WRI Report Outlines US Carbon Pricing Alternatives

The World Resources Institute (WRI) officially joined a growing consensus around the need for a price on carbon pollution through its recent release of a report intended to serve as a reference guide for policymakers on carbon pricing. Here, an environmental writer outlines WRI’s descriptive report, which presents a range of ideas on decarbonization and pricing greenhouse gas emissions.

This article was originally published in Clean Technica. Read the original here.

 

22 May 2015 | This May, the World Resources Institute, a global research organization spanning over 50 countries, released Putting a Price on Carbon: A Handbook for U.S. Policymakers, an important reference guide that addresses decarbonization and its interaction with many other policy priorities.

WRI envisions the working paper—and the detailed briefings to come—as playing “a helpful role in the coming national conversation on these issues.” The organization hopes it will lead to a proven, market-based solution that can reduce the US contribution to climate change and raise revenues that will enable communities to better adapt to its impacts. In doing so, WRI authors note, carbon pricing will also help meet other pressing national priorities.

The report echoes statements made by numerous prominent individuals–from triple Cabinet Secretary George P. Schulz to Jerry Taylor, formerly of the libertarian Cato Institute, to Pope Francis, and organizations like the World Bank, the International Monetary Fund, and the World Economic Forum–that the time for taxing carbon is now. Andrew Steer, president and CEO of WRI, states it succinctly: “It’s abundantly clear that putting a price on carbon is the right choice to deliver multiple benefits, including driving innovation, boosting economic growth and reducing emissions.”

“We cannot continue to use the atmosphere as a dumping ground for carbon pollution. It surely makes no sense to tax productive activities like labor, income, and profits, while giving a free ride to carbon emissions that degrade the environment and imperil public health.”

The working paper is not prescriptive, however. It’s descriptive. It presents a range of ideas for pricing GHG emissions throughout the economy rather than promoting a choice. Thus it should greatly help in the definition and prenegotiation stages of decisionmaking on all sides of a thorny issue.

The handbook describes fundamental choices policymakers have in putting an actual price on carbon emissions. It includes a very complete list and description of precedents, all the way from Sweden’s carbon tax of nearly 25 years ago to working schemes in the recent past (see map below). About 40 countries (nearly 25% of world governments) and numerous subnational jurisdictions already have carbon taxes or cap-and-trade policies in place, and the number of important regional pacts is also on the upswing.

It is also realistic in recognition of the critical roles of compromise and of incorporating political goals beyond emissions reductions. Here are the factors the paper suggests might have the best chance of minimizing political barriers and attaining a comprehensive carbon-pricing policy:

  • Bipartisan support for federal tax reform,
  • Stated goals for deeper reductions in GHG emissions,
  • Desire for alternative climate policies,
  • Bipartisan support for deficit reduction,
  • Experience at the state level, and
  • Increased awareness of climate-related impacts

While none of these alone will likely move Congress to put a price on carbon in the coming years, the authors suggest that “their confluence suggests a gradual mounting of pressure that could turn the tide.”

I’ll describe WRI’s cited alternatives from goal-stating, bipartisanship (a somewhat hackneyed and increasingly difficult effort), desire for complementary fiscal and environmental policy, state (and local, regional, and special-interest) actions, and the looming position of climate change itself.

WRI notes that President Obama (with his Cabinet, and many members of Congress) has followed experts in articulating known climate risks. The administration has in place an initial plan for near- and medium-term emissions reduction and limiting the largest emitting sectors in the years beyond.

While these actions clearly represent progress, WRI makes the point that its own analysis shows these administrative actions to be insufficient to meet the long-term US emissions target of roughly 83% below 2005 levels by 2050. The consultants say we will need an economy-wide climate policy to achieve the level of reductions developed nations must contribute to mitigate and adapt to climate change.

The authors present an illuminating matrix of policy goals and revenue options (above). It reveals two important aspects of our possible choices: first, addressing climate head-on can achieve numerous American goals in other areas; and second, none of the climate options exists in a vacuum.

Nearly everyone involved views the federal tax code as onerous, complicated, and full of unfair loopholes. WRI finds it encouraging that both Republican and Democratic members of the Senate Finance Committee have discussed replacing most or all energy subsidies and tax credits with a carbon tax or cap-and-dividend program.

Likewise, reducing the national long-term debt resonates with almost all lawmakers, as well as with the general public. A national carbon tax that has the potential to raise hundreds of billions of dollars could be very helpful in the fiscal long run. It might also be useful in the face of current budget stresses.

Too, WRI notes, the revenue could contribute to tax cuts, refunds, and rebates—much as ample petroleum receipts set Alaskans free from taxes decades ago—and/or it could finance innovation and forward-looking infrastructure and help the nation transition from using harmfully carbon-intensive goods and services.

A price on carbon is both a fiscal and an environmental policy. In addition to using revenues to “pay for” reductions in other taxes, as discussed above, some proponents advocate an economy-wide carbon price as an approach that is preferable to imposing sectoral emission standards. Others view such standards as important tools in their own right or as potentially complementary climate policies.

I would suggest that experience at the state level will prove to be one of the most useful strategies here. WRI points out that “in the absence of a national, economy-wide policy to reduce GHG emissions, some states have moved forward with their own carbon-pricing mechanisms.”

Nine of our northeastern states operate a regional utility sector cap-and-trade program that has saved consumers more than $2 billion in consumer savings. Massachusetts, Oregon, Vermont, Washington, and others have strong stakeholders advocating for a carbon tax to raise revenue for items like key transportation infrastructure. Also, in 2012 California initiated an economy-wide program, which it now shares with Quebec and Ontario. The most spectacular North American example is British Columbia’s successful 2008 carbon tax, which has created new revenue, lowered other tax rates, and will lower emissions to a third of 2007 levels by 2020.

This brings up a very important point: we are seeing carbon pricing work on regional, local, and international levels as well. Successful implementation of carbon pricing by other political units could lessen resistance at the US federal level.

The other factor I see as swiftly moving the debate to a decision point is the weather—not just a conversation-mover as usual, but in the way it may relate to climate impacts and personal priorities. Public opinion has already become more vocal on the need for action. Carbon pricing only makes sense in view of redirecting fiscal responsibility from the consumer/taxpayer to the generators who profit from selling emission-laden products.

Despite fierce and moneyed opposition, Congress has acknowledged the force of climate change, investors are leaving coal behind, we now have an inclusive clean power plan, and polls indicate that people are recognizing the challenge. Too, business and localities have started decarbonization projects on their own and have formed regional and international compacts to implement solutions to climate change issues.

The conservative faction ultimately frames its case in the simplistic argument that changes in energy options constitute redistribution of wealth. It expresses incredulity that Americans would take up such a socialist, if not “communistic,” cause. Loaded rhetoric cannot disguise the feebleness of this position. It’s like advertising that “you deserve” a better insurance plan, or that you have somehow “earned” it. Leaders of all stripes acknowledge that a worldwide climate response goes hand in hand with sustainable development, which will also improve the lot of disadvantaged parts of the world, and swiftly.

Those looking for confirmation of widespread American approval of a carbon tax need only look clearly at the numbers. These include the recent January 2015 Stanford University and Resources for the Future poll. This instrument showed 60% of US respondents in favor of charging a fee to those who emit pollution. The majority went up to two-thirds (67%) if the revenues from the fee were directed back to consumers.

Americans are beginning to see heavy climate impacts, not just the economic hits of typhoons leveling less developed countries or deplorable flooding in “civilized” Europe, but right here. Nothing will change the US perspective better than more runaway wildfires up and down the Rockies, droughts forcing choices between water and fuel in California and Texas, the palpable sinking of Florida, or the prospect of Hurricane Sandies ravaging the coasts on a more frequent basis.

This handbook has the potential to demystify a critical issue of our time. It offers liberals solid, constructive economics and policy, and it hands hard-liners appropriate alternatives to deliberate ignorance and unproductive chatter. Access the guide on WRI’s website.

 

Sandy Dechert covers environmental, health, renewable and conventional energy, and climate change news.

Ontario Inches Towards Carbon Pricing, Explores Ag And Forestry Offsets

12 February 2014 | Ontario officials have been hinting for weeks that they would be putting forth an ambitious climate plan that will include a carbon pricing program. Today, regulators released a discussion paper that seeks advice on the type of program to be implemented, but makes clear that carbon pricing will be coming to the Canadian province in some format.

Ontario has a long-term target of reducing greenhouse gas (GHG) emissions by 80% from 1990 levels by 2050 and is currently working with British Columbia, California and Québec to establish new interim targets. While the province emits less than 1% of total global emissions, it is one of the largest per capita GHG emitters in the world, the paper noted. The transportation sector is the largest emitter in the Ontario, followed by industrials such as cement and chemical manufacturers.

This spring, the province will confirm the market mechanism or mechanisms that will be used to price carbon in the jurisdiction. In the meantime, stakeholders have 45 days to offer their opinions on the best mechanisms for achieving its emissions reduction goals, according to the paper released by Ontario’s Ministry of the Environment and Climate Change.

“It is clear that carbon pricing is a climate-critical policy that will be driving emissions reductions across the Ontario economy, the paper stated.

Provincial officials are seeking comments on the type of carbon pricing program, with the paper highlighting four approaches: cap and trade, baseline and credit, a carbon tax, and regulations and performance standards.

The paper also observed that some of Ontario’s closest neighbors and key competitors have launched carbon pricing programs, including the province of Québec, which has linked its cap-and-trade programs with California through the Western Climate Initiative (WCI). Ten companies in Ontario are already covered by Québec’s cap-and-trade program, which recently expanded to include transportation and heating fuels.

Aside from seeking advice on setting a carbon price, regulators are also asking for comments on the role that the agriculture and forestry sectors can play in reducing emissions and/or providing carbon sinks or offsets.

That’s High Praise

Ontario’s announcement was highly praised by the International Emissions Trading Association (IETA).

“In the absence of strong national leadership, climate policy in North America is increasingly being driven by action at the subnational level, including Ontario’s neighbor Québec, says IETA President and CEO Dirk Forrister. “We welcome Ontario’s move to put a price on carbon and look forward to engaging the government on the advantages that cap and trade brings to reaching climate targets, while driving clean investment and innovation.

Ontario isn’t the only North America jurisdiction currently considering adopting a carbon pricing program. In late 2014, Washington State Governor Jay Inslee released a proposal for a cap-and-trade program that would cover an estimated 130 facilities and fuel distributors operating in the state that emit more than 25,000 metric tons of GHG emissions per year.

“With Washington State also looking at connecting to the trading pool, the addition of Ontario would further drive down costs and increase compliance flexibility for businesses across these jurisdictions, said Katie Sullivan, IETA’s Director of North America.

Ontario and Washington State were both previously members of the WCI, which now only features California and Québec and British Columbia pricing carbon, although British Columbia implemented a carbon tax. Ontario has also been an observer to the Regional Greenhouse Gas Initiative, the carbon trading program for nine states in the US northeast covering the power sector.

New Initiative Tracks 500 Entities That Could End Tropical Deforestation

11 February 2015 | 2014 was a year for zero-deforestation pledges. The New York Declaration on Forests brought governments, businesses, civil society and indigenous leaders together to cut forest loss in half by 2020 and end it completely by 2030. Then there is the Consumer Goods Forum’s resolutionto achieve zero-net deforestation by 2020. States within forested nations are making pledges of their own under the Rio Branco Declaration. Meanwhile NGOs have been making similar commitments for some time. In 2008, for instance, WWF initiated a campaign calling for zero net deforestation by 2020.

These pledges, however, mean nothing if they’¢re not made by entities big enough to actually make a difference and, obviously, they mean even less if the entities that make them don’t keep them.

This month, an initiative is launching to address each of these issues.

The Forest 500, is being launched today by the Global Canopy Programme (GCP), a tropical forest think tank focused primarily on natural capital. The Forest 500 ranks 500 “powerbrokers of zero deforestation with the potential to eliminate deforestation.

Who are the Forest 500?

The Forest 500 includes 50 jurisdictions, 250 companies, 150 investors and 50 other “powerbrokers (industry associations, development banks and so on). Together, they control the global supply chain of “forest risk commodities, the Forest 500 press release says.

“We are currently all part of a global deforestation economy,” says Mario Rautner, the GCP’s Drivers of Deforestation Programme Manager.“Deforestation is in our chocolate and our toothpaste, our animal feed and our textbooks, our buildings and our furniture, our investments and our pensions.

Palm oil, beef, pulp and paper and soybean are a few of these ‘forest risk commodities’, which have a trade value of almost USD $100 billion. They’re also the reason for two-thirds of the tropical deforestation happening.

The Forest 500 identifies who the 500 are and then assesses them based on their policies and impacts on forests. They’re identified based on a link to tropical deforestation through exposure to forest risk in their supply chains and also through their influence within the tropical deforestation sector. This could be in the form of rainforest conservation or agriculture development.

“Our goal with the Forest 500 is to provide precise and actionable information to measure the progress of society to achieve zero deforestation,says Rautner. “Together, these 500 countries, companies and investors have the power to clean up global supply chains and virtually put an end to tropical deforestation.

Identifying the Gaps

The Forest 500 assigns points to companies based on their policies, but only seven companies and four jurisdictions scored the maximum amount of points. Among companies, the seven highest-rated are Groupe Danone (France), Kao Corp. (Japan), Nestle S. A. (Switzerland), Procter & Gamble (US), Reckitt Benckiser Group (UK), Unilever (UK) and banking and financial services giant HSBC (UK). Among jurisdictions, Germany and the Netherlands scored the highest among countries importing forest risk commodities, while Brazil and Colombia were the highest among exporters.

But 30 countries, mostly in the Middle East and Asia-Pacific didn’t receive any points. Madagascar and Nigeria hold the lowest scores with India and China, two big importers of forest risk commodities, also received low scores.

As for the investors, none of them have zero or net zero deforestation commitments regarding forest risk commodities.

On the bright side, the analysis found that individual actors are making progress. Many consumer-facing businesses selling cosmetics and other home care products received high marks. And of course, money makes a difference. Companies surpassing $10 billion in revenue a year did better than those making below that. Being a publicly-listed company and having headquarters in North America also led to higher marks.

And while the sovereign wealth and hedge funds didn’t do very well from the investment and lending category, banks scored very high signaling that progress is possible in this sector.

Combining the good and bad news wrapped up in this report means the right steps-like building a more inclusive approach-must be taken in order to make a lasting long-term difference, Rautner says.

“Though the Forest 500 findings highlight that much work needs to be done, the good news is that a number of big players across sectors are demonstrating the leadership that is needed,” he says. “Putting policies in place is just the necessary first step in addressing tropical deforestation. Their implementation will be critical in order to transition to deforestation free supply chains by 2020.

The Environmental Mortgage: Connecting The Dots Between Microfinance And Ecosystem Services

29 January 2015 | All around the world, we see that environmental degradation and poverty go hand in hand as do sustainable land-use and wealth. This link builds a case for using microfinance to support payments for ecosystem services (PES) or, more specifically, investments in watershed services (IWS), because PES delivers social benefits providing sustainable and healthier livelihoods for communities.

In short, microfinance provides financial services (loans, insurance) to individuals and groups living in poverty-people who lack access to these services normally. Access to these services has the potential to attract more investors to PES projects. The steady cash flow required to attain credit would demonstrate to institutional investors that a watershed restoration project, for instance, is worth backing.

These were some of the thoughts of Josh Donlan, founder of the environmental organization Advanced Conservation Strategies, and his colleagues a few years ago when they wrote a paper on the subject. They reasoned an ‘environmental mortgage’ initiative could go something like this: a coastal fishing community in a developing nation has access to a more profitable and resilient fishery nearby but needs fishing gear-boats and nets-to reach it. A local environmental lending group could provide the needed finance as a low-interest loan. In return, the fishing community conserves a patch of reef proportionate to the area being fished along with paying a percentage of the fishing profits to the lender. Project design is specific to the region and repayment plans would vary accordingly. For instance, a larger area of reef conserved could result in a lower interest rate.

Donlan, along with the other authors of the paper, spent some two years scoping out potential pilot projects, mainly in South America. For a variety of reasons, though, the projects never got off the ground as planned. One of their projects in Peru was further developed, but Donlan was never assured that a microfinance component was part of it.

As it turns out, adopting microfinance as a means to finance environmental work is complicated and expensive with several issues that need to be ironed out in order for it to move forward. Donlan’s difficulty in implementing projects is just one example backing this up. According to Ecosystem Marketplace’s State of Watershed Investments 2014 report, only three projects use some sort of credit mechanism: one in Brazil, one in Costa Rica and one in Nepal. The latter two each use revolving-loan funds to finance restoration activities that repair damaged watersheds.

There are a few other examples. At the climate talks in Lima, an event focused on an initiative that partners with microfinance institutions over ecosystem based adaptation in the Andean region known as MEbA (Microfinance for Ecosystem-based Adaptation).

The Basic Problem

For the most part, however, credit mechanisms aren’t widely used. The most basic challenge, perhaps, is locational. Microfinance has met with success in urban areas whereas environmental loans would be happening predominantly in rural areas. As there is basically no access to credit in these places, it greatly increases the transaction costs. What’s more, environmental performance has to be tracked and verified adding more costs to an already expensive process.

The monitoring needed is just one of the extra risks for microfinance institutions, Donlan says. They also face correlated risk. Traditionally, microfinance institutions form diversified portfolios to protect themselves from a slew of defaulting loans when one industry falters. But environmental activity requires a focus on behavioral change at a community level rather than on the individual. It takes the bulk of a village practicing good environmental stewardship to make a meaningful impact. If the Brazil nut business tanks after a microfinance institution lends 100 nut gatherers capital on the basis of sustainable production, the institution stands to lose much more than if they had issued just one or two loans to that particular business.

Group-type models of microfinance like cooperatives and associations do exist but there is an emphasis on the individual, Donlan says, which can easily conflict with conservation activities.

Luis Rodriguez, an Australian-based ecological economist, also mentions the importance of critical mass in the success of PES.

“The public good feature of ecosystem services make them hard to be captured by microfinance,” Rodriguez says. In part because there is little to no incentive for one landowner to take out a loan for services that he/she will benefit from along with many others who won’t ever make payments on that loan. So it makes much more sense, from a PES standpoint, to have a large number of participants.

A Multi-Faceted Problem

This disparate structure remains an issue, but interest appears to be growing. Kiva Microfunds is a non-profit organization that provides loans funded mostly through internet donors, and project managers say there is some growth and definite interest in expanding, even though conservation-centered activities make up only a small portion of its portfolio.

“This is an area that Kiva is actively pursuing,” says Claudine Emeott, Kiva’s Director of Strategic Initiatives. “But our growth is dependent on existing opportunities.”

And as of right now, opportunities are slim. They’re dabbling in lending to sustainable forestry projects in Latin America. Kiva is also involved in the carbon markets, providing loans to East African communities so they can access chlorine drips to purify water without boiling it and funding clean cookstove distribution partly through carbon finance. The risk is very high, Emeott says, as repayment is dependent on behavior change.

As for reasons why opportunities are few, she thinks it could stem from philanthropic capital being the dominant form of funding in the conservation space. But as conservation finance continues to collect a mainstream audience, opportunities for Kiva and, thus, credit mechanisms, in this sector could increase as well.

Awareness Issues

Simple awareness on conservation finance and PES projects is also serving as a barrier.

Sean DeWitt, a Senior Manager for the Global Restoration Initiative at World Resources Institute (WRI) and a previous director at the Grameen Foundation, a microfinance organization, says he hadn’t heard of PES until he joined the environmental sector at WRI.

“In this space, we assume people are aware of things that they aren’t,” he says.

There’s also a longstanding culture around the environmental sector that we should be conserving because it’s the right thing to do, says Donlan, and the idea of PES just didn’t sit well with a lot of people.

However, like Emeott, Donlan says this mindset is changing especially as the poverty issues that cause and are a result of environmental degradation are taken into account. This, combined with the growth of conservation finance, could cause a shift in how conservation efforts are thought-of and managed.

Rodriguez points out several existing efforts backing up their claim such as MEbA and Bolsa Verde, a Brazilian project focused on environmental and social goals. Though Bolsa Verde doesn’t use a credit mechanism, its purpose is to alleviate poverty using conservation.

What needs to Happen?

Although expensive and full of potential issues, a method of finance dependent on sustainable behavior is a tempting and promising concept. And the price tag shouldn’t be too big of a deterrent.

Microfinance may be expensive but it isn’t more expensive than just pumping money into an environmental effort with zero expectation of a return, Donlan says.

“The starting point shouldn’t be making money or even breaking even,” he says, “rather it should be focused on cost recovery.”

In order to get microfinance for PES moving, the first step should be establishing the pilot projects Donlan and colleagues had previously tried to initiate. “That would provide a learning platform to figure out issues like the low cost monitoring, the sweet spot between individuals and the group, and what the main transaction costs are,” Donlan says.

Identifying the risks to microfinance institutions could also be addressed with pilots. They could help develop different lending portfolios for the various types of environmental loans possible, which could result in a degree of certainty surrounding this branch of lending.

There are different styles of microfinance: the Missing Middle or the Grameen model, for instance. Specialized banks typically provide agricultural loans, DeWitt says, because of the variability in repayments (they can be dependent on harvest) and increase in risk. Environmental lending, then, could be scoped and analyzed forming a unique type of borrowing.

It’s a definite possibility. Meanwhile, conservation activities will continue as will the documented evidence on the social benefits of conservation. And the quest for long-term finance to support these endeavors-both social and ecological-will continue as well.

“The question we should be asking,” Donlan says, “is does debt make sense from a human behavior standpoint and a long-term incentive standpoint.”

This Week In Forest Carbon: Indigenous REDD Explored

21 January 2015  Seen from above, the indigenous territories in the Amazon’s “Arc of Deforestation” appear as solid green islands amid a sea of grey-green degradation. This bird’s eye view corroborates the studies that say indigenous peoples are the best guardians of the forest. But like all maps, they show just a snapshot in time.

 

The reality is that these carbon-storing oases face daily threats, and indigenous peoples are not homogenous in their strategies for facing them. A ride down Brazil’s Highway 364 reveals three distinct approaches by neighboring groups:

 

First, the Zor³. Though their territory along the border of the Brazilian states of Rond´nia and Mato Grosso has achieved lower rates of forest degradation than their non-indigenous neighbors, the Zor³ are actively logging their old growth teak and mahogany forests. The wood travels down Highway 364, destined for luxury furniture showrooms across Brazil and the world and only a tiny percentage of the profit flows back to the Zor³.

 

Down the road, the Paiter-Surui once logged their forests just as aggressively as the Zor³, but that has changed over the past five years as the Paiter-Surui harnessed carbon finance to help implement their “Life Plan” for forest preservation. In June 2013, they struck their first deal to receive payments for carbon offsets with Natura Cosm©ticos, a Brazilian cosmetics company.

 

Highway 364 also passes briefly through the southern tip of the Igarap© Lourdes territory, home to members of the Gavio and Arara people who have never succumbed to the economic pressure to deforest. Ironically, this creates a bit of a Catch-22: REDD financing typically flows on the premise of saving forests from imminent destruction, and it is difficult for communities with very low historical deforestation rates to prove the threat.

 

Jurisdictional REDD, in which an entire state gets paid for reducing deforestation, may offer a solution. Acre, a tiny state to the west of Rond´nia, has pioneered this approach and in 2013 secured a four-year, $40 million agreement from the German development bank KfW to avoid eight million tonnes of emissions the first-ever REDD payment at the jurisdictional level. Discussions about creating a state-wide REDD system in Rond´nia have already started.

 

But indigenous peoples are also exploring other potential sources of funding to keep forests standing. One possibility: state-level ecological taxes that allow local governments to access a refunded portion of the value-added tax collected in their states based on the amount of forest cover and water resources protected. To date, at least 24 Brazilian states already have or are debating legislation related to this “green” tax.

