overall the opportunity for California to accept REDD credits from jurisdictions like Acre and Chiapas at some point in the future sends a message to business leaders that a market value has been put on stopping deforestation, Schwartzman says.

The panelists agreed that REDD+ programs created to participate in California’s market must be at the jurisdictional level and designed with the local and Indigenous populations in mind. So although California can’t force any jurisdiction to implement safeguards, it can require that certain protection measures are taken in order to participate.

Schwartzman also notes the importance of protected areas recognized for the ecosystem services they provide and to become part of a developmental policy that is sustainable. Otherwise the area will be difficult to maintain. He mentions that 20% of Amazon rainforest is recognized as a protected area for Indigenous populations and another 20% is under strict sustainable usage.

“If these lands could gain revenue for their ecosystem services, then that is a huge gain for the Amazon,” says Schwartzman. “And an enormous gain for the atmosphere and for the world.”

Support for allowing international offset credits based on reducing deforestation and forest degradation (REDD+) in California’s cap-and-trade program predates the program’s launch. Months after the state’s carbon mitigation program became fully operational, the REDD+ Offset Working Group presents its draft recommendations for the inclusion of REDD+ credits in the Golden State’s program – here we unpack the domestic and international importance that state endorsement carries.

FEBRUARY 21, 2013 | In November 2010, the Governors of California, Chiapas and Acre – all members of the Governors’ Climate and Forests Task Force (GCF) – signed a Memorandum of Understanding to promote collaborative efforts to reduce emissions from deforestation and forest degradation (REDD+). Through the MOU, the REDD+ Offset Working Group (ROW) was created February 2011, tasking 11 technical experts with providing guidance on the policy, legal framework and performance standards participating governments should consider regarding the recognition of REDD-based offsets in California’s recently launched cap-and-trade program. One year later, the ROW releases its draft recommendations, presenting a number of architectural options for REDD+ in California’s program, and – of equal importance – a sign that REDD+ inclusion is possible.

The group is also co-hosting a series of three workshops with three California-based universities; each workshop is focused on different, REDD+ topics. The first workshop was held in Stanford University on February 5th, providing an overview of the recommendations and discussion on reference levels; monitoring, reporting and verifying (MRV); and additionality.

Among the key takeaways of the workshop was a clarification of the type of REDD+ scheme that the group is advocating for (i.e. jurisdictional REDD+). Jurisdictional REDD+ presents an opportunity for both developing countries to include current, stand-alone REDD+ projects in broader REDD+ schemes, and developed countries to invest in programs with a greater permanence and lower leakage probability than stand-alone projects.

There’s more where that came from…

The issue of supply was also addressed in the recommendations on the assumption that Brazil’s Acre and Mexico’s Chiapas are the “Partner Jurisdictions”. If so, the potential supply of REDD+ credits stemming from Partner Jurisdictions is higher than the approximately 100 million tons of international, sector-based, CO2 offsets that California would allow through the program’s first three compliance periods.

According to the ROW, California is currently the only greenhouse gas (GHG) compliance system that is “actively considering the inclusion of REDD+ in its program.” Consequently, the state’s verdict on REDD+ offsets could influence similar decisions other countries are simultaneously facing regarding REDD+ support.

ROW member Dan Nepstad, who is the Amazon Environmental Research Institute (IPAM)’s International Program Director, adds that one of the overarching aims behind the recommendations is “for the California model to be adopted by other cap and trade programs or pay-for-performance strategies, hopefully helping Partner Jurisdictions become compatible with other systems.”

In good company

With an exemplary trajectory in domestic environmental policy, it is no wonder California is not planning on taking on just any partners in this potential linkage. Environmental Defense Fund (EDF)’s Director of Tropical Forest Policy and ROW member Steve Schwartzman says, “California regulators have been consistently clear that any [international] offset providers would have to prove they’re making their own effort.” Recognizing the economic incentive behind allowing regulated entities to use offsets over allowances, Schwartzman goes on to say, “California doesn’t just want to lower compliance costs, it also wants to be an international environmental leader.”

