Documents Back Nature Conservancy Over BC Auditor General On Darkwoods

12 April 2013 | Christian Schadendorf says he was taken aback when he read “An Audit of Carbon-Neutral Government”, the provincial Auditor General‘s (AG) much-ballyhooed take-down of the Pacific Carbon Trust (PCT), a state-owned enterprise that buys carbon offsets in support of the province’s Carbon Neutral Government program.

Especially surprising was the report’s assessment of the Nature Conservancy of Canada’s (NCC) Darkwoods Forest Carbon Project, a massive conservation effort funded in part by carbon credits that NCC generated by saving trees from “liquidation logging”, a term NCC had created to describe the practice of harvesting all mature timber on a property as quickly as the market can absorb it.

“(W)e found limited support for a ‘liquidation logger’ scenario,” the AG’s report said. “No such companies bid on the property, and it was widely reported at the time of sale that the owner’s preference was to sell to a buyer who would appreciate or maintain the area’s forest and wildlife values.”

The owner was Duke Carl von Wuerttemberg, and Schadendorf was the Duke’s right-hand man in that sale. Contrary to what the report said, Schadendorf had received formal letters of interest from several bidders whose practices would have qualified as liquidation logging, but NCC swooped in with a contract at the asking price before the others could be finalized (a process we will explore in detail later in this series).

“I was surprised to read that assessment in the AG’s report,” he says. “We had calls from several timberland buyers who would qualify as ‘liquidation loggers’, but NCC got there first.”

He wondered why the AG had relied on the news media to characterize the terms of sale even though one of its auditors had interviewed him personally, and he suspected the reference to “widely reported” knowledge meant items like this:

The duke laid down a tough list of conditions for the sale. “No speculators, developers or timber cutters needed to apply,” said Schadendorf. “We wanted someone who could appreciate and maintain the unique beauty of the forest and its wildlife riches.”

Schadendorf doesn’t dispute his own quote, but says the first sentence, which is not part of the quote, overstated things a bit – an error that seemed harmless enough at the time.

“Yes, we preferred a buyer who would maintain the unique beauty of the forest,” he says. “But there was no restriction on who would be eligible to bid or not, and we wanted full fair market value.”

That reality was also “widely reported”, albeit not “at the time of sale” in Canadian Geographic (a publication with a long lead time and the ability to double-check stories without the pressure of a daily deadline):

The Duke sought a buyer who would treat the land with respect, but he also wanted fair market value for a property valued at around $100 million. The usual suspects were interested: forestry companies and land developers that would inevitably strip the timber value, then subdivide the hell out of the place.

Schadendorf says he’d have gladly clarified the point for auditors, too, if they had asked him – but they didn’t. And he’s not the only person with intimate knowledge of the transaction or expertise in the timber business whose evidence was ignored by auditors over the course of their 18-month investigation. In just the two weeks since the report came out, I’ve contacted nearly two dozen easily-identifiable sources – from respected timber economists and carbon practitioners to investors who bid on the property – and only a handful say they heard from the auditors, while so far none who’ve commented say they were taken seriously.

Rather than seek out new information, the auditors seem to have fixated on anything that supported their “findings” – be it a stray paraphrase, a sentence in a newsletter, an outlier transaction, or a very narrow definition of a word with wider meaning – and ignored the vast body of evidence in front of them.

Take, for example, their assertion that NCC didn’t consider carbon finance until after purchasing the property.

“For the NCC, offsets were not a critical factor in the decision to acquire the Darkwoods property,” they wrote. “A carbon offsets feasibility study was not completed until January 2009. The NCC did not approach the Pacific Carbon Trust about offsets until late 2009.”

The last two sentences are correct, but they don’t in any way support the first – as lead auditor Morris Sydor himself conceded during our interviews – because the question isn’t when NCC conducted their formal study or approached the potential buyer, but whether they factored carbon offsetting into their finance plan before buying the property.

“The technical requirement is that you’re looking at legal documents, board minutes, etc,” said Sydor. “If you go back to that period when they purchased the property, there’s nothing publicly available that (indicates) they were going to need offsets to go ahead with this.”

Well, yes, there was nothing “publicly available”, but there was plenty of evidence that NCC was “going to need offsets to go ahead with this.” In fact, NCC’s Director of Land Securement, Tom Swann, sent me two internal memos and one external letter that clearly showed the Conservancy was not only considering carbon credits but actively looking for partners to buy them, and this was more than a year before the purchase (see “The Additionality Paper Trail”, below). I then asked Sydor – a cordial man with an almost encyclopedic knowledge of the facts related to Darkwoods – if he had reviewed these documents.

“They had referred to these documents during our meeting,” he said, “but I was not provided copies.”

Did NCC withhold them? No. The auditors simply didn’t ask.

Then there’s the issue of “regulatory surplus”, which basically says you can’t earn carbon credits just for doing something that the law already requires. The auditors point out – rightly – that NCC used an “Ecological Gift” as part of its financing mix to purchase the property. Once NCC accepted that gift, they were obligated to preserve the land. The report alludes to the gift several times, implying that the gift means that the property was already protected when NCC bought it, when in fact the property became protected because NCC purchased it.

“We also found that the NCC’s potential harvesting activities are significantly constrained by a legal obligation to conserve the land, thereby limiting the baseline options available to the NCC,” the report states – a clear implication that the gift meant the property failed the regulatory surplus test. But when I asked Sydor why he said the report didn’t meet the regulatory surplus test, he silenced me by saying, “We don’t have anything like that in our report.”

I went back and read it again, and he was right – nowhere does the report explicitly say that Darkwoods fails the regulatory surplus test, but it certainly implies it. Page 24 has a sidebar explaining the Ecological Gifts Program, and a sentence – in bold letters – stating, “The Nature Conservancy of Canada had a legal obligation to conserve the property.” They even created an elaborate and misleading timeline that showed when when NCC carried out the property appraisal for the Ecological Gifts Program (August 2007) but makes no reference to earlier efforts to secure carbon finance.

It goes on and on about the program and the obligations that NCC assumes for using the gift to fund its purchase, but nowhere does it explicitly state that there was a pre-existing law – just as nowhere does it really explain the gift’s role in the financing package.

Who Are the Sources?

Then there is the question of sourcing. The document cites only one academic source – an agricultural economist named G Cornelis van Kooten, whose self-described mission includes supporting an effort “to refute the results of computer models that attribute anthropogenic emissions of CO2 to be the leading factor in causing catastrophic global warming.” He’d written a paper critical of the Darkwoods deal – albeit one that was neither published nor peer-reviewed – so it certainly makes sense to contact him. But to make him (or anyone for that matter) the only cited source in the whole paper?

A project like this normally brings in paid consultants who are eager to get their names on the final product, but this one is radioactive. None of the paid consultants seem to want their names on it, and the only two I know by name say they quit. The most recent is Canadian engineering consultancy Stantec, which was retained last April.

“We were not provided with the opportunity to, and we did not, review or provide any comments on the draft or final OAG Report and as such, resigned from our role as an expert advisor,” said Daniel Hegg, the Discipline Lead for Stantec Climate Services, in an e-mail.

That sounds a lot like Stewart Elgie, the associate director of the University of Ottawa’s Institute of the Environment who also resigned after being frozen out of the process.

“I will simply say that I have not been shown or reviewed any of the BCAG’s draft reports for the past 7 months,” he wrote on March 23, 2013, in a letter to PCT. “Before that time, the materials I did review indicated that the audit findings were heading in a direction that was inconsistent with the expert advice I provided in several major areas, particularly concerning the Darkwoods project.”

I urge anyone who did advise them to contact me.

The Baseline Brouhaha (Again)

Then there’s the auditor’s critique of the project baseline, which is the foundation on which all carbon projects are constructed. It represents the consensus agreement on what would probably have happened to the property if NCC hadn’t stepped in to purchase it – a question that we can only answer by looking at other potential bidders and their expected rate of return (See BC And The Baseline Brouhaha: Dissecting The Darkwoods Documents for a more detailed introduction). Sydor and NCC offered widely differing views on this, but NCC backed their views up with reams of data and scores of experts. Sydor offered nothing.

In my interviews with timberland consultants – both those referred by NCC and those I found randomly on the internet – it quickly became apparent that Sydor was basing his analysis on a different expected rate of return than the one that timber analysts I kept running into were using. This matters, as we’ll see in our next installment, because it shows what a commercial buyer would do with the land. Sydor insisted that his data came from several unnamed experts – but he refused to connect me with any of them.

Keep in mind, these are experts who earn a living providing their professional opinions, and not whistleblowers with inside information of wrong-doing. To have one or two off-the-record sources is understandable, but to have none on the record – especially for a report like this – is unheard of.

Finally, after much prodding, Sydor offered an article from 2007 entitled “Rates of Return for Investments in Timberlands – How Low Can You Go?”. It had been written by a team of analysts at Cortex Consultants, but wasn’t an overview of market behavior. Instead, it was a warning to customers that tough times may lay ahead. Indeed, while it asked the question of how low rates could go, it never really answered it. When I e-mailed Cortex, the authors of that report seemed horrified to learn that this letter might have been used to support a major audit.

“This little paper was definitely not meant as an (even pseudo-) academic paper on the issue,” said one, speaking on condition of anonymity.

Of course, Sydor never actually says he used the paper as one of his sources.

“I’ve provided one of the articles that passed our way during the audit,” he said in the e-mail accompanying the link.   “It shows that timber returns were high in the 1990s but had dropped so much that returns of 5% to 6% were not unrealistic at the time of the Darkwoods sale.” (We will explore this in more detail later in the series.)

It just passed his way? What does that mean? Did he dig any further? Did he contact the authors? Who knows? And why didn’t he talk to other people who showed an interest in the property?

Schadendorf won’t name the bidders, but I have found two through other channels. One is Jack Julseth of Three Point Properties Ltd. He says he sent a formal letter of interest to Schadendorf, only to learn that NCC had the property “under contract”.

“My group was definitely interested in pursuing the opportunity and at the time had the capacity to do so,” he wrote in an e-mail to NCC. “If my group had been the successful bidder and followed through with a purchase, our intentions at the time were to create a managed forest, to initiate an appropriate and sustainable logging operation, and to subdivide and develop the land – as appropriate – to realize its highest and best use.”

When I asked him what that highest and best use might be, he said that he would have been looking to develop cottages and vacation homes – a scenario that NCC dismissed as being too aggressive to even consider.

To be fair, Julseth also said that NCC entered its bid before he could perform due diligence on the property, so he can’t say for sure what sort of development he’d have done; and Alec Orr-Ewing, who provided the initial timber evaluation that von Württemberg used to set his asking price, says the real-estate potential was quite limited.

“If you look at a contour map of the area, and also at its minimal water frontage, the chances of real estate are minimal, from my point of view,” he wrote in an e-mail. “The lake frontage is west-facing, behind a steep mountain ridge, also there is no legal access to all of the properties.”

Schadendorf says there is legal access, but by boat. Either way, my point isn’t that this was a done deal, but it was a legitimate inquiry, and it’s one of two that I have independently verified. When I asked Sydor if he knew of Julseth’s inquiry, he simply pointed out that “real estate companies are not eligible for this type of project.”

“When you look at the protocol, it says the only scenarios that should be considered are ones where forests remain forest,” he said – meaning that if von Württemberg had sold to a real estate developer, then the Verified Carbon Standard would not have recognized it as a carbon project, which doesn’ really have anything to do with whether there were competing bids or not.

“Now, in the real world, I guess the question is: Did the vendor actually consider Three Point Properties’ bid?” Sydor added.

That is, indeed, the question, and Schadendorf says he did consider it, but NCC moved too fast. He also says Three Points Properties weren’t the only ones who approached him, but they were the only ones he would acknowledge by name, and that because Julseth had already come forward.

“We had calls from several timberland buyers who were known for liquidation logging,” he says. “And we had some industrial timberland buyers look at the property – companies that are in the business of managing timberland sustainably – but they basically concluded that they would have to liquidate it in order to meet their investment objectives because they have investors to answer to.”

So, does this mean that the baseline the auditors advocated – one based on very low harvests in the near-term – wouldn’t have been economically viable?

“They said, ‘If we manage this sustainably, our expected rate of return will not be met, so this property doesn’t work for us,’” Schadendorf answered.

So, if these other bids existed, why didn’t Schadendorf tell the auditors about them?

“They never asked those types of questions,” he says.

The Additionality Paper Trail

There seem to be plenty of questions they didn’t ask, as I learned when I asked NCC’s Tom Swann if there was a paper trail to demonstrate additionality. Without hesitation, he provided three documents that showed what Sydor said couldn’t be shown. One of them was a letter to Patty Richards, Shell Canada’s Manager, Community Investment. It was dated March 5, 2007 (See “Shell Letter”, right) and makes it clear that carbon offsets were, indeed, a very critical factor in NCC’s decision to acquire the Darkwoods property, despite the auditor’s contention to the contrary. Here is an excerpt:

NCC has entered into a conditional purchase agreement to buy the company that owns the property and we are now actively seeking the resources to complete the sale and ensure that future management of the forest contributes to the survival of the mountain caribou and other species.
It is our understanding that Shell Canada and Shell International are involved in projects at various places around the world to realize goals that combine biodiversity conservation and carbon sequestration. We would be very interested in exploring the possibility of Shell Canada or Shell International working with NCC to achieve these goals at Darkwoods.
As you know, standards for calculating carbon increase and resultant CO2 equivalent sequestration are evolving, but I enclose for your information a draft calculation that projects 114,504 volume tonnes of CO2 equivalent sequestered annually in the standing timber alone at the Darkwoods property, which is largely treed with conifers.

Another of those documents was an internal memo (See “Carbon Calculation”, right) from Bill Freedman, a professor of biology at Dalhousie University in Halifax, Nova Scotia, and the Chair of NCC’s National Board of Directors. This is dated March 2, 2007, and it offers a calculation of the carbon potential that NCC had been using to make the deal happen.

And a third (See “Issues Analysis”, right) offers an updated analysis of carbon markets in general.

Also, in a notarized affidavit dated February 5, 2013, NCC CEO John Lounds said that “NCC considered the potential value of carbon credits on the Darkwoods property from as early as September 2006, when carbon sequestration was discussed by NCC fundraising contractors as a potential source of stewardship revenue at Darkwoods.” He says formal inquiries began in December, and that his staff met with Corinne Boone, Managing Director of carbon project developer CO2e, to explore its options.

Finally, there’s a paper co-authored by Freedman (See “Carbon Credits and Biodiversity”, right) and submitted to the Environmental Review on August 27, 2008 – shortly after the property was purchased. The paper clearly shows his thinking on how carbon credits could be used to save biodiversity-rich forests like Darkwoods, and it was just a Google search away.

 

Additional resources

Preserving Prairie Potholes

28 June 2008 | Adolph Feyereisen thought he knew all the ways to farm his 1040 acres in Emmons County, North Dakota. He’d taken over a dairy operation from his father in the 1960s, ran that until 1975, and then raised beef for a decade before dropping that to become a crop adjuster. Now that he’s semi-retired, he’s back to beef, along with small grains like barley and wheat.

But his latest cash crop is novel to the agricultural economy of the plains: sequestered carbon.

Last January, conservation group Ducks Unlimited purchased both a perpetual easement on Feyereisen’s native grassland and the rights to the carbon stored under that 272 acres. DU then passed the easement along to the Fish & Wildlife Service, but is bundling Feyereisen’s carbon with the carbon from scores of other North Dakota landholders and selling it on the open market, perhaps to a corporation in search of a significant carbon offset.

The short-term plan is to invest the proceeds from the carbon market in new habitat protection in the plains states. Then, if that works out, DU could take its 11.5-million-acre track record of habitat restoration and turn it into a revenue-generating portfolio to accelerate its conservation work.

For some of the most important and threatened waterfowl habitat in North America, the plan comes just in time.

 

The Brokers

“These are some of the best credits I’ve ever seen or been a part of,” says Radha Kuppalli of New Forests, a Sydney-based company helping to broker the deal.

Better known for forest management, New Forests is working with Equator Environmental, LLC to package the DU carbon for the voluntary carbon market. Equator provides financing to help fund carbon purchases, and will sell the credits to investors looking to downsize their carbon footprint. Equator and New Forests will work together to ensure that the credits meet high standards.

“Every single element that you can think of in a carbon project — additionality, quantification protocols, leakage, permanence — everything that you need to address is here,” says Kuppalli. “There is such an enormous biodiversity component.”

 

To Farm or Not to Farm

That’s precisely DU’s interest. Feyereisen’s 272 acres is native prairie, never tilled because it’s quite rocky and hilly. It’s also pocked with glacial potholes — shallow, watery depressions left by the glaciers. He’s never planned to plow it, but that doesn’t mean it can’t be done.

“They just have to rip the rock out,” says Feyereisen. “The equipment they’ve got now, it doesn’t take much. To say land can’t be farmed in this day and age, the way technology is going, that’s probably a pretty far-fetched statement.”

 

Abundance of Birds

Before the advent of European settlers, the Prairie Pothole Region in the Dakotas was at the heart of the world’s largest grassland, the Great Plains of North America. Feyereisen’s potholes are just a few of the millions of glacial potholes that cover some 100,000 square miles, harboring rich stores of aquatic plants and animals. Pintails, mallards, gadwall, blue-winged teal, shovelers, canvasbacks—each spring millions of ducks nest in the grasslands adjoining the potholes. Many other birds—lesser scaup, wigeon, green-winged teal, Canada geese and snow geese—use the area as a staging ground in their migration to the boreal north.

These fowl riches brought DU to the region almost at its inception, beginning habitat restoration in the adjacent Canadian portion as early as 1938. Since then, the organization has done restoration work on 11.5 million acres throughout much of the United States. But the potholes remain a priority: DU considers the area the most important and threatened waterfowl habitat in North America. Agriculture has already destroyed or altered more than half of the potholes. And climate change is the new threat on the horizon; the Wildlife Society projects a loss of as much as 90% of U.S. wetlands by 2080.

 

Competing Interests

Meanwhile, agricultural pressures are building. Ironically, climate concern has helped heat up the biofuels sector, putting further pressure on food prices that were already being ratcheted up by rising petroleum prices and natural disasters. Vagaries in federal agricultural policy are also having an impact. The Conservation Reserve Program (CRP), which rewards farmers for converting highly erodible cropland to grass, has been unable to compete with the hot ag land market as the 10 to 15 year contracts have expired. Almost 420,000 acres of North Dakota CRP land — more than 12 percent of the state’s total — were lost back to cropland in 2007 alone.

Federal ability to do conservation work in North Dakota is abridged as well; a political backlash against federal lands resulted in legislative veto power over the expenditure of federal duck stamp money to purchase habitat in the state. That leaves the private sector.

“Wildlife belongs to the public, yet private property – and therefore private landowners – really have all the habitat, so you have to work with them,” explains Jim Ringelman, DU’s Director of Conservation Programs for the Dakotas and Montana. DU has been working with private landowners for decades, developing tools and credibility.

 

Underground Carbon

Its carbon work began a couple of years ago, as the voluntary carbon market was beginning to solidify. While the carbon storage potential of forests rises in plain site, grasslands hide their carbon underground. Prairie plants sink deep roots five to nine feet into the plains, stockpiling carbon away from the oxidizing forces that would release it into the atmosphere. The Agricultural Research Service already had some local data on sequestration potential. With support from the Plains CO2 Reduction (PCOR) Partnership, DU worked with soil scientist Larry Cihacek of North Dakota State University to measure carbon stores under native prairies and restored grasslands.

It was an ideal research situation: Grasslands restored under the conservation reserve program range in age from a couple of years to 20 years.

“We could sample in one or two years a huge range of vintages,” explains Ringelman.

DU research shows that the north plains grassland sequester an average of 1.485 tons* of CO2 equivalent per acre per year. And while forest types in DU’s restoration portfolio can put away three to six times that, the acreage of the grassland resource is large enough to make it a potentially major player.

 

Adding Above and Below

Enter the US Fish & Wildlife Service, whose Grassland Easement program operates in the Prairie Pothole Region with a short budget and a backlog of interested participants. DU’s plan is to buy perpetual grassland easements and carbon credits at the same time. The easements are passed on to the FWS, and the carbon credits are bundled and resold to finance more conservation.

“It keeps the land in the private landowners’ hands,” explains Tammy Fairbanks of the FWS. “It doesn’t change their use on the property. They can still graze it, hay it, and get an income off it, and they pay taxes on it. The government does not have an operation and maintenance cost on that property. So we have the habitat protection, but we don’t have the cost of managing it.”

The DU assistance also cuts down on the FWS backlog, protecting habitat in imminent danger—the pothole counties of North Dakota alone have lost 88,000 acres of native prairie since 2002.