 

Another possibility is Indigenous REDD+ (known as “RIA”) which would take a jurisdictional approach to reducing deforestation and implementing indigenous Life Plans, but outside of carbon markets. Ecosystem Marketplace will soon follow with the next installment of our Indigenous REDD+ series.

The Ecosystem Marketplace Team

If you have comments or would like to submit news stories, write to us at general@forestcarbonportal.com.


News

INTERNATIONAL POLICY

Winter is (not?) coming

Though the United Nations negotiations around land use and climate change have primarily focused on tropical forest loss, 19% of the world’s forests (by surface area) are located in Russia, storing between 300 and 600 million tonnes of carbon dioxide (CO2). However, a new study has warned this absorption capacity could drop to zero by the mid-2040s. As “Siberian” winters with minus 20-degree-Celsius temperatures become rare, pests that are usually killed off are multiplying. Russia has yet to clarify whether forests are included in its emissions reduction target for 2020, but the country’s lead climate negotiator, Oleg Shamanov, has advocated for inclusion of boreal forests in the future climate agreement.

 

NATIONAL STRATEGY & CAPACITY

A shorter life expectancy

Indonesia’s Environment and Forestry Minister Siti Nurbaya Bakar announced plans to merge the ministry with the National Reducing Emissions from Forest Degradation Agency (BP REDD+), the first country-level REDD+ agency. Under this scenario, BP REDD+ would be absorbed by the yet-to-be-formed climate change mitigation directorate. Despite the announcement, BP REDD+ head Heru Pratseyo went forward with announcing plans for the coming year, including monitoring the forests permits moratorium, continuing the one-map program, and working towards recognizing indigenous land rights. “We will continue to work in 2015 and we want paradigm shift. It is not that the agency needs to continue forever, but the paradigm shift needs to be there,” Pratseyo told The Jakarta Post.

 

The Brazil chain saw massacre

After being elected for a second term as Brazil’s president, Dilma Rousseff has now appointed two people to top positions that environmentalists are less than pleased about. Katia Abreu, nicknamed “chainsaw queen” for her call for more roads through the Amazon and her past role in weakening Brazil’s forest code, will be the country’s new agricultural minister. Aldo Rebelo, a climate change denier, will be the new science minister. The appointment “completely unnecessarily makes Brazil look really provincial and silly on the world stage,” wrote Steve Schwartzman, Director of the Tropical Forest Alliance at the Environmental Defense Fund, in a recent op-ed.

 

Offsets off the table

Though at least two states Georgia and Kentucky have expressed interest in using carbon offsets from forest projects to meet their obligations under the Environmental Protection Agency’s (EPA) new carbon regulations for power plants, the EPA probably won’t allow it. “While states have significant flexibility in the development of plans to comply with the rule, their plans must include measures that reduce CO2 emissions from affected sources: power plants,” a statement from the agency said. Though the EPA has paid attention to state or regional-level cap-and-trade programs as a potential mechanism for meeting the regulation, they have specified that states must hit federal targets without the use of offsets.

 

PROJECT DEVELOPMENT

Sweet home Carolina

An Improved Forest Management project covering more than 4,000 acres in coastal South Carolina has been issued more than 160,000 compliance-grade carbon offsets under California’s cap-and-trade program the first project in the Southeast to be issued offsets by California’s Air Resources Board (ARB). Developed by North Carolina-based Green Assets, the project includes the forestlands of Brookgreen Gardens, a working woodland that includes a famous sculpture garden. “We are proud to be early participants in the new carbon economy,” said Bob Jewell, Brookgreen’s President and CEO. Green Assets is currently developing several forest carbon projects for the California market, including the Middleton Place project in South Carolina.

 

The projects of champions

Project developer Finite Carbon registered two new compliance forestry projects with ARB on behalf of timberland investment management organization The Forestland Group: the Champion project in New York’s Adirondack Mountains and the Connecticut Lakes project in northern New Hampshire. The Champion project was previously registered with the Climate Action Reserve and received more than 136,000 compliance-grade offsets when it transitioned to the ARB. The Connecticut Lakes project is registered with the American Carbon Registry and was developed specifically for compliance. It received more than 1.1 million offsets upon registration. Together, the projects generated nearly $12 million in offset revenue for The Forestland Group.

 

FINANCE & ECONOMICS

Promises to keep

Developed countries have pledged over $7.3 billion to support REDD+ Readiness by 2015, but information on how much funding has reached the ground is still hard to come by. Forest Trends’REDDX initiative is aiming to change that by working with country partners to map REDD+ financial flows. Just released, the first installment of this data tracks REDD+ finance in seven pilot countries between 2009 and 2012, finding that about a third of the $1.2 billion committed in this time period was disbursed. Though most REDD+ finance (78%) came from bilateral government donors chiefly Norway and Germany between 2009 and 2012, multilateral funding and domestic contributions are ramping up. REDDX currently operates in 14 countries, and more data is forthcoming.

 

HUMAN DIMENSION

A point of carbon clarification

Some village and clan leaders have called for a review of the Surui Fund, a governance apparatus developed to manage community finance, including funds from the Surui’s forest carbon project. Income from the sale of carbon offsets flowed quickly into the community in early 2014, but slowed as the year progressed. Signatories of a “letter of clarification” to the Federal Public Ministry say that though the Surui Fund’s manual describes a participatory, decentralized process, the reality has been more concentrated power. Some community members have continued logging in the protected territory as a means of survival because “legal and bureaucratic obstacles delayed the availability of financial resources,” they wrote.

 

STANDARDS & METHODOLOGIES

Sliding scales

The Verified Carbon Standard announced changes to its fee structure. These include a sliding scale on the issuance levy for Verified Carbon Units (VCUs) to accommodate emerging jurisdictional governments and projects capable of reducing millions of tonnes of emissions annually. Projects issuing less than one million VCUs will still pay 10 cents per VCU, but those issuing one, two, or four million VCUs at a time will be charged reduced fees. Other changes include a registration fee for new projects (effective July 1, 2015) and changes to the methodology approval process.

 

The rice is still simmering

California once again delayed the potential adoption of a new offset protocol for rice cultivation projects that reduce methane emissions. ARB officials project potential offset supply under the new protocol in the range of 500,000 and 3,000,000 tonnes of greenhouse gas reductions through 2020 the scheduled end date for California’s cap-and-trade program. Stakeholders widely praised the ARB’s efforts to include forestry projects located in Alaska in the program, but objected to several proposed technical updates to the forestry protocol, including planned changes to standards for even-aged management of forest stocks. California regulators also took some flak for the market uncertainty created by their recent invalidation of ozone-depleting substances offsets.

 

SCIECNE & TECHNOLOGY

Ain’t nothing but a gold digger

The rising demand for gold has spurred mining activities that caused around 1,680 square kilometers of tropical deforestation in South America between 2001 and 2013, according to a new study by researchers from the University of Puerto Rico, published in Environmental Research Letters. The study used a geographical database of newly developed mines to show that forest loss due to gold mining has been concentrated in four regions. “Although the loss of forest due to mining is smaller in extent compared to deforestation caused by other land uses, such as agriculture or grazing areas, deforestation due to mining is occurring in some of the most biologically diverse regions in the tropics,” said Nora lvarez-Berr­os, the lead author of the research.

 

Put charcoal in that Christmas stocking

For REDD+ to be effective in Zambia and neighboring African countries, the emissions associated with charcoal production for which people chop trees near their homes need to be calculated. But typical forestry tools may not work, according to the Center of International Forestry Research. Remote sensing is difficult in southern Africa because agricultural lands and dry forests look similar from the air. There is a licensing system for charcoal producers, but many people produce without a license. Drones could one day be used to collect better data, but for now, careful monitoring at a small scale is the best way to get accurate information, says David Gumbo, a Zambia-based scientist.

PUBLICATIONS

Little book in the big REDD sea

What steps have countries taken to prepare their legal frameworks for REDD+? The Little Book of Legal Frameworks for REDD+ has the answers. Published by the Global Canopy Programme this (literally) little book offers a crash course on the key elements of a legal framework including policies, regulations, statutory law, and customary law and how domestic actions line up with international requirements. The book finds that there is often a choice between relying on policy or taking the additional step of developing legislation, but the right path can only be determined on a case-by-case basis.

 

JOBS

Carbon Research Assistant Ecosystem Marketplace

Based in Washington D.C., the Research Assistant will be able to commit to 35-40 hours per week to support a range of activities under the Ecosystem Marketplace Carbon Markets Program, including supporting the development of the State of the Forest Carbon/Voluntary Carbon Markets reports. The ideal candidate will have a graduate degree, an interest in conservation finance/payments for ecosystem services and basic knowledge of the carbon markets or another ecosystem service market; excellent writing, verbal communications, research and organizational skills; and excellent working knowledge of Microsoft Excel.

Read more about the position here

 

AIME Program Manager Forest Trends

Based in Washington D.C., the Accelerating Inclusion and Mitigating Emissions (AIME) Program Manager will oversee a 5-year, $13 million program that seeks to build capacity of indigenous peoples and other forest-based communities to improve the governance of their territories and forests while designing REDD+ compatible Life Plans. The program operates in Brazil, Peru, Colombia, Central America, and Mexico. The Program Manager will be responsible for managing compliance with US Agency for International Development cooperative agreement requirements, providing logistical support for program meetings, and overseeing the program budget.

Read more about the position here

 

Vice President, Forest Carbon Projects Blue Source

Based in Utah, the Vice President of Forest Carbon Projects will work closely with the Blue Source forestry teams based in San Francisco and Salt Lake City to identify and contract new forest carbon projects. The position requires leading business development and outreach to forest landowners, negotiating landowner contracts, and supporting analysis of management plans and projection of timber and carbon revenue. The successful candidate will have a Bachelor’s or graduate degree in forestry, a personal network of forest owners, a proven track record of business development, and at least five years of experience in forest property and timber sales.

Read more about the position here

 

Forest and Climate Change Consultant – “sterreichische Bundesforste AG

Based in Pummergasse, Austria, the Forest and Climate Change Consultant will work with the international consulting department of Austrian Federal Forests to acquire projects, network with partners, and carry out short- and medium-term consultancy missions. The successful candidate will have a university degree in forestry or a related discipline and at least three years of post-graduate work experience. Familiarity with international policy negotiations related to REDD+ is a plus, as are technical skills in conducting terrestrial forest inventories through remote sensing.

Read more about the position here

 

Staff Auditor Rainforest Alliance (RA)

Based in New York, the Staff Auditor II will conduct carbon certification audits for RA-Cert’s Carbon Services, including audit scheduling, on-site visits, and report writing. Successful candidates will have a Master’s degree in forestry, ecology, or natural resource management and a minimum of four years of field work experience in forest management, geospatial analyses, forest carbon project development or a related field.

Read more about the position here

ABOUT THE FOREST CARBON PORTALThe Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers.

Gold Standard Announces Marion Verles As New CEO

13 January 2015 | The Gold Standard Foundation, experts in climate and sustainable development activities, today announced the appointment of Marion Verles as the new CEO effective from 1st February 2015. Marion brings more than a decade of relevant industry experience to her new role having previously been the Founder and Executive Director of Nexus Carbon for Development. Marion succeeds Adrian Rimmer, who has served as CEO since June 2010.

“We are delighted to announce this appointment, said David Shelmerdine, Chair of the Gold Standard Foundation Board. “Marion is a natural fit for the organisation given her expertise, the breadth of her experience, and the way in which she values our mission. Marion has a deep knowledge and understanding of our core business and a strong awareness of the wider market opportunities and issues that relate to other areas of our activities, including land use and forests, water, black carbon and our cities programme. We are excited that she is joining us and look forward to having her on board.

Marion successfully created, developed and led Nexus Carbon for Development, a co-operative of pro-poor low carbon project developers, to become leaders in their field. She has a wealth of strategy and management experience and specialises in innovative finance for climate and development programmes, and donor and investor relations. Prior to founding Nexus, Marion worked as a corporate development analyst for Barclays Bank in London. She also has experience working in communications and advertising.

“I am thrilled and honoured to be joining the Gold Standard Foundation. As climate and development challenges keep rising, our window for action is rapidly closing, says Marion Verles. “The need for reliable and timely information on the benefits delivered by each dollar of funding has become more and more important. The Gold Standard will continue to drive innovation in the delivery of practical, yet reliable methodologies to measure climate and development benefits on the ground.

Marion earned a Master of Public Administration with a focus on scaling up aid as well as a Master of Science in European Business. She is Chartered Institute for Management Accounting (CIMA) qualified. She has also served as a Civil Society Representative to the Climate Investment Funds managed by the World Bank.

REDDX: Keeping Track Of Forest Carbon Finance In 2015

8 January 2015 | The Lima Climate Talks last month yielded the Lima Call for Climate Action, which includes both a negotiating text that will be the basis for the start of negotiations in 2015 and general rules for countries to develop their Intended Nationally-Determined Contributions (INDCs) to the climate effort. With deforestation accounting for more than 15% of all greenhouse gas emissions, many countries will undoubtedly seek to incorporate REDD+ (Reduce Emissions from Deforestation and Degradation and other land use activities (REDD+) into their INDCs, meaning we now have two separate REDD+ tracks to consider.

That’s because INDCs don’t kick in until 2020, but REDD+ is already being deployed today through the private sector and various donor agencies. That means countries will need to figure out exactly how REDD+ is financed in the 2015-2020 period and how it will be integrated into INDCs after 2020. For that to happen, we must all be able to see where REDD+ finance comes from, where it goes, and what it achieves activities that have, until now, been difficult at best.

REDDX

In 2011, Forest Trends launched the REDD+ eXpenditures Tracking Initiative (REDDX) to provide greater transparency around REDD+ financial flows. Despite over US$7.3 billion pledged to support REDD+ Readiness by 2015, information has remained limited on how much of this finance has actually flowed to implementing REDD+ on the ground. In partnership with national government and civil society organizations, REDDX currently operates in fourteen countries collectively representing around 1.1 billion hectares of forest, or about 72% of the global tropical forest cover.


For a comprehensive overview of the Lima COP, see “Countries Know They Have to be Bold and Ambitious Next Year: Lima Negotiations Set That in Motion“.

For a detailed understanding of the new bottom-up approach to combatting climate change, see “INDCs, REDD+, And The Alphabet Soup of COP 20“.


We just released our first REDDX report, “Tracking REDD+ Finance“, which focuses on the years 2009-2012, covering the major developments of the Fast Start Finance period, in the initial seven REDDX pilot countries: Brazil, Colombia, Ecuador, Ghana, Liberia, Tanzania and Vietnam. The consolidation of the major trends and findings in each of the seven REDDX pilot countries presents a microcosm of the global picture of REDD+ finance. Key findings include:

  • Increasing commitments to REDD+: Between 2009 and the end of 2012, total REDD+ finance commitments increased steadily to US$1.2 billion.
  • Large gap between commitments and disbursements for REDD+: In the seven pilot REDDX countries, large commitments by donors for REDD+ were often followed by long delays before initial disbursement of funds. Of the US$1.2 billion tracked by REDDX in seven countries, less than a third (US$378.3 million) had been disbursed by the end of 2012.
  • Multilateral sources of funds are beginning to overshadow the bilateral donors and private foundations that had supplied early REDD+ finance: Approximately 78% of all REDD+ finance was committed by bilateral government donors, with the governments of Norway and Germany responsible for over 91% of these commitments.
  • The role of domestic contributions by REDD+ countries increasingly recognized: The extent to which national governments are themselves supporting activities for REDD+ has not been comprehensively quantified, yet domestic financing is increasingly being recognized as an important piece of the REDD+ finance landscape.
  • Low level of private sector financing: Our findings show that the private sector is still not making large-scale REDD+ investments. Data from the voluntary carbon market indicates that the private sector spent US $379 million in carbon offsets in 54 countries during 2013 while the seven REDDX countries only tracked around US $1.2 million. REDDX tracks funding and activities associated with national level REDD+ development. For private sector projects that are not linked with jurisdictional REDD+ programs, please refer to Ecosystem Marketplace state of the voluntary carbon market report 2014.

This report and other information can be found on the REDDX website at: http://reddx.forest-trends.org/

Women Key to Scaling Adoption Of Clean Cooking Solutions

5 January 2015 |When EcoZoom began designing its first cookstove, it wanted to include women from the start. “It was common sense for us, explains Amanda West, the co-founder and Chief Communications Officer at EcoZoom. “The cornerstone of our business is our product, and if we don’t have a product women want to use, the whole business was going to crumble anyway.

To make a product that women will use, the company involved them throughout the design process. “It was over 230 participants in the whole design process, she says. “Then we came out with this awesome charcoal stove that women are in love with.

The design went on to win Gold in the International Design Excellence Awards earlier this year, and now EcoZoom wants to integrate gender inclusion throughout the rest of their supply chain. However, they’ve found that including women isn’t always as simple as stakeholder consultations.

That’s where the Global Alliance for Clean Cookstoves comes in. EcoZoom is one of 6 Spark grant recipients, and the Alliance is helping them develop data that more clearly identifies the users by gender. In addition to working with individual companies, the Alliance also works to collect sex-disaggregated data at the sector-wide scale beginning with the organization’s newly-released 2013 Results Report.

The report was informed by a survey that asked all respondents about their gender strategies, as well as for data that breaks down users by gender when available. While over three-quarters of partners reported having a gender-focused strategy, challenges remain to appropriately address gender issues in the clean cookstoves and fuels sector. Most organizations (35%) cited funding as a key barrier to further implementation. Other commonly-cited issues include internal capacity, capacity of partners, ability to scale, and the ultimate sustainability of such operations.

The Alliance hopes to address these challenges head-on, since increased knowledge from data and case studies could help cookstoves activities around the world become more effective.

As a case in point, another Spark grantee, Sustainable Green Fuel Enterprise (SGFE), could have benefitted from adapting EcoZoom’s design process. A 2014 recipient of the prestigious Ashden Awards in 2014, SGFE still scored low on gender in their SPARK Fund application. The primary reason cited? Because SGFE didn’t disaggregate their data by gender, and didn’t address gender concerns throughout the supply chain.

“Now we start to include them [women], explains Carlo Fig  Talamanca, SGFE’s CEO. “Not just because we want to do good, but because it will also help us do better business.”

Talamanca already knew that women were integral to his supply chain. They were the majority of owners in retail shops, and restaurants that made bulk orders from his company employed many women. He had also found that women SGFE hired were more reliable than their male counterparts, even if they weren’t able to provide heavy manual labor.

However, he didn’t have an established strategy for including women his actions were primarily reactive, not proactive. In particular, problems started when he hired a female accountant and an administrative manager earlier this year. Talamanca explains that while the men weren’t overt in their disrespect toward the new hires, their subtle actions that had a big impact sometimes they might ignore what she said or be mildly rude in a response to her.

“I got really upset, Talamanca said. “I said anyone who is really impolite not just to women or to management, but to each other in general then they get a monetary fine. This they understand, because we enforce it.

Talamanca welcomed support from Els Rijke, the gender expert sent by the Alliance as part of the Spark Fund. The expert walked through every aspect of SGFE’s supply chain and created a gender action plan based off of the Alliances best practices guidebook,Scaling Adoption of Clean Cooking Solutions through Women’s Empowerment.

“She doesn’t have a magic wand, he explained to me over the phone. Instead, the expert would ask questions about practices or actions that were taken for granted and try to figure out the cultural reasons behind them. In some cases, problems were only tangentially gender-related and more overtly poverty-related.

Many of Talamanca’s employees come from poor waste-picker communities. Though they receive higher wages from SGFE than from many others jobs available, the women usually more responsible employees by showing up on time and working harder sometimes skip days.

Upon further questioning through a series of interviews, they found that this is because the majority of workers are indebted. The women are more often the ones who take out loans and repay debts (though their husbands often spend the money). They would skip days to work another job or try to find cash to pay off their debts.

After these interviews, Talamanca and Rijke worked to create a matrix of possible solutions and ranked them by long-term effectiveness and risk reduced. As a next step, Talamanca will review these suggestions to decide the next course of action.

He plans to address the lending issue immediately. Starting in November, Talamanca will pay salaries through a micro-finance institution instead of in cash. The bank account has multiple benefits: it reduces risk of theft both at the factory and at the employees houses, as well as encouraging savings.

A third benefit, as yet untested, is the opportunity for low interest loans. SGFE will back a few employee loans, so workers can benefit from reduced interest rates instead of going to money lenders. If the first test cases go well, Talamanca hopes to expand the backing to all employees that meet certain conditions (such as seniority or demonstrated reliability).

Back in Kenya, West of EcoZoom will also be deciding next steps. Asked what the most important take-away was from these consultations, she replied that with gender, it’s really important to think about your strategy for engaging men as well as women.

As EcoZoom looks to expand into manufacturing activities, they want to include women throughout the process. However, going into a community with high unemployment and only offering jobs to women may create additional problems for them at home.

West added, “Some organizations have tried to recruit women as sales agents¦ but then found that they were building all this income for women, but when she would bring it home the man would just take it. Because the man didn’t have any education about reinvesting money in the business, this short-term view hurt women entrepreneur’s ability to be successful.

“If you don’t look at it holistically, you don’t create the solution you set out to create. You’re really affecting a family and a household.

California Regulators Bump Rice Offsets, Forestry Updates To 2015

23 December 2014 | The California Air Resources Board (ARB) delayed the potential adoption of a new rice cultivation protocol the first crop-based methodology considered by the ARB as well as proposed updates to the forestry protocol to 2015 amid controversy about the planned revisions.

The rice cultivation protocol promotes eligible practices that reduce methane emissions from rice cultivation, such as switching from wet seeding to dry seeding and early drainage in preparation for the harvest in California. The ARB projects potential offset supply under the new protocol in the range of 500,000 and 3,000,000 tonnes of greenhouse gas reductions through 2020 the scheduled end date for California’s cap-and-trade program.

Board consideration of the rice cultivation protocol has been delayed several times due to questions raised by stakeholders about the environmental integrity of the offsets, namely the potentially destructive impact on the habitat of bird populations. But the updated protocol incorporated safeguards against negative impacts on migratory birds such as the exclusion of offsets from rice cultivation within the Butte Sink Wildlife Management Area a critical habitat and bans a particular project activity even though the practice could generate additional offset supply.

Robert Parkhurst, Director of Agriculture Greenhouse Gas Markets for the Environmental Defense Fund, praised several elements of the proposed protocol, including the ability of farmers to cooperate and aggregate their emissions reductions into a single project and the ability to perform risk-based and randomized verification since verification is typically responsible for 50% of the total project development cost.

“I think the protocol is in really good shape as it is,” he said.

The Rice is Still Simmering

In the days leading up to the hearing, several stakeholders urged the ARB not to proceed with the rice cultivation protocol without making substantial revisions. Leslie Durschinger, Founder and Managing Director of project developer Terra Global Capital, encouraged the ARB to include a stronger and clearer consolidation option. While the protocol was moving in the right direction in allowing consolidation of projects and related reports, the system as proposed did not support the level of consolidation necessary to make the rice protocol economically viable for growers to adopt, she said.

In March, the American Carbon Registry listed the first rice project, which aggregates rice growers over a 5,000-acre area in California’s Sutter, Colusa and Glenn Counties to reduce the equivalent of 6,700 tonnes of carbon dioxide emissions.

The American Farmland Trust (AFT) identified issues related to the calculation of emission reductions of rice cultivation projects that could reduce the amount of reductions credited to the grower, perhaps unnecessarily, said James Daukas, Vice-President, Programs.

However, the evaluation and the eventual approval of the rice cultivation protocol is critical for future consideration of nutrient management, wetlands and grassland protocols that stakeholders would like the ARB to adopt to expand potential offset supply, Parkhurst said – a sentiment echoed by others.

“The rice protocol has set the stage for a lot of additional protocols from agriculture,” he said.