Knowing this pre-existing requirement, the ROW suggests that Acre and Chiapas demonstrate their own effort in reducing emissions by setting a crediting baseline lower than the jurisdiction’s reference level, leading once more to the possibility of a greater supply than Californian demand of REDD+ credits. However, there are two important areas to note at this point – own effort from current and potential Partner Jurisdictions and additional sources of demand.

“A” for effort

In terms of own effort, the states of the Brazilian Amazon, including Acre, have already achieved emission reductions comparable to reductions from all European Union countries from 2008 to 2010 at a fraction of the cost – a 1/1000th of the cost approximately – while increasing agricultural and cattle expansion, demonstrating that states have the capacity and motivation to create significant changes in their rural development business models. Additionally, the Governor of Acre along with the Governor of Mato Grosso – another member of the GCF – has mentioned that their primary concern is not full compensation for all emissions reductions achieved.

According to Nepstad, the Brazilian jurisdictions are focused in the near term, mainly on covering costs of their REDD programs and attracting new investments into their states.

Chiapas – despite not having the emission reduction figures, monitoring technology nor legal framework of Acre – has also shown initiative to partake in REDD+ through numerous stakeholder consultations. The Mexican state stands a few years behind Acre in terms of preparedness to engage with California; however, the process of recognizing and transacting REDD+ credits may also take a few years, during which the state can continue adding to their “own efforts” and building the capacity necessary to implement a jurisdictional REDD+ scheme appropriate for linkage with California’s program.

The road that needs to be taken

Despite some Partner Jurisdictions possibly not seeking to gain monetary profits for their reductions in the near term, remuneration covering reduction costs is still necessary. For these expenses, Partner Jurisdictions will have to seek financing pathways that are available today – including national, multilateral and bilateral sources.

In terms of alternative markets, the ROW notes that “the administrative burden of selling to multiple markets could be reduced if the Partner Jurisdictions issue credits themselves for reductions achieved under their own programs or register these reductions with widely recognized third-party programs where a single ‘currency’ could potentially serve a variety of voluntary and regulatory markets.” Considering these comments, partnering with an independent carbon standard – like Acre, Costa Rica and Chile have – might be beneficial. The ROW recommends that Partner Jurisdictions that are improving their capacity to accurately measure their forest carbon emissions should qualify for more credits – inside or outside of California’s system.

What lies ahead?

The recommendations naturally have received mixed feedback from a broad spectrum of REDD+ actors. The ever-present concerns over safeguards and MRV capabilities remain at the top of the areas of apprehension list. Concerned stakeholders have an opportunity to voice their concerns at upcoming workshops and in writing during the recommendations’ public commenting period, which will be open until April 30th. Shortly after the comment period, final recommendations will be presented to the Governors of Acre, California and Chiapas.

The group hopes to see California take action on the topic in the next few years. “In terms of rule-making, if there is an appetite for moving forward with including REDD+ credits in the program, we could see the state making moves starting next year,” says ROW member Toby Janson-Smith, Conservation International’s Senior Director of Forest Carbon Markets. “It’s reasonable to say that we could see credits in California’s [cap-and-trade] program in the second compliance period,” scheduled to begin 2015.

Meanwhile, the ROW’s next workshop – focusing on benefits sharing and safeguards – is programmed for March 26th at the University of California, Davis.

Additional resources

This story has been adapted from Rachael Petersen’s blog. You can view the original here.

31 January 2013 | Cacoal | Rondí´nia | Brazil | Here are three things you should never leave home without in the Amazon: water, insect repellent, sunscreen.

And if you’re Chief Almir Narayamoga of the Surui, make sure to remember your high-tech video recording sunglasses.

New field sites often require weeks of cultivating trust, understanding, and the relationships to yield interesting work. Which is why when I first arrived at the Associacao Metareilí¡ headquarters outside the city of Cacoal in the state of Rondí´nia, Brazil, clad in a long flowing skirt and Chaco sandals, I expected a calm day of office humdrum: researching, talking to my Surui colleagues, reading over their 50-year plan. But when Almir invited me to track down reported illegal logging in the territory, I couldn’t say no.

Hours and kilometers into the jungle, I realize: the Amazon itself is now my office. And I should never leave home unprepared to face it.