 

Meager Resources

“We need resources in the order of many tens of millions if not hundreds of millions to do what we need to get done,” adds Ringelman. “We have no hope of getting that through the traditional sources – the duck stamp money. This is big potential for us to accelerate our work. It’s revenue of the order of magnitude that we think is necessary to really make the kind of conservation footprint that we need to have to save the critical habitats. And it comes at an ideal time because current crop prices are putting a whole new set of pressures on grasslands.”

 

All the Ingredients

A number of elements make the DU plan exciting, beginning with the federal foundation.

“Having a perpetual easement held and monitored and enforced by the US Fish and Wildlife Service is extremely valuable,” says Kuppalli. “You’ve got the federal government backing your product. It’s really enabling. If you’re investing in carbon, or you’re a carbon buyer, you have to choose between a perpetual easement helped by a lands trust versus one held by the federal government?”

But while a federal program enables the project, Kuppalli is also quick to point out that federal programs and subsidies for corn and other commodities create countervailing forces.

The private element is important too, argues Dick Kempka, who spent years developing GIS technology for DU before jumping recently to Equator as vice president of sales.

“Seventy percent of the opportunity in the ecological asset market will be on private land,” he says. “If you can’t work on private land, you’re probably not going to be a big player in this arena.”

Incorporating grassland into the voluntary carbon market is another coup.

“Whatever business you’re in, you want to have a diversified portfolio,” he says. “There is a lot of benefit to restoring grassland and having tonnage be available right away, in a market where most feel there will be an annualized accounting.”

Then there is the Ducks Unlimited brand.

“That’s the big selling point,” he argues. “The social benefits associated with offsets are much better than any type of geologic sequestration, or methane capture. The bottom line is if I’m a pre-compliant utility, or a carbon-neutral socially responsible type of investor, these types of offsets very much fit the bill because they’re going to get other benefits from it – whether they’re explicit or implicit.”

 

Rethinking Agricultural Value

Ringelman hopes to change the very definition of agricultural value in the plains.

“There is a notion here that we have to pump up the economy of the state, and that grassland – particularly native prairie – is just a land cover that’s waiting for a higher and better use to come along,” he says. “Now we have a chance through this carbon work to show them that look, there’s more to this land. It’s more than just cutting hay and running cows on it. You’re also sequestering carbon. You’re doing a lot of things that people are going to start paying for, so let’s hold on to this here and take another look at it.”

DU plans to keep pushing the ecosystem services envelope, looking at water quality and possibly biodiversity offsets as well.

 

Exploring Biodiversity Offsets

“What we do with restoring wetlands has big water quality benefits. I think that’s not very far off,” says Ringelman. “Biodiversity is a little bit funkier.”

Funky, but not far-fetched. Birds traverse North America from key breeding areas like the prairie pothole to wintering areas. And populations are often limited by what happens on the breeding grounds. The Henslow’s sparrow, for example, breeds in the plains grasslands, but winters to the south, often in populated coastal areas.

“Maybe the time’s not far off that when someone does a project that’s affecting wintering habitat and sparrows down there, they’ll be coming to us (because) we can really have a population affect working with on this end of the flyway,” says Ringelman.

Feyereisen thinks a little more down to earth.

“My kids are willing to leave it like it is, and I would hope it would be like it is,” he says. “If I want to be selfish about it, this is one way to make sure it is.”

 



Erik Ness writes about science and the environment from Madison, Wisconsin. You can reach him through his website, www.erikness.com.

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

* The initial posting of this story misstated the figure as 1.485 million tons. We regret the error.

Additional resources

On World Wetlands Day: The Allure And Elusiveness Of Mangroves As Carbon Sinks

2 February 2016 | It’s hard to imagine a more valuable ecosystem than a mangrove forest.  These wooded coastal wetlands protect the shoreline from both sudden storms and gradual erosion; they provide shelter for young fish, breeding grounds for shrimp, and wood for local villagers – all of which are the fruits of clearly delineated ecosystem services, each of which has clear human beneficiaries.

This should, in theory, make it easy to find money for mangrove protection. Tourism operators and industrial fishers, for example, both have an interest in keeping coral reefs alive, and mangroves support them too, while anyone along the shore has an interest in keeping the sea at bay, as the people of Louisiana and coastal Indonesia can attest.

[Study Sees $1.6 Billion For Blue Carbon In Louisiana Wetlands]

Unfortunately, in most developing countries, the people who depend the most on mangroves don’t have the money or political clout to protect them.  This leaves the carbon market as an intriguing way to keep these buffers alive.

Gold in Blue Carbon

Mangroves are disappearing at a rate of 2% per year, according to Ecosystem Marketplace’s 2014 report, “Turning over a New Leaf: State of the Forest Carbon Markets“, which offers a solid argument for investing in “blue carbon” projects that slow climate change by saving or restoring seagrasses, tidal salt marshes, and mangroves. The concept became a hot topic in 2009, with the publication of two reports: “Blue Carbon: The Role of Healthy Oceans in Binding Carbon” and “The Management of Natural Coastal Carbon Sinks”. Since then, the American Carbon Registry (ACR), the Verified Carbon Standard (VCS), and the Climate Action Reserve (CAR) have all established clear rules for developing projects. But our 2015 report, “Converging at the Crossroads: State of Forest Carbon Finance“, found that buyers hadn’t yet caught on; there weren’t yet enough blue carbon transactions to report on them as a unique category.

At recent climate talks in Paris, however, Australian Minister for the Environment Greg Hunt launched the International Partnership for Blue Carbon – an initiative designed in part to raise awareness of the value these ecosystems provide.

“It is an enormous opportunity, as has been recognized here, for reducing emissions, for improving marine biodiversity, and in particular for providing support for traditional communities and coastal communities,” he said.

Seagrasses, Mangroves, and Salt Marshes store far more carbon than do tropical forests, and mangroves store the most of all. Source: The Climate Trust
Seagrasses, Mangroves, and Salt Marshes sequester far more carbon per year than do tropical forests, and mangroves sequester the most of all. Source: The Climate Trust

The Rising Tide

Mangroves are especially suited for carbon capture because they pile most of their carbon on the ocean floor, while terrestrial forests keep most of it in trees and branches.

Both mangroves and terrestrial forests put down roots and drop leaves, of course, but when mangroves do it, the ground beneath them rises – as does the level of the sea, as it has for thousands of years, says McGill University professor Gail Chmura, who runs the Global Environmental and Climate Change Centre.

“Mangroves accrete soil vertically as the sea rises,” she says. “Then they also accrete laterally – which means they move inland as the sea moves up.”

The same applies to salt marshes, which move so far inland that when Chmura digs into the mud marshes of New Brunswick, Canada, she often finds the remains of forests below them.

As the levels of both the ocean surface and the mangroves soil rise, so too does the amount of carbon sequestered in the earth – and it can stay there for millennia.

That same rise, however, has a downside: namely, it often makes things inhospitable for the species of mangrove that created it, says McGill researcher Paola Fajardo. She’s studying the carbon storage accumulated in the soils of mangroves in Mexico, with an eye towards developing carbon offsets.

It doesn’t take much of a change in elevation for one species to die out and another to take its place – both in nature and in restoration projects, she says.  But if there’s no room for the mangroves to move inland, the mangrove forest can die.

“In some areas species can change based on differences in elevation of just centimeters,” she says.  “So, if you have a change in elevation of just one centimeter, you may get another species altogether.”

As a result, mangroves tend to be segregated along species lines within a single forest, as different types of trees seek different elevations within that forest.

Salt Please?

And it doesn’t stop there. Different species also have different taste and tolerance for salt.

“Some species can handle up to 90 units of salinity,” Fajardo says. “Each species is adapted physiologically to different conditions, and some die if salinity gets above 36.”

Seawater, by comparison, usually has about 35 units of salt – so some species thrive on the coast, some a bit inland, and others in areas where seawater gets trapped and salinity increases.

Global warming, therefore, poses a double-whammy of rising sea levels and altered salinity levels for these valuable resources – threatening not only mangroves as they exist today, but making it difficult to project with certainty the amount of carbon that any local action can sequester over time.

“We will be able to do this,” says Fajardo. “But we need to calibrate the soil carbon storage rates with species and salinity.”

Ultimately, that means developing sophisticated coastal plans that take into account the entire ecosystem in which mangroves lie. Many of the current plans for adapting to global warming, for example, involve the erection of dikes to hold back water, while networks of dams have been erected to keep cities from going dry.

Unfortunately, says Fajardo, many of those dikes and dams are altering the flow of runoff from land to sea – depriving the buffering mangroves of the fresh water and sediments they need for the ecosystem to be sustained. Even if done right in the short term, dikes provide a barrier against which mangroves can’t accrete inland – meaning as they rise but can’t migrate inland, they will have to either adapt, perish, or be altered artificially.

When Ecosystem Services Collide

Mangroves are a type of wetland, and one ecosystem service that wetlands provide is filtration: they extract unwanted elements from water passing into them, so that water passing out of them is relatively pure and clean. Chief among these unwanted elements are agricultural nutrients – fertilizers that farmers use to help their plants grow, but which feed unwanted plants such as algae when dumped into the sea.

Those nutrients, however, have a tremendous impact on the amount of carbon that mangroves capture and store – and salt has an equally tremendous impact on the net amount of greenhouse gasses that wetlands capture and emit.

Increasing the flow of agricultural runoff from coastal lands can spur the growth of mangroves in height, but it can also diminish the amount of carbon they store in the soil.

“Some counter-intuitive things happen when you start to look at root production and soil carbon, at least with grasses in salt marshes,” says Chmura. “For example, the more nutrients you give these grasses, the less root production there is – and therefore the less soil carbon – because the plants don’t need to reach out so much. We suspect it is the same for the mangroves.”

Salt, Again…

On the other hand, she says, more salt in the water usually means more sulphur as well – which usually translates into less methane released into the air and a better impact on the atmosphere, according to research conducted on the Chesapeake Bay back in 1987.

In fact, because methane is more than 20 times more powerful as a greenhouse gas than carbon dioxide, many freshwater swamps and bogs may be doing more greenhouse damage than they’re preventing – while saltwater mangroves are, she believes, most certainly doing more good than harm.

Measuring Soil Carbon: The Easy Part

Early research into the amount of carbon sequestered in mangrove soil yielded wildly varying results – but Chmura says that may reflect the fact that most research looks at the percentage of carbon in a patch of soil rather than the amount of soil per square meter of territory, which is what the carbon market looks at.

The reason: just as Arnold Schwarzenegger and Michael Moore may weigh the same but be composed differently, soil can be dense or lightweight. Dense soil might have a low percentage of carbon and a high percentage of sediment, while lightweight soil – like the kind in a peat bog – might have a high percentage of carbon and low percentage of sediment. They both, however, sequester the same amount of carbon per meter per year.

“This means that the variability is lower than many people have previously believed,” she says.

Voluntary Buyers Spend Nearly $4.5 Billion on Offsets Over Last Decade

The voluntary carbon markets have served as the testing ground for compliance programs all over the world, even moving forward when efforts to implement mandatory cap-and-trade programs stalled. This has led to the voluntary markets having an influence that extends well beyond the nearly one billion offsets transacted over the last decade, according to Ecosystem Marketplace’s latest State of the Voluntary Carbon Markets report.

3 June 2015 | Washington, D.C. | When the international negotiations take center stage in Paris this December in the hopes of reaching an agreement to rein in climate change beginning in 2020, negotiators will be able to draw on the lessons learned in the voluntary carbon markets, according to a new report from Forest Trends’ Ecosystem Marketplace.

Companies, governments, and individuals voluntarily spent just under $4.5 billion to purchase nearly one billion carbon offsets from projects that halt deforestation, install renewable energy, promote energy efficiency, distribute cleaner-burning cookstoves and more, according to Ecosystem Marketplace’s Ahead of the Curve: State of the Voluntary Carbon Markets 2015 report.

National and subnational government officials have leaned on the experiences of the voluntary markets in building their compliance programs, meaning the voluntary markets have influence that goes beyond their relatively small size. For example, the offset component of California’s cap-and-trade program was largely built on project methodologies initially tested in the voluntary markets, which paved the way for pre-compliance offsets to flow into the regulatory program despite a year-long postponement to the program’s launch. And South Africa’s carbon tax, currently scheduled to begin in 2016 after also being delayed, will welcome domestically-sourced carbon offsets generated under the Gold Standard and the Verified Carbon Standard (VCS) – stalwarts of the voluntary markets.

“However, while compliance markets have turned to the voluntary markets for inspiration on project types, standards and more over the years, this relationship is a two-way street in that the voluntary markets take demand cues from developing compliance markets and proposed legislation and regulation,” said Kelley Hamrick, Carbon Program Associate at Ecosystem Marketplace and Lead Author of the report.

This is most clearly reflected in the pricing of voluntary carbon offsets, which has experienced peaks and valleys driven by policy signals (or lack thereof). The global average price peaked at $7.3/tonne in 2008 as momentum appeared to be building toward the United States implementing a national cap-and-trade system to reduce these emissions. But prices began to decline in subsequent years as carbon trading legislation faltered in the U.S. Senate. The global average price has consistently fallen since 2011, when it became clear that nations would fail to ratify another phase of the Kyoto Protocol, to reach an all-time low of $3.8/tonne. Historically, the average price of voluntary offsets is $5.8/tonne over the decade Ecosystem Marketplace has tracked these projects.

“With few positive policy signals in the carbon markets in 2014, the year witnessed the voluntary market’s lowest average price per tonne on record – sending a clear signal to policymakers in the lead-up to the Paris talks,” Hamrick said.

An evolving market

From year to year, the project type most in demand has evolved, driven by policy signals and supply-demand fundamentals, according to the report. In 2009, landfill methane projects experienced the highest transaction volumes as U.S. buyers bet on these projects becoming eligible for the national cap-and-trade market being debated at the time or in California’s developing cap-and-trade market – a gamble that failed to pay off on both counts and created a major oversupply of these offsets. In 2011-2012, wind projects topped the charts due to their relative cost-effectiveness compared to other project types – the price differential being critical to European buyers, the primary purchasers of voluntary offsets, who were trapped in a major economic crisis at the time.

In recent years, however, REDD (Reduced Emissions from Deforestation and Forest Degradation) offsets have overtaken wind as the dominant project type, trading at an all-time high of 25 million tonnes in 2014, in large part due to funding from public sector entities in Germany and Norway committed to avoiding deforestation in tropical countries. Through the “REDD Early Movers” program, these European governments are funding avoided deforestation in Brazil’s Acre state and nationally in Ecuador and Colombia. These “payments for performance” are not offsets, meaning countries cannot deduct the reductions from their own emissions, but they rely on traditional carbon market infrastructure, and represent the kind of government-to-government deals that may become increasingly common. These agreements contributed $90 million to 2013-2014 market value.

“I think that (public-sector involvement) is something that is going to continue, which is good,” said Agustin Silvani, Managing Director of Carbon Finance for NGO Conservation International. “But what worries me is that many of these initiatives say they want to attract the private sector and they want to work with the private sector, but there is no mechanism for the private sector to engage, which is frustrating for the project developers. It’s worrying because if not designed correctly it could crowd out whatever private finance is there instead of seeking ways to leverage it.”

Deforestation contributes up to one-fifth of global emissions annually, and hundreds of companies are committing to purge deforestation from their supply chains. As international climate negotiators debate the potential inclusion of REDD offsets in a potential agreement emerging from the Paris talks, it is noteworthy that REDD offsets now have a slight edge on the list of most transacted voluntary project types with 84.5 million tonnes compared to the 84.3 million offsets transacted from wind projects over the last decade, according to the report.

“Whatever comes out of Paris will most likely not be super robust in terms of a globally legally binding agreement,” Silvani said. “It’s going to be a series of pledges and contributions, but nothing top-down like Kyoto. How does REDD form part of that? I think that remains to be seen, but it will be a big part of some countries’ national contributions and everything is positive for REDD to continue.”

2014 in the spotlight

In 2014, the volume of offset transactions rose 14% from the previous year to reach 87 million tonnes, from the 76 million tonnes tracked by Ecosystem Marketplace the previous year. However, the overall value only rose 4% to $395 million, according to the report, as a result of the average price shrinking to $3.8 per tonne from $4.9 per tonne in 2013. Offsets from household devices (cookstoves and water filtration) retained the highest average price by project type at $6.4 per tonne – although the price of these offsets also declined from the previous year’s $8.7 per tonne average.

Avoided deforestation offsets led the pack in 2014, guided by the $50 million to reduce deforestation in Ecuador through the REDD Early Movers program. Renewable energy projects were also in demand with nearly 14 million offsets transacted last year, according to the report.

The road to Paris

Countries that will play critical roles in the Paris talks have received notable shares of the voluntary financing pie for carbon offset projects. Over the last decade, the United States took the gold in terms of voluntary offset transactions, with the largest volume at the highest prices of any country (136 million tonnes of offsets valued at nearly $700 million), owing partially to the preference that domestic buyers such as automaker General Motors have for U.S.-based projects. Brazil, which will play a key role in the discussions on REDD, takes the silver (40 million tonnes valued at $233 million) due in part to the commitment of the government of Germany – another major player in the Paris talks – to pay the state of Acre to avoid deforestation in its jurisdiction. Turkey – not expected to be a major player in the international talks – takes the bronze (32 million tonnes at $207 million) as home to most of the renewable energy offsets supplied to European buyers – the largest regional purchaser of voluntary offsets over the last decade.

Several least developed countries have also benefitted from voluntary carbon finance, including Cambodia (4.3 million tonnes valued at $40 million) – home to Terra Global Capital’s Oddar Meanchey forestry project, which has received financing courtesy of software giant Microsoft’s internal carbon fee program. The Democratic Republic of Congo – home to the second-most forested area in the world after Brazil – has also benefitted from voluntary carbon finance (4.6 million tonnes worth nearly $21 million).

 

Additional resources

Opinion Rivaling Gold: Ecological Assets Outperform Traditional Commodities

26 May 2015 | The market value of compensatory mitigation credits for wetland, stream and species conservation have risen consistently over the past decade, according to a recent review of publically available mitigation credit price data undertaken by Eco-Asset Solutions Inc. (EASI) of Redwood City, California.

EASI analyzed over 500 available internet records on price information for wetlands and stream credits, California species and habitat credits, along with nutrient credits traded in the Chesapeake Bay and the Susquehanna River Basin. These records ranged from as far back as the late 1980s to this year. The outcome of this comprehensive research is the Mitigation Credit Price Report.

Mitigation credits represent the partial value of ecosystem services such as water filtration, aquifer recharge and biodiversity maintenance. When they are bought, sold or traded in the marketplace they take on the features of other monetized environmental commodities such as carbon credits or renewable energy credits. In each case these credits represent bottom line value to businesses. The value trend for these commodities suggests that mitigation credits have established themselves firmly in the economy.

 EcoAsset1

The positive trend for these wetland, stream and conservation credit values has been strong, based on market value insights made possible by U.S. Army Corps of Engineers’ (ACOE) information presented at the National Mitigation Banking Association (NMBA) annual meeting held in Orlando, Florida.

Steve Martin of the ACOE Institute for Water Resources, illustrated ‘wetland acreage debited’ for various Corps District Offices from 2005 through 2014 (Fig. 1).

 Eco_Asset

The trend line shows a gradual long term rise in credit demand despite the downturn of construction activity (and subsequent decline in mitigation demand) attributed to the recession of 2006-2011.

Acre-debits typically result in demand for mitigation credits used to compensate for development impacts in compliance with the federal Clean Water Act, ensuring no net loss of wetland ecosystem services. Acre-debits may occasionally be satisfied by payment of In Lieu fees or through permittee-responsible mitigation. But the increasing trend has been to rely on third party mitigation credits. Credits are available from approved mitigation banks across the U.S. and represent a form of ecological asset – fungible environmental products or commodities bought and sold in the environmental marketplace.

Summarizing the ACOE District information allows us to develop a trend line for wetland credit demand shown in Fig. 2. Next, combining the ACOE record of credit demand with the average market value of those credits through EASI’s price report provides a first-ever appreciation of the market power of mitigation credits. Credit market value is derived from price information but reliable, representative price data has been hard to find, making EASI’s analysis all the more significant.

EcoAsset8

Crunching the Numbers

Combining the total annual wetland credit demand (Figs. 1 and 2) with average annual credit prices (Fig. 3) illustrates the total value of the U.S. wetlands mitigation credit market between 2005 and 2015 (Fig. 4).

Studying the trend line, which averages annual market value year to year, we see a seven-fold increase (700%) – from roughly $250 M to $1.8 B – in wetland credit market value over the last decade.

Very few market commodities have performed as well over the same period of time.