In the Land of the Midnight Sun

Stakeholders speaking at the board hearing expressed widespread support for the inclusion of forestry projects located in Alaska in California’s program. Currently, forestry projects providing offsets to California’s program are required to be based in the lower 48 US states.

The ARB did not allow Alaska-based projects when considering early- action methodologies and programs in 2011 because of the absence of data from the Forest Inventory and Analysis Program of the U.S. Forest Service. Now having access to such data, the ARB staff has proposed allowing Alaska-based forestry projects into the program. But more revisions must occur before the proposal becomes official such as revising the approach for establishing baselines for improved forest management projects on public lands.

Removing the ban on Alaska-based offset projects from the cap-and-trade program would give the native populations in the state an alternative to timber harvest and reward sustainable forest management, said Sheri Buretta, Chairman of the Board Chugach Alaska Corporation.

“Alaska forest carbon offset projects could generate millions of offsets while achieving social, environmental and economic benefits to our Alaska native populations,” she said. “The data was not available when the program first started and now it is.”

A Chilling Effect

Foresters and forest carbon project developers, however, objected to several proposed technical updates to the forestry protocol, including planned changes to standards for even-aged management of forest stocks.

The proposal would have a “chilling effect” on the participation of even-aged-managed forests because it would create a substantially larger and longer-term buffer that is inconsistent with the requirements of the California Forest Practice Act, argued Gary Rynearson, a professional Forester with Green Diamond Resource Company, which owns and manages forest lands in Washington and California.

“These excessive buffers go far beyond prescriptions recommended,” said Roger Williams, President of Blue Source, which has registered 44% of the forest carbon offsets issued by the ARB to date. “Our proposed solution is to maintain the existing protocol language. The existing language was carefully developed over a 5-year period by a diverse group of expert stakeholders and should not be abandoned.”

Buyers’ Liability Still a Thorny Issue

The buyers’ liability provisions were a major topic of conversation following the ARB’s decision to invoke the invalidation provisionsfeatured in the state’s cap-and-trade program for the first time in November. The ARB invalidated 88,955 offsets for ozone-depleting substances, but limited the invalidation to one particular carbon offset project by developer EOS Climate generated at the Clean Harbors facility in Arkansas.

Thursday’s hearing marked the first time when stakeholders were able to voice their concerns about the final invalidation directly to board officials in a public hearing and they were not shy about raising their objections. A consistent theme revolved around the fact that the ARB invalidated the offsets for an alleged violation unrelated to the actual generation of the offsets, which represented real, quantified and verified emissions reductions by the ARB’s own admission, and the need for the ARB to provide specific guidance about the circumstances that would trigger a violation.

Adam Smith, ½Program Manager of Climate and Air Policy at Southern California Edison, said the lack of clarity in the invalidation rules creates problems for developers, registries and entities regulated under the cap-and-trade program.

The International Emissions Trading Association (IETA) recommended modifications to clarify that only activities in the offset project area could potentially trigger invalidation and that only a confirmed formal violation notice should trigger an invalidation investigation.

“It remains unclear what exactly constitutes a violation,” said Josh Strauss, Director of Forest Carbon Projects for project developer Blue Source, speaking on behalf of IETA. “IETA believes it is extremely important to ensure that violations unrelated to actual offset project activities are not grounds for invalidation.”

IETA also suggested a modification that specifies that only offsets generated during the period of an actual violation could be subject to invalidation rather than all offsets generated during the entire reporting period.

ARB board members appeared receptive on the need to offer guidance on the type of violations that would rise to the level of offset invalidation even as they acknowledged the difficulty in providing such guidance.

“I think that’s going to be a thorny issue, but it’s something that needs to be worked on,” said ARB board member Judy Mitchell.

“It’s not an easy job and it’s a slippery slope, but what’s going to be in front of Mr. (ARB Executive Officer Richard) Corey is a whole slew of possible invalidations,” said ARB board member Sandra Berg.

Indigenous People Call For Scaled Up REDD As Study Highlights Precarious State Of Territorial Forests

3 December 2014 | LIMA | Peru | “All across the Amazon, the only thing standing between forests and destruction is us, the people of the forest,” said Jorge Furagaro of COICA (Coordinadora de las Organizaciones Ind­genas de la Cuenca Amaz³nica, Coordinator of Indigenous Organizations of the Amazon River Basin), a federation of indigenous people across Latin America, as he presented the findings of a peer-reviewed paper appearing in the academic journal Carbon Management.

Entitled “Forest Carbon in Amazonia: The Unrecognized Contributions of Indigenous Territories and Protected Natural Areas“, the paper says that trees on indigenous and protected lands store more than half of the carbon content of the Amazon, but that more than half of those trees are in danger of being destroyed, while roughly 14% of indigenous territories have still not been officially demarcated. The findings bolster the case for ramping up the demarcation of indigenous lands and of using REDD (Reducing Emissions from Deforestation and Degradation) finance to support indigenous protection efforts.

“All across the Amazon, we have indigenous people crying out for help to defend the forest,” said COICA Coordinator, Juan-Carlos Jintiac. “But because they had no deforestation, they had no access to REDD finance. Now we see that their forests are in danger, and they have earned support.”

While national reference levels focus on historic rates of deforestation, the paper looks at current threats and concludes that roughly one-third of indigenous and protected territories are under “immediate threat” from illegal logging, mining, dams, and agriculture, while an additional fifth are under “near-term” threat.

Written by a team from COICA, the Environmental Defense Fund (EDF), and the Woods Hole Research Center (WHRC), the paper also takes a new look at sequestration, using more detailed measurements of carbon stocks than had previously been available, and says that indigenous lands store more carbon than had previously been believed.

“Our knowledge and awareness is changing every day,” said Furagaro. “In Colombia, we thought that old forests would not sequestrate as much carbon as young ones, but now we know just the opposite is true.”

The Amazonia Network of Georeferenced Socio-Environmental Information (RAISG, Red Amaz³nica de Informaci³n Socioambiental Georreferencia) has incorporated the findings into a map, which is available online here, with explanations in Spanish, English, and Portuguese.

The Need for Demarcation

Indigenous leaders used the occasion of the paper’s release to renew calls for demarcation of their lands.

“We now have evidence that there are strong rights, there are standing forests,” said COICA President Edwin V¡squez, who co-authored the paper. “Knowing that we have more than half of the region’s carbon on indigenous and protected lands, we can tell our leaders so they can strengthen the role and the rights of indigenous forest peoples.”

REDD and Life Plans

In a separate session later in the day, Jintiac and indigenous leaders from the Amarakaeri and Shuar people outlined their “Life Plans”, which are blueprints for long-term sustainable growth across the Amazon. Most indigenous people have developed such plans over the past decade, but they lack the funding to get them off the ground.

“If you look at what REDD does and you look at Life Plans, their objectives are basically the same,” said Jintiac.

In a Wednesday session, representatives from the Amarakaeri Communal Reserve of Peru and the Federaci³n Nativa del R­o Madre de Dios y Afluentes (FENAMAD) will offer details of a new methodology that uses Life Plans as a benchmark in the success of REDD.

Changing Shape of REDD

The role of indigenous people and REDD is emerging as a central theme of talks in Lima, and Furagaro said it may very well take a different shape in different parts of the region.

“It’s difficult to say that there is a comprehensive policy towards the Amazonian Indigenous REDD, since the government of each country is different,” he said. “The strength of different initiatives depends on the political and negotiating capacity of the indigenous communities and the state.”

Todd Lemons: Ecosystem Entrepreneur

Third in a series.

7 July 2014 | Todd Lemons spent 15 years working in sustainable forestry before he ever set foot on Borneo, and he thought he knew what a healthy forest looked like. So when he passed through a patchwork of palm-oil plantations and second-growth native forests on his way to Tanjung Puting National Park, his heart sank.

“Quite frankly, compared to sustainably-logged [secondary] forests I had gotten used to in the Amazon Basin, this one looked scraggly,” he says – and scraggly could ruin everything, because his plan to save the Seruyan Forest hinged on it being full of carbon, which to him meant plump, tall or both. If the Seruyan itself looked anything like the forest he was driving through, he thought, this whole trip is for naught.

 Todd Lemons and an orphaned infant

Todd Lemons and an orphaned infant

The year was 2007, and the world still seemed intent on forging a global solution to climate change by the end of 2009. The global economic crisis hadn’t yet pushed climate change off the front pages, and major media outlets had “discovered” that deforestation generated at least 15% of all greenhouse gas emissions – and possibly more. For Lemons, there was something else happening, too: his daughter had gone off to 1st grade, and his son had just started kindergarten.

“Your mindset changes when your kids reach that age,” he says. “Your focus shifts from worrying about their immediate survival to worrying about their future in a visceral way, and I didn’t like the world I was seeing in their future.”

It was the latest epiphany in a life of many twists and turns that began with romantic notions of the Amazon Rainforest, fed by Lemons’ grandfather’s tales of his own adventures in Guyana and nourished on a steady diet of National Geographic magazine. It was in National Geographic that he first learned of the woman he was on his way to meet: Birute Galdikas, who had been rescuing orphaned orangutans on the island since the early 1970s.

Lemons graduated from college a few years after reading about Galdikas, and then in the early 1980s he followed in his grandfather’s footsteps – first to Guyana, then to Chile and eventually to Brazil and Bolivia, where he got a job sourcing hardwoods for major American furniture dealers.

“It all started off great, and it was very exciting for a young twenty-something-year-old,” he says. “But then I had to go and look at was happening behind the scenes – at the sawmills.”

 Todd Lemons walks through a freshly-destroyed patch of forest

Todd Lemons walks through a freshly-destroyed patch of forest.

He likens the experience to that of a committed meat-eater who wanders into an unregulated slaughterhouse.

“At that moment, it’s no longer as simple as just a piece of steak or a simple wooden coffee table,” he says. “There’s a cost and a consequence behind your consumption that we have to face.”

He became incensed – not just at the environmental destruction, but at the pointlessness of it all.

“The primary mandate from the customer was to buy the widest, longest piece of mahogany you can find, because then we can be lazy [when it comes to forming the wood on-site],” he says. “So here I am sourcing this, and I’m looking at scrap piles bigger than the piles we’re shipping, and that’s putting an unnecessary burden on the environment, because a lot of this is going into a chair leg that’s no more than a foot and a half long.”

He implemented a “cut-to-size” program, which involved whittling the trees into smaller pieces designed to fit specific units of furniture before shipping the wood. As a result, he slashed the volume of trees that were destroyed but increased the volume of semi-finished products – and developed a lifelong obsession with finding economically viable solutions to environmental challenges.

Taking a Pass on Forest Carbon

In 2003, Lemons found himself managing a million-acre plantation forest in China as the world was gearing up for the 2005 implementation of the Kyoto Protocol, in which nearly 40 developed countries agreed to slash greenhouse gas emissions, and to help developing countries do the same. The Protocol, he learned, made it possible for companies that emit greenhouse gasses to reduce their carbon footprints by purchasing carbon offsets that reduce emissions elsewhere. It also made it possible for companies to generate carbon offsets by planting new trees (“afforestation”) or reestablishing lost forest (“reforestation”). His bosses asked him to find out if they could use carbon offsets to finance the expansion of their plantation.

“I looked into it, but economically, it would have been like a slow drip,” he says. “The money they could earn from carbon was just a rounding error compared to the money they were making by harvesting the forest.”

Plus, he adds, it just didn’t feel right.

 Birute Galdikas, Siswei, and Todd Lemons share a meal.

Birute Galdikas, Siswei and Todd Lemons share a meal.

“Morally, it was like a double dip,” he says. “We were going to plant the plantation forest anyway, and it didn’t seem right to get a credit for something that we’re already going to do.”

That, he later learned was a concept known as additionality: carbon markets don’t pay for business as usual. To earn carbon offsets, a developer has to prove that the finance for carbon reduction makes the reduction possible. For Lemons, “additionality” meant that even if the payments were higher, his company wouldn’t have qualified.

“I told my bosses that carbon credits weren’t worth their time, but the idea kept nagging me,” he says. “I loved the idea of a market mechanism that would pay for conservation, but I didn’t think of a plantation as conservation.”

Then he learned of a practice called avoided deforestation, which grew out of new thinking in the late 1980s among innovative organizations like Conservation International, The Nature Conservancy and Brazilian NGO SPVS. The idea was to generate carbon offsets by saving endangered rainforest rather than by planting new trees.

“That resonated with me,” he says. “If you could earn money by protecting a virgin forest – that’s cool.”

It might have been cool with him, but it wasn’t cool with some of the more traditional environmental groups like Greenpeace and Friends of the Earth. As the Kyoto Protocol took shape in the 1990s, they made sure avoided deforestation wasn’t part of it.

Simply REDD

But avoided deforestation didn’t die. Companies continued to use it voluntarily to offset their emissions, and rainforest nations continued to push for its inclusion in the United Nations Framework Convention on Climate Change (UNFCCC). By the time Lemons came to Borneo in 2007, Papua New Guinea had managed to get avoided deforestation back on the UN agenda, but now it was called REDD, for “Reduced Emissions from Deforestation and forest Degradation.”

The concept was deceptively simple: find a patch of forest that’s about to be destroyed, measure the carbon content of that forest, save the forest, and earn credit for the carbon that you keep locked in trees.

In practice, it was much more complicated than that. First, you had to prove that the forest you were saving really was endangered. Then you had to prove that your actions saved it, and finally you had to prove that the forest you saved didn’t result in another patch of forest being destroyed elsewhere.

The Seruyan Forest he was traveling to was definitely endangered: palm oil company PT Best had a concession to develop it, and the company had already developed 10,000 hectares. He hoped that Birute Galdikas could help him identify a way to save it.

The bigger challenge was to make it work financially, but the biggest challenges of all came from two sources. One, as expected, was PT Best, which would use its economic and political muscle to try to block the project any way it could. The other chalenge came from a source he hadn’t anticipated: old-school environmentalists who seemed to hate REDD almost as much as PT Best did.

A Labor of Love

On the economic front, Lemons found that-despite all the talk to the contrary, REDD wasn’t a lucrative endeavor, and it probably never would be – especially compared to Palm Oil.

At the time, most of the REDD research was focused on the Amazon, so he used the well-researched Brazilian forests as a model. He knew that a forest there held an average of about 200 metric tonnes of carbon per hectare. That translates into 200 tonnes of carbon dioxide kept out of the air over the 30-year lifespan of a forest-carbon project. At $7 per tonne of carbon dioxide, that’s $46 per hectare per year – and that’s just income. He had no idea what it would cost to measure, monitor, and protect the forest, which meant he couldn’t even begin to calculate the profit.

The calculus on palm oil plantations was, by comparison, incredibly straightforward: a typical plantation generated $1,000 per hectare per year in pure profit once it was up and running, and if the original forest had enough timber, the palm-oil plantation might even turn a profit on the conversion.

While the prices of carbon offsets and palm oil both fluctuated, carbon prices weren’t going to increase twenty-fold, and it was clear that it would be more lucrative to destroy a forest than to save it – a fact lost on many of the organizations involved in the REDD debate.

REDD Misunderstood

Proponents tended to talk of REDD as an “incentive” to save forests, while critics talked of it as some diabolical scheme hatched by the remnants of Enron to commoditize forests. Proponents, in other words, talked of a green utopia, while opponents talked of “carbon cowboys” and “land grabs.” Both sides were wrong.

REDD didn’t create an incentive to save forests, because anyone who responded to purely economic incentives would opt for palm oil. What REDD did create was a financing mechanism that might make it possible for people who wanted to save the forest to do so.

“It will always be easier to chop a forest than to manage it,” says Brazilian indigenous leader Almir Surui, who also incurred pushback from old-school environmental groups when he developed the first indigenous-led REDD project. “That’s what no one seems to get: REDD is hard work, and it’s not something you do if all you want to do is make money.”

To make matters worse, the land-grab that REDD opponents worried about had already happened, but the grabbers weren’t “carbon cowboys.” They were palm-oil developers like PT Best, which was in the process of devouring the Seruyan Forest. The grabbers in turn sold their palm oil to companies like Bunge, Cargill, and Unilever, who put it into foods that the rest of us bought and ate.

“In the end, we’re all complicit, because we all eat this stuff,” says Lemons, munching a granola bar that he purchased at Whole Foods on a recent trip to the United States. “The only difference between you and I and most people out there is that we got to know firsthand where it comes from.”

One Tool Among Many

To stifle climate change, he says, we have to change global buying patterns, but REDD is more of a supply-side solution, analogous to the cut-to-order procedures he implemented in Latin America. It’s one tool in a very big box that includes organizations like the Roundtable on Sustainable Palm Oil (RSPO), which aims to promote sustainable sourcing of palm oil, and even old-school environmentalists to put pressure on those companies that need some prodding.

Lemons says those tools all fit together: by putting a price on degradation, he says, REDD will eventually help consumers understand the true cost of their purchases. On a more immediate level in the short term, REDD can be used to leverage more efficient land-use practices among producers – by shifting production from forested lands to degraded lands, for example, as the Indonesian government advocates.

There’s something else, too, and for Lemons, it was critical: REDD, he says, unites economy and ecology by turning conservation into a business, while old-school environmentalists embraced a false dichotomy between growth and conservation.

“REDD is part of a global paradigm shift that traditional environmentalism is missing,” he says. “Opposition-based environmentalism has its place, and so does philanthropy, but neither can hold a candle to what the global economy can achieve. We just have to get that economy properly aligned.”

But for REDD to work as a business, Lemons would have to show that the returns – while nowhere near as lucrative as a ravenous sector like palm oil – were still worth pursuing. Then he’d have to attract investors, and the only way that would work was if the forests stored enough carbon to make the returns worthwhile.

As Lemons looked out at the scraggly trees zipping past his car window on his way to Seruyan Forest, he knew there wasn’t enough carbon in them to fund a kindergarten – let alone take on a palm-oil company looking at a $150-million-per-year business. He also knew that any hope lay not in the trees, but in the soil.

The Power of Peat

That’s because the Tanjung Puting National Park is a massive lowland swamp with trees in it, and those trees have been dropping leaves into water for 10,000 years. Those leaves have coalesced into a half-decayed loam of organic matter up to ten meters deep.

 Birute Galdikas with two orphaned orangutans.

Birute Galdikas with two orphaned orangutans.

Environmentally, the park and the Seruyan Forest that PT Best was converting to a palm-oil plantation are massive bins of carbon that extend to the mangroves along the Java Sea. As companies like PT Best destroyed the forest to make way for their plantations, they were releasing hundreds of millions of tons of carbon dioxide into the atmosphere. That’s what made Indonesia the world’s third-largest emitter of greenhouse gasses, behind the United States and China. It’s why Lemons needed to save the Seruyan Forest.

But for that to work, he had to know how much carbon was in those peat swamps and how much would be released if PT Best continued destroying them. That was a question no one had answered because no one had written the calculus for it.

“We now know that peatland has about eight times as much carbon per hectare as a typical rainforest of the Amazon,” says Heru Prasetyo, the head of Indonesia’s REDD Task Force. “Back in 2007, no one really knew.”

Lemons certainly didn’t know that as he climbed out of the taxi at Galdikas’ orangutan care center, but he sensed that she could somehow help him find the answers. Unfortunately, he’d neglected to tell her that he was coming.

Next Week: Wrestling with orangutans: The genesis of the Rimba-Raya REDD project.

 

DelAgua: Delivering Emissions Reductions, Clean Water, And Hot Beans

 

30 June 2014 | DelAgua Health is in the business of emissions avoidance as well as emissions reduction. It’s a tricky but vital distinction. In addition to cutting climate-warming emissions that are already occurring, the UK-based company is focused on preventing emissions that never have to occur in the first place – especially from the 3 billion people in the world who cook food using traditional cookstoves or open fires, and the 884 million who still do not have access to safe drinking water.

Carbon finance through the sale of offsets is central to DelAgua’s business model. Its programme of activities (PoA) under the United Nation’s Clean Development Mechanism (CDM) combines the distribution of two household devices – clean cookstoves and water filters – to Rwandan families and has been piloted in 2,000 homes so far. In addition to reducing the need for fuelwood to boil water and cook food, therefore alleviating pressure on forests, the water filters almost instantaneously reduce water-borne illnesses while the lower-smoke cookstoves relieve respiratory ailments over time.

Matt Spannagle, DelAgua’s Climate Partnerships Manager, spoke with Ecosystem Marketplace (EM) ahead of the release of EM’s full State of the Voluntary Carbon Markets 2014 report about the motivation behind the double registration, some unexpected benefits of clean cookstoves, and why carbon offset sales makes more sense than other potential finance streams.

Allie Goldstein: I know that DelAgua registered this project under both the CDM and the American Carbon Registry (ACR)? What was the motivation for the double registration?

Matt Spannagle: The low prices on the CDM is mainly it. We wanted to sell on the voluntary market as well as to people who would normally buy CDM. If you talk to American buyers, particularly US buyers but also Canadian buyers, they would rather see the American Carbon Registry because it’s American or the VCS (Verified Carbon Standard) because it’s based in the United States. The idea of private-sector led or business-led initiatives that are doing good things has more traction with US buyers than a United Nations system that is somehow government mandated.

AG: Do you still have hope for the CDM?

MS: That’s kind of the billion-dollar question! It’s a pretty risky gamble to put all your eggs in that basket. But at the same time, the fundamentals are: climate change is terrible now and it’s getting worse every day. The commitment globally is for a two-degree target, though anyone who knows anything about it doesn’t really believe we’re going to meet two degrees on the current trajectory. But that is the political commitment to doing something about it, and the only thing that has been shown to work at scale so far is market-based mechanisms. And CDM is the vanguard of that market-based mechanism.

AG: Tell me a little bit about the programme of activities and how the crediting works for doing both cookstoves and water filters within one program.

MS: It’s about avoided biomass use. You use less wood for cooking [with the new cookstove], and if you have a water filter, you don’t have to boil your water. There is a bit of a cross-over factor: When we gave people cookstoves, they would use less wood to boil their water, so we had to do a calculation for that cross-over, which we had to get approved by ACR and by the CDM Executive Board. But in terms of the monitoring requirements, it’s relatively straightforward.

And if you’re going through the trouble of setting up a program to get a cookstove in someone’s house, it’s not much additional effort to also put a water filter in their house. So you get that efficiency of scale and efficiency of process. We have a pilot of 2,000 households. We have good uptake rates, high responsiveness, and villagers are getting on with their lives.

Read more from the Forest Carbon Portal.

 

Additional resources

Biof­lica: Futbol Shines Light On Brazil’s Forests

As fºtbol fans tune in for the World Cup, host country Brazil’s emissions have also been in the spotlight. The International Federation of Association Football (FIFA) pledged to offset all direct emissions from the event, while local companies and foreign visitors alike have been encouraged to offset their impact. Local project developer, Mariama Vendramini of Biof­lica, says this represents one of several initiatives that has helped increase domestic interest in forestry offsets.

18 June 2014 | While emissions reduction projects are dispersed across the world’s fifth largest country, recent initiatives have caught the attention of local businesses. In addition to FIFA’s offsetting goals, Brazil has encouraged private companies to donate offsets for the World Cup. So far, 11 companies have received a Low Carbon seal – representing 30% of the estimated emissions generated – to use in advertising during the games. This marks the first time private sector donations have been used in the quadrennial event.

Last year, offsetting in Brazil also scored international headlines when the Brazilian costmetics giant Natura Cosmeticos purchased 120,000 tonnes of carbon from the Paiter-Surui people. The project marked the first indigenous REDD (Reduced Emissions from Deforestation and forest Degradation) project in the world.

Mariama Vendramini, Finance and Commercial Director of Biof­lica, spoke to Ecosystem Marketplace’s Kelley Hamrick about the impact of these and other trends in Brazil. Biof­lica, a Brazilian company working to conserve the rainforest through environmental markets, has currently invested in and developed five REDD projects throughout Brazil’s western states.