Things in the territory are tense. Loggers continue to lodge death threats against Almir, the leader of the indigenous Paiter Surui people, due to his efforts to protect the forest in his territory, La Sete de Setembro. As I write this, one of Almir’s ever-present personal bodyguards from the Brazilian Força Nacional sits to my left polishing his automatic weapon with a pink toothbrush.

How absurd, I thought to myself as we trekked together through the oppressive humidity of the Amazon, that preserving nature has become a matter of life or death, the source of animosity and aggression. The situation speaks to the specific importance of exploiting natural resources to the local economy as well as to the general human tendency to overvalue immediate gains and underestimate long-term costs.

“People think the forest will never end, like they think water will never end,” Almir says. “But one day, the forest could end. We need to have that vision.”

At a distance- from planes and satellites imaging-the Sete de Setembro territory looks like an island of trees amid a sea of historical deforestation. So for many local loggers, the Surui sit on a pot of gold to be exploited at all costs. But for Almir, the forest- of priceless importance to the Surui life and culture- can be protected by stimulating economic alternatives to logging. This vision’s supported by countless partners like USAID and Google and strengthened by the use of digital tools-has earned the Surui international attention. Their visionary 50-year life plan calls for an end to the unsustainable logging that serves as the historical financial lifeline in the territory and proposes economic alternatives such as commercialization of agricultural and artisanal goods and payment for ecosystem services. The Surui hope that others will pay them for preserving the forest in the form of carbon credits for avoided deforestation. This money will enter a locally administrated fund that will support an environmentally and socially-sustainable future in the territory.

It is a high-stakes game of indigenous peoples, governments, international NGOs and investors. It is a game that requires extensive monitoring of the forest to document illegal incursions that compromise this sustainable vision. Traditional knowledge of their territory must be writ digital through photographs and gmapping to render public forest conservation progress. So when the Metareilí¡ office received an anonymous tip last week that someone cut down trees in the territory, Almir and team had to conduct the due diligence that puts such incidents on the literal and figurative map.

Our trip from the Metareilí¡ office to the territory’s border lasted a grueling hour and a half. The Força Nacional truck shook as it passed over pocked dirt roads. A cocktail of antibiotics, antimalarial medication, and coffee stirred in my stomach; I was sure I would vomit. “Don’t do it don’t don’t do it,” I chanted to myself, acutely aware that such a sign of fragility could mark me as a woman incapable of tolerating Amazonian conditions. Surprisingly, I deep-breathed my way through the journey and we reached the village of chief Almir’s family, Lapetanha. After a short conversation, we were on our way again, off to search out the loggers.

We ran into trouble when our two trucks reached a bridge, or really, two deteriorating logs aligned with the wheels of the truck. Almir’s truck crossed first, but the front left wheel quickly fell between the logs. Using a cable mounted on the front of the Força Nacional truck, we towed the fallen truck from out between the logs. Deciding we could not cross, we-Almir, two guards, myself, and four other Surui-continued on foot.

Which is how I found myself ankle-deep in reddish clay mud last Friday with Chief Almir and other Paiter-Surui colleagues, hiking fifteen kilometers on the tails of illegal loggers. The sun beamed threats at my fair skin, made even more sensitive by a daily dose of antimalarials. The humidity rivaled a Houston summer. Almir joked about my sweat-soaked hair; others would later express surprise that a young American girl made it through the exhausting hike.

The path we traced through the territory was fresh, recently trampled by loggers. Two hours into the walk, we encounter freshly-cut logs, their shameless tan nakedness a startling interruption in the surrounding deep-green abyss. I waited behind talking with a colleague while others followed a small path to find a patch of stumps. Having found the evidence we sought, we returned to our abandoned trucks a few hours later, exhausted, having gone without food or water for hours. We stop in Almir’s aldea for water, chica, and bananas before making the long return to Cacoal.

The next evening, Almir invited me to his house for roasted wild boar. On the way, we also picked up Steve Zwick, an American journalist and the managing editor for Ecosystem Marketplace, who had arrived to work on his biography of Almir, to be published this year.

Steve asked if Almir video recorded our mission the previous day. “Yes,” he responded. But I was certain I saw no video cameras on our trek.