We might even say that wetland credits have outperformed many traditional commodities. For example, compare the trend lines for wetland credit prices in Ohio, North Carolina and California, or the value of California habitat credits (Figs. 5-6), with value trends for farmland, corn and cattle (Figs. 7- 10).

 Figure 5 Figure 6



Farm and ranch land values have varied modestly from year to year but the decadal trend is relatively flat, averaging about $3500/acre nationally, according to AgWeb.com.
Corn prices, on the other hand have been falling sharply since late 2010, from around $7 per bushel to about $3.80 today.

Prices for live cattle grew in 2014 after plateauing from 2012- 2013. Modest increases are projected for the rest of 2015. This is good news for ranchers since the price of feed has decreased in relation to falling corn prices. Ranch profits will rise if consumers continue to buy beef.

Perhaps of equal interest, ecological asset trends suggest there are new opportunities for rangeland owners on underutilized properties they may own or manage. While mitigation credit prices are high, ranchers may want to develop ecological assets right alongside livestock, hay or other traditional agricultural commodities.

Mitigation credit ‘stacking’, developing multiple eco-asset streams from the same property base, is now an accepted practice in most areas.

 Figure 7

 Figure 8

Eco-assets have outperformed even gold over the past few years. The symbolism of this is irresistible: gold has long been at the center of the world’s international monetary system. Mitigation credits can now be increasingly seen as the focus of value representing monetized ecological health and related quality of life. This reinforces the meaning of what was once a tongue-in-cheek expression – that environmental commodities were like ‘green gold’ representing revenues earned by protecting or restoring ecosystem services.

Green gold is no longer a euphemism based on results of this price trend comparison. In fact, if trends continue, someday soon we may need to differentiate between green gold and ‘gold gold’ – so people will know for sure the kind of value being discussed.

William G. Coleman has 40 years’ experience in environmental and sustainability management, specializing in ecological asset development and market management for agri-business and energy companies. He currently teaches global change and sustainability topics at UC Berkeley Extension and manages his own consulting enterprise, Eco-Asset Solutions Inc. in the San Francisco area. He can be reached at wcoleman@ecoassetsolutionsinc.com.

Opinion Rivaling Gold: Ecological Assets Outperform Traditional Commodities

26 May 2015 | The market value of compensatory mitigation credits for wetland, stream and species conservation have risen consistently over the past decade, according to a recent review of publically available mitigation credit price data undertaken by Eco-Asset Solutions Inc. (EASI) of Redwood City, California.

EASI analyzed over 500 available internet records on price information for wetlands and stream credits, California species and habitat credits, along with nutrient credits traded in the Chesapeake Bay and the Susquehanna River Basin. These records ranged from as far back as the late 1980s to this year. The outcome of this comprehensive research is the Mitigation Credit Price Report.

Mitigation credits represent the partial value of ecosystem services such as water filtration, aquifer recharge and biodiversity maintenance. When they are bought, sold or traded in the marketplace they take on the features of other monetized environmental commodities such as carbon credits or renewable energy credits. In each case these credits represent bottom line value to businesses. The value trend for these commodities suggests that mitigation credits have established themselves firmly in the economy.

 EcoAsset1

The positive trend for these wetland, stream and conservation credit values has been strong, based on market value insights made possible by U.S. Army Corps of Engineers’ (ACOE) information presented at the National Mitigation Banking Association (NMBA) annual meeting held in Orlando, Florida.

Steve Martin of the ACOE Institute for Water Resources, illustrated ‘wetland acreage debited’ for various Corps District Offices from 2005 through 2014 (Fig. 1).

 Eco_Asset

The trend line shows a gradual long term rise in credit demand despite the downturn of construction activity (and subsequent decline in mitigation demand) attributed to the recession of 2006-2011.

Acre-debits typically result in demand for mitigation credits used to compensate for development impacts in compliance with the federal Clean Water Act, ensuring no net loss of wetland ecosystem services. Acre-debits may occasionally be satisfied by payment of In Lieu fees or through permittee-responsible mitigation. But the increasing trend has been to rely on third party mitigation credits. Credits are available from approved mitigation banks across the U.S. and represent a form of ecological asset – fungible environmental products or commodities bought and sold in the environmental marketplace.

Summarizing the ACOE District information allows us to develop a trend line for wetland credit demand shown in Fig. 2. Next, combining the ACOE record of credit demand with the average market value of those credits through EASI’s price report provides a first-ever appreciation of the market power of mitigation credits. Credit market value is derived from price information but reliable, representative price data has been hard to find, making EASI’s analysis all the more significant.

EcoAsset8

Crunching the Numbers

Combining the total annual wetland credit demand (Figs. 1 and 2) with average annual credit prices (Fig. 3) illustrates the total value of the U.S. wetlands mitigation credit market between 2005 and 2015 (Fig. 4).

Studying the trend line, which averages annual market value year to year, we see a seven-fold increase (700%) – from roughly $250 M to $1.8 B – in wetland credit market value over the last decade.

Very few market commodities have performed as well over the same period of time.

We might even say that wetland credits have outperformed many traditional commodities. For example, compare the trend lines for wetland credit prices in Ohio, North Carolina and California, or the value of California habitat credits (Figs. 5-6), with value trends for farmland, corn and cattle (Figs. 7- 10).

 Figure 5 Figure 6



Farm and ranch land values have varied modestly from year to year but the decadal trend is relatively flat, averaging about $3500/acre nationally, according to AgWeb.com.
Corn prices, on the other hand have been falling sharply since late 2010, from around $7 per bushel to about $3.80 today.

Prices for live cattle grew in 2014 after plateauing from 2012- 2013. Modest increases are projected for the rest of 2015. This is good news for ranchers since the price of feed has decreased in relation to falling corn prices. Ranch profits will rise if consumers continue to buy beef.

Perhaps of equal interest, ecological asset trends suggest there are new opportunities for rangeland owners on underutilized properties they may own or manage. While mitigation credit prices are high, ranchers may want to develop ecological assets right alongside livestock, hay or other traditional agricultural commodities.

Mitigation credit ‘stacking’, developing multiple eco-asset streams from the same property base, is now an accepted practice in most areas.

 Figure 7

 Figure 8

Eco-assets have outperformed even gold over the past few years. The symbolism of this is irresistible: gold has long been at the center of the world’s international monetary system. Mitigation credits can now be increasingly seen as the focus of value representing monetized ecological health and related quality of life. This reinforces the meaning of what was once a tongue-in-cheek expression – that environmental commodities were like ‘green gold’ representing revenues earned by protecting or restoring ecosystem services.

Green gold is no longer a euphemism based on results of this price trend comparison. In fact, if trends continue, someday soon we may need to differentiate between green gold and ‘gold gold’ – so people will know for sure the kind of value being discussed.

William G. Coleman has 40 years’ experience in environmental and sustainability management, specializing in ecological asset development and market management for agri-business and energy companies. He currently teaches global change and sustainability topics at UC Berkeley Extension and manages his own consulting enterprise, Eco-Asset Solutions Inc. in the San Francisco area. He can be reached at wcoleman@ecoassetsolutionsinc.com.

Is Private Investment And Coastal Management A Good Or Bad Match?

Nicolas Pascal, of the BlueFinance project, a data collection initiative aimed at developing finance mechanisms for marine conservation management, says market mechanisms have potential to fill a big part of a funding gap that exists in marine conservation. But its practical experience in coastal environments is limited and so more know-how is needed to spur private investment.

This article was originally posted on the Conservation Finance Alliance blog. Click here to read the original.

 

13 May 2015 | Many recent studies have confirmed that total funding for protected areas and biodiversity conservation has to be increased dramatically to achieve the targets set at national or international levels.

Today, 80% of biodiversity finance is generated from non-market mechanisms (Parker et al., ed. 2012), the Global Canopy Programme’s Little Biodiversity Finance Book says. With the exception of philanthropy, non-market mechanisms are public sector mechanisms relying on regulation for their implementation. They cover domestic budget allocation, Official Development Assistance (ODA), debt-for-nature swaps and subsidies reform. The allocation of public finance is primarily a question of political will (and public opinion) and these mechanisms therefore tend to vary with political cycles.

Although these mechanisms could scale-up in the future, market-based mechanisms have a greater potential to increase in scale. The market-based mechanisms could generate up to 50% of biodiversity finance for coral reef in 2020, according to GCP’s Finance Book. Long-term, reliable sources of market financing for biodiversity conservation must be established and strengthened, according to a report note that instruments for conservation finance are diverse. Several classifications, such as tools to internalize the damages and profits, based on the “polluter-pays” or “beneficiary pays”, environmental taxes, taxation of contamination and compensatory measures of impacts (avoid-reduce-compensate sequence), have been proposed.

Recent recommendations from the CBD (Convention on Biological Diversity) identify exploring new and innovative financial mechanisms at all levels with a view to increasing funding to support the three objectives of the Convention. Seven areas of financial innovations have been set out and five of them concern private finance: schemes for payment for ecosystem services; biodiversity offset mechanisms; markets for green products; business-biodiversity partnerships and new forms of charity; development of new and innovative sources of international development finance.

The marine and coastal environment have very few practical experience of these mechanisms and one of the main priorities for the next years is therefore to provide empirical experiences of non-public funding mechanisms for integrated coastal management (ICM).

The real potential of various non-public financial instruments for sustainable long-term financing of ICM has still to be proven though concrete financial flows from the private sector. In that sense, the investor perspective has to be analyzed to propose concrete funding opportunities to the supply side.

From on-going activities of the Bluefinance project, the following preliminary results have been found:

Coral reef ES beneficiaries with potential payment capacity are mainly the tourism industry, end-users, real estate owners and impact investors. These beneficiaries might invest to enhance the ES of scenic beauty, coastal protection (against coastal flood and beach erosion) and fish biomass. Business models to make the project investable must be tested in the field. Agreement with the public sector, through Public-private partnerships (PPPs), must define clearly the management of funds as well as marine tenures. This is a preliminary step that must be defined before designing PES or other financial mechanisms.

Regarding business models, their aim is to provide funding for the initial investments and the management cost of the ICM activities through classic financing (e.g. equity, debt, Tourism User fees) and some more innovative (Payment for Ecosystem Services, bio-banking).  Given the early stage of development of the investment opportunities in marine conservation, initial investors target will include local high-net-worth individuals as well as venture philanthropists. Each of these groups has its own risk-return expectations, liquidity exigencies, investment horizons, ticket sizes and investment product preferences.

Regarding PPPs, agreements can take a wide range of forms, which vary in the degree of involvement of the private entity in a traditionally public infrastructure. Five main categories of PPP agreements have been selected as having the greatest potential for ICM: a parastatal agency, management contracts, leases, concessions and joint ventures. The agreement, which ultimately will be used, will be decided via negotiations between the public and private stakeholders. The objectives of the agreement; balancing between conservation of marine habitats and business enhancement of the ES will form the basis for these negotiations.

Some of these concepts are being explored in the Bluefinance project, which is a special division of Forest Trends’ (publisher of Ecosystem Marketplace) Marine Ecosystem Services (MARES) Program and GRID ARENDAL.  Bluefinance represents a portfolio of projects which aim for rapid uptake of marine ecosystem services information, in order to develop financing mechanisms for conservation and management.

The Bluefinance project is funded primarily by the United Nations Environmental Programme (UNEP), GRID ARENDAL and the Organization of American States (OAS). Demonstration sites are in Barbados, Croatia, Colombia, Mexico and Vanuatu.  A similar approach will be taken in each site; developing challenging business models with private sector balancing financial bottom line with conservation objectives. In Barbados, for example, an Island with a heavy reliance on the Tourism Industry and an extremely well informed and active tourism sector, the focus is on utilizing this sector in the management of marine areas and involving them in a PES system with the Fishers.

Implementation will demonstrate the potential of these instruments in a coral reef setting prior to considering their application at a larger scale and replication in other countries. More precisely, it is expected that the experiences from Barbados will contribute to updating existing guidance on PES, PPPs and tourism concessions to support their increased use in coral reef areas.

 

Nicolas Pascal is an environmental economist and conservation finance professional specializing in marine ecosystems. He can be reached at npascal@forest-trends.org.

This Week In Biodiversity: Choose Your Own Adventure

The argument over voluntary approaches to conserve at risk-species like the greater sage-grouse isn’t waning. Meanwhile, new research applying the mitigation hierarchy to the agriculture and forestry sectors finds net positive impacts for biodiversity are possible and a separate report finds commodity subsidies driving deforestation vastly outweigh conservation finance to protect forests.

This article was originally posted in the Mitigation Mail newsletter. Click here to read the original.

21 April 2015 | Greetings! In honor of those Mitmail readers whose next few weeks are dominated by preparing for exams or handing in dissertations, we thought we’d provide you all with some homework.

Your mission, if you choose to accept it, is to brush up on one of the “Three Cs”: commodities, candidate species, and carbon. Each is an emerging force that’s poised to radically change business-as-usual for biodiversity conservation and finance. So if you normally skim over these issues as you read our news briefs, this month pick a “C” to take a few minutes to get up to speed on.

 

If you choose commodities: Read our latest on applying the mitigation hierarchy to the agricultural and forestry sectors. Then get some background on the challenge: learn how commodity subsidies driving deforestation vastly outweigh conservation finance to protect forests, and how questions are emerging regarding the effectiveness of sustainable commodity roundtables. Finally, read about a new way to pair conservation finance and commodities, in which the Althelia Climate Fund is helping a sustainable cocoa project in Peru use carbon finance as collateral against loans to get the project off the ground. The project will then shift over time to sustainable cocoa production as its main revenue stream.

 

If you choose candidate species: Start with this piece introducing the concept of Habitat Exchanges, which help entities that impact imperiled – but not yet federally listed – species to pay to restore and protect critical habitat elsewhere, in order to keep those species from further decline. (Though arguably the system is set up for the energy and mining industries – not so much other sectors like agriculture.) Sounds good in theory, right? But as the first conservation bank for the greater sage-grouse prepares to open its doors in Wyoming, it’s beating back attacks from both sides of the political spectrum over whether voluntary mitigation really is the right mechanism to keep the grouse off the Endangered Species List.


If you choose carbon:
You’ll also want to read the article on how a sustainable cocoa project in Peru is using carbon finance to leverage start-up capital but isn’t exactly a carbon project. Then for a counterpoint, check out Mongabay’s reporting on efforts to get carbon projects going in Brazil’s Cerrado, which illustrates the larger point that carbon storage and biodiversity values don’t always go hand-in-hand. But! A carbon market that assigns higher values to biodiversity-rich areas could help undo fifty years of biodiversity decline on land, according to a new study. You have the weekend to ponder this challenge, dear reader.


Finally, Forest Trends is hiring
a Senior Communications Associate and a Research Assistant for Ecosystem Marketplace’s new Supply Change initiative. Scroll down to the Job Openings section for descriptions.
Cheers,


—The Ecosystem Marketplace Team

 

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

 

Venturing Into Uncharted Territory: Applying Net Positive Impacts For Biodiversity In Forestry And Agriculture

Despite the impact that the agriculture and forestry sectors have on biodiversity, the IUCN finds that companies active in forestry and agriculture tend not to participate in conservation efforts that apply the four-step mitigation hierarchy. Contrast this to the extractive industries like mining and fossil fuels as well as the infrastructure sector, which have been involved in mitigation, in partnership with NGOS like Flora and Fauna International,BirdLife International, and Conservation International since at least the early 2000s.

 

In the fall of 2013, IUCN’s Global Business and Biodiversity Program convened with private sector and biodiversity experts to figure out how the mitigation hierarchy could be applied to the agriculture and forestry sectors. The outcome of that informal meeting is the report, No Net Loss and Net Positive Impact: Approaches for Biodiversity, published this week.

Get the full story from Ecosystem Marketplace.

 

The BBOP Files: Lessons from the Community of Practice

Two recent Business and Biodiversity Offset Programme (BBOP) webinars offer insights from the ground on offsets practice and policy.

 

On March 27th, Sally Johnson and Kirsten Hund presented “National Biodiversity Offset Scheme: A Road Map for Liberia,” reviewing World Bank-backed efforts to explore the feasibility of a national offset program in Liberia to help minimize impacts from mining in the country.

 

Then on April 8th, Tom Grosskopf and Derek Steller discussed the use of offsets to finance conservation and manage growth areas in Western Sydney, Australia and the surrounding region.

Watch recordings and get a copy of presenters’ slides here.

 

Where Chocolate Meets Carbon: One Peruvian Project Finds The Sweet Spot

The Tambopata REDD project in the Madre de Dios region, known as Peru’s “Biodiversity Capital,” aims to help locals make ends meet while taking pressure off the valuable forest. But generating the offsets is only the first step. Project developers have to figure out how to sell them. Until governments reach a deal on integrating avoided deforestation into an international climate change agreement, the REDD market is entirely dependent on voluntary buyers. And though REDD offset sales are growing, prices are dropping, and last year project developers reported taking home less than 70% of the revenue they needed to keep projects afloat long-term.

 

The Althelia Climate Fund had an idea: Why not use REDD offsets as collateral against loans but also design projects to produce deforestation-free products, therefore creating multiple revenue streams?

Get the full story here.

 

Subsidies for Deforestation-driving Commodities Dwarf Conservation Finance – New Report

The race against deforestation is being won or lost hectare by hectare in the tropical rainforest countries that also provide the majority of the world’s agricultural commodities. But subsidies for commodities that drive deforestation may be undermining the efficacy of financial incentives for conserving forests and their carbon content, according to a new working paper by the Overseas Development Institute (ODI), a United Kingdom-based think tank.

Agricultural subsidies worth at least $486 billion in 2012 dwarf the $8.7 billion total that developed countries have committed towards Reducing Emissions from Deforestation and Degradation of forests (REDD+) since 2006, the report finds.

Get coverage here.

 

Commodity Roundtables: Green Gatekeepers Or Dirty Doormen?

It’s been a decade since the first commodity roundtables brought producers of soy, palm, and other crops together with environmental organizations. The results have been less than stellar, as the Roundtable for Sustainable Palm Oil recently disciplined 100 members for failure to comply with paperwork requirements. Critics say that’s a nice beginning, but we still have far to go.

Read more.

 

Opinion: Bioenergy Can Support Climate, Food, Land Restoration – If Done Right

Governments have long promoted the use of biofuels like ethanol derived from corn as a relatively clean-burning alternative to coal, but biofuels have gone from hero to zero as people started chopping forests to plant fuel crops. Many environmentalists today are calling for an end to pro-biofuel policies, but Emily McGlynn of The Earth Partners LP says we simply need to use land more efficiently.

Read it here.

Changing Course on Global Biodiversity Loss with a Carbon Market

The bad news: Since the 1500s, the Earth has experienced a 14% drop in the average number of species living in various ecosystems due to human-caused land use change. The good news: a first-of-its-kind global analysis finds that some of this biodiversity loss can be reversed. Using climate change mitigation scenarios, report authors found that establishing a strong carbon market that assigned higher values to biodiversity-rich forests was effective in conserving and restoring lost wildlife. The lead report author explains, “If society takes concerted action, and reduces climate change by valuing forests properly, then by the end of the century we can undo the last 50 years of damage to biodiversity on land.”

 

But in order to prevent further biodiversity loss and undo years of damage, more data and policy change is certainly needed. Another recent study, published in the journal of Applied Ecology analyzes the Essential Biodiversity Variables (EBV), a list of the essential elements related to biodiversity that require monitoring, to answer those questions. The study identifies gaps between global biodiversity goals, indicators used to develop policy reports and available data that measures the indicators and objectives.

Learn more about carbon and biodiversity conservation here.
Read about the EBV analysis.

 

Whither New South Wales’ Biodiversity Legislation?

Australia’s New South Wales recently held an election for state leadership. Prior to election day, residents expressed concern about the future of biodiversity legislation following an independent review that included the controversial suggestion to repeal the Native Vegetation Act and Threatened Species Act. It also recommended less government oversight on land clearing activities and a greater dependency on biodiversity offsets, which opponents say currently lack the transparency needed for meaningful offsetting. The Liberal-National Coalition announced that they would adopt all the recommendations for the state’s biodiversity legislation, if re-elected. And on March 28, they won the election.

Get analysis at The Conversation.
Read more on the Coalition’s announcement at the Sydney Morning Herald

 

The Greater Sage-Grouse Gets Its Own Marketplace

Some western landowners in the US are backing a new approach to conserve the declining greater sage-grouse. It’s the so-called “sagebrush marketplace,” which allows an assortment of developers that unavoidably destroy sage-grouse habitat to offset their impact by purchasing credits from landowners that have performed an amount of sage-grouse conservation like removing juniper trees that overtake the ecosystem.