KH: What have you seen in the Brazilian market this year? MV: We’ve been seeing a scattered market. We’ve seen demand mostly for small volumes and corporate social responsibility (CSR) purposes. We have our national plan on climate change that, within other activities, sets a cap on important sectors of Brazil’s economy: the largest emitters from sectors such as industry, agriculture, mining and transportation. So far they are in the phase of inventories development. On average and except land use, they have a 5% reduction target over the estimated level of emissions in 2020 considering 2005 as a base year. So that’s what’s happening on the compliance side. While this happens, companies that are more consumer-driven will do their CSR activities and some of them are considering offsets. So there are a few companies that have been steadily buying volumes on the voluntary market.

KH: It sounds like most are domestic?

MV: We have domestic companies but we also have Brazilian branches and subsidiaries of multi-nationals. So it’s not only Brazilians, but Brazilian companies are main front runners in sustainability. All are still learning what REDD+ is. We’ve found a little bit of skepticism from these companies because REDD+ was out of Clean Development Mechanism and we had all these struggles with technical aspects. But this changed as companies are getting to know more about REDD+, technical issues have been rapidly evolving and as the Warsaw Platform for REDD+ brought legitimacy by turning REDD+ into a wide accepted tool to tackle climate change under the United Nations Framework Convention on Climate Change. People are getting to know REDD+ better and understanding that projects and programs on the ground need to be carried out so that local realities can be changed and result in aggregate decline of deforestation.

Natura, a Brazilian company, bought significant amounts from the Surui project last year and this was good as a signal to other companies. Other examples come from the Brazilian chain of gas stations Ipiranga, Brazilian subsidiaries of the French Ticket Edenred and of the Spanish Santander. There are other companies moving the market with lower volumes still but as they get to know the mechanism more, they are getting more interested. But we’re still on the way with it. There are a few issues that need to be demystified: first is the carbon management itself, then the use of offsets and afterwards advancing towards REDD+ as a high value added type of offset. This is where we are in the Brazilian market today.

KH: The World Cup might help with awareness, right?

MV: Exactly. And we see that there are a few prompts that are being developed in parallel with each other. There is the Brazilian government buying CERs and asking for companies to donate those CERs to be retired in the name of the government. An official stamp will then certify to the public that Brazil’s official emissions were made neutral.
There’s also FIFA’s initiative to offset their emissions in a program managed by BP Target Neutral. Then there are other initiatives driven by sponsors on their own emissions, such as the one done by TAM Airlines on offsetting their flights during the World Cup.

KH: Any other developments?

MV: We are also working with IPAM and GCP on the development of a Brazilian business case for an interim finance facility for REDD+. It would work as a linkage between what we have of forest supply that is being developed until 2020 and the potential Brazilian emissions reductions market that we are assuming will start operating in 2020. Our climate change national policy already mentions a Brazilian market as a tool to reduce emissions, and we are building upon that with a proposition of a viable mechanism to finance forestry emissions reductions generated until 2020. We’re working in many ways to scale up demand for REDD+.

KH: What are your future predictions about demand? Will these policies help?

MV: Demand will rise as public awareness grows with examples such as the World Cup’s, Natura’s and other companies’ activities on the voluntary market. And it has a shifting potential with a push from the to-be-established Paris agreement. Despite of the level of commitment to be assumed, we are already seeing the development of local mechanisms to price carbon that are popping up around the world pushed by this trend. We are seeing it happening within countries that had no reductions commitments under Kyoto. New pricing mechanisms being established around the world, recognition of REDD+ under the Convention and the increasing gap of emissions reductions needed to be made to keep us under a secure level or temperature increase put us in a path where demand for REDD+ will have to scale up.

 

Carbon Partnership: Breaking New Ground

 

June 9  2014 | Consultancy Carbon Partnership has finished designing and developing a new methodology for New Zealand forests – specifically, for its Rarakau project. While this first project covers only 1,000 hectares, it is part of a larger program that applies to indigenous forests nationally. Since these forests existed before 1990, they didn’t qualify for New Zealand’s compliance markets. Instead, Director Sean Weaver created his own methodology for the voluntary carbon markets.

However, the voluntary market presents its own challenges: buyers usually prefer the Verified Carbon Standard (VCS) for forestry projects. While elements of the methodology were created with VCS, the overall project has been verified under the lesser-known ISO14064-2 carbon standard – principally because Carbon Partnership and its funders could not afford the transaction costs of the VCS path. But both standards present complications and New Zealand project developers face other larger risks in developing current projects, Weaver explained.

Despite these hurdles, he hopes that the project’s strong biodiversity and conservation co-benefits will interest buyers – and he’s not afraid to look outside of the voluntary carbon markets to find them. Ecosystem Marketplace’s just released State of the Voluntary Carbon Markets 2014 executive summary highlights the growing trend (in New Zealand and elsewhere) of companies preferring and paying above-average prices for projects with strong co-benefits.

Kelley Hamrick: What stage are you at right now?

We’re just at the stage of commercializing the project. That’s also including a plan to try and find buyers who aren’t interested in carbon but are more interested in saving rainforests; for which, the bigger story is: what kind of forests are you protecting? Because, of course, there are buyers, even in the voluntary carbon market, who are more interested in a corporate social responsibility (CSR) claim than they are in offsetting carbon. It’s those kinds of people we need to try and connect with, for this particular project and program in New Zealand.

To read the rest of this Q&A, please visit the  Forest Carbon Portal  for free.

 

This Week In Forest Carbon News…

This article was originally published in the Forest Carbon newsletter. Click here to read the original.

 

12 May 2014 | The Brazilian state of Acre is “the best in the world when it comes to subnational jurisdictions working on REDD, (Reduction of Emissions from Deforestation or Degradation of forests),” Brian McFarland of the Carbon Fund told Ecosystem Marketplace. The state’s 2010 payment for ecosystem services (PES) law, known as SISA from the Portuguese acronym, aims to place economic value on forests, biodiversity, water, soil, climate – and even traditional knowledge – to create mechanisms to invest in ecosystem and cultural survival. The forest carbon aspect of the law is the furthest along, and in 2012 Acre partnered with the Verified Carbon Standard (VCS) to pilot their Jurisdictional Nesting REDD+ framework.

However, it was a long road before finance actually began to flow, especially for the rubber tappers and small farmers who constantly face competing demands. Last November, Chief Jose Maria Arara of the Arara people expressed his frustration at a workshop in Acre.

“When will PES arrive?” Zé Maria asked. “We’ve held about five different meetings…”

This year, he got his answer – at least in part. The Acre Association of Indigenous Agroforesty Agents received 3.6 million Reais (US $1.6 million) in January, and the state put up an additional 3 million Reais (US $1.35 million) in April. The funding is part of the German development bank KfW’s commitment to spend 50 million Reais (US $24.2 million) in Acre through 2018 – and it marks the German government’s first grant to a state rather than a country.

To disperse the first 1.5 million Reais this year, Acre’s government will issue a series of calls for proposals to support indigenous people’s long-term development visions, known as “life plans.” The awards will range from 50,000 to 210,000 Reais and can be used for a variety of activities, from strengthening land management practices to generating income for women. Though international REDD+ payments are based on the state’s ‘performance’ against emissions targets, Acre’s government has the leeway to distribute the funds internally based on a variety of activities consistent with the SISA law, including payments for watershed services and payments for habitat restoration. The state government believes these targeted payments will ultimately result in lower deforestation rates across its territory – and that means more REDD+ income down the road.

“We’re talking about 2.4 million hectares of forest being managed by indigenous peoples,” said Beto Borges, who heads Forest Trends’ Communities and Market Initiative, which has been working in Acre for years. “That’s 15 distinct ethnicities dispersed among 35 indigenous territories. Their traditional territories have been demarcated. They’re official. Now, the new funding from SISA will strengthen the management and conservation of their forests.”

More stories from the forest carbon markets are summarized below, so keep reading!

—The Ecosystem Marketplace Team

 

If you have comments or would like to submit news stories, write to us at general@forestcarbonportal.com.


News

INTERNATIONAL POLICY

Passing the torch

Speaking to the nearly 2,000 attendees of the Center for International Forestry Research’s (CIFOR) Forests Asia Summit on May 5, Susilo Bambang Yudhoyono, the outgoing President of Indonesia, called on his successor to continue the moratorium on deforestation he declared in 2011. Indonesia reduced its deforestation rate from 1.2 million hectares annually between 2003 and 2006 to 450,600 hectares annually between 2011 and 2013 under the policy, he said, avoiding the emission of 211 million tonnes of carbon dioxide. However, more work remains to be done. Illegal logging and slash-and-burn practices contributed to the recent debilitating fires in Riau province, and more than a hundred individuals and a dozen corporations are currently facing court trials for related crimes.

NATIONAL STRATEGY AND CAPACITY

All smoke and mirrors?

Australia’s Carbon Farming Initiative (CFI) will be folded into the Emissions Reduction Fund partly to create new opportunities for land-based carbon projects, perhaps including offsets developed under a proposed methodology that would allow soil carbon sequestration projects in grazing systems. The CFI announcement was made in an April white paper outlining the details of the fund, which the federal government sees as the centerpiece of its plan to repeal and replace the country’s carbon tax. However, the Labor Party’s Shadow Environment Minister Mark Butler said the plan was “nothing more than smoke and mirrors” because of the lack of funding certainty in future years. CFI offsets can be used for compliance under the carbon tax until February 2015.

Drafting REDD into service

India has released a draft national policy on REDD+ that aims to enable local communities to receive financial incentives for forest conservation and sustainable forest management initiatives. The proposed policy could allow India REDD+ projects to access millions of dollars provided by developed countries by creating a national regulatory body, establishing policies to safeguard local community rights, and developing a mechanism to fairly channel REDD+ funds to these communities. India’s Ministry of Environment and Forests noted that forest cover in the country neutralizes 11% of its greenhouse gas (GHG) emissions. But India only added three million hectares of forest from 1997 to 2007, according to its State of Forest Report. Comments can be made on the draft policy until May 27.

PROJECT DEVELOPMENT

Plan Vivo looking lively

After a relatively slow year of project development in 2013, with only two projects added to its pipeline, Plan Vivo, a standard for payment for ecosystem services projects, has already approved seven new Project Information Notes in the first quarter of 2014. Among these are the standard’s first non-forest carbon project, located in Mongolia, through which the University of Leicester and the Mongolian Society for Range Management will work with herders to conserve threatened grasslands. Another proposed project called ‘Two Worlds – One Bird‘ will finance habitat restoration for the Bicknell Thrush, a bird that migrates between the Dominican Republic and New York in the United States. Project activities will include reforestation in both countries.

FINANCE AND ECONOMICS

You snooze, you lose

Pakistan has failed to sign a formal agreement worth $3.8 million with the World Bank’s Forest Carbon Partnership Facility’s (FCPF) Readiness Fund by a March 31 deadline. The FCPF assists developing countries through compensation for REDD+ activities, including conservation, sustainable management and enhancement of forest carbon stocks. Pakistan was one of eight new countries to be selected from 27 that competed for the funds in December 2013. A pledge of $100 million to the fund from Norway allowed new entrants into the program, including Bhutan, Burkina Faso, Cote d’lvoire, Fiji, Dominican Republic, Nigeria and Togo, aside from Pakistan.

SCIENCE AND TECHNOLOGY

Houston, we have a problem

Since 2011, the National Aeronautics and Space Administration (NASA) has been monitoring forest loss using a global imaging satellite called MODIS (Moderate Resolution Imaging Spectroradiometer). So far in 2014, Bolivia, Malaysia and Cambodia have recorded some of the worst losses, and NASA officials suspect the cause is human activity. NASA releases deforestation reports quarterly that can assist conservationists and officials in detecting illegal logging or burning. The Quarterly Indicator of Cover Change identifies land areas that have lost at least 40% of their green vegetation cover annually.

Reverse the carbon curse

The latest Intergovernmental Panel on Climate Change (IPCC) report describes the actions that people need to take to maintain a safe and stable global climate, including carbon capture and storage (CCS) efforts to keep global temperatures from rising more than 2 °C. But trees remain the only CCS “technology” that can deliver on a meaningful scale. Jonah Busch of the Center for Global Development dissects the latest IPCC report and offers his own meta-analysis. “Not many models project that it’s possible to limit warming to +2 °C without CCS technology, but those that do require not only stopping deforestation altogether, but reversing it to create a massive terrestrial carbon sink of regrowing forest vegetation by 2030,” he wrote.

Putting the trees out to pasture

A recent study from the University of California, Berkley finds that if Brazil subsidized more productive use of pastureland and taxed less sustainable practices, deforestation rates in the country could be cut by half (or 25% of all global GHG emissions). Recommended practices include rotating where animals graze, planting better grasses more frequently, and amending the soil to unlock more nutrients. These practices result in doubling productivity for a given land area, potentially reducing pressure to clear more forest for pasture. “These practices are already used commercially on some ranches in Brazil, but they’re not yet cost-competitive because of higher upfront costs, so subsidies can provide a needed boost to make the investment worthwhile,” said study lead author Avery Cohn.

HUMAN DIMENSION

What not to wear

Major clothing brands H&M, Zara and Stella McCartney recently announced that, within three years, they will find alternatives to the viscose and rayon fabrics that may be sourced from endangered or ancient forests. Straw and recycled fabrics are possible substitutes for fabrics made from dissolvable pulp. H&M’s environmental sustainability manager, Henrik Lampa, said that prior to working with non-profit Canopy on the issue, company officials hadn’t been aware that their viscose and rayon might be driving deforestation. “The sustainability issue is a big learning curve for fashion companies. Consumers are expecting us to make good choices for them – and yet we can only make good decisions with good awareness of what is going into our products,” he said.

No more (forest) tears

From mouthwash to baby powder to Band-Aids, you probably have your medicine cabinet well-stocked with Johnson & Johnson (J&J) products – and, by association, palm oil. As of May 1, the personal care products company has committed to a new, comprehensive palm oil sourcing policy that includes no conversion of high conservation value areas, high carbon stock forests or peatlands, as well as social criteria such as respecting the land rights of indigenous peoples. Implementing the sourcing policy will not be straightforward, since most of the palm oil J&J buys is in a derivative form that doesn’t come directly from the plantation. But NGO The Forest Trust says that J&J is eager to take on the challenge

Not fit for man or beast?

Between 1990 and 2010, Zimbabwe lost nearly 30% of its forest cover – an alarming average of 327,000 hectares were felled per year. This destruction of habitat is at least in part to blame in the apparent spike in human-wildlife interaction in recent years. “If the lions are not eating our livestock, they are trying to eat us,” Zimbabwean villager Donotio Nyoni told Reuters. Organizations such as Carbon Green Africa are trying to change the financial incentives around forest conversion by developing REDD+ projects, but forests have stiff competition against the lucrative tobacco and timber industries and smallholders’ need for fuelwood. Lions, cheetahs, hyenas and buffalos may continue to be displaced.

STANDARDS AND METHODOLOGY

All risks being equal

Since the launch of California’s cap-and-trade program, buyers of forest carbon offsets have dodged a bullet faced by purchasers of other types of compliance offsets: the invalidation risk that could force them to replace problematic offsets. But the risk is one that all California offset buyers will soon have to bear as regulators approved a change shifting the invalidation risk for forestry offsets away from forest owners to the buyers. The change – designed to ensure consistency – was approved by the California Air Resources Board as part of a package of amendments that will become effective on July 1.

The Sixth Sense

A new tool developed by Terra Global Capital could allow project developers to use remote sensing instead of traditional ground-based forest inventory plots to estimate forest carbon pools. The remote sensing biomass measurement tool could help mitigate the challenges in estimating Aboveground Live Forest Biomass through a combination of remote sensing data and field measurements. This tool is designed to be used with VCS methodologies in the Agriculture, Forestry, and Other Land Use arena. The methodology is open for public comment until May 24.

Technically speaking

The UNFCCC Secretariat has published a technical paper on land use, land-use change and forestry (LULUCF) under the Clean Development Mechanism (CDM). The paper explores options for more possible LULUCF activities and alternative approaches to address the risk of non-permanence under the CDM, as well as their implications for validation, monitoring and verification of projects under the CDM.

PUBLICATIONS

Perception is nothing

The ‘gender debate’ in forest communities has seesawed from pre-1970s perceptions that men were the main contributors to family income to the post-1970s view that overemphasized women’s role in collecting forest products. An analysis of forest and rural livelihoods covering 8,000 households in 24 developing countries twists the assumptions again, finding that men and women contribute almost equally to the household income from unprocessed forest products. However, the study also shows considerable regional variability. In Latin America, men bring in about seven times more income from forest projects such as Brazil nuts than women. In Africa, “women tend to dominate,” said Terry Sunderland, a principal scientist with CIFOR.

Some pain, little gain

A review of REDD+ pilot projects in Nepal found that community forest user groups received little overall gain from these projects. There were some noticeable benefits, including better control over forest fires, but local groups had to make sacrifices to maximize the carbon offsets developed under the projects, such as cutting back the amount of wood they would normally use. “REDD+ is not a poverty reduction strategy; it is for reduction of emissions,” said Bhaskar Singh Karky, resource economist at the International Centre for Integrated Mountain Development. “But given our context, the drivers of deforestation and forest degradation stem from livelihoods needs. We have to enhance the livelihoods of forest dependent populations to prevent it.”

JOBS

Forest Carbon Program Research Assistant – Ecosystem Marketplace

Based in Washington, DC, the Forest Carbon Program Research Assistant will help in the development of a research product focusing on public-private partnerships for financing REDD+ projects, and support the development of the State of the Forest Carbon Markets report. The ideal candidate will have excellent writing and research skills (journalism skills a plus); strong Spanish-language speaking and writing skills; and the ability to work well in a team environment, but also with minimal management. This is a three-month position, paid hourly.

Read more about the position here

Program Associate – Forest Trends’ Katoomba Incubator

Based in Washington, DC, the Program Associate will support the development of pilot payment for ecosystem services projects in Latin America, Africa and Asia under the Katoomba Incubator. The successful candidate will have excellent analytical, research and time management skills; demonstrated interest in valuing ecosystem services; intercultural experience and language proficiency in Spanish, Portuguese or Chinese; and the capacity for extended travel. A master’s degree and/or experience with Geographic Information Systems, forest carbon standards, hydrology or forestry are highly desirable.

Read more about the position here

Senior Ecological Economist and Team Leader – Asian Development Bank

Based in the Philippines, the Senior Ecological Economist and Team Leader will review and synthesize methods and tools for ecosystem service valuation and REDD+ and analyze barriers, constraints and opportunities for their wider adoption in Asia and the Pacific, including potential entry points for the Asian Development Bank. The successful candidate will have a master’s degree in environmental or ecological economics and at least 10 years of experience related to PES or carbon finance; experience in Asia and the Pacific is highly desirable.

Read more about the position here

Malawi REDD+ Advisor – US Forest Service International Programs

Based in Lilongwe, Malawi, the REDD+ Advisor will advise the Department of Forestry in convening and coordinating governance structures of the Malawi REDD+ Program and lead coordination of REDD+ activities in Malawi. The successful candidate will have a master’s degree in natural resource management or a related field; at least five years of international work experience, preferably related to REDD+; experience living and working in Africa; and experience in program management and monitoring.

Read more about the position here

Product Manager Fairtrade Certification – FLO-CERT

Based in Bonn, Germany, the Product Manager will develop, implement and drive FLO-CERT’s strategy for its core Fairtrade service, representing FLO-CERT at industry events and driving business development activities. The ideal candidate will have at least five years of work experience in product management, a background in certification, and extensive know-how about the Fairtrade core services. Advanced language skills in German and/or Spanish would be a plus, as would experience with other schemes such as Rainforest Alliance or Utz Certified.

Read more about the position here

ABOUT THE FOREST CARBON PORTAL

The Forest Carbon Portal provides relevant daily news, a bi-weekly news brief, feature articles, a calendar of events, a searchable member directory, a jobs board, a library of tools and resources. The Portal also includes the Forest Carbon Project Inventory, an international database of projects including those in the pipeline. Projects are described with consistent ‘nutrition labels’ and allow viewers to contact project developers.

ABOUT THE ECOSYSTEM MARKETPLACE

Ecosystem Marketplace is a project of Forest Trends, a tax-exempt corporation under Section 501(c)3. This newsletter and other dimensions of our voluntary carbon markets program are funded by a series of international development agencies, philanthropic foundations, and private sector organizations. For more information on donating to Ecosystem Marketplace, please contact info@ecosystemmarketplace.com.

 

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Julio Tresierra: Transforming Lives With Investments In Watershed Services

16 October 2013 | Julio Tresierra has always been obsessed with change. That’s what lured him from his native Peru five decades ago, and it’s what keeps him going at 71. Since then, he’s been traveling the world – both geographically and philosophically – in search of real-world solutions to our deepest societal problems. He found the answers living with the poorest of the poor and working on over 60 social development projects with various civil society organizations and government agencies across Asia, Latin America, and Africa.

We reached him by phone in China, his booming baritone resonating with the power of a man half his age. He chalks his strength up to his playful curiosity concerning the world as well as his passion for knowledge – a passion that led him to embrace systems theory and the works of Fritjof Capra, which led him to appreciate the holistic approach to conservation that many payments for ecosystem services deals seemed to be taking.

Tresierra reasoned that if farmers and ranchers improved the areas upstream of a watershed by preventing sedimentation and erosion, then residents, businesses and landowners downstream, who rely on healthy watersheds to conduct business, would be willing to pay for the service. It would help lift farmers out of poverty, he thought, and also generate a sustainable cycle: farmers in upland areas, which are usually those who live in extreme poverty and grow food for consumption, would benefit from better crops to restore water quality. This would also enable them to sell their crops to local markets or even trade with foreign buyers. Ultimately, an investments in watershed services (IWS) scheme would allow for cooperation between the water sector and other stakeholders operating in a basin, instead of conflict and competition.

Over the past four years, his ideas for IWS plans have been implemented in Indonesia, Peru and Guatemala benefitting hundreds of families. And it continues to spread as local authorities move forward with the idea.

From Ideas to Actions

Eight years ago, Tresierra went to work for the environmental NGO World Wildlife Fund (WWF) and applied his model in cooperation with CARE, a humanitarian organization specializing in assisting marginalized populations.

“We felt it was critical to work with a humanitarian organization on this,” he says. “The whole point was to attack the drivers of degradation and to lift people and nature together.”

The result is a global network of pilot projects called Equitable Payments for Watershed Services.

Though considered a landmark accomplishment, it was difficult to get rolling, with a lot of “doors closing and opening,” and, “trying and failing.” The project couldn’t move forward in the field without undergoing feasibility assessments in different locations. But their perseverance paid off and the work done in northern Peru’s Jequetepeque watershed began to show significant results. According to Ana Marleny Cerna, the project’s regional coordinator, local communities’ have tripled their incomes in two years due to restoration of the ecosystem focusing on reducing contaminants from sediments. The Jequetepeque Basin includes the northern regions of Cajamarca and Lambayeque. Work on this project continues in collaboration with Peru’s Ministry of Environment and the irrigation board for Jequetepeque’s water users.

A Child of the Mountains and the Forests

Tresierra says he has always been linked to nature growing up in the Amazon rainforest and the Andes Mountains of Peru. He spent his childhood in Peru’s mountainous Central Sierra region and went to work on tunnel construction when he was 13 – work he chose to gain a sense of independence rather than because he had to.

“That began a profound process of learning,” says Tresierra. “I could see the abyss between local communities, the grandeur of nature and the innocence of the people.”

Tresierra went on to obtain a degree in sociology at the Catholic University of Peru and later travelled to the US to study anthropology and sociology at the University of Notre Dame earning a Master’s and Ph.D.

“I did it to equip myself with the knowledge needed to understand the roots of social problems in the long term,” Tresierra says. “It was also a starting point that gave me the international connections required to implement theories I had learned.”