“Uh, he didn’t record anything in my presence,” I interjected.

“I recorded it all with my eyes, with my glasses,” Almir insisted. He must be joking, I thought, speaking metaphorically, or perhaps making light of his lapse.

But after dinner, he retrieved a pair of Oakley-style sunglasses from his living room. “I recorded everything with these,” he stated, indicating a small, unmistakable camera lens in the middle of the nose bridge. He had bought them during a trip to Switzerland, he confessed, aware they could aid in documenting the forest.

I launched into laughter. “You had no idea I was filming?” Almir asked me. “No!” I said, half afraid he caught embarrassing footage of my mud-covered huffing and puffing from the previous day. He modeled the sunglasses for us and began recording,joking that he was creating an informational video about Americans.

He removed a small memory card from the sunglasses and inserted it into his computer. The video from our trek-of surprisingly high quality- revealed the destruction of the forest we witnessed, including the roads, freshly cut wood, and stumps bespeaking invasion. Indeed, Almir had captured our jungle trek through his eyes, branded in memory but packaged in MegaBytes.

“This shows that indigenous peoples are doing their job,” Steve admired, “they’re doing the work.”

Almir has witnessed tremendous turmoil within his tribe, which was first contacted in 1969. He now hopes to witness a brighter future- one in which his peoples financial riches do not depend on depleting their remaining natural riches. And with the help of technology, the Surui will not witness this change alone. Their traditional knowledge and surveillance of their lands can be transmitted to the world via videos and maps. But Steve is right: it is not the technology or fancy camera-sunglasses that do the work in the territory, it is the people. And despite being the subject of flashy headlines ( Tribe saves the forest using internet), the Surui have a lot of work ahead of them. I certainly have the sunburn, insect bites, and muscle aches to prove it.

The United Nations and World Bank are spearheading efforts to help developing countries get ready for REDD, but many countries across Latin America are tapping a combination of World Bank donors and independent carbon standards to make sure they’re ready for REDD when it arrives. Costa Rica and Chile are among the most advanced. Here’s a look.

28 January 2013 | Both Costa Rica and Chile suffer from high rates of deforestation, which means both can earn carbon credits by saving their rainforest and reducing emissions from deforestation and forest degradation (REDD). For that to happen in a way that is recognized under the United Nations Framework Convention on Climate Change (UNFCCC), however, the countries must first develop national accounting procedures to keep track of their forests and monitor the activities designed to save them.

Even if they do, a global agreement under the UNFCCC is years away and does nothing to combat deforestation now. So, the countries have begun developing REDD programs today that can be absorbed into the national accounting systems that eventually emerge. It’s a procedure called nesting, and it’s being practiced around the world – from Peru to Vietnam.

Costa Rica and Chile, however, have signed formal agreements with the Verified Carbon Standard (VCS) to develop their nesting strategies – becoming the first countries to formally involve an independent standard in the development of their REDD strategies. In addition, both countries are using their established forest conservation schemes as their starting point, giving them the credibility they need to attract both external investors and local participants. By taking these steps, they are broadening Latin America’s efforts to supply forest carbon credits and testing nesting procedures that others can learn from and emulate.

Chile’s National Forestry Corporation (CONAF) of the Ministry of Agriculture signed its agreement with VCS on November 2012, becoming the first national government to formally partner with an international carbon standard to address forest-related emissions at a national level. Months after, Costa Rica’s National Fund for Forest Finance (FONAFIFO) followed, signing on to a similar nesting-focused agreement to help the country reach its goal of carbon neutrality by 2021. Each country also has agreements with the World Bank’s Partnership for Market Readiness (PMR) and Forest Carbon Partnership Facility (FCPF).

Why it matters

This past year, Costa Rica became the first country to receive approval to access performance-based payments through the Carbon Fund under the FCPF. As part of Costa Rica’s Carbon Fund proposal, they are projecting emission-reductions close to 29.5 million tons of carbon dioxide (MtCO2) by the year 2020. Approximately half of these emissions (12.6 MtCO2) would be offered to the Carbon Fund, while the remaining would be put forward to other compliance market buyers, including through the Clean Development Mechanism (CDM).