 

The marketplace is made up of Habitat Exchanges, which are a type of payment for ecosystem services program developed by NGO Environmental Defense Fund (EDF). They’re taking hold in several states including Colorado, Wyoming and Nevada. As it stands, the bird isn’t listed under the Endangered Species Act yet so the exchanges operate on a voluntary basis. The energy interests, ranchers and others participating are intending for their actions to prevent regulatory obligations down the road should the grouse end up listed.

Yale 360 has the story.

 

Despite Potential, Litigation Marks Wyoming’s First Greater Sage-Grouse Conservation Bank

The Sweetwater River Conservancy in central Wyoming marks the first conservation bank for greater sage-grouse. Supporters hope that the 235,000 acre ranch can balance efforts to conserve and restore dwindling sage-grouse populations with energy development and other sources of economic growth.

 

However, the bank’s projected success is likely not enough to stamp out ongoing controversy regarding greater sage-grouse conservation, over whether mitigation can work, where it should take place, and how migratory grouse populations will be managed. In addition to these disputes, which have a big chance of ending up in court, a coalition of energy and farming interests are pursuing legal action against the federal government. The group claims the government is using bad science to justify top-down solutions to grouse conservation.

Read more about the bird wars from the Casper Star Tribune.
Learn about the greater sage-grouse conservation bank here.

 

Proactive Greater Sage-Grouse Conservation: Worth its Weight in Gold?

The Barrick Gold Corporation, a multinational gold mining company, is making its contribution to greater sage-grouse conservation by establishing a conservation bank in Nevada, one of 11 states that make up the bird’s range. The bank will allow Barrick to expand its mining operations while simultaneously conserving sage-grouse habitat. The sage-grouse is one of a few grouse species that has seen their numbers decline drastically in the last few decades. The Gunnison sage-grouse was listed as endangered last year, and the US Fish and Wildlife Service will likely make a decision on the greater sage-grouse this year. Voluntary efforts such as this conservation bank can help keep the sage-grouse off the endangered list, the US Department of Interior says.

NPR has the story.

 

Whether Tis Nobler to Maximize Minimization, or Just Go Ahead and Mitigate

A recent US District Court decision that upheld the US Fish and Wildlife’s issuing an incidental take permit for endangered Indiana bats at a wind power project may have implications for application of the mitigation hierarchy (avoid, then minimize, then mitigate) when it comes to impacts to endangered species. Union Neighbors United had challenged the permit on the grounds that Buckeye Wind had not minimized take to the lowest extent possible before moving on to mitigation.

 

The court rejected this argument on the grounds that the 1996 Habitat Conservation Planning and Incidental Take Permit Handbook takes the long view, allowing agencies to focus on whatever is most likely to deliver “substantial benefits” to the species. “Here, the USFWS found that the minimization and mitigation measures ‘fully offset’ the impact of the taking of Indiana bats, and thus, it was not necessary to determine if the plan was the ‘maximum that can be practically implemented by the Applicant,” the decision stated.

 

Get analysis at Lexology.

 

In Brazil’s Cerrado, the Co-Finance Dream Endures

In 2008, Hyundai announced an offset commitment aiming to conserve and reforest 3,000 acres of tropical forest in Brazil Cerrado region to great fanfare. The project was promoted as “one of the first voluntary carbon offset projects that will meet the high standards of the Climate, Community and Biodiversity Standards.” Within three years, the project had been quietly withdrawn from validation after auditors brought up concerns that despite the Cerrado’s biodiversity values, the area had little promise in terms of carbon storage.

 

It’s a familiar story, says Mongabay: opportunities to link carbon finance to biodiversity conservation have so far been a rare beast. In fact, the biggest carbon project in the Cerrado to date, which plants eucalyptus to burn as charcoal, is terrible for the region’s biodiversity. But that may be changing. New science suggests that even savanna ecosystems like the Cerrado can be valuable in the fight against climate change, and advocates for the Cerrado aren’t ready just yet to unpin their hopes from carbon.

Read it at Mongabay.

 

Payments for Ecosystem Services Turns Blue

As the value of coastal ecosystems like mangroves grows and their many ecosystem services become fully recognized, a new payment for ecosystem services (PES) mechanism is emerging. Right now, it’s focused on the ‘blue carbon’ that marine ecosystems store, with NGOs initiating projects like the International Blue Carbon Initiative. But recently, the International Center for Forestry Research (CIFOR) noted how PES projects are principally designed for terrestrial ecosystems. Therefore the special risks related to coastal ecosystems must be identified so project design can reflect them and the proper policies are in place. Stressors unique to marine ecosystems include hurricanes, sea-level rise and changes in sediment supply.

Read the blog post at CIFOR.

 

Proposed Alaskan ILF Aims to Go Beyond Preservation

A watershed coalition in southeast Alaska is in the midst of creating an in-lieu fee (ILF) program focused on local wetland and stream restoration and enhancement. If approved by the Army Corps of Engineers, the Southeast Alaska Mitigation Fund would be different for a couple reasons. First, preservation is the only type of mitigation currently practiced in southeast Alaska. Secondly, the fund says it’ll focus on mitigating impacts locally, a departure from what’s often current practice in the region.

Stikine River Radio has coverage.

 

VIP Treatment for Energy in Lesser Prairie Chicken Conservation?

A rangewide plan to conserve the federally listed lesser prairie chicken contains a mitigation banking program – but it’s primarily for the energy industries, as developers hoping to install a dairy worth $70 million found out. Wind and oil and gas developers can sign on to the plan which allows them to harm chicken habitat and compensate for it by conserving an area greater and of more value to the bird than what was destroyed.

 

According to state wildlife officials, the plan is much less costly for energy interests than consulting with the Fish and Wildlife Service on a case by case basis. In some circumstances, farming activities can qualify under the plan, but as officials explained, a dairy wouldn’t be able to comply with specific sound and activity rules during the prairie chicken’s mating season and so doesn’t qualify.

Get coverage from the Lamar Ledger.

 

Little Protection Happening in Indonesia’s Protected Areas

Areas protected specifically to preserve biodiversity in forest-rich Indonesia do very little in protecting these places from deforestation, a Singapore-based study has found. It’s a critical issue because not only do Indonesia’s forests contain high levels of unique and endangered biodiversity, but its standing forests help fight climate change. The increased demand for agricultural land and timber, combined with weak enforcement of protected areas, are the key reasons for the forest loss. Report authors suggest better monitoring efforts, particularly of road construction, stronger enforcement rules, and alternative livelihoods for local peoples as more effective methods to preserve the protected areas.

Learn more about the study here.

 

Connecting the Dots Between Human Health and Biodiversity

Biodiversity and human health are inextricably linked through biodiversity’s impact on ecosystem services like air and water quality, food production and medicine. And this year, the link was officially recognized at the 14th World Congress on Public Health where the World Health Organization and Convention on Biological Diversity launched a new report meant to be this issue’s flagship publication. The report offers recommendations that can help halt global biodiversity loss. Because land-use change and agriculture are dominant causes of the loss, sustainable production is one such suggestion. As for climate change and the risk to biodiversity it poses, report authors say ecosystem-based adaptation and mitigation strategies that build resilience are the best approaches. They also note another significant factor in preserving biodiversity: human behavioral change.

Mongabay has the story.

 

JOB LISTINGS

 

 

Senior Communications Associate – Forest Trends

Forest Trends – Washington DC, USA

Based in Washington, D.C., the Senior Communications Associate will support the Communications Manager in strengthening Forest Trends’ overall communications, with a special emphasis on media and social media outreach. S/he will be responsible for promoting Forest Trends’ work to the media and also generally strengthen the organization’s outreach by cultivating and organizing media contacts and lists, assisting with mailings (primarily electronic) and other forms of outreach, coordinating event logistics, supporting the publication and communications production process, and performing other duties as assigned. Successful candidates will have a bachelor’s degree and three to five years of relevant experience.

Learn more here.

 

Supply Change Research Assistant – Ecosystem Marketplace

Forest Trends – Washington DC, USA

Based in Washington, D.C., the Research Assistant will support Supply Change, a project that provides real-time information on the extent and value of commitment-driven commodity production and demand. The position involves researching public commitments to reduce supply chain impacts on ecosystem degradation, compiling data in Excel, identifying news for the Supply Change web platform, and conducting stakeholder outreach. The successful candidate will have excellent research, organizational and writing skills; an interest in agricultural commodity-related deforestation; and experience with Excel. The position runs for an initial three-month period at a negotiable hourly rate.

Learn more here.

 

Managing Director, West Africa

Envirofit – Lagos, Nigeria

Envirofit International (www.envirofit.org) is rapidly scaling its operations in West Africa. With this rapid growth comes the need for high quality in-country management to oversee operations and manage expansion. Envirofit is seeking a Managing Director to oversee and grow its operations, sales and business development within the West Africa region. This director will have full Operations and P&L responsibility. Position will be based at Envirofit’s West Africa Sales and Manufacturing headquarters in Lagos, Nigeria.

Learn more here.

 

EVENTS

 

2015 National Mitigation & Ecosystem Banking Conference

The 2015 National Mitigation & Ecosystem Banking Conference, scheduled for May 5-8, 2015, in Orlando, Florida is the only national conference that brings together key players in this industry, and offers quality hands-on sessions and training as well as important regulatory updates. Proven to be “the” place to gain insights, explore new markets and learn from sessions, the 2015 Conference will continue its focus on educational content – both advanced and basic sessions as well as moderated exchanges and a variety of mini workshops that help to connect bankers, regulators, users and others involved in this industry. Pre and post- event workshops include Primer 101, Stream Banking, Long-Term Stewardship, Financing & Valuation and more. Hear perspectives from bankers, regulators and users, get updated on regulations, legislation and legal challenges, participate in field trips and benefit from the many opportunities to network! With a high attendance this past year, we anticipate a record attendance in Orlando and encourage you to make plans to submit to present, attend, even sponsor or exhibit! Orlando FL, USA. 5-8 May 2015.

Learn more here.

 

2015 Conservation Finance Boot Camp

The Conservation Finance Network at Island Press is pleased to announce the 2015 Conservation Finance Boot Camp training course being held at the Yale School of Forestry and Environmental Studies in partnership with the Yale Center for Business and the Environment. Now in its ninth year, this intensive week-long course aims to help professionals utilize innovative and effective financing strategies for land resource conservation, restoration, and stewardship. The course will offer in-depth information on trends and opportunities in public funding, private investment capital, bridge financing and loans, gifts and grants, income from the land, and monetized ecosystem services. There will be a strong emphasis on practical, hands-on tools and lessons from relevant case studies. Attendees will have an opportunity to consult with conservation finance experts on projects or problems from their work. The course will also serve to convene a peer network of committed conservation professionals working on similar issues across the nation. Past attendees have included U.S. and international conservationists, foundation leaders, land trust board members, executive directors, private investors, business executives, and academics. Opportunities for networking will be built in throughout the week in order to foster long-term professional relationships and support networks among attendees and presenters. 1-5 June 2015. New Haven CT, USA.

Learn more here.

 

SOCAP 15

We are a network of heart-centered investors, entrepreneurs, and social impact leaders who believe in an inclusive and socially responsible economy to address the world’s toughest challenges. Since 2008, SOCAP has created a platform where social impact leaders can connect and present their ideas to a global audience. Our annual flagship event in San Francisco is the largest conference for impact investors and social entrepreneurs and has drawn more than 10,000 people.

6-9 October 2015. San Francisco CA, USA.

Additional resources

Venturing Into Uncharted Territory: Applying Net Positive Impacts For Biodiversity In Forestry And Agriculture

For many land-use sectors, the mitigation hierarchy is an effective way to manage the possible loss of biodiversity that comes with development. However, it isn’t used in several significant sectors like agriculture and forestry. That may be changing as new research finds that using the hierarchy can lead to net positive impacts for biodiversity within some of these missing sectors.

17 April 2015 | Agriculture impacts over 8,000 threatened species globally, according to the IUCN’s (International Union for Conservation of Nature) Red List of Threatened Species. The forestry sector isn’t far behind, impacting just below 8,000.

Despite the impact these sectors have on biodiversity, the IUCN finds that companies active in forestry and agriculture tend not to participate in conservation efforts that apply the four-step mitigation hierarchy: namely, seek first to avoid impacts, then to minimize those deemed unavoidable, then to restore the areas you impact, and finally to offset your damages by restoring comparably habitat nearby.

Contrast this with the extractive industries like mining and fossil fuels as well as the infrastructure sector. The global metals and mining corporation, Rio Tinto, for example, works with NGOs Flora and Fauna International and BirdLife International on its biodiversity strategy. And BHP Billiton, a multinational mining company, is in partnership with Conservation International. So these spaces have been involved with elements of the mitigation hierarchy since at least the early 2000s.

The reasons why agriculture and forestry are lagging behind are many, according to Deviah Aiama, a program officer in IUCN’s Global Business and Biodiversity Program. Primary challenges stem from the complexities of their supply chains and the sheer size of commercial agriculture and forestry operations, he says.

But these challenges can also offer opportunity. And in the fall of 2013, IUCN’s Global Business and Biodiversity Program convened with private sector and biodiversity experts to figure out how the mitigation hierarchy could be applied to the agriculture and forestry sectors. The outcome of that informal meeting is the report, No Net Loss and Net Positive Impact: Approaches for Biodiversity, published this week.

No Net Loss (NNL) and Net Positive Impact (NPI) are methods applied to development projects that either balance out negative biodiversity effects (NNL) or outweigh adverse activities (NPI) so the end result is a biodiversity gain. These approaches follow the mitigation hierarchy but since there aren’t any existing agriculture and forestry projects applying it, IUCN’s study uses hypothetical scenarios to demonstrate possible outcomes of NPI in these two sectors.

We wanted to gain a better understanding of the process and the context behind how NPI is applied in the extractive sector and then to tease out that process, says Stephen Edwards, a Program Manager within IUCN’s Global Business and Biodiversity Program. “Can we take that very same process and try and test out its application in agriculture and forestry?”

In short, the five steps of a NPI approach are: identifying priority biodiversity values, establishing a baseline or reference point, apply the mitigation hierarchy, implementation and monitoring. The study then applies this approach to three hypothetical landscape scenarios: existing managed lands, degraded lands and legal expansion into green fields.

As this research is essentially drawing from uncharted territory, Edwards along with Aiama, a lead author of the study, note the report isn’t meant to be comprehensive but a starting point to explore this area more. “This was an initial hypothetical exercise on getting practical experience from a collaborative partner and business perspective on the feasibility of applying NPI in a landscape, a farm field, a woodlot and a forest,” Aiama says.

Both Aiama and Edwards recently spoke with Ecosystem Marketplace about the creation of the paper and implications of NPI in the agriculture and forestry sectors.

EM: What were the main reasons for initiating this paper?

Stephen Edwards (SE): So we’ve seen net positive commitments to biodiversity from the mining sector and oil and gas sector increasing over the past 10 years. It started with work done by Rio Tinto and others back in the early 2000s and there has been a fair bit of progress made in terms of understanding what the commitments are and what the implications are. But the groups that are notoriously absent from those discussions are agriculture and forestry. These sectors-among others-have significant land impacts. Therefore, we thought that it was important to try to stretch our understanding to see if the agriculture and forestry sectors could consider a NPI approach.

Deviah Aiama (DA): It was timely to start exploring this subject. While we aren’t seeing net positive commitments in agriculture and forestry, we are seeing commitments to sustainability through recent initiatives that focus on taking deforestation out of supply chains, for instance. Also, agriculture and forestry have experience with sustainability standards that actually predates some of the NPI efforts in the extractives. It goes back to the 1990s when FSC (Forest Stewardship Council) was born. So we see efforts in these sectors that basically have biodiversity benefits.

It’s important to note also that the NPI’s five stage process itself is meant to be broad enough that it can be applied to a multitude of sectors and the way the five step process is presented in the paper isn’t specific to agriculture and forestry. It’s broad and generic enough that it’s applicable to tourism and so on.

EM:  Can you elaborate on why implementing NPI in agriculture and forestry is more difficult than in other sectors?

DA: There are difficulties and also opportunities. First, it’s not exactly a concept that has emerged in these sectors although arguably, there are linkages; for example, sustainable forest management standards. But agriculture and forestry aren’t as exposed to the financial sector and financial standards like IFC (International Finance Corporation). Also these sectors operate on larger spatial scales so production areas can be across entire landscapes compared to, for instance, a spatially limited mining scale. There are also differences concerning the temporal scale. Typically, forestry and agriculture are permanent land conversions. These areas are under production for the long-term. Of course, mine sites can be up to 50-100 years long but there is often a closure and rehabilitation phase which may not be there particularly in agriculture.

Broadly speaking and noting some exceptions, another difference is that agriculture and forestry usually involve a greater number of stakeholders. Agriculture, in particular, often deals with a range of producers, smallholder farmers, large contract farms, big industrial farms and so on. To coordinate action across a range of producers can be difficult. And finally, there’s the economics. Typically there is more upfront capital available in a mining project in part because of access to large loans through IFC for instance. Whereas in agriculture and forestry, they have smaller capital investments upfront and smaller revenue returns over the long-term. The marginal gains are smaller.

On the positive side, agriculture and forestry are often dealing with more dynamic landscape. That’s particularly true with forestry. A sustainably managed forestry operation has an opportunity to set a portion of its land aside to host wildlife so it’s easier to have restoration approaches implemented in a forestry landscape, as opposed to a mine.

EM: How significant are the agriculture and forestry sector to achieving the Convention on Biological Diversity’s (CBD) goals by 2020?

DA: If you look at the data from the IUCN Red List of Threatened Species in terms of threats, agriculture and forestry are essentially sectors that pose the highest threat to species primarily because of habitat loss, conversion and fragmentation. That’s also why IUCN is looking at these sectors. One of the CBD goals (Target 5) talks about no net loss of natural habitat by 2020. Without engaging the agriculture and forestry sectors on no net loss approaches, meeting that CBD goal won’t be possible.

EM: What particularly are you hoping to achieve?

SE: One: IUCN is hoping to gain a better understanding of the possible application of a NPI approach to different sectors beyond the extractives and to explore how might that be done. As Dev said, as of yet we don’t know of specific cases where this has been tried so we had to use hypothetical scenarios. The report documents that process and shows some possible avenues within those scenarios where a NPI approach might work and others where it won’t.  Going forward, the main recommendation of the working group is to pilot the NPI approach in specific agriculture and forestry landscapes in order to develop a better understanding and assessment of its practical application.

That’s what we want to achieve in the shorter term. Obviously, in the longer term, we’re hoping that all sectors reduce their biodiversity impact and generate the best possible returns for conservation.

EM: Is there a certain audience you’re hoping to reach?

SE: IUCN is trying to reach a broad range of audiences. We are reaching out to the business sector to gain a better understanding of these issues. We’ve been pleasantly surprised actually by the level of commitment and uptake of the mitigation hierarchy and these kinds of issues in the oil and gas and mining sector, as well as in the finance sector. Another important audience is the finance sector because of the leverage that they wield in terms of some of their performance standards, which are important. The NGO community is also key because it functions both as a civil society watchdog/advocate and as a support organization for businesses, finance institutions and governments. And, government is the one party that is going to have to apply regulations for these types of practices. In a voluntary realm, I think there’s only going to be limited amounts of traction.

EM: What are the key takeaways?

SE: IUCN believes that it’s critical that issues regarding conservation are looked at in a broader landscape level. Until we look at the broader landscape level, we’re not going to achieve global goals.

Where we’re most interested in looking when it comes to discussions around NPI is ensuring that there are clear credible and measurable biodiversity benefits coming out of it. While we’re in support of any efforts to improve biodiversity and conservation performance, we need to be cautious of throwing around claims without having them strongly based in science and done in ways that are clearly measurable, credible and transparent.

Additional resources

Global Forum To Highlight Solutions To Water Shortages, Stress And Scarcity

10 April 2015 | With historic droughts playing out in different parts of the globe, it seems that water is at the top of everyone’s mind. For the first time ever, groundwater legislation was introduced in drought-plagued California, shortly followed by mandatory water restrictions. Meanwhile, Sao Paulo, Brazil and Taiwan run dry – perhaps waiting for better water resource management.

But just how to manage this increasingly scarce resource is the constant question among those working in the water space. And the answer continues to evolve as policymakers, practitioners and scientists account for new factors like more people and a changing climate.

Center to the issue of water management is cities-hubs of not only water consumption but food and energy also and key to the water-energy-food nexus. A recent breakthrough regarding water management in cities came in the form of Lima, Peru’s new water tariff. The bill allows for nearly 5% of collected water fees to be devoted to green infrastructure, climate change adaptation and disaster risk reduction. Over a 5-year period, an estimated $112 million will be collected to address these issues. It’s a significant step forward in terms of not only actual progress made but also a huge show of leadership on the side of Peru’s water regulator-SUNASS (National Sanitation Service Superintendence), said Gena Gammie, a Manager in NGO Forest Trends’ Water Initiative

So it’s also a milestone cultivated in part by Forest Trends (publisher of Ecosystem Marketplace) over the past three years through its Watershed Services Incubator, a partnership with the Peruvian Ministry of Environment to develop cost-effective methods that would keep the water flowing in one of the world’s largest desert cities.