A college classmate, Luis Herrera, remembers Tresierra as a sensitive and perseverant visionary. And his current project with WWF is a clear reflection of his vision for improving the lives of the poor.

“This proposed model promotes a business arrangement between buyers and sellers of environmental services,” Tresierra says. “It’s not a donation, but an incentive to protect nature. It’s a business proposition between upper basin farmers and water users in the lower basin.”

As Tresierra has pointed out through his IWS model-water is not only consumed. It’s used by large companies to manufacture their products or to generate energy.

“The idea is to find ways to unite the management of economic capital with the management of nature,” he says. Tresierra also points out that this process brings to the forefront the important question-what is the natural element that is responsible in some way for social and economic development? The answer is water and this process puts a monetary value on it.

Tresierra also says that an effective water management system will help communities bear the consequences of nature-like a drought- better. Three types of capital, says Tresierra, have been united and put on equal level. They are: social capital, (the rural poor in upland areas) natural capital, (ecosystems that provide water resources) and financial capital (public or private corporations that benefit from clean water flowing downstream.)

Lessons

It’s been a journey filled with ‘trial and error’ attempts, Tresierra says. And his model will continue to grow and change as Tresierra gains more insight.

“Nothing is finished,” he says. “You have to keep trying over and over again.”

Tresierra says he was always convinced his proposal for an IWS plan would be successful because it was based on knowledge and reality and not emotion. It’s important to, “respect differences and be consistent in proposals and speeches.”

While the original idea was to start a project in Honduras and Peru, they met with challenges in both countries. In Honduras, it just wasn’t possible and in Peru’s Chira river basin in the Piura region, the model was opposed by the authorities and a good proportion of the population.

“You have to realize that sometimes there isn’t opportunity to reach an area,” he says.

Tresierra continues to search for mechanisms that will finance conservation while at the same time alleviate poverty. His stretch with WWF is over but he is looking into Tanzania, Romania and Bulgaria as potential candidates for projects. He also worked in China for three years replicating a development model in rural areas.

Not content with the rules that involve exploiting nature for development’s sake, Tresierra understands the biological and ecological limits this planet has and that we need to take care of it.

 

Milagros Salazar is an investigative journalist specialized in environment and social issues. She collaborates on the investigative team of IDL-Reporteros in Lima, Períº and is a correspondent for InterPress Service. She is also a member of the International Consortium of Investigative Journalists. You can reach her at milisalazarh@gmail.com.
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Almir Surui: Perseverance Under Pressure

18 September 2013 | Almir Surui was ten years old when the first logging truck came to his tiny village deep in the Amazon Rainforest. It came to chop down a single stand of centuries-old mahoganies, and it came with the grudging approval of the chiefs. After all, they reasoned, it was just one truck, one stand, one time, and for a good cause.

Long an isolated and elusive people of the Amazon, the Paiter-Surui were first contacted by Brazilian authorities in 1969. Numbering 5,000 at the time of First Contact, more than 90% of them died of tuberculosis and smallpox before Almir was born in 1974. He grew up under siege – from white invaders on one side and displaced indigenous people on the other.

By 1983, however, things were looking up. The Paiter-Surui (often just called “Surui”, the name Brazilian authorities bestowed upon them after misinterpreting a neighboring people’s name for “enemy”) had won demarcation for their territory from federal authorities, and they were keen to shift their strategy away from war and bloodshed and towards politics and commerce. That meant they needed money for travel to and from Brasilia.

The loggers offered to cover that expense in exchange for one stand of trees – worth, it turns out, orders of magnitude more than what the Surui received for them.

“That first sale made sense, given the information they had,” says Almir, who became overall chief of the Surui in late 2010. “But that sale led to another and another. It opened an era of short-termism focused on easy money, and soon everything was out of control. Logging trucks were running roughshod over our territory.”

The trucks came by the scores on roads built with money from the World Bank’s Polonoroeste initiative (the “Northeast Pole Northwest Region Integrated Development Program”). By 1986, high-ranking officials from the Indigenous Affairs Agency (Fundaçí£o Nacional do índio, FUNAI) were encouraging the logging operations in exchange for kickbacks from timber companies, and Almir – though barely into his teens – became one of their most vocal critics.

“Many of our own people supported logging,” he says. “I’d argue they had become fixated on the tangible income from logging while overlooking its intangible but very real cost.”

It was a cost not limited to logging, and not borne just by the Surui.

“Neighboring people like the Cinta Larga accepted money from miners, only to find that mining killed the fish,” he says. “Now they spend more money on groceries than they ever got from miners.”

Off to School

By 1988, Almir had achieved an impressive academic record which – together with his eloquent critique of logging – earned him a spot at the Centro de Pesquisa Indigena. The brainchild of indigenous leader Ailton Krenak, the Centro brought young Indigenes like Almir out of the rainforest and into the Universidade Federal de Goií¡s, where he studied applied biology.

Upon graduation in 1992, he was elected chief of his clan, the Gameb. He dutifully married and settled into his village, where he planned to implement a sustainable agriculture program. Tribal elders – most of whom were under 40 themselves after the devastating plagues of the 1970s – had other plans.

The Go-Go Nineties

The Rio Earth Summit had just launched the United Nations Framework Convention on Climate Change (UNFCCC), and the World Bank had just launched the Rondí´nia Natural Resources Management Project (Planafloro), which was an effort to right the wrongs visited by Polonoroeste.

Unlike its predecessor, Planafloro created a vehicle for the active involvement of forest people and local NGOs. Almir, though not even 20 years old, was elected head of CUNPIR (Coordenaçí£o ads nacoes de Povos Indí­genas de Rondí´nia, Sul do Amazonas e Norte do Mato Grosso/the Coordination of Nations and Indian Peoples of Rondí´nia, Southern Amazonas and Northern Mato Grosso), which represented indigenous groups across three Brazilian states.

It was a position that soon brought him into conflict with organizations he had long admired, some of which had been helping indigenous peoples in Rondí´nia since the early 1970s

A Break With Old Friends

“This was a painful period for me,” he says. “These organizations had played an important role in the indigenous movement – they had done some truly wonderful work, and without them, I might not even be here today – but by 1994, a new generation had taken over. They had a very paternalistic attitude towards us, and some of them thought we should do what they told us to do and not talk back.”

He first encountered that paternalism after CUNPIR tried tracking the Planafloro funds that were going into FUNAI coffers. They found much more was going in than coming out, and little of what disappeared was being accounted for.

“It was clear that we needed to push for more transparency, but some of the more radical organizations responded by sending a letter to the World Bank demanding an end to all disbursements under Planafloro,” he says. “Well, first of all, that’s not what any of us wanted – we wanted transparency and good governance – and, second of all, they sent that letter on our behalf, but without our approval.”

Experiences like this sparked his lifelong quest to develop sources of income that are independent of charities but don’t require the destruction of trees.

The Quest for Independence

By the late 1990s, Almir had become a recognized political figure in the state of Rondí´nia, where the bulk of his territory is located, but he didn’t feel he’d done much for his own people. So he resigned his position at CUNPIR and dedicated himself to reorienting the tribal economy towards sustainable products such as non-timber forest goods, handicrafts, ecotourism, and organic agriculture.

The Surui, however, were completely dependent on aid and income from logging for their food and health-care. They lacked the agricultural expertise to implement his sustainable land-use program, and they lacked the business acumen to market such products even if they could produce them. Plus, impoverished members of his people had a hard time focusing on potential income from new activities when they could accept concrete bribes from loggers today.

Gradually, Almir conceived a 50-year economic redevelopment plan that would build up the required expertise by introducing sustainable sources of income where possible, providing reliable healthcare and – critically for the creation of a sustainable economy – teaching the skills needed to thrive in the modern world.

But the sine qua non was a solid governance structure, and for that he still needed the support of international development agencies like the Norwegian Agency for Development Cooperation (NORAD), which had long helped with health care, and the United States Agency for International Development (USAID). Both were instrumental in helping the Surui build up and maintain inclusive governance across the territory, and USAID continues to support such activities to this day.

“One day, we’ll ween ourselves of that, too,” he says. “That’s when we’ll know the 50-Year Plan is succeeding.”

Getting Paid to Plant Trees

In 2004, all four Surui clans were feeling the precariousness of their situation, and each was looking for a way to feed their people if and when the aid dried up. The clan chiefs convened a meeting to discuss their business proposals. One of the chiefs wanted to ramp up logging. One wanted to dig for gold or diamonds. And one wanted to bottle water.

Almir said he wanted to plant trees.

“The Amazon is ill, and I knew that it was up to us to save it,” he says. “I knew that saving the forest was good for everyone, and I knew there were organizations working to save it. I wanted to work with them, to earn our income by saving the forest.”

He was promptly ridiculed by everyone in the room, including those within his own clan.

After the meeting, he went into town, logged onto his computer, and typed “reforestation Amazon” into Google. The first hit was a Swiss organization called Aqua Verde.

“It’s run by a man named Thomas Pizer, and he’s a true friend of the forest,” Almir says. “He was looking to plant trees, and he wanted to hire locals to do it.”

That meant he was offering compensation for a clear and tangible outcome – the kind of economic activity that Almir wanted to nudge his people towards.

“That was a giant step in the right direction,” Almir says. “It would demonstrate that we can earn money by planting trees instead of chopping them down.”

While waiting for that funding to come through, he learned that the Amazon Conservation Team (ACT) had worked with another indigenous people, the Xingu, to create a “cultural map” of their ancestral land. The map identified sacred burial grounds, traditional hunting grounds, and historic sites, among other things. Such a map, he reasoned, could help him formulate a management plan and also promote cultural cohesion among his people.

In December of 2004, he approached ACT, which secured a grant from the Annenberg Foundation to develop a cultural map of the territory.

“This might not seem like much, but it was huge,” says Almir. “It meant we could once again offer our people an opportunity by delivering something of value. That’s tremendously empowering, and helps break the cycle of programmed helplessness.”

What’s more, through ACT he developed a deep and lasting friendship with Vosco van Roosmalen, then head of ACT Brazil, which eventually broke off to form a separate entity, Equipe de Conservacao da Amazonia (ECAM).

The First Logging Moratorium

Dangling the mapping project, with its temporary jobs and its promise of cultural revival, as a carrot, Almir was able to win support from other chiefs for a moratorium on logging.

“The money we got for the mapping project in no way made up for the money we lost by giving up the logging, but it was honest money,” he says. “Deep down, that’s what people want – they want to carry their own weight, but they also need to feed their families.”

When the mapping project started, the logging stopped – but that earned him the animosity of loggers, who placed a $100,000 bounty on his head. For two years, he was looking over his shoulder.

That ended when the mapping project drew to a close and logging started creeping up again. Almir was once again on the road with his hat – and his cultural map – in his hand.

Google Earth

In 2007, Almir logged onto Google Earth for the first time.

“I did what everyone does: I zoomed into my home town,” he says. “But instead I found something like ‘uninhabited territory’.”

That doesn’t mean it wasn’t beautiful. In fact, he clearly saw the way his territory stood out as a sort of oasis of green in a sea of yellow and gray. It was shaped almost like an arrow, and surrounded on all sides by dead land and farms.

“Two things went through my head,” he says. “One was that this could be a great tool for monitoring our forest, and the other was that Google Earth had missed something really important.”

With a trip to San Francisco already in the works, he convinced van Roosmalen to arrange a meeting with Rebecca Moore, who manages Google Earth Outreach. She remembers the conversation well.

Almir the Salesman

“He came in with Vosco, and they sat on the other side of the conference table from me,” Moore recalls. “He was wearing his feathered headdress and speaking in Portuguese, with Vosco translating. It didn’t seem promising.”

But then Almir stood and told the story of his people: of how they had long defended their territory with bows and arrows, and how they shifted to pen and paper, and were now shifting to computers.

“The whole room got very quiet,” she says. “I felt transported to that place he was telling us about, and then he told us they had made a map.”

At her request, he unfurled the cultural map, which he had rolled up in a sheath. She called in other “googlers”, as employees call themselves. Among them was John Hanke, the man who founded Keyhole, which Google bought in 2004 and rechristened “Google Earth”.

“John comes in, and Almir compliments him on his technology,” Moore says. “Almir goes on and on about what a great product we have, and he invited us to come down and see his territory – but then he starts giving us a hard time.”

She says Almir pointed at his map, and then he pointed at her computer, and then he asked why his territory was blank on Google Maps and Google Earth.

“If you go to Sao Paulo or Rio, you see cultural information,” he said – by Moore’s recollection (Almir says he goes on autopilot when he speaks, and rarely remembers what comes out of his mouth).

“You see roads and hotels, museums and schools, videos and photographs,” he continued. “But if you go to our territory, no one would ever know that there are people there, or that they have lived there for generations, or that they are struggling to survive.”

Whatever the exact words, he left with Google’s firm promise to put his territory on their maps – a promise they have kept in spades.

The Seeds of REDD

On the same trip, he ran into Beto Borges, who runs the Communities and Markets initiative of environmental non-profit Forest Trends (publisher of Ecosystem Marketplace). The two had first met in Almir’s days at the Centro.*

“At the time, I thought Forest Trends was like Aqua Verde, and that it had money for reforestation,” Almir says. “Beto said that wasn’t the case, but he told me that we might be able to earn carbon credits by planting trees, because they lock up carbon.”

Borges told him there was carbon funding for planting trees and carbon money for saving trees.

“If you earn it by planting trees, it’s called ‘A/R’ (afforestation/reforestation),” he said. “If you earn it by saving endangered forest, it’s called ‘REDD’ (reduced emissions from deforestation and degradation).”

“This was like a dream come true,” says Almir. “The payments are based on environmental results and not on philanthropy. We would be providers of an ecosystem service and not wards of the state, because we would be fulfilling a very real need for carbon sequestration.”

Forest Trends commissioned a study to make sure indigenous people did, in fact, have the legal rights to generate income from the carbon captured in their trees. Then Almir and Borges pieced together a network of NGOs, consultancies, and lawyers, each with a different role.

Building the Team

“He was adamant that we create a consortium,” says Borges. “He wanted several partners, each doing what they do best, instead of one entity, because he said he never wanted to become dependent on one organization. That’s how Forest Trends works as well, so it was a good fit.”

Almir brought in ACT and the Associaçí£o de Defesa Étnica e Ambiental Kanindé (the Association of Ethnic and Environmental Defense, or “Kanindé”), with whom he’d been working since the early 1990s, while Borges brought in the Instituto de Conservaçí£o e Desenvolvimento Sustentavel do Amazonas (The Institute for the Conservation and Sustainable Development of Amazonas, or “Idesam”) and the Katoomba Incubator, a project of Forest Trends designed to support new initiatives that can then be replicated around the world.

The first job was to explain the project to the tribe and see if they understood it and supported it. Representatives of Kanindé and ACT spent months visiting remote villages and explaining the concept.

Then they needed to see which parts of the forest were really in danger – a task that fell on IDESAM. They looked at other indigenous people who had faced the same needs as the Surui and then calculated the amount of forest that would likely be destroyed through continued logging and eventual conversion to farmland. They concluded that, of the 248,147 hectares that comprised the Surui territory, at least 13,575 hectares would have to be converted to farmland over the next 30 years if the people were to survive – an amount that translates into 7.8 million tons of carbon dioxide. If the Surui instead saved that forest, they would avoid more than 90% of that deforestation, and could expect to earn carbon credits for roughly 5 million tons after accounting for uncertainty.

Almir presented the plan to the Forum of the Clans, and explained that all income would go into a fund to develop schools and jump-start the 50-Year Plan. Once they understood the concept, the other chiefs agreed to unilaterally implement a new moratorium in 2009.

Soon there were more death threats, prompting ACT and then ECAM to send Almir abroad for his own safety. During these trips, he continued to promote the project and raise funds to keep his people going while waiting for the project to kick in.

Bearing REDD Fruit

Then they made their case to the Verified Carbon Standard (VCS) that without carbon finance, they would have to destroy that much forest. They also made their case to the Climate, Community, and Biodiversity (CCB) Alliance that they would preserve the forest in a way that conserves biodiversity and supports their culture.

For three years, the bulk of his people resisted logging, as the tribe subsisted on funding from USAID, NORAD and others. As the years went on, however, the moratorium began to take its toll. A small but vocal minority called for the resumption of logging.

“We’re not a monolithic entity,” Almir says. “Some of our people wanted to move forward with logging, and others were simply desperate.”

In 2010, Almir was named Labiway Esaga – the overall chief of all Surui clans – but his leadership was about to be tested.

So Close, but oh, so…

In June, 2012, VCS auditors “validated” the project – meaning they signed off on its design. That meant there was agreement that without carbon finance the Surui would have to chop a certain portion of their forest to survive. It also meant that the steps the Surui had outlined for preserving that patch of forest made sense.

The next step was the critical one – this was the “verification” phase, where auditors from the Instituto de Manejo e Certificaçí£o Florestal e Agrí­cola (Institute for the Management and Certification of Forests and Farms, or “Imaflora”) and the Rainforest Alliance would look to see that the Surui were, in fact, doing what they said they would do to ensure that those steps were, in fact, being taken.

IDESAM immediately began reviewing satellite images to begin the validation and quickly realized that a 2010 fire in the territory had taken more land than the Surui had realized.

“That fire took ten days to put out, and we had reported it as best we could, but we hadn’t realized how extensive the damage was until we saw those satellite images,” Almir says. “The very day that we got the good news about the validation, Idesam told us that the fire damage meant we’d have fewer credits than we thought we would.”

Fortunately, as the verification process continued, auditors found that their loss wasn’t as bad as they had feared. Logging threats escalated, however, and when police uncovered evidence of a bungled attempt to collect the bounty on Almir’s head, federal authorities responded by providing bodyguards from the elite Força Nacional.

The Loggers Return

As the year dragged on, a Surui patrol found evidence of recent activity on an old logging road, so Almir turned to local authorities for help. When they demanded proof, he started tracking the loggers and documenting their actions.

When authorities still refused to act, he began posting images onto the internet and using both local and international media to ratchet up pressure on authorities to act. He also called out members of the Surui who he believed were colluding with loggers.

“I know that some of our people were looking the other way in exchange for gifts from the loggers,” he says. “Fortunately, they were in the minority, and it’s a testament to my people and to the governance structures we have implemented that more of them didn’t give in to that temptation.”

Meanwhile, the verification process was still underway, and the Surui were lining up buyers.

“We’re in discussions with several potential buyers, but Natura came through first,” says Almir. “They really understood the concept and the project, and they asked the right questions.”

Natura was all but sold on the deal by early 2013, but the Surui wouldn’t have credits to sell until the project was verified. That happened in May, 2013, and in August Natura officially made its purchase, which was announced last week.

“REDD+ is a bridge between the indigenous world and the non-indigenous world, so it’s an appropriate way to begin this process” said Almir in making the announcement. “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.”

* CORRECTION:  This article originally stated that Borges had written his master’s thesis on Surui efforts to develop a sustainable agriculture program, but that was not the case. We apologize for the error.

 

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Can His Water Bank Help Montana Solve its Water Troubles?

The state of Montana has more outstanding water rights than it has water, and it’s taking a toll on the state’s streams and aquifers. Chris Corbin thinks a water bank specifically for mitigation can solve the problem.   If his idea works, it’ll be the latest in a series of projects in the West that use water rights markets to remedy environmental problems.

3 November 2011 | Chris Corbin likes to open his presentations with a news clipping: “Stevensville Man Accused of Shovel Assault.” The article recounts how last June, in a town a few miles south of Corbin’s hometown of Missoula, Montana, a man with a shovel jumped a fence, sprinted across a field, and took a swing at his neighbor’s head. The assailant was apparently angry because the other man had opened the headgate on his irrigation ditch an hour earlier than he was supposed to. The neighbor ended up with a cracked tooth and a black eye.

Welcome, Corbin tells his audience, to the world of water rights.

With water fights like this, it’s no wonder that Montana streams and aquifers have been running low, prompting many areas to order water rights users to mitigate for new withdrawals. Now Corbin, founder of Lotic Water Marketing, and a local ditch company envision a “water bank” that lets people trade their water rights instead of fight over them. If it works, it will provide an alternative revenue stream for agricultural operations feeling pressure from urban growth; it will incentivize greater efficiency of use within the ditch company; and it will help make sure that the upper Clark Fork River and the local aquifer aren’t depleted further.

Water disputes in the West are old news. Across the region, tens of thousands of miles of streams and rivers are chronically or periodically dewatered from over-withdrawal. We’re pumping from our aquifers at an alarming pace: the Oglalla aquifer, which underlies a huge swatch of the Great Plains from South Dakota to Texas, has had its water level drop by over 100 feet in some areas since the 1940s – despite the fact that agricultural operations are, for the most part, much more efficient than they used to be. Coupled with the fast pace of urban growth – the five fastest growing states are all in the West, according to the latest census – water supplies in the region are under tremendous pressure.

Perverse Incentives Under the Law

The water problem has extra traction because the laws governing water rights – which you need if you are going to use more water beyond that used by a normal household – tend to create incentives to use more water than less because they have historically come with a ‘use it or lose it’ caveat: if you don’t use your full allocation, you forfeit your legal claim to it.

Furthermore, environmental uses – like leaving the water instream to protect fish populations – have only very recently begun to be recognized as a legitimate use of the water; and in some states, like Colorado, private parties cannot legally hold instream flow rights. What this all means is that your average water user is not going to be rewarded for making do with less, and thereby leaving the water in the river or aquifer.

Complicating matters even more is the fact that a lot of these rights were issued in the flush years of the early twentieth century. Plentiful rain and roaring rivers were thought to be the norm, and water rights were handed out accordingly.

Now, “the state of Montana has recognized that there are more valid claims to water than there is water available,” says Corbin.

Montana’s response has included legislatively ‘closing’ highly appropriated basins. No new appropriation applications will be accepted in the six currently closed basins. New developments must mitigate for any significant water depletion to streamflows or groundwater levels by purchasing existing rights to restore in-stream flows or recharge groundwater levels.  

But buying a water right involves huge transaction costs. Getting approval for a change application transferring ownership usually takes between one and three years, plus a year or two spent preparing the application. A typical change application can be 100 pages long.

Corbin recalls telling one man who called him about buying a water right that he should expect to spend around $1,100 per acre-foot of water, and $10,000 for the change application process.

A Ditch Company Becomes a Mitigation Bank

Missoula, MT is a smallish city in the western part of the state. The city is growing fast: its population has increased by about 20 percent in the last ten years, to around 67,000 currently. But the basin where the city is located is closed to further water appropriations, and any significant new use has to be mitigated.

Corbin thinks he’s found a smarter way to meet demand without degrading the area’s water sources further. He’s been working with a local irrigation company, the Grass Valley French Ditch Company, on a project that would essentially create a mitigation bank for water – a one-stop shop for buyers. Whatever water the company doesn’t need for irrigation could be sold for mitigation and returned to the nearby Clark Fork River, or used for aquifer recharge. Developers with mitigation needs driven by basin closure rules can buy these rights directly and skip the long and expensive application process. If Corbin’s project is approved, it’ll be the first of its kind in Montana.

Making Water Law Work for Mitigation

It’s also a project that wasn’t possible until last month, when House Bill 24 took effect in Montana. It included a short provision that “an appropriator may apply for a change in appropriation right for the purpose of marketing water for aquifer recharge or mitigation.”

In other words, a water rights holder doesn’t need to have a contract with a buyer in place in order to apply for a change in use. It seems like a small detail, but needing to have lined up a buyer in advance is in fact a huge drag on the water rights market at large – and stops sales for environmental purposes dead in their tracks.

“Nobody for mitigation or aquifer recharge is going to have existing contracts in place,” Corbin explains, “because they don’t know where the demand’s going to come from.”