At the same time, Costa Rica is expecting to generate an additional 30.4 MtCO2 for the voluntary market – of which only 2 MtCO2 can be sold domestically. For the program to succeed, any credits generated have to appeal to international buyers, and that’s where the formal engagement with VCS comes in, according to FONAFIFO REDD Strategy Director Alexandra Saenz Faerron.

“We knew that our program needed to have a seal of quality and recognition and that VCS was an accepted international standard,” she says.

Chile, meanwhile, is working with the PMR to develop a national emissions trading scheme (ETS). The project is being directed under the Ministry of Energy, which oversees Chile’s greatest emitting sector; however, CONAF sits on the steering committee and is advocating for the inclusion of the forest sector in early actions/assessments under this ETS effort.

“Chile is using the international trends seen in REDD+, NAMAs and CDM to formulate an adequate, national forest and climate change strategy, taking into consideration the local situation of the forests and soils feasible to forest that the country has, owing to the national voluntary commitment to reduce at least 20% of the emissions projected to the year 2020,” says  Angelo Sartori, CONAF’s Chief Technical Secretariat for Forest Management and National Coordinator of Forest and Climate Change.

Demand

Domestic demand is limited by the countries’ size and the fact that both are developing countries – or “non-Annex I” under the UNFCCC – which means neither is obligated to reduce emissions. Additional demand, however, may come from positioning REDD as a “Nationally-Appropriate Mitigation Activity” (NAMA).

Sartori says Chile is working with Switzerland in a forestry NAMA – beginning with a study on current and potential demand at both the domestic and international level, among other initiatives.

Costa Rica, meanwhile, plans on tapping into the regulated market as a supplier in the near-term with the recent registration of their reforestation project, CoopeAgri, under the UNFCCC’s CDM. German Obando, a consultant for FONAFIFO, also says early stage discussions are being raised within FONAFIFO about establishing a regulatory framework at the national level in the long-term.

Social aspect

Representatives from both countries’ project proponents state they have contemplated pursuing social and environmental standards, which provide a value-add to carbon credits, but they are anticipating reaching that area in a later stage. In Chile’s case, Sartori says, “First we’ll put our strategy to use and then we’ll start adding on these different themes to bring more potential to the country in terms of the credits.”

Both countries are REDD countries under the FCPF and are following the FCPF’s social safeguards requirements already; therefore, both Chile’s Sartori and Costa Rica’s Saenz state they hope that will facilitate transitioning into a social and environmental standard, such as the Climate, Community and Biodiversity Standard.

For Costa Rica in particular, biodiversity is heavily being weighed in the discussion considering the species richness of the country. With a land mass comparable to West Virginia – approximately 0.3% of the world’s land mass, Costa Rica is home to 4% – or around 500,000 – of the world’s species, making the country the highest worldwide in biodiversity density and one of the top 20 countries with the highest overall biodiversity. Given these numbers, co-benefits stemming from biodiversity could be significantly high for Costa Rica.

Where they stand now

In the meantime, both countries are working on strengthening their national REDD+ strategies, which are to include nesting frameworks. In Costa Rica, Obando says they are pushing to include harvested wood products in the scheme given that the country’s wood production potential far exceeds its domestic consumption. By bringing harvested wood products to the table, they intend to incentivize the private sector to invest in the sustainable management of harvested wood products, with the end goal of bringing private sector investment to the country’s national Payment for Ecosystem Services program, upon which their Carbon Fund proposal is based on.

In Chile, the diffusion phase of their national forest and climate change strategy, inclusive of REDD+ concepts, with all types of stakeholders is well on its way, according to Sartori. The country is “spinning” the initiative as voluntary and complementary to the subsidies CONAF grants to property owners for sustainable forest management and reforestation. In this manner, property owners are already involved in forest-related initiatives and may opt to “add-on” carbon credit generation.

It is clear that both countries have similar ambitions to reduce their forest-related emissions using their country-specific resources – whether that is a ten-year PES program or a new market analysis. With their recent VCS partnership, we’ll have to see how these agreements factor into the trajectory of each country’s forest carbon initiatives.