One such method under consideration by SUNASS is basically restoring pre-Incan canals, called amunas, which allow water to trickle slowly down the Andes Mountains arriving at the bottom just in time for Lima’s dry season. The amunas funnel water across the mountains instead of directly down. What’s more, a Forest Trends report found that amuna restoration – among other green solutions – is more cost-effective than the gray approaches assessed. And with the significant funding directed to initiatives such as this through the water tariff, the odds are in favor of moving the work on the amunas forward.

The water tariff will show how these green infrastructure approaches can address water scarcity, Gammie said. “It’s one part of the solution that’s been underutilized, but we’re now seeing the policy and mechanisms that can make a difference.”

Every Three Years

It’s a message Gammie plans on taking to the World Water Forum, a major convening of private and public representatives aimed at improving sustainable water resource management, happening this week from the 12-17 in Daegu, South Korea.

Hosted by the World Water Council, an international platform for the future of water, the World Water Forum is a big deal. Occurring every three years, it’s a high-level ministerial meeting that attracts CEOs and other top actors from the private sector as well.

This time, the forum was organized using a participatory process where all participants in the forum develop what are called ‘implementation roadmaps.’ These roadmaps are frameworks clarifying the activities and objectives pertaining to water management that governments and private companies are working on. They all feed into the forum’s four themes: Water Security for All; Water for Development and Prosperity; Water for Sustainability: Harmonizing Humans and Nature; and Constructing Feasible Implementation Mechanisms.

Forum events will address these themes through solutions and new data. For instance, one event addressing the fourth theme will discuss closing a finance gap estimated at trillions of dollars. It’s the gap in finance needed to fix existing water infrastructure that’s decaying and then also to construct new infrastructure that ensures the developing world has access to clean water. The panel will specifically look at identifying indicators to determine the role green as well as multi-purpose infrastructure plays in filling this gap. The indicators can then be used to evaluate finance for sustainable water management, according to the event description.

Tough Questions

What will the top topics of this World Water Forum be? It’s likely the current water shortages will come up in many discussions. “Hopefully, the forum will be able to identify and share some solutions that cities can use to mitigate these crises,” Gammie said.

Another topic related to current events that is sure to make its way into the forum’s dialogues is the Sustainable Development Goals (SDGs) negotiations. The United Nations is set to establish them this year with a singular goal focused on water, among other objectives relating to water.

“The World Water Forum will definitely be informed by those negotiations to help direct its own implementation roadmaps,” Gammie said.

Participants like Gammie expect the SDGs to be a key subject among high-level policymaker discussions asking questions such as how should water be positioned within the SDGs Because of the forum’s focus on water management, ensuring the SDGs adequately encompass all matters surrounding water management to achieve sustainable development will also most likely be debated.

“It’s a big year for the world,” Gammie said, referring to the SDGs. It’s fitting then that the World Water Forum is happening this year as well.

It’s also fitting that Fernando Momiy Hada, the President of SUNASS, will be on hand to discuss the groundbreaking water tariff, which has implications for other cities struggling with their own versions of water stress.

 

Additional resources

Climate Plans and the Role of Land Use: A Running Tab

As countries submit their plans to cut greenhouse gas emissions – commitments known as Intended Nationally Determined Contributions, or INDCs – ahead of this year’s international climate negotiations, the role of forests and land use in this agreement is still developing. This article will be updated often to offer summaries of how land use is included (or not) in INDCs as they are submitted to the United Nations Framework Convention on Climate Change (UNFCCC).

If you want to read the INDC documents, they are all available here.

GABON*

INDC submitted: April 1, 2015

Notable because: It’s the first African country to submit an INDC.

The basics: Gabon will cut emissions by at least 50% by 2025 compared to a business-as-usual scenario.

Inclusion of land use: Gabon notes that 88% of its land area is covered by forests and the country therefore acts as a net carbon sink, absorbing four times the carbon dioxide it emits. Since 2000, Gabon has adopted a Forest Code, created 13 national parks that ban logging across large areas, and created a National Land Use Plan that identifies carbon-rich forests. However, the country notes that it does not want to rely on international carbon finance to preserve its forests, stating that these market mechanisms hinder its sovereign economic development.

*This INDC was submitted in French and has been roughly translated.

RUSSIA*

INDC submitted: March 31, 2015

Notable because: Russia’s submission means that two-thirds of industrialized nations covering 80% of emissions from developed countries have now released their climate plans.

The basics: Russia will limit emissions to 70-75% of 1990 levels by 2030, on one condition…

Inclusion of land use: Russia’s commitment is conditional on the “maximum consideration” of forests in emissions accounting under the UNFCCC. The country notes that it houses 70% of the world’s boreal forests and 25% of the world’s forests overall. Protecting these forests is the “most important element” of Russia’s climate policy, the INDC states.

*This INDC was submitted in Russian and has been roughly translated.

UNITED STATES

INDC submitted: March 31, 2015

Notable because: The United States is the second largest emitter in the world.

The basics: The U.S. will reduce emissions 26-28% below 2005 levels by 2025.

Inclusion of land use: The U.S. does not intend to use international carbon market mechanisms to meet its targets – a move that would appear to exclude mechanisms such as Reducing Emissions from Deforestation and forest Degradation (REDD+). However, it will account for emissions from the land sector using a “net-net” approach, which in UNFCCC-speak means subtracting the net emissions in the accounting period from the net emissions in 1990, the base year for most countries. This land-use carbon accounting will include emissions by sources and removals by sinks as reported in the Inventory of United States Greenhouse Gas Emissions and Sinks, including everything from cropland to forest land to wetlands to rice cultivation.

NORWAY

INDC submitted: March 27, 2015

Notable because: Norway has been an early and consistent supporter of international efforts to reduce deforestation through payments for performance to REDD projects. Its International Climate and Forest Initiative has funding up to three billion Norwegian Krones ($517 USD) per year pledged to avoided deforestation efforts, from the Brazilian Amazon Fund to the Congo Basin Forest Fund.

The basics: Norway will cut emissions at least 40% by 2030 compared to 1990 levels.

Inclusion of land use: Accounting emissions from the land-use sector remains a question mark for Norway. “Net removals” of greenhouse gases by forests accounted for 10.1 million tonnes of carbon dioxide equivalent (MtCO2e) in 1990 – about a fifth of Norway’s total emissions in that year. As forests grow, Norway projects that the land-use sector will account for 21.2 MtCO2e in net removals by 2030. The country does not currently have a final position on land-use carbon accounting, but plans to work with European Union member states to come up with one. Depending on the outcome, “the commitment would need to be recalculated to ensure that the ambition level stays unchanged,” according to the INDC.

MEXICO

INDC submitted: March 30, 2015

Notable because: Mexico was the first developing country to submit an INDC.

The basics: Mexico will unconditionally reduce its emissions 25% under the business-as-usual scenario by 2030. With access to financial resources and technology under an international agreement, the country has set a more ambitious “conditional” target of a 40% emissions cut.

Inclusion of land use: Mexico’s INDC states that the country will reach zero deforestation by 2030 and focus reforestation efforts in riparian zones, to promote ecosystem-based adaptation in important watersheds.

EUROPEAN UNION

INDC submitted: March 6, 2015

Notable because: It covers 28 Member States and sets the tone for an entire region.

The basics: The European Union and its Member States will reduce domestic emissions at least 40% by 2030 compared to 1990 levels.

Inclusion of land use: The EU’s INDC states that “Policy on how to include Land Use, Land Use Change and Forestry into the 2030 greenhouse gas mitigation framework will be established as soon as technical conditions allow and in any case before 2030.” A previous EU decision sets rules for how to account for carbon emissions from the land use sector, but is just a first step.

 

This Week In Biodiversity: EM Tracks the Co-Financing Unicorn to the Gulf

It was a good month for conservation finance as a study on the potential of wetland carbon offsets in Louisiana found that the state’s blue carbon could be worth between $540 million and $1.6 billion over a five year period. And in California, farmers may be able to leverage finance from both the carbon market and a habitat exchange.

This article was originally posted in the Mitigation Mail newsletter. Click here to read the original.

 

17 March 2015 | Greetings! Since the 1930s, Louisiana has lost an area of wetlands equivalent to the size of Delaware, and it continues to lose a football field of wetlands every hour. If current loss rates continue, by the year 2040 more than one million acres – or nearly another Delaware – of wetlands will be gone – and the carbon stored in these ecosystems will be released into the atmosphere.
But a new study says it’s possible to not only restore the wetlands – but generate a lot of money doing so: Wetland restoration in Louisiana could be worth between $540 million and $1.6 billion dollars over the next five decades, according to the Louisiana Blue Carbon study.

 

The study, supported by Entergy Corporation through their Environmental Initiatives Fund, and prepared in partnership by New Orleans-based Tierra Resources and Portland-based nonprofit The Climate Trust, looks at Louisiana’s potential to produce blue carbon offsets.

 

But the high costs of wetland restoration may surpass the value of carbon finance in projects – which means that project developers are looking at pooling finance from other quarters: stacking environmental credits, eligible types of conservation easements, and federal funds are all on the table.

 

Leveraging finance across ecosystem markets and funding sources is like a unicorn: often talked-about but rarely seen. But activities in the Gulf – and in California, where rice farmers this year for the first time may be able to draw finance for conservation from both a new habitat exchange and the California carbon market – suggest that we may be getting closer to a successful sighting.

 

Conservation finance got more good news with the launch of the European Investment Bank’s new Natural Capital Financing Facility, which will seek to support sustainable ventures – and attract additional investors – with an initial US$135M purse.

 

And it wouldn’t be Mitmail without some lawsuits and colorful language. This month, they’re in New South Wales, California, and Alaska.

 

Enjoy!

—The Ecosystem Marketplace Team

 

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

 

US Gulf Coast Prime For Wetlands Restoration

Since the 1930s, Louisiana has lost an area of wetlands equivalent to the size of Delaware, and it continues to lose a football field of wetlands every hour. If current loss rates continue, by the year 2040 more than one million acres of wetlands will be gone – and the carbon stored in these ecosystems will be released into the atmosphere.

 

But what if there is another way? While a large degree of wetland loss in the Gulf of Mexico is inevitable due to the dual forces of land subsidence and sea level rise, project developer Tierra Resources and utility Entergy are optimistic that wetland restoration is possible in some areas. Tierra Resources estimated that Louisiana has the potential to produce 1.8 million carbon offsets per year, or almost 92 million offsets over 50 years, according to the Louisiana Blue Carbon study. Wetland restoration in Louisiana could be worth between $540 million and $1.6 billion dollars over the next five decades, the study finds.

 

Learn more at Ecosystem Marketplace.

 

Opinion: Can Putting A Price On Environmental Risk Mainstream Corporate Sustainability?

As it stands, some companies take environmental issues and sustainability seriously but the majority don’t. In a new opinion piece, Ivo Mulder, the REDD+ Green Economy Advisor for UNEP (United Nations Environment Programme), argues how quantifying environmental risks in monetary terms may be necessary to convince the bulk of corporations to follow suit.

Read it here.

 

Researchers Say Ecotourism In Protected Areas Delivers 60:1 Annual Return On Costs

The world’s national parks and nature reserves receive around eight billion visits every year, according to the first study into the global scale of nature-based tourism in protected areas. The paper, by researchers in Cambridge, UK, Princeton, New Jersey, and Washington, DC, published in the open access journal PLOS Biology, is the first global-scale attempt to answer the question of how many visits protected areas receive, and what they might be worth in terms of tourist dollars.

 

The authors of the study say that this number of visits could generate as much as US$600 billion of tourism expenditure annually – a huge economic benefit which vastly exceeds the less than US$10 billion spent safeguarding these sites each year.

 

Scientists and conservation experts describe current global expenditure on protected areas as “grossly insufficient”, and have called for greatly increased investment in the maintenance and expansion of protected areas – a move which this study shows would yield substantial economic return – as well as saving incalculably precious natural landscapes and species from destruction.

Learn more.

EU NatCap Financing Facility Is Ready for Business

With the intention of attracting investments from a variety of public and private sources, the European Investment Bank (EIB) launched the Natural Capital Financing Facility last month, one of two pilot projects to grow investments in climate adaptation and energy conservation. The Natural Capital Financing Facility has pockets USD$135M deep for investing in – and attracting investors to – sustainability projects like forestry management.

Read more from Yahoo News.

 

Cozy Relationship Between Government and Mining Company Irks Australian Public

A controversial mine expansion in Australia grew more contentious when a media organization released information suggesting that the Office of Environment and Heritage (OEH) rubber-stamped offsets for the Warkworth expansion. The organization claimed the OEH approved the mine’s biodiversity offsets for clearing 600 acres of vegetation that contained endangered woodlands prior to actually calculating the value of the offsets. The area proposed for new mining itself was actually set aside as a biodiversity offset for prior impacts. An OEH spokesperson responded by saying that the calculation was done before certifying the mine.

 

Meanwhile, the Labor Party is promising that if elected it would scrap the Coalition’s current biodiversity policy in favor of a policy allowing only “like-for-like” offsets on land “within a reasonable geographic proximity” to the impacted area.

The Sydney Morning Herald has the story.

 

Mitigation Bankers, Locals Spar Over Recreating Wild Lands

Turning developed property back into natural habitat for mitigation purposes has become profitable in places like southern California where so many wetlands have been destroyed. As there is ample opportunity and money to be made, mitigation bankers have been busy buying agricultural land and business properties and converting them into mitigation banks. But owners of a shuttered golf course who are attempting to turn it into a bank have met with opposition from local residents concerned about the effect on local property values. Supporters counter that most opposition stems from misinformation, and that these issues can be ironed out through better community engagement.

Learn more.

 

BSI Unveils a Business Standard on Biodiversity

UK-based standards group BSI just released a new standard for business on biodiversity management. BS 8583 Biodiversity, Guidance for businesses on managing the risks and opportunities lays out a framework for setting targets on a local, national and global level, and managing biodiversity across normal operations, supply chain management, and land/premises management.

Read a press release.

 

Mitigation Roundup

Work is underway at Wildlands’ new San Luis Rey Mitigation Bank in Oceanside, San Diego County, California.

 

Cadiz Inc. saw its 7,400-acre Fenner Valley Desert Tortoise Conservation Bank in California’s San Bernardino County approved early this month.

 

A reservoir in Clitheroe in Lancashire, England, will be restored as a nature reserve, with funds coming from via the Environment Bank’s biodiversity offset pilot work.

 

 

‘Counterfeit’ Credits of Alaskan Mitigation Bank Drive Lawsuit Against the Corps

Last month, a mitigation banker operating out of Alaska sued the US Army Corps of Engineers for what he says is a violation of the Clean Water Act (CWA). The banker, Scott Walther, argues that in 2012 the Corps steered a developer in need of wetland mitigation away from his bank, which is authorized to sell credits to CWA permit holders, to a bank operated by the Matanuska-Susitna borough that Walther says has no business selling credits. Walther says the Su-Knik Mitigation bank’s credits were awarded in violation of the Final Rule. In the lawsuit, Walther is seeking an injunction blocking the Corps from directing CWA permit holders to buy bank credits fro Su-Knik until the bank comes into CWA compliance.

Read it at Law360 (registration required).

 

Can Colombia Create the World’s Biggest Ecological Corridor?

With the cooperation of its neighbors, Brazil and Venezuela, Colombia has plans to create the world’s largest ecological corridor. It would span over 135M hectares of Amazon rainforest ,helping to slow global warming by reducing deforestation and preserving the region’s biodiversity. Norway and Germany are pitching in as well: they have agreed to US$65M worth of finance for an Amazon protection program. He plans to announce the eco-corridor initiative, called ‘Triple A’, at COP21 in Paris later this year.

Learn more.

 

Cali Farmers See Opportunities in Habitat, Carbon

A farmer in California’s Central Valley will leave rice fields flooded for part of this season, to provide habitat for waterfowl, shorebirds, and Chinook salmon. John Brennan, who oversees the 1,700-acre Knaggs Ranch, says he hopes to be able to market these benefits on the Central Valley Habitat Exchange, a new mechanism channeling finance to landowners undertaking voluntary conservation. Funds are expected to come from private and public investors, including some with mitigation or restoration requirements. Brennan also has his eye on the California carbon market: this spring, the California Air Resources Board will likely approve the first standard for carbon sequestration from rice farming.

Learn more at the EDF blog.

 

Locals, Activists Protest to Save Australia’s Native Vegetation Act

The independent review board that recommended that Australia’s New South Wales government repeal the Native Vegetation Act is getting pushback from landowners and a local environmental group. Critics particularly take issue with the review’s suggestion that land conserved under voluntary conservation agreements (VCA) can be used as offsets for biodiversity loss elsewhere. “We are horrified to think that at some time in the future our VCA-protected land in this remarkable rainforest could become a tool to enable vegetation destruction in other areas,” said the secretary of the Gerroa Environmental Protection Society. But supporters of the repeal argue they are looking for fair policy that balances environmental stewardship with economic growth. And the review board claimed the Native Vegetation Act didn’t meet expectations for biodiversity conservation in the state.

The Kiama Independent has coverage.

 

Alberta Starting to Rethink Wetland Incentives

Researchers at the University of Alberta plan to pilot a reverse auction mechanism for wetland restoration in the province. The provincial government will fund the effort, which aims to test out market approaches to restoring wetlands. Offering payments to landowners from a designation restoration fund isn’t working, says U of A’s Peter Boxall: 90% of wetlands around Calgary have been lost, and 70% of wetlands in the ‘white zone’ (e.g. the developed part of Alberta).

The Edmonton Journal has coverage.

 

To Finance Green Growth, Namibia Needs A Little Green

Namibia has taken strides to protect its biodiversity: It’s one of the few countries that have a clause in the constitution targeting biodiversity management. And between 2001 and 2010, it implemented its National Biodiversity Strategy and Action Plan (NBSAP) to international recognition as one of the best first generation plans. Namibia is now undertaking implementing the second phase of its plan, which aims to promote the sustainable use of natural resources by mainstreaming biodiversity conservation across the government and private sector. But funding is a big impediment, the Minister of Environment and Tourism notes, as a conservative estimate for implementing NBSAP2 costs over US$40M. The Minister emphasized the importance of donor aid and exploring innovative finance as means to finance implementation.

All Africa has coverage.

 

Landscape Level Environment Project Saves Three Birds with One Stone in Vietnam

Vietnam is moving forward with a project integrating biodiversity, climate resilience and forestry management. The national government approved the “Integrating Biodiversity Conservation, Climate Resilience and Sustainable Forest Management in Trung Truong Son Landscapes” project, which is comprised of two parts. One is to manage biodiversity and forests in the region’s protected areas and their buffer zones. The other part is to implement landscape conservation at the community-level in the surrounding areas, which will promote sustainable livelihoods and reduce the bad environmental habits that contribute to climate change.

Learn more.

 

CEMEX and BirdLife Renew Partnership

CEMEX and BirdLife International renewed their partnership for another three years. The two groups have worked together since 2007 to improve understanding and monitoring of conservation actions at CEMEX’s quarry sites. The partnership has supported projects in Mexico, the UK, and France, and collaborated on a number of company-level initiatives.

Read a press release.

 

EVENTS

 

 

2015 National Mitigation & Ecosystem Banking Conference

The 2015 National Mitigation & Ecosystem Banking Conference, scheduled for May 5-8, 2015, in Orlando, Florida is the only national conference that brings together key players in this industry, and offers quality hands-on sessions and training as well as important regulatory updates. Proven to be “the” place to gain insights, explore new markets and learn from sessions, the 2015 Conference will continue its focus on educational content – both advanced and basic sessions as well as moderated exchanges and a variety of mini workshops that help to connect bankers, regulators, users and others involved in this industry. Pre and post- event workshops include Primer 101, Stream Banking, Long-Term Stewardship, Financing & Valuation and more. Hear perspectives from bankers, regulators and users, get updated on regulations, legislation and legal challenges, participate in field trips and benefit from the many opportunities to network! With a high attendance this past year, we anticipate a record attendance in Orlando and encourage you to make plans to submit to present, attend, even sponsor or exhibit! Orlando FL, USA. 5-8 May 2015.

Learn more here.

 

SOCAP 15

We are a network of heart-centered investors, entrepreneurs, and social impact leaders who believe in an inclusive and socially responsible economy to address the world’s toughest challenges. Since 2008, SOCAP has created a platform where social impact leaders can connect and present their ideas to a global audience. Our annual flagship event in San Francisco is the largest conference for impact investors and social entrepreneurs and has drawn more than 10,000 people.