HB 24 is part of a larger effort in Montana to create a legal framework that is friendly to mitigation.   “The permitting system needs to work for everyone,” says Laura Ziemer, Director of Trout Unlimited’s Montana Water Project, which was a major backer of the bill. “We see HB 24 as removing some of the existing legal and regulatory barriers for the folks who are interested in providing mitigation.”

For Agriculture Feeling the Pinch, A Possible New Source of Revenue

The Grass Valley French Ditch company (GVFDC) is located about ten miles west of Missoula, in an area that’s seen a lot of recent growth. Some of its lands have already been developed and the water shares turned back to the company.

“The ditch company has 80 percent of their shareholders paying for 100 percent of their operation and maintenance,” says Corbin. “As an asset-holder and a manager of these water rights, this company is saying, ‘What can we do in this changing landscape to maintain our livelihood?’”

The answer they’ve hit on – creating a bank of water shares to be sold for mitigation – will require the ditch company’s converting all of its shares to marketable rights, and initially selling the 20 percent currently going unused. Proceeds will be reinvested in the company for maintenance and more efficient irrigation infrastructure.

To date Corbin and the GVFDC have filed a change application and are waiting to see what the regulatory authorities make of the project. They think their chances of approval are good, but plenty of work remains before the project can actually starting marketing water for mitigation.

How Much is Mitigation Water Worth?

Corbin’s not sure how much the rights will ultimately sell for, but he knows it will be more than the current average of roughly $1,100 an acre-foot and less than current cost of transferring ownership.

“If you do this on your own, and don’t buy from this bank, you’re looking at a $10,000 change application then three years to go through the regulatory process,” he says.   “So there should be a premium price, because we already fought those battles, are taking all of the risk, and now have this banked position. We’re going to build the transaction costs into the price of the water.”

He expects to have plenty of takers.

“Time is money for developers, too,” he says. “If they’re getting their subdivision plotted, and they’re going through the regulatory process and then their water right’s holding up the final approval for three years – that’s a bad thing.”

But is it Scalable?

It helps that downstream is the Noxon Rapids dam and reservoir,  which the ditch company expects to be the major driver for mitigation on the stream reach. The presence of that reservoir means it’s much easier to demonstrate that mitigation is adequate – something Corbin readily admits won’t always be the case.
 
“The model will work in other locations, but it won’t be as widespread,” he says. “90 miles downstream there’s not going to be this dam that has year-round storage.”

Showing that mitigation is physically going to work is just one hurdle. “Each regional office is different, and going through the regulatory process is a big component of this,” he adds. “The personalities are different. The interpretation of the rules can be different. This isn’t a CostCo, where you can pick it up and put in down in the next community and the next community.”

The Fish Factor

The project’s location may be doubly blessed. As Norman Maclean wrote in his novella A River Runs Through It, growing up as a boy in Missoula “there was no clear line between religion and fly fishing.”

In western Montana, most people are pretty nuts about fly fishing. The outdoor recreation tourism industry is a big part of the local economy. Trout, upon which all this depends, disappear quickly from dewatered streams. These circumstances make it a lot easier to sell to the general population the case for restoring river and stream flows. This is another thing, Corbin concedes, that won’t be the case everywhere.

One Market, Many Models

But with basin closure and water scarcity worries a growing trend, Corbin’s new project is just one of a crowd of new mechanisms being tested that use the water market to achieve environmental goals.

Trout Unlimited is developing a groundwater mitigation exchange program to offset groundwater withdrawals, that might look similar to efforts to establish mitigation banks for permit-exempt wells in Washington and Oregon. The State of Montana already uses a number of different water rights leasing mechanisms to partner with landowners to increase instream flows. Corbin has worked on a project creating flow restoration certificates for voluntary buyers like the Big Sky Brewing Company to offset their water use.

All over the West, state and private trusts are experimenting with using the water market to meet environmental goals. A recent report by the Property & Environment Research Center estimates that a half-billion dollars’ or ten billion acre-feet worth of water was reallocated to instream use between 1987 and 2007.

There may even be scope for linking the mitigation water market to other environmental markets.

“Wetlands are incredible infiltration galleries,” Corbin points out. “Something like 97 percent of a wetland is aquifer recharge. Why design and build infiltration infrastructure like strip pits when you could sell wetland credits on the surface and aquifer recharge credits below the surface?”

The pressure that the Grass Valley French Ditch Company and operations like it are feeling could turn out to be an opportunity in disguise – both for the agricultural and environmental communities.

“Historic irrigation institutions are looking at a landscape that has changed,” says Corbin. “There’s an opportunity for them to still be water managers, but use green infrastructure and other techniques to manage water for all uses, and not just irrigation.”

 

Additional resources

State of the Forest Carbon Markets 2011 is Launching!

Report authors and a panel of market players and experts will discuss the latest findings from this one-of-a-kind report, as well as the future outlook and drivers of the marketplace. The forest carbon markets have grown dramatically since Ecosystem Marketplace’s first State of the Forest Carbon Markets report, so come join us to learn more about this rapidly evolving marketplace, where it has come from, and where it is going.

Space is limited for each of the following events, so we encourage you to RSVP soon to secure a spot for you and any guests. The three launch events will be happening at the following times and locations:

September 29, 2011 – Washington, DC

Office of Baker & McKenzie LLP
815 Connecticut Avenue, NW
Washington, DC 20006
4:00-5:30 PM EST, followed by reception

RSVP by September 26:
Via email to bakerevents@bakermckenzie.com

This launch event is sponsored by Baker & McKenzie LLP

October 4, 2011 – San Francisco

Office of Baker & McKenzie LLP
Two Embarcadero Center, 11th Floor
San Francisco, California 94111
4:00-5:30 PM PST, followed by reception

RSVP by September 29:
Via e-mail to pablo.reed@dnv.com

This launch event is sponsored by Det Norske Veritas

October 11, 2011 – London

Office of Markit
Ropemaker Place
25 Ropemaker Street
London, EC2Y 9LY, United Kingdom
5:00-6:30 PM BST, followed by reception

RSVP by October 5: Via e-mail to mnorman@ecosystemmarketplace.com

This launch event is sponsored by Forest Carbon Group, Face the Future, and Markit

Note: The London launch event is taking place on the eve of the 11th Dialogue on Forests, Governance, and Climate Change, co-hosted by the Rights and Resources Initiative, Forest Trends, and the Forest Peoples Programme. The event will focus on the issues and outlook for REDD+ financing, engaging a broad and diverse set of stakeholders and leaders regarding REDD+. Find out more and RSVP to attend this Dialogue from the RRI website here.
 
 

 

The State of the Forest Carbon Markets 2011 report would not be possible without the interest and support of our readers, sponsors, donors, and the participation and insights of hundreds of project developers and market players. Thank you all for your support, and we look forward to seeing you at one of our launches!

 

 

 

Odigha Odigha: Speaking Truth to Power

15 March 2010 | Odigha Odigha has taken on governments and corporations in true David versus Goliath style to protect his beloved forest in Cross River State, southern Nigeria.   But what comes across during conversations is his unwavering determination rather than a boastful list of successes.

“Forests mean life for us,” he says. “I hope I will be remembered for preserving them.”

Odigha was born in the district of Ikom in Cross River State in 1957 and spent much of his childhood roaming the rainforest with his grandfather. The area is a biodiversity hotspot: it’s home to about 20% of the world’s butterfly species and hosts the highest diversity of primates on the planet (including the highly endangered drills, gorillas and chimpanzees). It was during these formative years that Odigha developed a consciousness of how unique the forest was.

Through Business to Politics

Odigha left his native district in 1976 to study math and statistics before earning an MBA and doing his national service.

“I was inspired to study business by my mother: she was a very entrepreneurial woman,” he says. “There is also a lot of micro-enterprise in Cross River State, but many of these small businesses were badly run. I thought an MBA would give me the skills to add value to these businesses.”

When he went back to Cross River in 1986, however, he was dismayed at the state of the forest (about 90% of the rainforest in Nigeria has been lost since the 1960s).

“I saw oppressed local people, cocoa farmers exploited and forest products being taken without adequate compensation, and I felt I had to use my skills to put these issues right,” he says.

Cocoa farming was the cornerstone of the local economy, yet the industry was in disarray: farmers were poorly organized, crops sold at a loss, contracts rarely drawn up between buyers and sellers. Odigha therefore took it upon himself to re-organize the local cocoa buyers association, establishing a business plan, bringing farmers together, teaching basic accounting skills and raising awareness about the value of local forests.

“My idea was to rationalize the use of local resources,” he says. “I thought that if people earned enough with cocoa farming, they would not need to find alternative sources of income and turn to logging.”

Odigha worked extensively among local communities, and it was then that friends suggested he get involved in local politics.

“People said I would get more results working as a local politician, that I would have more influence and better resources,” he says.

Odigha took the leap and first got involved with his local government in 1987. A year later, he became representative of the People’s Front of Nigeria (later known at the Social Democratic Party, SDP) for Cross River State.

Constitutional Crisis

Odigha hoped that by lobbying at the national level, he would be able to hold logging companies more accountable and promote the rights of local people. But the 1993 presidential elections changed everything: deemed the first democratic elections of the country’s history, they gave Moshood Abiola of the SDP a clear victory. Incumbent ruler Ibrahim Babangida, however, saw it differently: he annulled the elections and re-instated himself as president. Nigeria plunged into political turmoil, a process that eventually led to dictator Sani Abacha seizing power in 1994.

“This event really upset my belief in democracy,” Odigha says. “We wanted to campaign for fairness and justice, and there was a government which clearly didn’t believe in that.   Nothing good was ever going to come out of it. That’s when I decided to go it alone and set up my own NGO.”

From Politics to Activism

He sold what little he had to get the Coalition for the Environment (NGOCE) set up in 1994 and set about raising awareness about Cross River State, its forests, its people and the devastating impact of commercial logging.

“Our mandate was to advocate the protection of the rainforest, and we did this at every level: locally, regionally, nationally, even with the international community,” he says.

A first victory came in 1995, when Odigha successfully forced Hong-Kong-based Western Metal Products Company (WEMPCO), one of the most aggressive loggers in Cross River state, to carry out an Environmental Impact Assessment. EIAs were compulsory under Nigerian law, but political interests had always over-ridden the requirement.

Odigha says a defining moment in his crusade to save Cross River forests came that year when he met Andrew Choi, then director of WEMPCO.

“He offered me Naira five million to stop lobbying against logging,” Odigha recalls. “It was a lot of money, but I refused, and he told me he would log Cross River until the very last tree. My response was just to increase the tempo of my activities.”

Odigha also encountered opposition from local people.

“I remember a local doctor telling me that my work was futile and that I should not waste my time,” he says. “I was determined to prove him wrong.”

More worryingly, Odigha’s campaign had ruffled many feathers among Abacha’s government. In 1995, fellow environmental campaigner Ken Saro-Wiwa was executed for promoting the right of Ogoni people in the Niger Delta. Odigha therefore went into hiding for three years. It was only after Abacha’s death and with the return of civilian rule in 1998 that Odigha resumed his work in earnest.

Victories and Challenges

Odigha approached the newly elected governor of Cross River State, Donald Duke, and with him, managed to set up the first ever Forestry Commission in Nigeria and obtain a first logging moratorium in 2000. The commission lacked teeth but it included representatives from the government, private sector and civil society – Odigha was on the board – a definite step in the right direction.

In the end, the ban only lasted one year. The commission was chaired by a consultant with close ties to WEMPCO and opposition to logging was weak. In 2002, WEMPCO even obtained the renewal of their concession, so Odigha decided to step down. This was an enormous blow for him.

“My campaign was to shut them down and send them packing. So the granting of the concession for me was a psychological punishment,” he says.

Odigha’s determination and efforts didn’t go unnoticed among members of the international community, however. In 2003, he was awarded the Goldman Prize – an annual award recognizing the work of environmental activists around the world, often dubbed the “Green Nobel” – for his tireless advocacy to protect the rainforest and determination to build democratic institutions to manage local resources.

It was a small compensation for the hardship Odigha encountered on the way and a huge morale booster.

“It was confirmation and affirmation that I was on the right track, working on a cause that is appreciated by the international community,” he says. “It also brought up awareness and credibility on a much wider scale. People thought: ‘Well, if this man can be recognized internationally, then we’d better take what he says seriously.’”

And seriously they took him. Odigha continued his advocacy following his award, and the victories kept coming: in 2007, WEMPCO was ordered to close down all its operations in Cross River State and has not returned since. In 2008, the new Cross River State governor Liyel Imoke asked Odigha to organise a state-wide Stakeholders Environment Summit to discuss the future of environmental policy in Cross River. The meeting resulted in radical actions: Governor Imoke declared a two-year, moratorium on all logging. He also re-organised the Forestry Commission so that it would have a full-time board (board members used to be part-time representatives with little power) and set up the Illegal Logging Task Force to ensure the moratorium was enforced.

John-O Niles, director of the Tropical Forest Group, an international conservation organization and UN observer that has worked in Cross River for many years, says that Imoke and Odigha have shown unique leadership in international conservation.

“It was a very bold decision from the state government,” he says.   “They basically agreed to forego one of the few revenue streams they had.   The challenge will now be for Odigha to show the state that he can put real alternative money on the table and this is a monumental task.”

Niles says that Governor Imoke absolutely trusts Odigha. Odigha was named chairman and chief executive of the Forestry Commission in July last year, a very symbolic nomination to a body he helped set up 10 years previously. The trouble is whether the international community will rise to the challenge of supporting such visionary leaders: the Cross River Moratorium is one of only two such measures in the world, the other being in the state of Aceh, Indonesia.

Odigha is well aware that his priority is now to find alternative revenues for local communities. Logging may not have benefited many, but in an area where every little counts few have the luxury of supporting visionary thinking without evidence that it’ll deliver results.

The trouble is that many initiatives can take years before yielding results, so Imoke and Odigha are casting the net wide: REDD+, Payment for Ecosystem Services, agroforestry, ecotourism; no stone is left unturned.

“We are looking for low-hanging fruit that we can pick and present to our people,” Odigha says. “Our success depends on results. If we are able to generate income from non-timber activities, I feel very strongly that we can extend the logging moratorium.”

Odigha says he wants to go further than halting deforestation and also wants to restore ecosystems and extend forest cover, all of which would increase Cross River’s carbon stocks and potential revenues from carbon credits.

Another difficulty is that Cross River is a regional government and that much of the support granted towards REDD development is done at a national scale, even though more than half of the rainforest left in Nigeria is in Cross River. Niles says that Odigha and Imoke have successfully engaged with the Nigerian federal government in that respect. Odigha and Imoke played a crucial role in getting Nigeria accepted in the UN REDD programme; they also facilitated the country’s application to the World Bank Forest Carbon Partnership Facility.

Best of all perhaps, Governor Imoke and Odigha are the first representatives of an African state to join the influential Governors’ Climate and Forest Taskforce (http://www.climatechange.ca.gov/forestry_task_force/index.html), an outfit bringing together several states from the USA, Brazil, Indonesia and now Nigeria, to promote cooperation on issues related to climate policy.

Odigha has also started campaigning about environmental issues more widely. At the Katoomba Meeting in Accra, Ghana, in October 2009, he told a cautionary tale of environmental demise and violence in the Niger Delta to an audience still high on the news that Ghana has oil (click the video below or scroll to the presentation at the bottom of this page for details).

The Oil Curse

“Oil was meant to be a blessing in Nigeria, but oil companies and the government just dispossessed local people of what God had given them,” he says. “I don’t think we would have degenerated to the current level of violence had the right of local people been taken into account.”

He says his other motivation was to demonstrate the role civil society can and must play.

“Politicians are rarely interested in what happens beyond their mandate. Four or five years is not long enough to build momentum; the same goes for businesses who are too short-sighted in their search for profit,” he says. “But when everybody else has to go, civil society will still be there. I have been working on forest preservation for 16 years.”

Most recently, Odigha and Governor Imoke gave a presentation (http://cop15.meta-fusion.com/kongresse/cop15/templ/play.php?id_kongresssession=2576&theme=cop15) at the COP15 Copenhagen Summit, calling on the international community to help them in their endeavour. The media spotlights of Copenhagen are a far cry from the lush forests of Cross River, but Odigha knows this is where his work is needed. His next calling perhaps.

“I can influence policy and the law now, and I have the power to make good, so I am happy in my new role,” he says resolutely. “But I still take people to the forest because you can’t just talk about solutions from sitting at your desk,” he says.

Niles says that Odigha and Governor Imoke “have done everything possibly imaginable to show real conservation results and international engagement”.

“This is precisely what the world needs to make a dent in tropical deforestation and the associated greenhouse gas emissions,” he adds. “If the international community wants to propel and expand tangible REDD+ leadership, right now is the time to show financial commitment and support.”

Presentations by Odigha Odigha at Recent Katoomba Events

At this year’s Katooma Meeting on Payments for Marine Ecosystem Services in California, Odigha delivered this presentation on the “Dutch Disease” and how abundant resources don’t always translate into wealth for all:

The Perils of Resource Development for People, Environment, and Business

Presented by Odigha Odigha, Government of Cross River State, Nigeria

At last year’s Katooma Meeting in Accra, Ghana, Odigha chaired this discussion on the role of ecosystem services in the larger land-based economy

Toward an Integrated Landscape Approach

Download MP3

Moderator:   Odigha Odigha, Chairman, Cross Rivers State Forestry Commission, Nigeria

PDFPolicy and Financial Mechanisms for Scaling up Climate Action in Agricultural Landscapes“, delivered by Musah Abu-Juam, Forestry Commission, Ghana

This presentation examines integrated land use in the context of transboundary conservation projects in the region, including the multi-donor TerrAfrica sustainable land management (SLM) project in northern Ghana and Burkino Faso.

“Monitoring and Measuring Carbon at the Landscape Scale”, delivered by Peter Minang, Global Coordinator for the Alternatives to Slash-and-Burn Partnership (ASB) of the World Forestry Centre, and Kieth Shepherd, Senior Scientist, World Agroforestry Centre

PDFInstitutional Challenges for Engaging Smallholder Farmers and Pastoralists in Landscape-scale Carbon Initiatives“, delivered by Sara Scherr, President & CEO, Ecoagriculture Partners

This presentation focuses on the policy and institutional issues for ‘landscape carbon’. The presenter emphasizes the need for economies of scale, focusing on carbon-rich landscapes and building on current institutions (e.g., micro-finance groups); the benefits of increasing productivity against the ‘compensating opportunity costs’ approach; the potential for bundling with agricultural certification; community training, etc.

The ensuing discussion included the great potential of such innovations as mobile (phone) finance and live Google maps which can be used by communities. Rainforest Alliance also mentioned the potential to build on their group-based agricultural certification work, and (again) the key role of the private sector in view of its interest in the sustainability of the supply chain, e.g.., for coffee, cocoa, etc.

Emilie Filou is a free-lance writer specializing in African development issues and a regular contributor to Ecosystem Marketplace. She is based in London, and can be reached at filouemilie@yahoo.com.

Please see our Reprint Guidelines for details on republishing our articles.

Additional resources

EM Podcast: Planting Empowerment (and Spreading the Wealth)

14 April 2010 |   After their Peace Corps service in Panama, Chris Meyer and a few colleagues saw an opportunity to offer socially and environmentally minded investors growth opportunities in sustainably-managed timber projects and began to explore   how carbon revenue could play a part in their model.   The result is Planting Empowerment, one of a growing number of companies that earn money by sustainably managing trees and are dipping their toes in the carbon markets.  

Unlike many forestry businesses, however, PE doesn’t buy land outright from local inhabitants.   Instead, the group establishes reforestation/afforestation projects on deforested or degraded land that belongs to local Panamanians.   PE provides a lease payment to these partners that exceeds the opportunity cost from the land, along with profit sharing and educational opportunities.

*A correction was made to this introduction since it was first published on Ecosystem Marketplace to reflect the fact that Planting Empowerment currently does not have any projects “reducing greenhouse gas emissions from deforestation and forest degradation” (REDD).*

The podcast will soon be available in Spanish for our Latin American and other Spanish speaking audience both here and at www.mercadosambientales.com.

Left-click below to listen in streaming content; right-click to download as mp3 podcast.

Or Click here for the mp3 url of the interview in English

Click here for the mp3 url of the interview in Spanish

Maria Bendana is a research fellow at the Pinchot Institute for Conservation.

Please see our Reprint Guidelines for details on republishing our articles.

Andrew Mitchell: Forest Utility Meter Man

3 November 2009 | People who know Andrew Mitchell don’t bat an eye when he breaks into a rousing gibbon whoop in front of a packed lecture hall – or when they see him poring over papers with Prince Charles in Clarence House, or talking trees with indigenous leaders deep in the Amazon, or clutching a blow-dart pipe in his hand, ready to spear a balloon from 100 paces while schoolkids cheer him on.

Wherever he is and whatever he’s doing, this Oxford zoologist is trying to communicate the science behind forest canopies – and the importance of protecting forests and the services they provide. His Global Canopy Programme links up 38 scientific institutions in 19 countries to pull together the latest research on forests – from how they interact with the atmosphere to the ecosystem services they provide – and runs an ever-expanding number of programs applying this research to forest conservation.

Many of these programs are designed not just to test new methodologies, but to question basic tenets of environmental policy – which Mitchell fears is becoming too arcane and complex to attract the kind of large-scale investment needed to secure endangered ecosystems.

While the world is just beginning to embrace REDD (Reduced Emissions from Deforestation and Forest Degradation), for example, Mitchell has begun to think a step ahead and discuss something he calls “PINC” – or “Proactive Investment in Natural Capital”.

The premise of PINC is that all ecosystems – and especially rainforests – provide immensely valuable ecosystem services that are in danger of being lost – even if they are embedded in countries with low rates of deforestation. Therefore, he argues, smart money from markets in collaboration with new support from governments should be moving to secure for posterity healthy rainforests based on their value as environmental utilities (more on this in a bit) rather than on simply emissions-based reference scenarios designed to determine whether or not the forests are endangered and how that endangerment can be measured.

 

Canopy Capital: Pioneering Forest Bonds

Even before coining the PINC acronym, GCP helped to convince investors to launch Canopy Capital, which Mitchell hopes could pioneer investing in forests as a new asset class, as straightforward as any other investment, as a new way of funding their protection.

Canopy Capital aims to provide a model to the financial world for investing in ecosystem services. GCP holds 20 percent of Canopy Capital as a donation and serves as scientific and technical advisor to the company; twelve international investors make up the remaining 80 percent.

In March, 2008, Canopy Capital embarked on its first investment in the Iwokrama Reserve, a 370,000-hectare swath of pristine rainforest in Guyana.

The Iwokrama International Centre for Rainforest Conservation and Development signed a deal granting Canopy Capital license to measure and value the reserve’s ecosystem services for five years, with annual payments made to the IIC to continue its model of sustainable forest management and to invest in the livelihoods of people living in the 16 local communities. It is not an emissions-based carbon deal, but rather about valuing all the services the forests provide.

With this project, Canopy Capital is betting that the services the forests provide – from cooling the atmosphere to exchanging and recycling water to storing carbon – will all become valuable in the future.

The company is looking for ways to market Iwokrama’s ecosystem services to other investors, particularly through 10-year tradable bonds that carry an “Ecosystem Service Certificate” and fund forest maintenance with the accrued interest. The trees remain with their rightful owners and 80% of the profits will be returned to Iwokrama and the people of Guyana.

While Mitchell acknowledges that the results of this particular agreement may be years in the making, he calls it “a very bold experiment in investment.”

 

Laying the Foundation

When he founded GCP in 2001, Mitchell had already spent decades studying forest canopies in Asia and South America and trying to both convey his sense of wonder and advocate for forest protection.

His work in and around forests included participation in the scientific expeditions Operation Drake and Raleigh, establishing EarthWatch Europe, and spreading the word through numerous books, articles, TV and radio appearances.

Yet amid all this, he says, he came to a realization: “There was simply no way in which conservation could stand up to commerce.”