24 January 2013 | Today, Maryland-based project developer CarbonCo, LLC announced the validation of its pilot project to reduce emissions from deforestation (REDD) in Brazil’s Acre state. It also announced its first contract to deliver carbon credits to London-based The CarbonNeutral Company. Situated on 34,702 hectares of tropical rainforest, the Purus Project also supports endangered species and a range of ecosystem services – putting the “+” in its “REDD+” moniker.

The Purus Project validation is the latest in a string of headlines from Acre, which is leveraging a Verified Carbon Standard (VCS) framework to account for REDD from statewide activities – to meet the needs of California’s cap-and-trade program buyers.

The deal is a significant milestone for the forest carbon market, where daunting questions remain as to how private projects will “fit” into larger-scale state-administered REDD programs. Like, will the state receive carbon credits for all achievements in its jurisdiction, and then distribute the credits or proceeds to land owners? Will private sector project developers get credits for early projects, before knowing the rules of the game? Will the state issue rulings related to what kind of entities can buy and sell REDD credits?

The fact that Acre itself is only now exploring these questions didn’t stop CarbonCo from advancing its REDD+ project, now dually validated to the VCS and the Climate, Community and Biodiversity Standards (CCB). Brian McFarland, Carbon Project Developer for Carbonfund.org Foundation – of which CarbonCo is a subsidiary – says that the state actually offered active support for project development.

“The state of Acre helped us immensely when it came to discussing forest carbon inventories, giving guidance on how to structure the project baseline and grievance mechanisms, among a lot of other issues,” says McFarland. “Add to that the fact that they’re working with VCS and other states that could facilitate the market and purchase these credits – and it demonstrates how dedicated they are.”

The Acre program’s nascent stage also didn’t stop The CarbonNeutral Company from jumping into the ring as an early financial supporter of the project. In fact, the state’s positive signals and active engagement in market and project development propelled their investment.

“In Acre, at the state level, it’s great that things are moving forward to create a state-wide jurisdictional approach,” says Zubair Zakir, The CarbonNeutral Company’s Global Carbon Director.

“That’s certainly been a reason to feel confident about the future of the project we’re investing into and the future of the market infrastructure in Acre for allowing this project and hopefully others to flourish.”

I’ll take the bottom, you get the top…

Market participants say that regulatory risk remains the largest barrier to project development and investment in REDD countries, where an Ecosystem Marketplace report found that the volume of REDD credits contracted for delivery to voluntary buyers dropped significantly in 2011.

While risks remain even in jurisdictions like Acre, Zakir and McFarland both emphasize the importance of the state’s willingness to engage with market participants in early stage project activities – as opposed to reinventing the wheel with its state-wide REDD program. This cooperation enhanced investor confidence and ensured that, in the words of Acre’s Climate Change Institute, “The Purus Project is… fully aligned with the State’s System of Incentives for Environmental Services (the SISA).”

Zakir points out that it also gives project-level REDD+ actors an opportunity to finance and implement results-based climate action immediately, while Acre sorts out the details of its scaled-up program – thanks in part to project’s inherently shorter timelines to implementation.

“Project-level REDD activities continue to really demonstrate how deforestation can be avoided today and how carbon markets can play a pivotal role in making that possible,” he says.

California here we come… someday

McFarland foresees that credits from CarbonCo’s Acre REDD+ project – and several others in their regional pipeline – will be primarily sought by voluntary buyers for the immediate future. This includes the clients of The CarbonNeutral Companies of the world – which help corporates source offsets to meet their voluntary climate commitments.

An alternative buyers market is emerging in California, where the state’s cap and trade program is newly underway. There, regulators have signaled that emitters may one day be able to buy and surrender REDD credits to meet their GHG obligations. California has already signed MOU’s with Acre, Brazil, and Chiapas, Mexico, to support the development of such a mechanism.

McFarland admits that California’s signal was a huge impetus for the choice of project sites, and that having multiple market options would be ideal for CarbonCo’s growing pipeline – where projects are mostly of an equivalent size to Purus.

“While these credits might be more of a voluntary play right now,” he says, “once the REDD process is revealed in California, we’ve worked closely with the state to place these projects in best possible position for acceptance into a California regime.”