6-9 October 2015. San Francisco CA, USA.

Learn more here.

 

2015 Conservation Finance Boot Camp

The Conservation Finance Network at Island Press is pleased to announce the 2015 Conservation Finance Boot Camp training course being held at the Yale School of Forestry and Environmental Studies in partnership with the Yale Center for Business and the Environment. Now in its ninth year, this intensive week-long course aims to help professionals utilize innovative and effective financing strategies for land resource conservation, restoration, and stewardship. The course will offer in-depth information on trends and opportunities in public funding, private investment capital, bridge financing and loans, gifts and grants, income from the land, and monetized ecosystem services. There will be a strong emphasis on practical, hands-on tools and lessons from relevant case studies. Attendees will have an opportunity to consult with conservation finance experts on projects or problems from their work. The course will also serve to convene a peer network of committed conservation professionals working on similar issues across the nation. Past attendees have included U.S. and international conservationists, foundation leaders, land trust board members, executive directors, private investors, business executives, and academics. Opportunities for networking will be built in throughout the week in order to foster long-term professional relationships and support networks among attendees and presenters. 1-5 June 2015. New Haven CT, USA.

Learn more here.

 

JOB LISTINGS

 

Program Manager of Marine Ecosystem Services

European Institute of Marine Studies – Plouzané, France

The candidate(s) will work with Linwood Pendleton, the International Chair of Excellence at the European Institute of Marine Studies/Laboratory of Excellence of the Sea/Center for Marine Law and Economics/University of West Brittany to build an international program on policy, management, and science regarding human uses of the sea and coast. The program already has attracted over a million euros of research investment in just the last 6 months. The work of the International Chair focuses particularly on new and innovative science and policies to help better manage the ecosystem services provided by marine and coastal areas and to better coordinate development, conservation, and management to balance the use of living and non-living resources. The International Chair is a fundamental contributor to a proposed United Nations University for the Ocean. Research areas pursued by the International Chair and his team currently include the a Global Environmental Facility project on Blue Forests (i.e. blue carbon), a new European Commission study (ECOPOTENTIAL) that uses Earth Observation and Ecosystem Services data to monitor the effectiveness of protected areas, as well as projects that focus on the impacts of ocean acidification, mapping and visualizing ecosystem services, and managing resources in the high seas and deep sea. The successful candidate(s) will assist the Chair in all aspects of his work including (but not limited to) research, scholarly and popular writing and presentations, seminar and workshop planning, grant proposal writing, and project and grant management.

Learn more here.

 

Land Conservation Manager

The Nature Conservancy – South central Pennsylvania, USA

The Pennsylvania Chapter of The Nature Conservancy seeks a knowledgeable, energetic conservationist for the position of Land Conservation Manager. The position, based in south central Pennsylvania, offers the opportunity to join the staff of one of the largest, most successful conservation organizations in the world. The Nature Conservancy’s global success can be measured by the protection of 117 million acres in over 30 countries. The Pennsylvania Chapter is known in the Conservancy and beyond as a leader in innovative, effective strategies that benefit both people and nature at a scale that matters. The Land Conservation Manager will lead the Chapter’s efforts to protect and restore high priority areas in Pennsylvania, including lands along one of Pennsylvania’s most spectacular and scenic natural features, the Kittatinny Ridge, and lands within the Chesapeake Bay Watershed.

Learn more here.

 

Environmental Finance Officer

International Union for Conservation of Nature – Vaud, Switzerland

The Environmental Finance Officer will undertake research and analytical work at the interface of economics, development, business and the environment. Contributions will be in the form of applied research (data collection and analysis), drafting of policy papers and reports for knowledge uptake, and providing environmental finance insights throughout IUCN programmes and projects. Broad thematic areas of work include:

 

  • Apply finance analytical tools and financing lenses to issues affecting biodiversity and ecosystems and their management and decision support;
  • Explore and develop innovative public and private sector financial mechanisms to support conservation and sustainable development initiatives;
  • Assess the role and contributions of financial mechanisms in equitable benefit-sharing for vulnerable natural resource dependent communities;
  • Follow the debates and developments on resource mobilization and sustainable finance in global policy fora such as UNFCCC, CBD, SDG, etc.;
  • Promote uptake of existing knowledge and generate new knowledge on environmental finance.

Learn more here.

 

Senior Program Associate, Ecosystem Services

Winrock International – Arlington VA, USA

The Senior Program Associate will be responsible for assisting in the implementation of projects related to ecosystem services including climate change mitigation and adaptation in the agriculture, forestry, and other land uses (AFOLU) sector. Responsibilities will include: performing field data compilation and collection, especially in relation to forest carbon and ecosystem services valuation; analysis and synthesis of data and information on land use and forests; tracking national and international activities in related fields; document and report writing; and assisting in holding capacity building training sessions on subjects related to climate change and ecosystem services.

Learn more here.

 

Program Associate, Ecosystem Services

Winrock International – Arlington VA, USA

The Program Associate will be responsible for assisting in the implementation of projects related to ecosystem services including climate change mitigation and adaptation in the agriculture, forestry, and other land uses (AFOLU) sector. Responsibilities will include: performing field data compilation and collection, especially in relation to forest carbon and ecosystem services valuation; analysis and synthesis of data and information on land use and forests; tracking national and international activities in related fields; document and report writing; and assisting in holding capacity building training sessions on subjects related to climate change and ecosystem services.

Learn more here.

Additional resources

This Week In Forest Carbon News…

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

 

3 June 2014 | Forest Trends’ Ecosystem Marketplace launched the Executive Summary of our State of the Voluntary Carbon Markets 2014 report last week to a full house at Carbon Expo in Cologne, Germany. In the context of a market in which some projects struggled to find buyers, projects that reduce emissions from deforestation and forest degradation (REDD) more than doubled their transaction volumes from 2012 to 22.6 million tonnes of carbon dioxide equivalent (tCO2e) in 2013 – enough to offset the annual emissions from energy production in a small country such as the Dominican Republic or Croatia.

The market value of REDD also increased by 35% in 2013, to $94 million, buoyed by a significant and historic transaction between the German development bank KfW (Kreditanstalt fí¼r Wiederaufbau) and Brazil’s Acre state. This growth came at an average price of $4.2/tCO2e, down from $7.4/tCO2e in 2012 – though less than a handful of REDD project developers sold REDD offsets at under $3/tCO2e.

“Some of the larger [REDD] projects are able to unload a significant quantity of offsets at a very low price to help with their cash flow issues,” explained Brian McFarland of Maryland-based CarbonFund.org, in an interview with Ecosystem Marketplace. McFarland noted that he’s hoping for a compliance signal from California or (longer-term) China or a forward market commitment by a multi-lateral agency like the United Nations’ REDD program or the World Bank’s Forest Carbon Partnership Facility.

Other REDD projects are holding their ground on price.

“We continue to believe that REDD+ projects really shouldn’t be looked at the same as other projects; they really do have a minimum threshold if you want to have a good REDD+ project that’s making the right kind of investment in communities,” said Mike Korchinsky, President of Wildlife Works, a leading REDD project developer in Africa. “There is a minimum cost and therefore there is a minimum price.”

In March, the Althelia Climate Fund made its long-awaited first investment in a REDD+ project, supporting Wildlife Work’s Kasigua Corridor project in Kenya’s Taita Hills to the tune of $10 million. And, just last week in Cologne, US Secretary of State John Kerry announced that the US Agency for International Development (USAID) will guarantee the Althelia Climate Fund at $133.8 million in order to de-risk forest conservation and sustainable agriculture projects.

Stephen Matzie, Investment Officer for the Development Credit Authority (DCA) at USAID, commented on the announcement: “REDD is a good place for us to work because there are some huge challenges, some of them just in terms of how little upfront financing there is to develop projects, the length of time it takes to develop projects that can be implemented and earn credits and prove sustainability over time and, of course, the challenges of being solely in the voluntary markets at this point,” he said.

Other forest carbon offsets, including those from afforestation/reforestation, improved forest management, and agro-forestry projects accounted for an additional 4.1 million in transactions and $37 million in value as these project types maintained above-average pricing, according to the State of data.

We hope that you’ll join us either in person or via webcast for the launch of the full State of the Voluntary Carbon Markets 2014 report on June 24 in Washington DC from 4:30-6:00 EDT. Details to follow.

More stories from the forest carbon marketplace 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

Vamos, Colombia

Kerry’s announcement about USAID’s guarantee for REDD projects made a splash at Carbon Expo, but agency officials made it clear that they’re not newbies when it comes to reducing deforestation projects. USAID has supported the BioREDD+ program in Colombia since 2011, through which $27.8 million will be invested in eight REDD+ projects covering more than 700,000 hectares along the Colombian Pacific Coast. The agency’s partial credit guarantees certainly make a difference, but multiple revenue streams and partners are what would really ensure the long-term financial security of the projects. Matzie of the DCA said that if project partners could ever convince a Colombian bank to participate in a transaction financing a local REDD+ project, it would be a “landmark event.”

NATIONAL STRATEGY AND CAPACITY

Looking for a $1 billion boost

The Democratic Republic of Congo (DRC) is seeking funding to protect nine million hectares of rainforest under the United Nation’s REDD+ mechanism. Project developer Wildlife Works is assisting the Congolese government in the design of the program. “The DRC accepts its responsibility to protect its forests for the benefit of humanity,” Bavon N’sa Mputu Elima, the DRC Minister of Environment said. “But as a developing country we require a partnership with industrialized nations to provide the financial support needed by the program.” The Congo Basin and surrounding regions are the second largest concentration of rainforest outside of the Amazon.

PROJECT DEVELOPMENT

Bamboo shoots, scores

EcoPlanet Bamboo last week completed verification of its 2014 vintage offsets under the Verified Carbon Standard (VCS) from its Nicaragua projects – marking the debut of bamboo offsets on the voluntary carbon market. In an interview with Ecosystem Marketplace, EcoPlanet Bamboo founder Troy Wiseman explained why the company pursued triple certification with VCS, the Community, Climate and Biodiversity (CCB) Standard, and the Forest Stewardship Council (FSC) – and how the upfront investment pays off in its bottom line. “We are currently negotiating an offer for this year’s vintage as we speak,” he said.

No place like home

The Conservation Fund’s Go Zero program last week announced that two US-based projects achieved gold level verification with the CCB Standard, which certifies climate, community and biodiversity benefits. The Marais des Cygnes River project south of Kansas City restored 775 acres of native oak and hickory, reinvigorating lost habitat for migratory birds. And the Red River National Wildlife Refuge project in Louisiana facilitated the planting of hundreds of thousands of cypress, oak and hickory trees across 1,180 riverside acres. The projects are expected to sequester 260,500 and 300,000 tCO2e, respectively.

Red light, green light

The CarbonFund.org’s Brian McFarland is “hesitantly optimistic” about REDD offsets after the roller coaster year that was 2013. The organization’s CarbonCo subsidiary Purus Project – the first REDD+ project in Acre, Brazil – issued carbon offsets in January, and McFarland hopes that, given oversupply on the voluntary carbon market, there may be a place for REDD in compliance programs. “It seems like it’s still on the radar for California, but they have some higher priorities they are working on now. China will definitely be a longer-term play,” he said. His interview with Ecosystem Marketplace is available in full here.

FINANCE AND ECONOMICS

More bang for the carbon buck

More than four million people die each year from strokes, cancer and cardiopulmonary diseases caused by indoor cooking, according to the World Health Organization. Clean cookstoves can save millions of lives around the world, and voluntary carbon markets have become a key source of finance. Government actors such as the Swedish Energy Agency are recognizing the added benefits beyond carbon offsets that clean cookstoves can provide and are willing to pay a premium price for those projects. In the State of the Voluntary Carbon Markets 2014, Ecosystem Marketplace found that the additional social, economic and environmental benefits of cookstove distribution projects resulted in one of the highest average prices paid for any offset type at $9.2 per tonne of carbon dioxide eliminated.

SCIENCE AND TECHNOLOGY

Feeling degraded

Carbon loss from tropical forests is being significantly underestimated, according to a recent report published in the journal Global Change Biology. Researchers say degradation in Brazil causes additional emissions equivalent to 40% of those from deforestation or about 54 billion tonnes in 2010. “It is mainly fires that escape from burning pasture, selective logging and edge effects,” said Erika Berenguer from Lancaster University. The new study attempts to overcome the limitations of satellite-based monitoring that only evaluates canopy cover by using on-the-ground assessments. Forest loss in the Amazon is said to account for 12% of human-induced greenhouse gases (GHG).

We’re melting!

Black carbon may be contributing to an increased rate of surface snow melt on Greenland’s ice sheet and thus more rapid ice thawing, according to a new study in the Proceedings of the National Academy of Sciences. Black carbon – fine particulate matter from burned fossil fuels and forest fires – absorbs the sun’s radiation more than white snow and raises surface temperature. The study examined climate data and cores of Greenland’s snowy layers during the country’s biggest recorded thaws, in 1889 and 2012. Those years saw both warm temperatures as well as heavy blankets of black carbon that combined to cause rare snow-surface melting on up to 97% of the ice sheet.

Vines choking out carbon

Not all plants are created equal when it comes to carbon storage. A study published this month in Ecology shows that a woody vine called lianas, which inhibits the growth of trees, results in a net loss of forest carbon sequestration. Lianas climb to the top of the canopy and shade out sunlight for the trees that support them. Scientists in Panama showed that lianas can reduce net forest biomass accumulation by almost 20%. Previous research has demonstrated that lianas are increasing in tropical forests around the globe. Their success may be due to decreased rainfall and lianas’ comparatively high drought tolerance.

HUMAN DIMENSION

Take the challenge, Pepsi!

PepsiCo – which includes the brands Lays, Tropicana and Quaker in addition to its namesake – has increased its commitment to avoid deforestation in its supply chain for 450,000 annual tonnes of palm oil to also avoid conversion of peatland to plantations. PepsiCo had previously pledged to only use palm oil certified under the Roundtable on Sustainable Palm Oil by 2016. However, some environmental organizations are pressuring PepsiCo to go further, pointing to P&G, Unilever and Nestle as having stronger safeguards. They cite the need for greater traceability and a full action plan for implementation of the policies.

STANDARDS AND METHODOLOGY

Plugging the leaks

Agriculture, forestry and other land use (AFOLU) projects present a significant opportunity to sequester GHG emissions. To ensure these projects are not displacing emissions elsewhere, VCS projects are required to quantify and deduct any leakage. In cooperation with the Leakage Working Group, VCS has developed an AFOLU Project Market Leakage Module. This ensures consistent accounting procedures for market leakage for both jurisdictional programs and any projects nested within the jurisdictional program. A public comment period on the proposed module will be open until June 28.

Tag, you’re social!

Emissions reductions are great, but reductions with added environmental, social and economic benefits are better. The VCS, a leading voluntary offset standard, and SOCIALCARBON, a certification standard for contributions to sustainable development, have partnered to make going the extra mile easier. The two organizations have released new templates that will allow developers and auditors to validate or verify projects simultaneously to both standards, while only having to complete one set of documents. The resulting offset is a Verified Carbon Unit with a SOCIALCARBON tag. Other standards have shown that offsets that can demonstrate additional co-benefits collect a price premium in the market.

PUBLICATIONS

Leading from ahead

MegaFlorestais, a group of leaders of public forest agencies worldwide, discusses challenges and shares experiences on critical issues affecting forests and forest peoples, including climate change, market transitions, forest tenure, poverty alleviation and public governance. Given that public forest agencies officially control some 75% of all forests worldwide, the outputs of this group can provide global insight into forest management in the immediate and longer-term future. This latest report focuses on driving change through transparency, tenure reform, citizen involvement and improved governance.

Not drinking the Kool Aid

Oxfam calls on the top 10 food and beverage companies to face up to the scale of GHG emissions produced through their supply chains, and address deforestation and unsustainable land-use practices. The anti-poverty coalition compares the public commitments that each company has made side-by-side on a number of agricultural and deforestation policies and argues these companies should better leverage their influence to call for urgent climate action from other industries and governments.

JOBS

Director – Center for International Forestry Research, CGIAR Program

Based in Jakarta, Indonesia, the Director of the CGIAR Research Program on Forests, Trees and Agroforestry: Livelihoods, Landscapes and Governance will lead the CGIAR research initiative, which brings together several hundred scientists from six programs, with a 2014 budget of $89 million. The successful candidate will have a PhD or advanced degree in a relevant discipline, proven expertise in leading collaborative research, and knowledge and experience of the CGIAR and its operations.

Read more about the position here

Senior Researcher, Commodities and Transparency – Global Canopy Programme (GCP)

Based in Oxford, United Kingdom, the Senior Researcher at GCP for Commodities and Transparency will pioneer research into how to reduce the impacts of major agricultural commodities on forests and create demand among producers and retailers to ‘green’ supply chains. GCP is looking for candidates with an advanced degree and deep knowledge of key forest risk commodity supply chains, as well as experience working with the sustainability/CSR/procurement sector – and availability for extensive international travel.

Read more about the position here

Senior Manager, Sustainable Forest Management – World Wildlife Fund (WWF) India

Based in New Delhi, India, the Senior Manager for Sustainable Forest Management will implement WWF India’s strategy for promoting responsible forest projects trade and credible forest certification, in particular FSC and Global Forest & Trade Network within India. The successful candidate will have 7-10 years experience of working on forest conservation and forestry industry issues, an advanced degree in forestry or a related field, and a strong technical background of the Indian forestry sector.

Read more about the position here

Carbon Projects Officer – CO2balance

Based in Taunton, United Kingdom, the Carbon Projects Officer will conduct and assist with the research, development, documentation and coordination of Gold Standard, VCS and Clean Development Mechanism projects. The position requires conducting feasibility studies for potential project activities, liaising with stakeholders, completing project documentation, and keeping up-to-date with developments in the carbon management industry. CO2balance has developed several micro-scale clean cookstove projects across Africa that reduce the need for fuelwood.

Read more about the position here

Methodologies Manager – Verified Carbon Standard (VCS)

Based in Washington, DC, the Methodologies Manager will supervise the management of VCS methodologies, interacting with a wide range of stakeholders on many technical and operational aspects of the VCS. The successful candidate will have a minimum of six years of professional experience, preferably within the context of GHG inventories or carbon markets and detailed knowledge of methodological topics, including project boundaries, baselines, additionality, leakage, non-permanence and monitoring.

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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Study Sees $1.6 Billion For Blue Carbon In Louisiana Wetlands

23 February 2015 | A two-year assessment of the potential to develop blue carbon projects on Louisiana’s coast estimates  that carbon finance revenue can provide up to $1.6 billion in critical funding to assist with wetland restoration over the next 50 years. The study, supported by Entergy Corporation through their Environmental Initiatives Fund, and prepared in partnership by New Orleans-based Tierra Resources and Portland-based nonprofit The Climate Trust, examines existing wetland restoration techniques—river diversions, hydrologic restoration, wetland assimilation, and mangrove plantings—identifying areas for future scientific investigation to support carbon offset programs.

Findings from the report will be shared by Tierra Resources and the American Carbon Registry at a free national webinar, scheduled for March 5, 2015, at 1 p.m. Central Standard Time.

Initial study findings showed that restoration in Louisiana has the potential to produce over 1.8 million offsets per year; almost 92 million offsets over 50 years. This is the equivalent of taking approximately 350 thousand cars off the road each year or 20 million cars off the road over 50 years.  Wetland restoration techniques identified in this study could potentially generate $400 million to $1 billion in offset revenue depending on the dollar value of the carbon offset—with the potential for almost $630 million more by including prevented wetland loss in the carbon accounting.

Entergy’s commitment to the study stems from the company’s mission to create sustainable value for all its stakeholders. Wetlands play a crucial role in storm protection for many Entergy communities, helping preserve industries, businesses, homes, and livelihoods along with Entergy’s own facilities and assets.

“Entergy was pleased to be able to sponsor this important work and help unlock the huge potential for wetland carbon credits in Louisiana,” said Chuck Barlow, vice president for environmental strategy & policy for Entergy Corporation. “By capitalizing on the economic benefits offered through carbon credits, more of Louisiana’s wetlands can be restored and preserved. Eventually, this work in Louisiana can be expanded to address other critical wetland areas throughout the nation and the world, making this study a first step, with the potential for major global impact.”

Of the restoration techniques studied, forested wetlands that receive treated municipal effluent, referred to as wetland assimilation systems, have the highest net offset yield per acre. However, it was concluded that river diversions and mangrove plantings have the potential to generate the largest volume of offsets in Louisiana due to the huge amount of acreage upon which these restoration techniques can be implemented. Additionally, carbon offsets from wetland assimilation systems and river diversions show potential to be stacked with water quality credits should these markets evolve in Louisiana.