Now, Mitchell and GCP have taken their understanding of forest science into the arenas of economics, policy, and finance to make commerce work for forests, not against them.

 

Moving up in the World

Mitchell’s view of forests started out on the forest floor when he was charged with identifying primate species in the forests around Mt. Mulu on the island of Borneo on a 1978 expedition with the Royal Geographic Society.

From the ground, spotting primates – let alone identifying them – is tricky. Squinting up at black silhouettes jumping from branch to branch 150 feet up in the canopy, “you just get a great crick in your neck, and if you lie on the ground the termites get in your pants,” Mitchell says. “And I thought, ‘I’m stuck in the underground car park and all the interesting stuff is going on in the penthouse. I should be in the penthouse.'”

Mitchell became one of the pioneers of canopy research. First, he scaled up into the trees with ropes. In the 1980s, he developed aerial walkways allowing researchers to get an even closer look at canopy species and phenomena.

Climbing into the canopy came with surprises. At first, the amount of species, including ones no one had seen before, found in this leafy world was astounding, Mitchell says.

Some surprises were less welcome.

 

Confronting Apathy

“Nobody cared about them, really,” he says. “Trying to save forests on the basis of unknown species really doesn’t work. People aren’t prepared to pay a billion dollars for a bug.”

Along with never-before-seen species, the way in which forests interact with the atmosphere was an undiscovered field.

In 2002, he climbed 60 meters in a ‘flux’ tower high into Amazonian canopy with eco-physiologist Antonio Nobre, who works on the Large-Scale Biosphere-Atmosphere Assessment project. They looked at the carbon dioxide meter and saw the reading: 382 parts per million of carbon dioxide in the atmosphere, uncomfortably close to the level of 450 parts per million the Intergovernmental Panel on Climate Change (IPCC) has set as the threshold level above which consequences from climate change would be dangerously severe.

“We were already that close,” Mitchell says. “Yet these forests suck CO2 from the atmosphere, a service the world needs now more than ever – surely here was a key to saving them.”

 

Eco-Utilities

So how can you make people care about rare bugs and carbon dioxide, when it seems all they care about is money?

Mitchell and GCP have put forward the concept of forests as eco-utilities which regulate rainfall, pull and store carbon dioxide from the air, and deliver all of the ecosystem services provided by biodiversity which underpin food, energy, and climate security for humans.

To understand the economics that might drive forest protection, GCP starts with forest science.

“You have to look at the science in order to work out what the forests are doing that might become valuable,” Mitchell says.

 

Putting a Number on Ecosystem Services

GCP-affiliated researchers are working to quantify carbon and water cycles in Brazil.

The Amazon, for example, evaporates close to three trillion tons of water into the atmosphere each year, and it is this water that feeds the breadbaskets of South America.

By absorbing 4.8 billion tones of CO2 from the atmosphere each year, ancient tropical forests act as a natural carbon capture and storage (CCS) facility worth almost US$200 billion per year in terms of their benefit to society – bigger and cheaper than proposed industrial CCS.

“It’s absolutely gigantic,” Mitchell says. “And it’s provided as a free service, yet we’re tearing it to bits.”

 

From Apathy to Action

Mitchell’s early enthusiasm for forest canopies wasn’t always met with support.

“When we first started this, there was a great deal of indifference,” Mitchell says.

In the early days of the GCP, raising funds was a struggle, says Nigel Winser, executive director of EarthWatch Europe and a GCP trustee. “Every day, he struggled hand-to-mouth to keep it going.”

While no NGO has complete security in terms of funding, Winser says, GCP’s footing is much more solid – and Mitchell, “one of the world leaders in forests,” now wields impressive influence in the upper levels of policy and corporate circles, as well as conservation ones.

Mitchell describes growing awareness of the economics of climate change and the role that deforestation plays in carbon emissions – particularly as explored in studies like the 2006 Stern Review on the Economics of Climate Change – that has made his work easier.

 

Forest Footprints

One of Mitchell’s more recent challenges is awakening businesses and their investors to their effect on forests.

Many businesses get their products from rainforests, from soy to feed chickens and beef, from cattle raised in the Amazon to palm oil made from Asian trees. These products are long-haul travelers that then appear in markets around the world.

“You and I, every day without knowing it, are eating the Amazon,” he says.

As a response, GCP launched the Forest-Footprint Disclosure Project in June, which encourages companies to examine how their operations and supply chains affect forests.

To kick off the project, Mitchell wrote to CEOs of more than 200 companies that GCP believes have sizable forest footprints, requesting that companies complete a questionnaire targeted to five main commodities: beef, soy, biofuels, palm oil, and timber.

It wasn’t just a letter. Mitchell had called for support, and, to his surprise, investors responded in force.

During what Mitchell calls “the worst financial crisis the world has probably ever seen since the Depression,” investors with a total of almost US$3 trillion in holdings backed his call for forest disclosure before the project launched.

Mitchell attached a list of these investors to his letter. “Their support was an amazing vote of confidence,” he says. He already has responses from a growing list of major companies willing to take their forest footprint seriously.

In January 2010, the project will have its first in a series of planned annual reviews. Mitchell hopes the project will drive development of worldwide best-practice standards for companies that do source their products from rainforests.

 

Filling the Gaps

Colleagues say Mitchell’s engaging personality has turned detached government officials and CEOs – as well as researchers – into forest fans. His GCP publication “The Little REDD Book” (www.littleREDDbook.org) has become an authoritative yet remarkably popular guide to the often impenetrable UN negotiations around reducing emissions from deforestation.

Canopy scientist Margaret Lowman recalls inviting Mitchell to the first international canopy science conference, held in 1994 in Sarasota, Florida, as a keynote speaker. Mitchell stood on stage and unveiled “this amazing plan that he had worked out, where we’d have canopy stations with a balloon, with a walkway, with a tower, with a crane, with all of these cool gadgets dotted throughout the forests,” Lowman says.

Then he put up a map of where he wanted these canopy stations: everywhere. The scientists in the audience started laughing.

Anyone else might have walked off the stage, disheartened. “His charismatic personality carried the day,” says Lowman, who is now on GCP’s steering committee. “Andrew just charged right ahead, full steam – and carried the crowd right along.” And at the next conference, dozens of scientists were advocating for the same canopy stations that they’d been skeptical of a few years earlier.

Mitchell says while his mission to protect forests hasn’t changed, his audience has expanded.

In 2007, Prince Charles approached him to find a way to protect rainforests. Mitchell helped start the Prince’s Rainforest Project, which both promotes awareness of deforestation and has advocated an emergency plan for forests which would provide some US$20 billion of financing to rainforest nations ahead of REDD.

“Why ahead of REDD?” Mitchell asks. “Because we cannot afford to wait.”

The pressure to help forests fast is what drives Mitchell to address deforestation on multiple fronts.

“Probably we try to take on too much,” he says. “But you just feel such a sense of urgency and need that you just got to have at it, you just can’t allow these things to go by and not do something about it.”

 

Spreading the Word

Winser, of EarthWatch Europe, first met Mitchell in 1975, when he hired the young zoologist to work on a survey of Kenya’s Tana River. Even then, Winser says, “I saw in Andrew someone who wasn’t just a great scientist, but a great communicator.”

Along with an ability to transform complex canopy science into a story that’s understandable in boardrooms and remote villages, Mitchell has a few other tricks up his sleeve.

On a later expedition with Winser and the Royal Geographical Society to Malaysia and the forests around Mt. Mulu, Mitchell learned how to imitate forest primate calls.

The two researchers also worked with the nomadic Punan people, learning how they lived sustainably within the forest – and how to shoot darts out of traditional blowpipes.

“I think Mitchell has this lovely mix between being the academic, the adventurer, and the communicator,” says Winser, now a close friend and godfather to Mitchell’s son. Together, these qualities allow Mitchell “to inspire people to take on the big issues of the world.”

 

There and Back Again

When Mitchell spoke with the Ecosystem Marketplace, he was embarking on an adventure: a trip to Manaus,Brazil, where he had invited key representatives from indigenous and other communities from across Amazonia to discuss how they could be compensated for the ecosystem services they help to maintain.

One of the great gaps, Mitchell says, is in understanding what people will do once they’re given the means to protect forests.

“In a sense, raising the money is the easy part,” Mitchell says. “The international community needs very much to hear from them what they think works, how they would monitor and look after their forests, what they need at a grassroots level.”

Mitchell is often on the road stirring up princes and presidents to protect forests – or learning more about forests from the people who live and study there.

But when he’s home, you might find him strolling through the oak, ash, and sycamore trees in Wytham Woods near Oxford University, where Mitchell is a research associate in the zoology department.

“When Brazilians come here and I show them my wood, they laugh,” he says.

These woods, the site of many early studies in forest ecology, now also host courses for people from around the world who want to learn how to climb up in to the canopy – another of GCP’s programs. And when Mitchell’s not teaching, writing, or deep in conversation, these woods are where he mulls over his latest foray to protect forests.

“It’s a beautiful place to go and walk on a sunny afternoon to get inspiration about how we can figure out how we can all live with nature,” he says. “It’s just the right place to do it.”

Cameron Walker is a regular contributor to the Ecosystem Marketplace. She may be reached at cwalker@nasw.org.

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John Reid: Teaching Ecologists the Economics of Nature

4 September 2009 | In 1997, John Reid already knew that conservation and economics were inseparable.

“All you need to do is spend a day in the field in any developing country in any region where there are conservation efforts going on,” he says, “and you see that the economic development issues are an integral part of solving the conservation challenges.”

At the time, however, few conservationists had looked at environmental problems through an economic lens.

Then, while pedaling home from his job in Conservation International‘s Washington, DC resource economics program, Reid started mulling over the dynamics of the community he’d become a part of: a conservation community whose primary culture was biology and ecology, and whose quest to protect species and land was driven by science and love of nature – rather than by an appreciation of nature’s utilitarian value to society and industry.

But what if conservationists could take a crash-course in economics?

Reid’s wheels spun across the bridge over the Potomac River, and “a number of different ideas and pieces fell into place,” he says. “By the time I was home, I had the idea pretty well-formed, the way it is today.”

This idea became the Conservation Strategy Fund, which runs economic boot camps of sorts for conservationists and conducts its own analyses of infrastructure projects. With training courses several times each year in the US and in South America, the fund helps people working in many of the world’s threatened areas acquire the tools they need to understand the role of economics in environmental decisions and to communicate the economic value of ecosystem services to policymakers confronting decisions about development.

Randy Curtis says it’s impossible to over-estimate the importance of distilling that value and then conveying it to the right people. A senior policy advisor for international government relations with the Nature Conservancy, he says a typical response to traditional conservation pitches is: “Don’t talk to me about the birds and the bees, or biodiversity, or endemic this and endangered that.”

Policymakers want numbers, he says – and usually with dollar signs in front of them – to convince their constituents, colleagues, and the media.

 

Wheels Start Turning

Reid and his colleagues now teach conservationists how to use economics to show the true costs and benefits of proposed projects. Yet when Reid first launched CSF, his own grasp of another economic reality – fundraising – was “pretty naí¯ve,” he says. Once he tracked down foundations with similar interests, he thought he’d just send out a letter, and the foundation would send back cash. His first flock of letters returned with nothing.

But his persistence paid off: a few small donations, then a series of grants from the W. Alton Jones Foundation, the Charles Stewart Mott Foundation, and the Moriah Fund, and CSF was on its way. The first course ran in September, 1999, in a partnership with Smithsonian; the students mostly came from Latin America, many from conservation NGOs and a few from government agencies – the profile that most CSF courses now serve.

At first, CSF had to market courses through conservation networks. Now, people seek the course out. CSF offers tuition-free courses in Brazil and other parts of Latin America; for these courses, more than 300 extremely qualified applicants typically apply for 25 spots.

CSF also runs a tuition-based course with Stanford’s Center for Conservation Biology. Reid expected enrollment to drop during the economic downturn, but this summer’s course was as popular as ever.

“We have to take some credit for selling the idea that economics is important to conservation work, and that shift in attitudes has generated some of the demand,” he says. “In the last five years, there’s been increased interest in the idea of environmental markets, and that’s brought more people who want to figure out the economics of environmental services, and of course the most recent manifestation of that is the forest carbon issue.”

 

Beginning in Brazil

Reid’s own interest in conservation work came almost accidentally. As a teenager, he felt a strong connection to the public lands around his home in Marin County, but he never thought that he’d have a career involving nature.

In 1991, when Reid was in his mid-20s, he went to Brazil to learn Portuguese; while there, he became an intern on an environmental project.

At the time, environmentalism in the tropics was still a modest – but growing – movement, he says. “I discovered that there were people out there who were making a career out of trying to protect the environment.”

Reid returned to the United States for a graduate degree in public policy at Harvard University, focusing on environmental policy and economics. He’s been immersed in the field ever since.

With Conservation International, he was studying an area surrounding a public reserve in Brazil, where CI and other conservation groups wanted to encourage private landowners to preserve forest, extending habitat for species in the reserve. Reid and his colleague looked at the incentives landowners had to make choices from cutting forest for cattle to ecotourism.

The project helped spark CSF.

“It was a really sensible way to go about things, to understand the economics before trying to figure out what the appropriate conservation strategy was,” Reid says of the project. “But it was also an incredibly rare approach within the conservation community.”

 

Conservationists in the Classroom

With the help of CSF’s courses, conservationists – particularly those who work in developing countries and don’t have the time or money to get a PhD in environmental economics – are starting to make economics an integral part of their work.

 

Starting with the Basics

The core course starts with a few days of basic microeconomics – how markets work and how individuals, families, and companies behave as participants in markets. While there have been other courses in valuing environmental services, Reid says those have skipped over basic market theory – things like supply and demand, what makes a competitive market, and how to privatize a public good.

“These are all key issues, and you need to know the basics to understand them.”

Then, students look at the methods for assigning value to ecosystem services.

“The goal is to give people real fluency and familiarity with what all of these methods are, what their potential is, what their limitations are, where they’re most appropriately applied,” Reid says.

The next part of the course varies depending on students’ interest. A group interested in forests might focus on forest economics, exploring concepts including the basic economics of timber, how harvests are timed, and what decisions forest owners might make.

The course wraps up with a cost-benefit analysis, using spreadsheets to calculate rate of return and net present value of an investment, taking examples from everything from a small-scale sustainable animal husbandry project to a $6 billion hydropower project that threatens indigenous groups.

Students then present their results, tailoring their talk to a particular audience: politician, NGO board of directors, media. Those slated to speak to local community members have to slash terms like “internal rate of return” from their explanations; if they’re talking to a politician, Reid says, they only have five minutes to make their case – “and the guy takes a phone call in the middle of the meeting.”

 

Communicating the Calculations

The point, Reid says, is to reinforce that numbers are useless unless they can be communicated.

The courses don’t offer environmental economics as a cure-all approach for environmental issues – or turn participants overnight into economists – but Reid says students come away with practical knowledge to start chipping away at conservation challenges.

“They can find conservation approaches that are more cost-effective, and they can influence development policy in a way that is economically more efficient, more equitable and more environmentally sustainable.”

Participants also come away happy.

“They say it’s the best thing that ever happened to them,” says Curtis, who’s helped send as many as 50 TNC employees to the CSF-Stanford program.

 

Getting Results

One of Reid’s original goals, along with giving conservationists a solid background in environmental economics, was to find people with an analytical bent who could actively pursue this work alongside more seasoned environmental economists.

Once the courses are over, CSF has often joined with students to create research teams.

One example: After the first course in Brazil in 2000, three students wanted to do a cost-benefit analysis of a water diversion project. The group was a true mix: an analytical government researcher, a long-haired activist from the affected countryside, and a member of the national environmental agency. Together, they determined that the water diversion project would waste millions of dollars and wreak environmental havoc.

With the convincing data delivered by course participants, the national and state governments “saw that the public works project was a white elephant,” Reid says. Instead, they created a 1.7-million acre protected area, one of the earliest validations of CSF’s work.

Since then, former students have done influential work in Tanzania, Panama, and Brazil, among other places – and a few have even become a part of CSF’s staff. Reid estimates that the core staff of 15, based in Brazil, Bolivia and the United States, has contributed to the conservation of around four million acres of habitat.

 

The Consultancy Game

More and more, CSF was asked to perform analyses independent of teaching courses, and today the group provides cost-benefit analyses for major infrastructure projects around the world.

“They are now recognized not only as a great training organization, but also as an honest, objective and very competent analytical team for assessing major infrastructure development projects,” says Jason Cole, a senior program officer at the Gordon and Betty Moore Foundation, one of CSF’s funding sources. “Their findings and conclusions bear more weight now and we are seeing their work as directly influencing key decision-makers.”

In Brazil, CSF has studied an area of the Amazon where major road rebuilding is proposed – and found that there’s no economic benefit to the project, Reid says. Two Brazilian students-turned-staff members have done cost-benefit analyses and looked at the costs of protecting the land along the road in the case the road is built.

 

An Evolving Course Catalogue

When Reid began CSF in 1998, valuing ecosystem services was just beginning to take root.

“Since we started doing this work, the world has changed,” Reid says. CSF’s courses need to be ever-evolving, so Reid and his colleagues are tapped in to the latest research and policies on economics and the environment in order to infuse their courses with current information.

“Since the beginning, we’ve taught people about instruments for market-based environmental protection, so we’ve been talking about environmental taxes, and we’ve been talking about cap-and-trade, and the concept of how markets can accomplish environmental goals cost-effectively if they’re set up right,” Reid says. “So it’s a short leap to talking about REDD now and the kinds of things the international community is trying to hammer out.”

Reid already sees a need for more economics-based training on the issue – they’ve already been starting to incorporate some REDD-based information in current courses.

“Depending on the outcome of Copenhagen, we’ll be launching a series of REDD-specific economics trainings next year,” he says.

Marine conservation is another area that CSF plans to increasingly spotlight for its students. Coastal marine environments are incredibly economically valuable, Reid says, and policy tools for conservation are often already in place that can turn this economic value into conservation.

“Even more than the tropical forest, there’s a real opportunity to marry the economic interests and the conservation interests,” he says.

 

Hitting the Trail

In Panama, there’s an area of cloud forest where CSF analysis helped locals defeat a proposed road that would have gone through a national park and destroyed a popular hiking trail. Reid returned last fall and walked the trail in Volcan Baru National Park; the all-day rain that filtered through the trees reminded him of winter hiking in northern California.

“I felt completely at home and just grateful that it was there, and that we’d played a role in protecting it,” Reid says.

He’s known for bringing others out on the trail, too. Reid typically requests meetings that include a hike or bike ride, Cole says – a chance for discussion not only of the project at hand, but to experience the natural world they’re working to protect.

When he’s on his own, Reid uses his mountain bike to get into the same mental zone that first fueled Conservation Strategy Fund.

“I find that my brain goes into some different kind of a pattern when I bike, and new ideas do come up and solutions to problems emerge,” he says. “Riding is also a great way to have the discipline to get out in nature regularly and remember why I’m doing this work.”

Cameron Walker is a regular contributor to the Ecosystem Marketplace. She may be reached at cwalker@nasw.org.

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Mark Tercek: Investment Banker Brings Market Finesse to Conservation

The new head of the Nature Conservancy is a 24-year Goldman Sachs vet who thinks big and acts globally. The Ecosystem Marketplace talks to Mark Tercek about his past success, his current challenges and his vision for TNC’s future.

12 August 2008 | Mark Tercek’s kids are stoked. They’ve been on family eco-vacations to Greenland, Patagonia, the Galapagos Islands and Costa Rica — and now, their dad is in charge of a conservation powerhouse that protects many of the spots they’ve visited.

Tercek, who became president and CEO of The Nature Conservancy (TNC) July 15, ran Goldman Sachs’ Center for Environmental Markets and the firm’s Environmental Strategy Group.

Growing up in Cleveland, Tercek didn’t have extensive exposure to the natural world apart from local parks. Now as a parent of four, he’s gone global so that his own kids can experience nature firsthand.

Clearly, they love it. “When my kids learned I got the job as head of the Conservancy, they were just as excited as I was,” he says.

Along with enthusiasm, Tercek arrives at TNC with decades of experience in the investment banking world and, since 2005, he’s been bridging the narrowing gap between finance and conservation through Goldman Sachs’ environmental initiatives.

Banking Background

Tercek, a Harvard MBA, got into investment banking because he saw it as a world where he could work with the best and the brightest from around the world on critical business decisions. “It’s a fast-paced, competitive environment that lived up to all my expectations,” he says.

He started at Goldman Sachs in 1984 and became a partner in 1996. During his time there, he led the firm’s investment banking global divisions in everything from transportation to equity capital markets. Tercek, who worked in Tokyo for Bank of America before joining Goldman Sachs, returned to Tokyo to lead the firm’s corporate finance business from 1990-1993; he also worked out of the London office during his career.

More than two decades into his varied work with Goldman Sachs, Tercek thought he needed a change.

“I was considering shifting gears into the public sector, education or the environment,” says Tercek, who was already putting in time as an adjunct professor at New York University’s Stearns School of Business, “and was thinking that I would leave the firm to do so.”

In 2004, just before Tercek began contemplating a departure, Goldman Sachs began a partnership with the Wildlife Conservation Society to conserve a large swath of land on Isla Grande de Tierra del Fuego, a Chilean island. The pairing created permanent protection of more than 680,000 acres containing the world’s most southern old-growth forest stands and wildlife from the Magellanic woodpecker to the guanaco, a wild relative of the llama.

The partnership, too, was Tercek’s first significant experience with TNC, which was an advisor for the project.

Seeing the positive results, Tercek says he “started thinking that opportunities for firms like Goldman Sachs to enact positive environmental change were only increasing.”

The project planted the seed of a new venture for the firm, too. While Goldman Sachs’ environmental advisors lauded the firm’s efforts in Tierra del Fuego, they also wanted more, challenging the firm to harness its financial acumen to address environmental problems.

“This really resonated,” Tercek says, “and the more we looked into it, the more we saw that we could pursue good environmental outcomes that were simultaneously good for business.” The result: the Center for Environmental Markets, established in 2005, which looks at market-based approaches to environmental problems

A conversation with Henry Paulson — then chairman and CEO of Goldman Sachs and chairman of TNC’s board of directors — set Tercek off in a new direction with the company.

Paulson, now the U.S. Secretary of the Treasury, asked Tercek to stay at the firm and spearhead a new initiative to make Goldman Sachs’ investments, and the firm itself, more sustainable. Tercek took the helm of the Environmental Strategy Group, which implements the firm’s environmental policy, and of the nascent Center for Environmental Markets.

Getting Sustainability Going

Working within both the Center for Environmental Markets and the Environmental Strategy Group, Tercek jumped into crafting the firm’s environmental policy.

At first, he and the firm met resistance both from within and without — people wondered whether they could boost both business and environmental goals. Yet the more the firm learned, the more opportunities they saw to achieve both business and sustainability goals. The process, he says, “made me realize how corporate America can really help to enact lasting environmental change.”

John Holdren, director of the Woods Hole Research Center (WHRC), met Tercek when he became the head of the Center for Environmental Markets. Goldman Sachs and the Massachusetts-based research center, which focuses on land use and forest ecology research, had been exchanging ideas since 2003, when Holdren gave the opening address at a New York climate summit and attracted the firm’s attention.

The private sector has realized not only that environmental problems are real, Holdren says, but that “ultimately, there will be money made by solving them.” Goldman Sachs worked with WHRC to understand the latest environmental research so that they could be on the forefront of this movement, he says.

In fall 2006, Goldman Sachs’ Center for Environmental Markets committed $1 million over three years to the research center through the Clinton Global Initiative. The research center has already added an economist and beefed up their work in forest ecology, studying how a forest’s health affects how it stores carbon.