The Purus Project represents CarbonFund.org Foundation’s second major foray into the forest carbon space, the first being the Tensas River National Wildlife Refuge Reforestation Project – the first reforestation project in North America to be validated to both the VCS and CCB.

11 January 2013 | The Brazilian state of Mato Grosso has become the second Brazilian state   after Acre to create a regulatory framework for rewarding those who combat climate change by saving endangered rainforest.   Acre, meanwhile, will receive 50 million Real ($24.2 million) for REDD+ from KfW, the German development bank, with up to that 70% of that going to providers of environmental services, including rubber-tappers and indigenous groups, according to Brazilian media.

On Monday, Mato Grosso Governor Silval da Cunha Barbosa signed Law No. 9878, creating the State System of Reducing Emissions from Deforestation and Forest Degradation (REDD).   The new law includes provisions for sustainable forest management and the increase of forest carbon stocks, which means the new framework will also accommodate REDD+.

Mato Grosso has the second-highest rate of deforestation in the Brazilian Amazon, behind Parí¡, and is home to several emerging REDD projects, including part of the Surui Carbon Project. The state will now create a 12-member REDD+ Management Board to oversee REDD activities.

For Acre, the award represents international recognition of its System of Incentives for Environmental Services (Sistema de Incentivo a Serviços Ambientais, or “SISA”), a ground-breaking framework for ecosystem services laws implemented just over two years ago.

Additional resources

This story has been adapted from Rachael Petersen’s blog. You can view the original here.

31 January 2013 | Cacoal | Rondí´nia | Brazil | Here are three things you should never leave home without in the Amazon: water, insect repellent, sunscreen.

And if you’re Chief Almir Narayamoga of the Surui, make sure to remember your high-tech video recording sunglasses.

New field sites often require weeks of cultivating trust, understanding, and the relationships to yield interesting work. Which is why when I first arrived at the Associacao Metareilí¡ headquarters outside the city of Cacoal in the state of Rondí´nia, Brazil, clad in a long flowing skirt and Chaco sandals, I expected a calm day of office humdrum: researching, talking to my Surui colleagues, reading over their 50-year plan. But when Almir invited me to track down reported illegal logging in the territory, I couldn’t say no.

Hours and kilometers into the jungle, I realize: the Amazon itself is now my office. And I should never leave home unprepared to face it.

Things in the territory are tense. Loggers continue to lodge death threats against Almir, the leader of the indigenous Paiter Surui people, due to his efforts to protect the forest in his territory, La Sete de Setembro. As I write this, one of Almir’s ever-present personal bodyguards from the Brazilian Força Nacional sits to my left polishing his automatic weapon with a pink toothbrush.

How absurd, I thought to myself as we trekked together through the oppressive humidity of the Amazon, that preserving nature has become a matter of life or death, the source of animosity and aggression. The situation speaks to the specific importance of exploiting natural resources to the local economy as well as to the general human tendency to overvalue immediate gains and underestimate long-term costs.

“People think the forest will never end, like they think water will never end,” Almir says. “But one day, the forest could end. We need to have that vision.”

At a distance- from planes and satellites imaging-the Sete de Setembro territory looks like an island of trees amid a sea of historical deforestation. So for many local loggers, the Surui sit on a pot of gold to be exploited at all costs. But for Almir, the forest- of priceless importance to the Surui life and culture- can be protected by stimulating economic alternatives to logging. This vision’s supported by countless partners like USAID and Google and strengthened by the use of digital tools-has earned the Surui international attention. Their visionary 50-year life plan calls for an end to the unsustainable logging that serves as the historical financial lifeline in the territory and proposes economic alternatives such as commercialization of agricultural and artisanal goods and payment for ecosystem services. The Surui hope that others will pay them for preserving the forest in the form of carbon credits for avoided deforestation. This money will enter a locally administrated fund that will support an environmentally and socially-sustainable future in the territory.

It is a high-stakes game of indigenous peoples, governments, international NGOs and investors. It is a game that requires extensive monitoring of the forest to document illegal incursions that compromise this sustainable vision. Traditional knowledge of their territory must be writ digital through photographs and gmapping to render public forest conservation progress. So when the Metareilí¡ office received an anonymous tip last week that someone cut down trees in the territory, Almir and team had to conduct the due diligence that puts such incidents on the literal and figurative map.