The primary barrier to wetland carbon commercialization that was identified through this study is the high cost of wetland restoration. Carbon finance will likely lead to new public-private partnerships that leverage carbon funds with government restoration dollars to stimulate investment into wetland projects.

“The results of this study demonstrate that carbon finance has substantial potential to generate important revenue to support wetland restoration,” said lead author Dr. Sarah Mack, President and CEO of Tierra Resources. “Furthermore, this study points to Louisiana as an innovator of creative financing strategies for wetland restoration, and as creating new investment opportunities that will yield substantial economic and environmental benefits.”

The American Carbon Registry, a leading voluntary and California compliance Cap-and-Trade Offset Project Registry, in 2012 approved a methodology developed by Tierra Resources, which quantifies the greenhouse gas emission reductions and carbon sequestration associated with restoring degraded deltaic wetlands in the Mississippi Delta. This methodology allows landowners and project developers to document, quantify, and seek verification for the GHG benefit of their wetland restoration projects, ultimately leading to certified offset credits that can be sold as carbon credits in the voluntary market.

“Carbon markets provide economic incentives for reducing carbon emissions, as well as an important and innovative approach to finance environmental restoration and conservation,” said Dick Kempka, vice president of business development for The Climate Trust. “The opportunity to engage in this emerging sector and help provide a path for wetlands restoration to enter the carbon markets has been an exciting journey.”

The restoration of the Mississippi River Delta and the storage of blue carbon (the carbon captured by coastal ecosystems) is of national significance. The economic health of much of the United States depends on sustaining the navigation, flood control, energy production, and seafood resources of this valuable deltaic river system. Each of those functions is currently at severe risk due to a coastal wetland loss rate of approximately one football field an hour.

“Wetland restoration provides a wealth of benefits including storm surge reduction, habitat preservation, carbon sequestration and recreation; as well as job creation, and economic development that are vital to Louisiana’s sustainability and resilience,” states Michael Hecht, President & CEO of Greater New Orleans, Inc. “By innovating creative financing solutions for coastal restoration, local companies like Tierra Resources are contributing to the growing hub of Emerging Environmental expertise that can be found in Greater New Orleans.”

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 V-Carbon: One Step Forward, One Step…

29 January 2015 | The Paiter-Surui Amazonian tribe took a historic step in 2013 by becoming the first indigenous people in the world to generate REDD+ (Reduced Emissions from Deforestation and Degradation) offsets. But now – more than 18 months later – it’s an open question whether the mechanism set up to distribute the revenues generated by carbon offset sales is functioning as it should.


Some Surui leaders
have called for a review of the Surui Fund, a governance apparatus developed to manage the community’s finance. The fund began earning income from the REDD+ project in September 2013 when Brazilian cosmetics giant Natura Cosméticos purchased the first tranche of offsets. Income from that sale was earmarked for institutional strengthening, border control/surveillance and jump-starting economic alternatives to illegal logging. The funding began flowing quickly into the community early in 2014, but reportedly slowed as the year progressed. nbsp;

 

In response, several village and clan leaders sent a “letter of clarification” to the Federal Public Ministry (Ministério Píºblico Federal) outlining what they saw as flaws in the governing mechanisms designed to handle community finances. They expressed concerns about power being concentrated in the Metareilí¡ Association – reducing the involvement and autonomy of the other clan associations – rather than the participatory, decentralized process envisioned by the fund’s manual.

 

“We are not questioning the Surui Carbon Project and its partners,” they wrote. “But there is a huge discrepancy between the money that the Surui Fund received and the amount passed on to the associations.”

 

The signatories also defended the resumption of logging by some families, which they say began in 2012 – three years after they implemented a logging moratorium to support the carbon project and two years before funding from the carbon sales started to flow into the community. They blamed legal and bureaucratic delays for forcing some community members to return to selling wood so their families would not go hungry.

 

Chief Almir acknowledged the delay, with some funds held up over concerns about how the first tranche was spent. Both he and the fund head will provide a detailed response to the grievances by next week.

 

More news from the voluntary carbon marketplace is summarized below, so keep reading!

 

—The Editors

 

If you value what you read in this news brief, consider supporting Ecosystem Marketplace’s Carbon Program as a Supporting Subscriber. Readers’ contributions help us keep the lights on and continue to deliver voluntary carbon market news and insights to your inbox biweekly and free of charge. For a suggested US$150/year donation, you or your company can be listed as a V-Carbon News Supporting Subscriber (with weblink) for one year (~24 issues). Reach out to inboxes worldwide and make your contribution here (select “Support for Voluntary Carbon News Briefs” in the drop-down menu).

 

For comments or questions, please email: ggonzalez@ecosystemmarketplace.com

V-Carbon News

ANNOUNCEMENTS

GreenBiz Forum Coming Soon

GreenBiz Forum from February 17th to 19th in Phoenix, Arizona brings together an unprecedented partnership between GreenBiz Group, The Sustainability Consortium and Arizona State University to give attendees an unparalleled in-depth look at the key challenges and opportunities facing sustainable business today. Framed by GreenBiz’s State of Green Business report, the high-wattage stage presentations, workshops and networking opportunities make GreenBiz Forum an unforgettable event. Save 10% with Ecosystem Marketplace’s discount code discount code GBF15EM here.

Climate Leadership Conference Shortly After

The Climate Leadership Conference will be held in Washington, D.C. from February 23rd to 25th. The conference convenes leaders from diverse sectors to explore market transformation and share energy and climate solutions. On the agenda are: a roundtable on transparency in carbon accounting hosted by The Climate Registry; a discussion of California cap and trade hosted by the Environmental Defense Fund; a breakout session on best practices in corporate carbon reduction strategies; and much more. Check out the speaker list here and then go ahead and register. Want 20% off your registration? Contact Allie for Ecosystem Marketplace’s discount code.
VOLUNTARY CARBON

Who will be the Lord of the Rings?

China and Kazakhstan are on a quest to become the 2022 Winter Olympics host and both have pledged to host a carbon neutral event as part of their Olympic pitches. Offsets have been used to neutralize the impact since the 2002 games and both countries plan to incorporate offsetting into their neutrality strategies. China said it will set up an ecological corridor and forest belts, contributing more than 70,000 hectares of forest, while Kazakhstan has promised to compensate through reforestation, energy efficiency and renewable energy projects. The entire footprint of the 2014 Winter Olympics was mitigated prior to the Opening Ceremony, but Sochi’s offsetting success wasn’t matched with sustainable construction or zero waste promises.

Read more here

I do…offset you

A Chinese couple exchanged vows last month in the first-known Gold Standard carbon neutral wedding in China. It shouldn’t have come as a surprise to any of their friends or family. Li Zhi, the groom, is an energy expert and VIP member of the China Energy Conservation Association. Several of the attendees were also well-known environmental experts, including the President of Beijing Shenwu Environment and Energy Technology Corp and the head of low-carbon expert group CECA. Approximately 38,000 kilograms of carbon dioxide equivalent (CO2e) was offset through purchases from a wind power project and a solar power generation project.

Read more here

Offsetting your carbon emissions: priceless!

With the average American lifestyle producing an estimated 17.6 metric tonnes carbon dioxide, there’s only so much that can be accomplished through reduce, reuse and recycle. Now, for everything else, there’s Mastercard — the biodegradable Sustain:Green Mastercard to be precise. For every dollar in net purchases, Sustain:Green will reduce the user’s carbon footprint by two pounds through retirement of Nike’s carbon offsets on the American Carbon Registry. The shoe company reduced millions of carbon emissions in 2006 when it replaced the sulfur hexafluoride gas in its athletic shoe airbags with nitrogen. Now, when those offsets are retired through the voluntary market, the proceeds go to seed Mata no Peito, a Brazilian coalition that supports local projects to protect and replant forests.

Read more here

Fueling a birthday wish

ClimateCare just celebrated its 18th birthday with the launch of a clean cooking fund in Kenya. The fund, part of a set of services provided to the UK Department for International Development (UKaid), has the lofty goal of creating a new market for ethanol cookstoves throughout Kenya. But first, the project will start small(er) in Kibera, the largest slum in Nairobi. With UKaid subsidizing the initial cost, the fund then lends money to residents at zero interest, so they can purchase the remainder. Kibera was chosen due to the high number of people using charcoal as their main fuel, which causes both indoor air pollution and high carbon emissions. So far, 800 stoves have been sold.

Read more here

Nothing ventured, nothing gained

Emergent Ventures International just announced the issuance of India’s first SOCIALCARBON and Verified Carbon Standard offsets. The project, co-developed with UK-based Carbon Clear, is a small hydro project located in Karnataka state. It has generated 15,000 tonnes in tandem with the international registry APX. Emergent expressed satisfaction with achieving the “first-of-its-kind” project, and believes the project sends a positive message that the voluntary carbon market can still offer niche opportunities.

Read more here

COMPLIANCE CARBON

As the carbon world turns

Last week was particularly chaotic in the battle over potential reforms of the European Union Emissions Trading Scheme. There are two camps: countries who want to address the glut of allowances by 2017, and those who wish to delay action until 2021. A compromise for 2019 action, led by the European Parliament’s largest political group, failed to muster enough votes last Tuesday. Two days later, the pro-industry parliament rejected amendments to begin removing the surplus by 2017 by two votes, and passed a vote to begin in 2021 instead by one. Yet the narrow margin led the committee to reject the entire session’s votes, leaving the earlier date still on the table. Resulting confusion caused the markets to drop 5% to 7.05 Euros.

Read more here

Opening the floodgreat (wall)

China opened the doors to seven million approved offset credits last week, more than doubling the supply from the 6.5 million Chinese Certified Emissions Reductions (CCERs) approved in December. At the same time, the country also opened its national registry, so CCERs can be transferred to regional exchanges. This means sellers can now place their CCERs directly on the regional exchanges, a move which is expected to contribute to more spot transactions and give a clearer pricing picture. Meanwhile, the regional pilots are continuing to narrow and define the type of accepted offsets, as Shanghai became the second regional pilot to narrow the rules for eligible offsets. Shanghai will only allow offsets generated after January 1, 2013.

Read more from the Business Times here
Read more from the Economic Times here

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.

Read more from E&E Publishing here
Read more from Ecosystem Marketplace here

The last frontier awaits

The California Air Resources Board (ARB) announced it will not make a decision on whether to include Alaskan forestry projects until this summer. Unlike the lower 48 states, Alaska was not originally included in the California’s cap-and-trade program because of a lack of key data, but that information has since become available. Alaska has an estimated 126 million acres of forest land. If a final vote takes place in June or July, Alaskan forestry projects could be eligible by late 2015 or early 2016.

Read more here

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 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.

Read more here

STANDARDS & METHODOLOGY

Economies of scale

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.

Read more here

SCIENCE & TECHNOLOGY

A view from the bottom

Teaching basic field ecology techniques to Amazonian indigenous groups has revealed carbon storage capacity sometimes 40% higher than satellite estimates. That’s not too surprising, given that any on-the-ground measurements will reveal more detailed findings than something taken from space making wide estimates for swaths of land. The real takeaway from the project is the training given to indigenous people. The science team had to first explain what carbon is and then teach about measuring survey plots. The results could influence how indigenous people manage their forests and engage in carbon offset programs.

Read more here

Featured Jobs

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

Policy Researcher: Climate Change Mitigation – Stockholm Environment Institute (SEI)

Based in Seattle, Washington, the Policy Researcher will expand upon SEI’s climate change mitigation research on climate policy with a particular interest in the roles of cities, land use, and fossil fuel supply in mitigating global GHG emissions. Successful candidates will have an advanced degree and work experience in urban GHG abatement, carbon markets and/or climate policy.

Read more about the position here.

Head of Sustainability Management South Pole Carbon

Based in Zurich, Switzerland, the Head of Sustainability Management will support the Key Account Management team in finding solutions for South Pole Carbon clients and be responsible for developing services within two Climate-KIC Flagship Projects. Successful candidates will have a university degree in science or engineering, as well as five years of work experience in a sustainability or climate change-related field.

Read more about the position here

Director, International Policy Analysis Center for Clean Air Policy (CCAP)

Based in Washington, D.C., the Director will be an integral part of CCAP’s Mitigation Action Implementation Network initiative, which seeks to catalyze the development of win-win climate change mitigation and sustainable development policies in developing countries in Latin America and Asia. The position will be responsible for leading the development and financing of climate mitigation actions, and directing analyses to design low-carbon climate strategies for developing countries. Successful candidates will have demonstrated experience conducting technical, economic and policy analyses with a view to designing a comprehensive project proposal or business plan with minimal oversight.

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

Water, Energy, Food: Nexus Thinking Catches On, But Nexus Spending Lags

14 January 2015 | Brewing giant MillerCoors recently slashed the amount of water and energy it uses to produce barley for its beer, and it did so without losing yields. How? In part by planting vegetation alongside streams and restoring wetlands, which saved them the cost of filtering water before discharging it

They’re hardly alone. All around the world, companies and even cities are learning that the wetlands, dunes and sea grass they once took for granted act as natural buffers against hurricanes, enhance water quality, and save energy and resources that would otherwise be spent to construct and operate gray infrastructure.

In the new lingo of resource management, they’re recognizing the water-energy-food nexus and the important role nature – and, more specifically, natural infrastructure – plays in this nexus.

The concept of natural or “green” infrastructure is replacing the old-school “gray” infrastructure of concrete and steel that has traditionally been used to address water, energy and food security challenges.

Unfortunately the success stories are the exception that proves the rule, as investment in green infrastructure to solve nexus challenges often falls short of its potential, according to Ecosystem Marketplace’s State of Watershed Investments 2014 report. The survey tracks globalinvestment in watershed services (IWS), and it finds investment lagging potential except in those cases that address interrelated issues such as reducing water use and pollution in agriculture or in increasing resilience to flooding and wildfires.

 Water-Energy-Food Drivers for IWS

But when it comes to using nature-based solutions to manage water-related energy risks and ensure sufficient crop production for growing populations, investment drops off precipitously. Investment also remained low when it came to complementing gray infrastructure with green elements, such as a hybrid coastal defense system that uses a mix of wetlands, dunes, and built seawalls and levees.

Investing in the food and energy security side of the nexus is crucial because of these sectors’ tremendous water risk exposure. According to CDP’s Global Water Report 2014, 82% of the energy sector is exposed to water risk while 77% of consumer industries that include food and beverage companies are affected. Current investments in natural infrastructure, which can help manage risk, doesn’t reflect the looming threat of water scarcity and other forms of water risk.

Report author Genevieve Bennett says awareness is a big part of the problem. Maybe, she says, companies haven’t addressed water risk because water is still relatively cheap, making the associated financial impacts of water risk appear lower to a business than the true costs. Better data on ecosystem services values and on the ‘return on investment’ for conservation would be a big help. There are also uncertainties in terms of long-term regulatory drivers: the report finds that policy support for natural infrastructure is often missing or inconsistent.

 Nexus Investments in Natural Infrastructure

The report does note cases where natural infrastructure is being implemented to address the energy and food side of the nexus. In Brazil, for instance, IWS ventures that protect watersheds are estimated to save millions in reducing energy use for water treatment.

But if the challenges of the water-energy-food nexus are going to be solved, investments in natural solutions from all three sectors must be scaled up.

2014: The Year In Voluntary Carbon

30 December 2014 | As the Lima climate talks went into overtime, they followed the 20-year tradition of previous international climate negotiations: starting with a bang of enthusiasm and ending, two days over schedule, in a whisper. Observers can continue to argue about the achievements of this negotiated text or that acronym’s placement or they can do what the weary staffers at Ecosystem Marketplace plan on doing taking a much-needed break for the holidays and starting afresh in the new year.

Putting the money where the emissions are

With the 20th Conference of Parties (COP 20) once again representing a mixed bag of progress and political gridlock, much more breaking action occurred  and is being demanded on the ground. Some of the biggest events of this year including the Super Bowl, the Sochi Olympic Games, and the World Cup offset their greenhouse gas (GHG) emissions.

In Ecosystem Marketplace’s State of the Voluntary Carbon Markets 2014 report, project developers reported selling 76 million tonnes valued at $379 million, with forestry and cookstove projects fetching some of the highest prices. Demand for forest carbon offsets rose 17% in 2013  albeit at lower prices than in the previous year while a subsequent report for the Global Alliance for Clean Cookstoves showed prices for these particular offsets rose a modest 5% to $10.4 per tonne of carbon dioxide equivalent. Chevrolet one of the largest buyers in the voluntary carbon markets went back to school in a big way, purchasing more than 500,000 offsets developed under a new methodology designed to reward US-based colleges and universities for renewable energy and energy efficiency initiatives.

Perhaps most unexpected in 2014 was the more than 400,000 protestors who took part in the People’s Climate March, which heralded the start of New York City’s Climate Week in late September. The turnout, dubbed “the largest mobilization against climate change in the history of the planet, preceded a major declaration by companies, governments, indigenous groups and non-profit organizations pledging to end deforestation by 2030 and promising $1 billion toward the effort.

Similar pledges materialized at COP 20, as Norway and Belgium helped the Green Climate Fund reach its $10 billion initial fundraising goal. However, analysts say the achievement is more symbolic than financial, as it represents only a small fraction of the finance that developed countries have promised to provide to developing nations to deal with the impacts of climate change.

Home of the partnerships?

Though the U.S. historically has struggled to implement global commitments negotiated at the COP (Kyoto, anyone?), bilateral agreements are all the rage. California started off the year by linking markets with Quebec, marking the first cross-border compliance trading program in North America. The state also entered into a pact with Mexico, which agreed among other things to cooperate on carbon pricing. This could eventually lead to another market linkage, where California would recognize REDD offsets generated in Mexico.

The Verified Carbon Standard (VCS) has received the full blessing of California regulators to pre-screen coal mine methane and other types of offset projects for the state’s regulated carbon trading program. However, the VCS hopes to take its participation in the California program even further by helping regulators pursue international REDD offsets using the VCS jurisdictional approach. Communities in Mexico are also preparing for this possibility. A community of San Juan Lachao in Oaxaca, Mexico has developed the first pilot carbon offset project under the Climate Action Reserve’s Mexico Forest Protocol, with voluntary funding provided by Disney.

While California continues to figure out the rules and limits of its offset program including approval of a new coal mine methane protocol and the controversial invalidation of ozone depleting substances offsets the federal government has promised not to step on any toes. The Clean Power Plan, launched by the U.S. Environmental Protection Agency in June, heeded calls to give state and regional cap-and-trade programs a compliance role in its proposed rules for reducing carbon pollution from existing power plants in the US, but could not find a role for carbon offsets as a compliance mechanism.

Most recently, the U.S. made headlines with its joint emissions reduction announcement with China. Both countries, which account for one-third of all global emissions combined, set reductions targets that relate to their planned “Intended Nationally Determined Contributions for the upcoming COP 21 talks in Paris.

Carbon castles rise and fall in the global sandbox

Outside of the U.S. pact, China has been on a roll with its own climate agenda. The country currently has seven pilot emissions trading schemes up and running, and looks to propose a national ETS in 2015 for implementation in 2016. Also in Asia, South Korearemains on track to launch its own ETS in January.

This good news comes on the heels of some setbacks in the carbon world. In a move long seen coming, Australia became the first country in the world to reverse its carbon pricing program. Instead, the government has agreed to create an AUD$2.5 billion Emissions Reduction Fund, which will serve as a reverse auction for the government to buy from competing sellers.

Analysts don’t expect South Africa to go the same route. While the country delayed its carbon tax a second time now set for January 1, 2016 the policy has better political acceptance. The delay comes on the heels of a policy paper that sets out a strong role for carbon offsets within the program, including a plan to include standards developed for voluntary carbon markets. The South Africa plan proposes welcoming offsets developed under both the VCS and the Climate, Community and Biodiversity Standard (CCB), but the regulators won’t have to think of those standards separately anymore as the VCS will assume the day-to-day management of the CCB a nod to the rising importance of the community and biodiversity outcomes of carbon offset projects.

This Week In Forest Carbon: What Role Will Forests Play In Future Climate Deal?

9 December 2014 | Ecosystem Marketplace is right in the middle of the action in Lima, Peru this week, where thousands of government negotiators, non-profit representatives, indigenous leaders, corporate officials and journalists have gathered for the 20th Conference of the Parties (COP 20) of the United Nations Framework Convention on Climate Change (UNFCCC). It is in this strange alternative universe where people speak in acronyms and debate negotiating text over pisco sours that the groundwork for an international climate agreement next year in Paris is being laid.

 

What role will forests play in this future deal? After the last-minute agreement on the REDD (Reducing Emissions from Deforestation and forest Degradation) Rulebook at last year’s Warsaw COP, market participants were expecting a quiet year in Lima in terms of concrete decisions on forests and that’s what they’ve mostly gotten so far.