While the center will miss Tercek in his former post, “he’s an asset whether he’s in the financial community or the NGO community,” Holdren says. “Mark is very smart, very energetic, very thoughtful. He’s a terrific entrepreneur in thinking about how to use markets to solve environmental problems.”

Along with developing programs and relationships with organizations like the Woods Hole Research Center, Tercek and the firm also turned the sustainability lens inward, investing $1.5 billion in alternative energy and clean technology, incorporating sustainability principles into financial research, and building the firm’s new LEED-certified world headquarters in Manhattan. The firm started using recycled office products and disclosing its carbon footprint.

“When we initially released our environmental policy framework, the main goal was to get each of our businesses thinking about being more sustainable,” Tercek says. The long-term goal: to use the firm’s global influence to tackle environmental problems. “While there’s certainly still a lot of work to be done, all of our investors and corporate partners have thus far really been on board.”

Moving into Conservation

Big challenges seem to call to Tercek, and the ambition of TNC’s work (one goal is to protect 10 percent of every habitat type by 2015) caught his attention.

“The very size, scale, track record and fundraising success of the organization made me realize that the organization is well positioned to achieve real conservation successes,” he says.

Even if a shift from investment banking to conservation might surprise some, Tercek came to the attention of the organization’s board through recommendations from several leaders in the environmental community, says Jim Morgan, a member of TNC’s board of directors.

His commitment to the environment — and his desire to widen his knowledge — has caught the eye of others, too.

Phil Sharp, president of environmental policy think-tank Resources for the Future, says that while Tercek’s early background was not in conservation, he kept seeing Tercek at major environmental meetings and events. It was apparent that Tercek believed in the importance of his work.

“He’s genuinely committed,” Sharp says.

Resources for the Future also partnered with Goldman Sachs through the Clinton Global Initiative, and Tercek joined Resources for the Future in April.

And Tercek’s desire to understand isn’t just limited to attending meetings; he already has an intimate knowledge of how large institutions work — and if he needs help, he’ll ask for it.

“He strikes me as a person that, as problems come up for the organization, will just naturally seek out advice,” says Sharp, adding that quality is “a good sign of leadership.”

Partnerships have been crucial to the organization’s work, TNC’s Morgan says. Two recent programs are the Great Rivers Partnership, which links river basin research on the Yangtze (China), the Zambezi (Africa), the Paraguay-Paraní¡ (Brazil), and the Mississippi (US); and research in the Coral Triangle, which spans three nations in its efforts to protect 15 percent of the region’s marine habitat in the next decade.

Creating interwoven strategies like these is an area “that TNC has to be really outstanding in going forward.” Tercek’s experience in bringing together various organizations with the center for environmental markets will be an asset, Morgan says, calling him a “natural collaborator.”

Though he’s only been on the job since mid-July, Tercek says he’s already told colleagues that the research he’s doing at TNC feels very similar to the documents that came across his desk at Goldman.

“There is a lot of overlap in the way the Conservancy does business and the way Wall Street does business,” he says.

He’ll also bring in his other interests, including education, to the organization. Along with teaching at NYU, he ran Goldman Sachs’ leadership development program. Tercek plans to continue to focus on professional development at TNC.

Two weeks into the job, Tercek didn’t give specifics for his plans in his new role; he did say that climate change would remain one of the organization’s top priorities.

Sure, climate change is a huge issue — but that’s no surprise.

“I really enjoy collaborating with hard-working, well-intentioned, smart people in the pursuit of tackling big challenges,” he says. “The Nature Conservancy is full of creative problem-solvers working passionately to achieve ambitious goals for conservation.”



Cameron Walker is a regular contributor to the Ecosystem Marketplace. She may be reached at cwalker@nasw.org.

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Guaraqueaba: Where the Buffalo Roamed

If efforts to save the tropical rainforests by Reducing Emissions from Deforestation and Degradation (REDD) ever yield large-scale results, it will be in part because of demonstration projects like those in Brazil’s Guaraqueaba Environmental Protection Area.

Fifth in a series leading up to the 14th Katoomba Meeting in Mato Grasso, Brazil.

18 March 2009 | The first Asian Water Buffalo to cross the Pacific staggered onto dry land in Brazil more than a century ago, and quickly took to the country’s lush prairie grasses, making cattlemen wealthy in the process. By the 1970s, their progeny had outgrown the plains and were being herded into the rainforests, often at the hand of government-sponsored deforestation projects – even as environmentalists decried the immorality of putting agriculture before ecology.

By the early 1980s, however, environmental economists began winning converts among Brazilian regulators to the idea that healthy rainforests deliver more economic value in the form of environmental services than do cattlemen and their buffalo.

The Economics of Nature

Key among these services is regulation of the atmosphere and the earth’s temperature, with the Intergovernmental Panel on Climate Change (IPCC) estimating that rainforest destruction contributes roughly 20% of all greenhouse gasses.

The result is a growing body of progressive environmental protection mechanisms, and an increasing number of industrial emitters who believe they can offset their industrial emissions by saving rainforests – a process called Reducing Emissions from Deforestation and forest Degradation (REDD).

At least two non-governmental organizations (NGOs) saw the potential early on: the US-based Nature Conservancy (TNC) and Brazil-based Sociedade de Pesquisa em Vida Selvagem e Educao Ambiental (Society for Wildlife Research and Environmental Education, SPVS).

Together, with funding from American Electric Power (AEP), General Motors, and Chevron, they began the process of purchasing 19,000 hectares of degraded land in eastern Brazil’s newly-designated Guaraqueaba Environmental Protection Area, which lies in an ecosystem that has been recognized as a World Biosphere Reserve by the United Nations Economic and Social Organization (UNESCO), making it one of the planet’s highest priorities for conservation.

The quality of the land ranged from standing forest to degraded pasture, and the companies hoped to offset their greenhouse gas emissions by saving the existing forests from destruction and restoring the degraded lands.

A Forty-Year Experiment

The 40-year project aims not only to reduce emissions by avoiding deforestation in the Atlantic Rainforest, but also to test and expand the limits of REDD financing to restore degraded lands across the region and to create jobs for local inhabitants. On top of all this, project developers also aimed to develop procedures that can be replicated across the surrounding 314,000 hectares of protected land.

Bill Stanley, who runs TNC’s global climate-change initiative, says the technological phase is already proving fruitful. “These projects and others have basically settled the debate over whether we can measure carbon in trees,” he says. “SPVS has been especially good at measuring species diversity and promoting its development, and the tools they helped develop are being applied in other places as well.”

Now, he says, the challenge is more social than scientific.

“The technical issues that a lot of people thought were the major obstacles to these types of projects are not the major obstacles at all,” he says. “The most difficult thing is coming up with strategies for protected forests that will work for local people and for the governments involved and that will be sustainable.”

Creating the Public Infrastructure

In 1985, the state of Paran¡ reversed its policy of promoting agriculture in the Atlantic Rainforest and instead created the Guaraqueaba Environmental Protection Area (EPA), mandating a phased shift to “sustainable use” of lands as determined by the EPA committee. Then, in 1992, the state initiated the ICMS Ecologico, a sales tax designed to raise funds for conservation.

Meanwhile, in neighboring Bolivia, TNC and Bolivian NGO Fundaci³n Amigos de la Naturaleza (FAN) were putting together the first forest emissions reduction project based on Kyoto Protocol standards to be verified by a third party. That project, the Noel Kempff Mercado National Park, caught the eye of environmental NGOs across Latin America.

Realizing that income from ICMS Ecologico is a drop in the bucket compared to both income from agriculture and the cost of restoring degraded land, SPVS devised a plan to harvest funding from carbon offsets to purchase three private properties in the Guaraqueaba EPA which they wanted to convert to private nature reserves (Reserva Particular do Patrim´nio Natural, RPPN).

The Post-Kyoto Forestry Challenge

On the technology front alone, SPVS’s plans for Guaraquaba were nothing if not ambitious. They wanted to save endangered forests from the chain saw, re-plant old forests, and nurture degraded forests back to health with as little intervention as possible. All of this meant making sure than any reforestation came as close as possible to reviving the exact same blend of trees that had been chopped down for grazing.

But they faced a serious challenge: the 1997 Kyoto Protocol had come into effect without a provision for generating offsets by saving endangered forests, leaving many NGOs in the lurch.

“We expected a lot of big companies to come in and put a lot of money into these forests,” says Miguel Calmon, who at the time was a consultant with the environmental services arm of Winrock International, a global NGO that, among other things, develops methodologies for measuring the amount of carbon captured in trees. “We had trained almost 40 other NGOs in how to conduct feasibility studies, how to structure products, how to monitor carbon sequestration, etc. so that they wouldn’t risk being unprepared when the money came,” he says. “But that never happened.”

In 2000, Calmon joined TNC, and is currently director of the group’s Atlantic Forest Conservation Program.

Tapping the Voluntary Market

With compliance offsets off the table, SPVS decided to look for corporate investors interested in “gourmet” offset – those offering benefits beyond mere carbon sequestration. Having worked with TNC since the early 1990s, SPVS turned to them for help on the financing.

The timing couldn’t have been better. AEP had just contacted TNC to find out how it could offset its emissions by saving a piece of the rainforest, and the energy concern was willing to spend $5.4 million to do so. General Motors and Chevron soon joined the discussions as well, and SPVS began approaching local landowners with offers.

By 2000, the NGO began purchasing what eventually became 19,000 hectares of private land spread over three private reserves: the Serra do Itaqui Natural Reserve, the Cachoeira Natural Reserve and the Morro da Mina Natural Reserve.

They dubbed the three properties the Guaraqueaba Climate Action Project, and then began putting their theories to the test.

“Assisted Natural” Regeneration

Roughly 30% of the funds went to land acquisition, with the remainder being placed in an endowment fund that is intended to provide funding well beyond the project’s 40-year life. In the near term, the endowment will cover the cost of carbon monitoring and other expenses related to the upgrade of the reserve. Long-term, the fund is designed to cover the cost of management of the reserve and working with local communities.

On degraded lands, SPVS chose to let as much forest return on its own as possible rather than to actively re-plant. Where re-planting was necessary, they hired locals to dig through the land in search of native seeds that had lay dormant under the grazing fields.

“That was a real production,” says Stanley. “They brought the seeds to a nursery and did everything they could to get them to germinate – submerging them, cutting them – anything to get seedlings they could plant.”

To make sure the extra effort pays off in all ways possible, TNC brought in Calmon’s former employer, Winrock International.

“We basically took their methodologies and moved them forward,” says Gilberto Tiepolo, TNC’s Forest Coordinator. “For example, we quantified the differences in the amount of carbon that different species of tree capture, which makes measurement more accurate.”

That work will pay off for other groups as well – helping to provide more certainty for both buyers and sellers around the world.

Giving Back to the Community

All of these labor-intensive activities had the advantage of bringing undocumented locals into the employment system for the first time, and the project still has roughly 50 people from the region working for it full-time, ranging from forest rangers to reforestation technicians.

SPVS also conducts ongoing training workshops in skills such as ecology, first aid, and search and rescue, and has also been working to promote sustainable business in and around the reserve. The group recently helped set up a beekeeping enterprise for the production of honey, and is in talks with more than 100 farmers interested in the production of organic bananas.

“SPVS is looking at lots of different ways of generating income not only in the reserve, but in the surrounding communities,” says Calmon. “Only then will you really do something about the economic drivers of deforestation.”

Keeping It Real

After purchasing the land, SPVS sent all of the buffalo off to slaughter and also conducted interviews with farmers to make sure they weren’t simply taking the money and clearing land someplace else.

“There’s a lot of debate as to how far we should go with that,” says Calmon. “We do what we can, and the C³digo Florestal does place limits on the amount of forest that a farmer can chop down – but we all know there is a lot of illegal logging, and ultimately the only way to really eliminate leakage is to create incentives for not doing it.”

He says that local farmers are beginning to take heed, and that SPVS and other NGOs meet regularly to discuss ways of expanding the model across the entire Guaraqueaba.

“We used to have agriculture cooperatives, and now we have to think about forestry cooperatives,” he says. “In the future the model should not focus on land acquisition per se, but work with land-owners to help them profit by keeping their forests alive.”

Steve Zwick is Managing Editor of Ecosystem Marketplace. He can be reached at SZwick@ecosystemmarketplace.com.

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Dorjee Sun: Rockin’ for REDD!

When not raiding illegal Indonesian logging operations with the Governor of Aceh or hanging ten off the Australian coast, Dorjee Sun is cutting carbon offset deals – among them the world’s largest avoided deforestation project to date. The Ecosystem Marketplace talks to one of the environmental movement’s true mavericks.

20 June 2008 | It was March, 2007, and Dorjee Sun was trying to crash a party. The CEO of carbon offset project developer Carbon Conservation, Sun had applied to get into a workshop on reduced emissions from deforestation and degradation (REDD) in Cairns, Australia, only to be turned down five times.

So he bought a plane ticket and checked himself into the Cairns Hilton. “I sat in the lobby at the coffee store, grabbing delegates as they went to the toilet,” he says. He nabbed delegates from Costa Rica, Indonesia, and Papua New Guinea before a security guard latched onto him.

Not to be deterred, he showed up to schmooze over canapés and drinks at a conference reception.   Again, the security guards… along with the Australian delegate to the conference.

Getting Results

But this time they told the protesting Sun that he could attend the conference – if he could have a fax sent from the Australian environment minister by eight the next morning.

“7:45 AM, baby,” Sun says, laughing — that’s when the fax machine started whirring.

Sun’s persistence — and enthusiasm — has fueled an unprecedented agreement with the Indonesian province of Aceh to protect 1.9 million-acre Ulu Masen forest, avoiding 100 million tons of CO2 emissions over 30 years.

In February, the project was validated under the Climate, Community & Biodiversity (CCB) standards; and in April, Merrill Lynch signed a $9 million deal with Carbon Conservation to finance it.

“As far as we know,” says John-O Niles, Carbon Conservation’s chief scientific officer, “this is the largest single climate mitigation project in the history of the world that’s actually going to market.”

Niles was an advisor to the Coalition of Rainforest Nations when he met Sun as he tried to sneak into the March, 2007, meeting.

“He said, ‘I’ve been studying this, and I want to stop deforestation this year, and I’m kind of sick of everyone just talking about it so I came to do something,'” Niles recalls.

The next day, Sun took him snorkeling, and then to dinner — a dinner at which Sun handed over his Blackberry and told Niles to contact anyone he wanted, so that he’d know how serious this party-crasher was.

Starting out in Sydney

Sun has always charged into what interests him.

After studying law and finance at the University of New South Wales, and studying Chinese and law on scholarship at Beijing University for a diploma of Asian Studies, he jumped into the dot-com boom: starting a recruitment software company, an education company, and a creative agency that focused on animation and viral marketing, among others.

Sun’s parents immigrated to Australia from near Darjeeling, India, but are of Chinese Tibetan origin and, once they’d gotten citizenship, started a small business.

“As a good migrant child, I was a student in tennis, and swimming, and all of the stuff that you do to try to be the overachieving eldest son,” he says.

Along with being the “typical” eldest son, he was infected by typical Australian outdoors obsessions — whether setting out into the bush for a day or surfing the northern beaches of Sydney.

Man on a Mission

Sun, 31, says he wanted to pair his entrepreneurial urges with something that he cared about. Each time he started up a new venture, he says, “I never felt fulfilled, and I felt that just being in front of a computer didn’t really satisfy the urges that I had. I couldn’t explain what they were. All I knew was that I wanted adventure and I wanted passion and I wanted to go out and change the world.”

By 2006, Sun had started learning more about Kyoto and what he calls the “rabbit hole” of avoided deforestation that emerged during the 2001 Marrakesh Accord.

“Once you get into avoided deforestation and you see the insanity of the multilateral negotiations and the total obliviousness to the science; and the deeper you dig past carbon, you get to all the amazing roles from pollination through to biodiversity the forests provide,” he says.

Surfing for Solutions

Sun kept surfing — this time on the web — to find out who was taking the lead in avoided deforestation. He tracked down a company in Lismore, Australia, and did what he always seems to do when he wants to get involved in something: he just showed up.

“I went knocking and I found this office, and there were a bunch of these ‘hippie-greenies’ that were trying to do this, and I was there in my suit,” Sun says. “And I kind of sat there until they let me buy the company.”

The Carbon Pool had been known for its Minding the Carbon Store project, which protects 12,000 acres of native Australian vegetation. Part of this project included Australia’s largest sale of verified emissions — one million tons – to mining company Rio Tinto.

While Sun calls the Rio Tinto deal “fantastic,” he wanted to up the stakes.

“Every day we lose 71,000 football fields of pristine rainforest by rapacious forestry companies which are unsustainably destroying the world,” he says. “Do you want to continue to kick around on the fringe of irrelevancy, or do you want to actually step up to the plate and make a real difference?”

With the blessing of the Carbon Pool (now under the umbrella of Carbon Conservation), he hopped on another plane—this time to Aceh, Indonesia.

Indonesia’s Forests

LeRoy Hollenbeck, an advisor to the governor of Aceh, recounts that Governor Irwandi Yusuf likes saying that only about 35 percent of the forest cover in the whole island of Sumatra is intact — and 65 percent of that is in Aceh, a province on the northern tip of Sumatra.

“That’s why we’re really keen on Aceh,” Hollenbeck says. “It has probably the largest tract of natural forest in all of Sumatra, and Irwandi is a green governor. He wants to do what can be done so that the forest doesn’t disappear. And if he can get paid for it, even better.”

In late 2006, Hollenbeck proposed the idea of linking Aceh and the province of Papua in a REDD program to the World Bank, but got nowhere. A few months later, Hollenbeck hopped a plane back to Aceh and talked with Scott Stanley of conservation organization Fauna & Flora International; Stanley told him there was a guy named Dorjee Sun in Aceh that he should meet.

In late January, 2007, the two men had dinner with Sun, and, Hollenbeck says, “The rest is history.”

For the Thirteenth Conference to the Parties of the United Nations Framework Convention on Climate Change (COP-13) held in December in Bali, Indonesia, Carbon Conservation organized a Green Governors’ Gala; here, the Indonesian governors of Aceh, Papua, Papua Barat, and Amazonas, in Brazil agreed to protect their forests and work toward developing carbon credits for voluntary markets.

Sun, whose company is working on the nuts and bolts of bringing the governors’ carbon to market, says his main work is as the cheerleader of the deal.

The Ultimate Rah-Rah

“That’s all I really do: I just keep rah-rah-ing,” he says, although the plan did take some negotiation on his part. “I actually said to the governors, I said look, if I actually tried to get away with the behaviors [that traditional resource extraction companies have participated in], I invite you to put a spear in my chest, or in my eye, or my leg.”

As of yet, he’s had no close encounters with the business end of a spear. (“Despite my wide girth, I’m amazingly dexterous,” the less-than-portly Sun says).

Riding Shotgun

And he seems to have found a place to use that dexterity in Aceh: riding shotgun with the governor as he performs raids on small illegal logging operations, with heavy metal band Deep Purple playing in the background.

Sun compares those chopping down forests to the Dark Side in the Star Wars series: Darth Vader, the Emperor, and their minions.

“If you imagine the economy is a runaway train, and the rules of finance and investment are just off the chain, basically, that’s the evil empire,” he says. “Without any type of change to fundamental infrastructure or market constructs, you don’t really get the runaway train being redirected, and we’ll eat our way all the way through the Earth.”

On the other side are Luke Skywalker, Han Solo, and the protectors of the world’s forests: “The people who choose to stand up on the [forest moon] of Endor are essentially fighting the good fight,” he says. “We’re far outnumbered, and far outgunned.”

But while Sun talks about his work with a mixture of humor and zaniness, he’s serious when it comes to protecting Indonesia’s forests.

The Financial Incentive

Sun considers himself a “pragmatic conservationist,” and would like to make money on the project, but if he really wanted a windfall, “holy s**t, there’s a lot of other better ways to do that,” he says.

“At the end of the day, we’re trying to protect the rainforests forever, we’re trying to alleviate [Aceh’s] poverty, and provide alternative non-timber livelihoods which will result in a viable protection scheme,” he says.

In Aceh, the work is going at high-speed — and perhaps a pace that isn’t always comfortable.

“If you look at the old phonograph records, Dorjee’s probably moving at 78 speed and we’re probably moving at 45 or 33 1/3,” says Hollenbeck. “And there’s nothing wrong with that.”

Even at warp speed, Sun’s enthusiasm seems contagious. “No matter who he meets, it’s the same thing,” Niles says. “He’s usually got his rainforest ranger shirt on – a khaki short-sleeve shirt – and he goes into every meeting the same. It doesn’t matter if it’s the president of Starbucks or former president of the World Bank. He’s like, ‘High five! How you doing! Alright, here we go! Are you with me?'”

The Merrill Lynch Deal

One of Sun’s full-speed-ahead efforts has been finding investors for the project.

He began pursuing Merrill Lynch last year, and the company’s managing director and global head of carbon emissions, Abyd Karmali, started working with Sun once they focused in on the Aceh project in October 2007.

“I’ve never chased a girl as hard and as fast as I have Abyd Karmali,” Sun says.

Interest in the Aceh project was mutual, Karmali says. Merrill Lynch then did its own assessment of the proposed program, meeting with the governor, local NGOs and others involved.

“Merrill Lynch wanted to be an early mover in the forestry carbon area.” The deal was an excellent fit with Merrill Lynch’s new Environmental Sustainability Framework and a company green initiative, Karmali says, and along with the commercial potential, the project could help shape REDD policy. “And then of course, Dorjee himself is someone who was able to represent his project very eloquently, and was able to transmit the broader vision that the governor of Aceh had for his region.”

Karmali says the deal is structured in such a way that the project itself will benefit, along with its investors. And while, as a first-of-its kind project that carries risks, he says, “the potential for this project is very significant, because if we can achieve greater sales, then that’s obviously going to deliver far more than $9 million in terms of value to the actual project.”

Merrill Lynch’s participation is groundbreaking, Sun says, because instead of investing philanthropic or conservation money in the deal, they’re pulling money from their commodities trading fund.

“When Merrill Lynch stepped forward and put their name to this, it wasn’t just the money; it was the fact that an investment bank, for the first time was deploying its money, thinking they’re going to make more money by helping us save (the forest) than they are by helping us tearing it down,'” Niles says.

Sharing the Risk

Sun has taken on much of the uncertainty himself.

While there are many who talk about doing projects like this, Sun has actually poured his own money into his work, a step many haven’t taken, says Martijn Wilder, a partner at the Sydney office of Baker & McKenzie, a law firm that advises Carbon Conservation.

“He’s put everything he has at risk,” Wilder says. “You’ve got to credit him with that.”

Next Steps

One of Sun’s goals is to turn Aceh into an exemplary project to show off at the COP 15 conference to be held in Copenhagen at the end of 2009. Early reports indicate that Aceh’s forests are already improving: Niles says trails that were logging roads a year and a half ago are overgrown, and this summer they’ll conduct remote sensing surveys and calculate the actual emissions reductions accomplished.

Meanwhile, Sun’s company is lobbying for emerging carbon markets to include the project’s carbon credits, and working on convincing other financial institutions that this project is only the beginning in terms of where carbon markets — and projects — could go.

“We’re easing people into what could eventually turn out to be a significant market,” he says. “They just have to change their valuations from short term finance to long-term total economic value.”

And Sun has a lot more he wants to bring to the table. Having worked in the fashion industry, he compares labels like Ralph Lauren and Tommy Hilfiger – which he says promote an image without meaning – to the plans he has for creating a global “brand” based on protecting forests.

“I haven’t started really using my marketing,” he says. “I haven’t started really using my viral stuff, but I will absolutely tie it together for one campaign, and it’s the campaign that I think is going to pretty much cover the rest of my life, and that’s going to be the appropriate valuation and protection of the most important resource in the world, which is our only home.”

Cameron Walker is a regular contributor to the Ecosystem Marketplace. She may be reached at cwalker@nasw.org.

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