Our trip from the Metareilí¡ office to the territory’s border lasted a grueling hour and a half. The Força Nacional truck shook as it passed over pocked dirt roads. A cocktail of antibiotics, antimalarial medication, and coffee stirred in my stomach; I was sure I would vomit. “Don’t do it don’t don’t do it,” I chanted to myself, acutely aware that such a sign of fragility could mark me as a woman incapable of tolerating Amazonian conditions. Surprisingly, I deep-breathed my way through the journey and we reached the village of chief Almir’s family, Lapetanha. After a short conversation, we were on our way again, off to search out the loggers.

We ran into trouble when our two trucks reached a bridge, or really, two deteriorating logs aligned with the wheels of the truck. Almir’s truck crossed first, but the front left wheel quickly fell between the logs. Using a cable mounted on the front of the Força Nacional truck, we towed the fallen truck from out between the logs. Deciding we could not cross, we-Almir, two guards, myself, and four other Surui-continued on foot.

Which is how I found myself ankle-deep in reddish clay mud last Friday with Chief Almir and other Paiter-Surui colleagues, hiking fifteen kilometers on the tails of illegal loggers. The sun beamed threats at my fair skin, made even more sensitive by a daily dose of antimalarials. The humidity rivaled a Houston summer. Almir joked about my sweat-soaked hair; others would later express surprise that a young American girl made it through the exhausting hike.

The path we traced through the territory was fresh, recently trampled by loggers. Two hours into the walk, we encounter freshly-cut logs, their shameless tan nakedness a startling interruption in the surrounding deep-green abyss. I waited behind talking with a colleague while others followed a small path to find a patch of stumps. Having found the evidence we sought, we returned to our abandoned trucks a few hours later, exhausted, having gone without food or water for hours. We stop in Almir’s aldea for water, chica, and bananas before making the long return to Cacoal.

The next evening, Almir invited me to his house for roasted wild boar. On the way, we also picked up Steve Zwick, an American journalist and the managing editor for Ecosystem Marketplace, who had arrived to work on his biography of Almir, to be published this year.

Steve asked if Almir video recorded our mission the previous day. “Yes,” he responded. But I was certain I saw no video cameras on our trek.

“Uh, he didn’t record anything in my presence,” I interjected.

“I recorded it all with my eyes, with my glasses,” Almir insisted. He must be joking, I thought, speaking metaphorically, or perhaps making light of his lapse.

But after dinner, he retrieved a pair of Oakley-style sunglasses from his living room. “I recorded everything with these,” he stated, indicating a small, unmistakable camera lens in the middle of the nose bridge. He had bought them during a trip to Switzerland, he confessed, aware they could aid in documenting the forest.

I launched into laughter. “You had no idea I was filming?” Almir asked me. “No!” I said, half afraid he caught embarrassing footage of my mud-covered huffing and puffing from the previous day. He modeled the sunglasses for us and began recording,joking that he was creating an informational video about Americans.

He removed a small memory card from the sunglasses and inserted it into his computer. The video from our trek-of surprisingly high quality- revealed the destruction of the forest we witnessed, including the roads, freshly cut wood, and stumps bespeaking invasion. Indeed, Almir had captured our jungle trek through his eyes, branded in memory but packaged in MegaBytes.

“This shows that indigenous peoples are doing their job,” Steve admired, “they’re doing the work.”

Almir has witnessed tremendous turmoil within his tribe, which was first contacted in 1969. He now hopes to witness a brighter future- one in which his peoples financial riches do not depend on depleting their remaining natural riches. And with the help of technology, the Surui will not witness this change alone. Their traditional knowledge and surveillance of their lands can be transmitted to the world via videos and maps. But Steve is right: it is not the technology or fancy camera-sunglasses that do the work in the territory, it is the people. And despite being the subject of flashy headlines ( Tribe saves the forest using internet), the Surui have a lot of work ahead of them. I certainly have the sunburn, insect bites, and muscle aches to prove it.