 

In a roundtable discussion with Ecosystem Marketplace, REDD policy experts discussed the two major forest carbon issues on the table at COP 20: The rules for Safeguards and whether the guidelines for countries’ Intended Nationally Determined Contributions (see our COP alphabet soup piece for background) will include REDD.

 

The technical committee discussions concluded this weekend without a decision on whether the UNFCCC should offer further guidance on REDD social and environmental safeguards, punting the issue to June meetings in Bonn, Germany. Many tropical forest countries were in favor of this no decision outcome.

 

“Many REDD countries said, We’re implementing them [the safeguards], figuring out our system, making sure everything is connected, and they interpreted the calls for more guidance as additional demands being imposed even before they’ve been able to see if they have any problems or not, said Peter Graham of World Wildlife Fund. “They’re basically saying, You’re asking us to see how we’re doing before we do it, and they don’t see it as fair.

 

The rules for INDCs will be discussed this week as the negotiations transition from technical discussions to policy ones and high-level ministers arrive.

 

“My understanding is that the INDCs to be submitted by March will be a range of numbers coupled with explanations saying, This is how we came up with this number. These are the policies that we expect to use to implement or meet our INDC. Basically, numbers with context, said Gustavo Silva of Forest Trends.

 

“Also, for some countries like least-developed countries, we’re not expecting them to come in with numbers, but more activities, added Chris Meyers of Environmental Defense Fund. These activities might include forest conservation, climate-friendlier agricultural techniques, or even improved land tenure in indigenous territories, he said.

 

Over the next week, policy experts are following whether the rules for INDCs will specifically mention forests and land use, since this would send a signal about the potential role of REDD+ in countries emissions reductions plans.

 

More stories from the forest carbon market 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

ANNOUNCEMENT

Ecosystem Marketplace in Lima

If you are in Lima this week, please join us tomorrow at 1 p.m. in the Forest Pavilion at Voces de Clima for a debrief of our State of the Forest Carbon Markets 2014 report. Co-authors Gloria Gonzalez and Allie Goldstein will present key findings from the report and provide insight on current market dynamics. Panelists Juan Carlos Gonzalez Aybar of Althelia Climate Fund and Mariama Vendramini of Biof­lica will comment on their experience developing or investing in forest carbon projects and the state of the market in the context of the United Nations climate negotiations. More info about the event is available here. We look forward to seeing you there.

 

TOP STORIES OF 2014?

You decide!

It’s that time of year again…please rank the top forest carbon stories of 2014 here. Was it the first compliance forest carbon offset issuance in California? The first jurisdictional REDD payments flowing to Acre, Brazil? The Consumer Goods Forum zero net deforestation pledge? The Green Climate Fund reaching the $10 billion mark (today)? We give you 20 stories, you rank them (or add your own). We’ll tell you the results in the new year. The survey also includes a place to write in your predictions for the forest carbon market for 2015.

– Get ranking!

 

INTERNATIONAL POLICY

Older and wiser markets

Much discussion in Lima has centered on the potential “new market mechanisms” that could merge from the negotiations. But market experts speaking at a side event last week advocated that “new” should mean “reformed” rather than “starting from scratch.” “Because if we don’t learn the lessons of the (Clean Development Mechanism) and from Joint Implementation, then we’re simply going to recreate history,” said Miles Austin, Executive Director of the Climate Markets and Investment Association. The International Emissions Trading Association proposed language for a new agreement that includes a unified international transfer system that allows countries to transfer portions of the INDC contributions through instruments of their choice, whether that be CDM, REDD, or something else.

 

NATIONAL STRATEGY AND CAPACITY

Time to check those references

Colombia, Guyana, Indonesia, Malaysia and Mexico formally submitted information and data on their forest-based greenhouse gas emissions to the UNFCCC on Monday. This data is required to establish forest emissions levels in these countries reference levels that are in turn used as the benchmarks for reducing deforestation and potentially receiving payments for REDD offsets. The data will now be assessed by forestry experts coordinated by the UNFCCC according to rules agreed on last year in Warsaw. These countries join Brazil, which was the first country to submit its reference level data last June.

 

Oh, how the mighty have fallen

New Zealand Carbon Farming is suing Mighty River Power for $34.7 million over carbon offsets the energy company contracted to buy to offset carbon emissions from electricity generation. The case is based on a methodology change governing the generation of forest offsets under New Zealand’s Emissions Trading Scheme. Mighty River Power is resisting the claim because it could be forced to buy significantly more forest carbon offsets than expected, which would double the value of its 15-year contract with New Zealand Carbon Farming.

SUSTAINABLE COMMODITIES

No easy assembly

The Swedish behemoth company IKEA just unveiled a new palm oil policy, calling for zero deforestation and no conversion of peatlands for any oil used in its candle and food products. These actions go a step beyond the certification standards required by the Roundtable on Sustainable Palm Oil, of which IKEA is a member. The company aims to source all of its palm oil sustainably by December 2017. Suppliers that fail to source certified palm oil will likely see their relationship “phased out”.

 

FINANCE & ECONOMICS

Just reaching the starting line

Norway last week announced it has doubled its pledge to the Green Climate Fund (GCF) to NOK 1.6 billion ($258 million USD), bringing the fund to $9.95 billion. And today Belgium contributed $60 million,officially bringing the fund up to the $10 billion that the UNFCCC Executive Secretariat and others have set as the minimum that should be achieved at this COP. Parties have agreed that $100 billion per year should flow annually from developed to developing countries, both to curb emissions and to adapt to climate change’s effects, by 2020. 

Early movers get the worm

The governments of Germany and Norway committed up to $65 million apiece to Colombia and Ecuador, expanding the REDD Early Movers Program (REM) to these two rainforest nations. The contributions will be distributed over three years, starting in 2015 through the end of 2017, as payments for verified emissions reductions. “The best contribution we can make as donors is to demonstrate that we are willing to pay for the results,” said Hege Araldsen, the Norwegian Ambassador to Ecuador, Chile and Peru. The announcement marks a significant expansion of the REM program, following the 2013 agreement between Germany and the state of Acre, Brazil.

 

HUMAN DIMENSION

A tragic outcome

After going missing on November 28, Shuar leader Jos© Isidro Tendetza Antºn was found dead last week. Tendetza disappeared on his way to meet protestors against the Mirador copper and gold mine on his peoples’ territory in the Ecuadorean Amazon. The project is operated by Chinese conglomerate Ecuacorriente, originally a Canadian-owned company. Tendetza had planned to participate in COP 20. “We believe that this murder is part of escalating violence against indigenous leaders which responds to the Ecuadorean government and the companies’ need to clear the opposition to a mega-mining project in the Cordillera del Condor,” Luis Corral, an advisor to Ecuador’s Assembly of the People of the South, told The Guardian newspaper.

 

STANDARDS AND METHODOLOGIES

Agriculture strikes Gold

The Gold Standard launched its agricultural program last week at a side event at COP 20. “Our secret agenda is to make sure that payments for carbon reduction actually become payments for sustainable development,” said Pieter van Midwoud, Director of Land Use and Forests. The certified emissions reductions program includes streamlined guidelines for smallholder farmers. The Gold Standard is working with partners Hivos, Solidaridad and the Cool Farm Alliance, and their announcement states that they aim to make their agricultural program “a strong weapon for corporates implementing zero-net deforestation commitments.”

 

Digging into the details

Australia’s Emissions Reduction Fund just released its soil carbon method for public consultation. The method seeks to offer a low-cost tool for cropping, pasture and mixed farming systems to calculate soil carbon. The method uses modeled estimates of sequestration and builds on the soil carbon grazing method used in the Carbon Farming Initiative. Consultation closes on December 12.

 

SCIENCE & TECHNOLOGY

When a tree is logged, does the soil notice?

While scientists have a clear understanding about the above-ground biomass stored in forests, a lot remains unanswered about what happens underneath. The U.S. Forest Service assumes soil carbon doesn’t change from harvesting, but Dartmouth College researchers thought differently. They examined mineral soils, which are difficult to collect but make up the majority of carbon storage in the northeastern U.S., from forests logged 5, 25, 50, 75 and 100 years ago. Their latest findings, reported in the Global Change Biology Bioenergy journal, found that harvested forests show a gradual release of carbon for decades following logging.

 

PUBLICATIONS

Keeping up on current events

Indigenous peoples in the Amazon have long suffered from economic straits while preserving standing forests. Yet because of these actions, they could not tap into REDD+ finance because their forests had no history of deforestation. A new study, “Forest Carbon in Amazonia: The Unrecognized Contributions of Indigenous Territories and Protected Natural Areas,” takes an innovative approach by focusing on current threats (instead of historic rates) of deforestation. It concluded that nearly one-third of indigenous and protected territories are under immediate threat from illegal logging, mining, dams and agriculture, while an additional one-fifth are under near-term threat. Presenting at COP 20, report authors emphasized the need to demarcate indigenous lands and to aid indigenous tribes in using life plan methodologies as a benchmark of success in REDD.

 

Consolidation is the name of the game

COP 19 in Warsaw, Poland produced a series of decisions around REDD+ commonly known as the REDD Rulebook. However, it wasn’t completely comprehensive. Prior UNFCCC decisions had additional implications for REDD+. A new publication, The Consolidated Guide to REDD+ Rules under the UNFCCC, written by the Baker and McKenzie Law for Development Initiative combines all of the UNFCCC REDD+ rules into a single document.

 

No clear road to REDD

In the Center for International Forestry Research’s (CIFOR) new book, “REDD+ on the Ground: A Case Book of Subnational Initiatives Across the Globe“, the authors analyzed 23 REDD+ initiatives from all over the world to try and tease out global lessons. William Sunderlin, a principal scientist for CIFOR, presented about the report findings at a COP 20 side event, noting the importance of clear land tenure in REDD projects. “There are reasons for hope in the future about REDD but there are certainly grounds for serious concern, and this book will give you an appreciation for how big the obstacles are,” he said. “The core concept of performance-based incentives has proved very difficult to implement without secure, long-term funding.”

 

JOBS

Staff Accountant Forest Trends

Based in Washington, D.C., the Staff Accountant will focus on accounts payable, project audits and payroll. Candidates should have a bachelor’s degree in accounting, finance or equivalent with two to five years of experience in a non-profit setting.

– Read more about the position here.

 

Manager, Investment Analysis – New Forests, Inc.

Based in San Francisco, California, the Investment Analysis Manager will be responsible for acquisition valuation, fund portfolio model development and maintenance, and cash flow management for the New Forests investment funds managed in the U.S. Successful candidates should have at least six years of meaningful experience in comparable roles with investment firms or conservation mission NGOs and a Chartered Financial Analyst designation and/or master’s degree in relevant field.

– Read more about the position here.

 

Program Manager, Government & Community Partnerships – Wildlife Conservation Society (WCS)

Based in Vientiane, Laos, the Program Manager will take overall management responsibility across WCS sites for the Lao Program’s Community Partnership component, which includes outreach, land-use planning, and sustainable livelihoods sub-component, and lead coordination activities at various government levels. Successful candidates should have a master’s degree in environment-related field, extensive knowledge of Government of Lao PDR ministries involved in natural resource management and good Lao language skills.

– Read more about the position here.

 

Communication and Stakeholder Engagement Specialist – United Nations Development Program

Based in Jakarta, Indonesia, the Communication and Stakeholder Engagement Specialist will develop a communications strategy to support the legal certainty of forests in Indonesia by arranging workshops on participatory mapping, initiating a media campaign at the national level and more. Successful candidates should have a master’s in communication and at least six years of experience in a related field.

– Read more about the position here.

 

Assistant Professor – Oregon State University

Based in Corvallis, Oregon, the Assistant Professor is a 9-month tenure-track position within the Department of Forest Engineering, Resources and Management. The professor will contribute to the Department’s focal areas of forest management, economics, and policy through research on the application of economic analysis to problems of active management of the forest resource for an array of objectives. Successful candidates should have a PhD in forest, resource or applied economics or related economics program by date of hire and an educational background in economics sufficient to teach master’s level courses in Oregon State University’s Applied Economics Program.

– 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.
ABOUT THE ECOSYSTEM MARKETPLACEEcosystem 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

This Week In Forest Carbon: A Blast From The Past

30 October 2014 | In 2007, the forests of Indonesia’s Ulu Masen Ecosystem were rapidly disappearing, thanks to encroaching development caused by the country’s burgeoning palm oil sector. The problem caught the attention of Governor Irwandi Yusuf of Aceh Province, who saw REDD (Reducing Emissions from Deforestation and forest Degradation) as a possible solution.
A consulting team hired by Yusuf estimated that an 85% reduction in deforestation in the ecosystem, which spread across 750,000 hectares, would prevent more than three million tons of carbon dioxide from entering the atmosphere every year.

Yusuf launched what would have become the largest REDD project to date one designed to slow deforestation in part by jump-starting sustainable palm oil, coffee, and cocoa programs, as detailed in the latest installment of Ecosystem Marketplace’s series, Palm Oil vs The Peatland Forest. This would ensure that the activities driving deforestation in Ulu Masen don’t just migrate down the road, but are instead transformed into more sustainable practices that continue to meet existing demand without killing the forest. He also implemented a moratorium on illegal logging across the entire province and even began to personally lead raids on loggers’ camps to enforce the moratorium and show potential investors that he was serious.

 

It was a gamble that cost his province millions in the short term, but it also made sense because the Bali climate talks of 2007 were supposed to culminate with the creation of a successor to the Kyoto Protocol. To do that, officials needed to bridge a schism between industrialized nations and developing countries a bridge built in part on REDD offsets. The World Bank had already created the Forest Carbon Partnership Facility (FCPF) and Australia had pledged $100 million to support REDD efforts on Borneo.

Ecosystem Marketplace’s State of the Forest Carbon Markets 2014 report will have much more information about the FCPF and other financial mechanisms that countries are now looking to tap to support their REDD+ initiatives. And we’re mining lots of interesting new information this year, including a closer look at buyer motivations and activities, and robust data on the co-benefits of forest carbon programs, from employment to endangered species protection.

We’re $37.5k away from being able to publish this year’s report in a few weeks’ time. Can we count on your support? Please take a look at this sponsorship prospectus for more information, and contact Molly Peters-Stanley (Director of Ecosystem Marketplace) orAllie Goldstein (Forest Carbon Associate) with any interest. We’d be happy to discuss sponsorship opportunities with you in more detail.

Many thanks to EcoPlanet Bamboo and New Forests for their generous sponsorships.

From October 27-December 5, Forest Trends Ecosystem Marketplace’s parent organization is part of a Crowd-Funding Campaign where donations will be matched. Your gift helps protect endangered ecosystems and contributes to local livelihoods.

More stories from the forest carbon market 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

NATIONAL STRATEGY

THERE’S A NEW LEGEND IN MEXICO

A new map of aboveground forest carbon stocks in Mexico could help the national government enhance the measurement, reporting and verification system governing its mitigation efforts under the United Nations (UN) REDD+ program. The map integrates Mexico’s National Forest Inventory, which provides field measurements for 26,000 plots across the country, with spatial imagery data from the Japanese ALOS PALSAR radar and U.S. Landsat satellite sensors.

 

SUSTAINABLE COMMODITIES

YOU DON’T WANT TO WIN THIS POPULARITY CONTEST

One-third of the world’s deforestation stems from four popular products: beef, palm oil, soy and wood, according to a new report called Trading Forests: Quantifying the Contribution of Global Commodity Markets to Emissions from Tropical Deforestation. These four commodities were responsible for the loss of 3.9 million hectares of forest, an area roughly the size of Switzerland, in 2009. Many of the eight locations tracked Argentina, Bolivia, Brazil, the Democratic Republic of Congo, Indonesia, Malaysia, Papua New Guinea and Paraguay are known deforestation hotspots. The deforestation is driven by consumer demand from international markets, with China as the biggest importer of these commodities, followed by the European Union (EU).

 

NEW LAW OF THE JUNGLE

The Indonesian government jeopardized palm oil companies’ zero deforestation commitments when it revised its Plantation Act last month, according to a new report by Greenomics. Palm oil giant Golden-Agri Resources (GAR) successfully demonstrated its commitment to conserving high-carbon stock forests through a pilot project being implemented across eight concessions in West and Central Kalimantan. But the revised law states all concessions must be “fully cleared and converted for its intended purpose within six years of the license being granted.” If the land isn’t cultivated, it can be seized and turned over to another entity for conversion, meaning forest lands set aside by GAR could wind up in the hands of companies that have not pledged to end deforestation.

 

FINANCE & ECONOMICS

A FINANCIAL ATTRACTION

Inching closer to its $150 million target goal, the Althelia Climate Fund just received a $5 million investment from the Packard Foundation, a non-profit investing in conservation and environmental sustainability initiatives. The investment helps increase Althelia’s funding to about $117 million ahead of a planned December closing. Althelia made headlines in May when it received a loan guarantee worth up to $133.8 million from the US Agency for International Development (USAID) to lend to forest conservation and sustainable land use projects in developing countries. In September, the fund announced it would make a $12 million investment over seven years to finance conservation of 570,000 hectares in Madre de Dios, Peru.

 

HUMAN DIMENSION

NIGHT TERRORS IN THE AMAZON

Every night, empty trucks fade into the Amazon only to return filled with timber in the morning. Greenpeace-Brazil uncovered this illegal logging after activists secretly tagged the trucks with GPS (Global Positioning System) locator beacons. This is the first time the organization has used these tactics, but they are not without danger in a country with the most murders of environmental activists every year. The new report, called Amazon’s Silent Crisis: Night Terrors, details the flow of this illegal timber from source to the international market.

 

A TREE-TO-TREE SALESMAN

The Nature Conservancy (TNC) has a new way of communicating to loggers: the sales pitch. The organization has started using ex-loggers to pitch company owners on the notion that switching to greener logging techniques will reduce their costs and increase the profitability of their businesses. The organization is working with Karya Lestari, a timber producer in East Kalimantan, to implement reduced-impact and cost-saving logging practices. Currently, the company will only test the suggestions in a 100-hectare plot, but TNC hopes this pilot will pave the way for broader acceptance of climate-friendly logging practices in the industry.

 

STANDARDS & METHODOLOGIES

NO DUDE RANCHES HERE

The American Carbon Registry approved a protocol that rewards ranchers for land management practices that put more carbon in the soil, which improves soil health and reduces GHG emissions. The Compost Additions to Grazed Grasslands protocol provides a clear process for calculating the GHG reductions from applying compost to rangeland, which allows ranchers to generate revenue from the sale of emission reductions on voluntary carbon markets. But some observers see a faster approach to developing a carbon farming model that includes composting through the Natural Resources Conservation Agency, which is incorporating carbon planning into its voluntary national farm conservation protocols.

 

PUBLICATIONS

CONSIDER THE SOURCE

A new publication called A Sourcebook: Biodiversity Monitoring for REDD+ shows how the United Nations Framework Convention on Climate Change’s Cancºn Safeguards for REDD deliver biodiversity benefits and how the Convention of Biological Diversity’s Aichi Targets support healthy forests. It also provides side-by-side comparisons of the four biodiversity safeguard initiatives already in place for REDD two emerging under the UN and World Bank, one created by two NGOs but for government programs, and one program that serves the voluntary sector.

 

NOT A WELL-OILED MACHINE

Is palm oil a miracle plant or a grave threat to land rights and the environment? Depends on who you ask. A new book called Palms of Controversies: Oil palm and development challenges tackles the question, which concedes that the environmental impact of palm oil has been “disastrous,” particularly in Southeast Asia, but asserts that the plant itself bears no responsibility for this and should not be demonized. “The problem is not the oil palm but the way people have chosen to exploit it,” authors Alain Rival and Patrice Levang say.

 

JOBS

COMMUNICATIONS COORDINATOR II, GLOBAL FOREST WATCH WORLD RESOURCES INSTITUTE (WRI)

Based in Washington, D.C., the Communications Coordinator will support WRI’s Global Forest Watch, an online forest monitoring and alert system, through media engagement, blogging, event management, online communications, social media and writing. Global Forest Watch uses satellite technology, open data and crowdsourcing to provide timely and reliable information about forests for free. Successful candidates will have a degree in communications or journalism with a minimum two to three years of relevant experience.

– Read more about the position here.

 

FORESTS AND CARBON INVENTORY EXPERT – AGRICONSULTING

Based in Freetown, Sierra Leone, the Forests and Carbon Inventory Expert will design and implement forest carbon stock inventories for the EU-funded project Technical Assistance for the REDD+ and capacity building project in Sierra Leone. The Expert will also train field staff in forest inventory techniques, including Geographic Information Systems (GIS) proficiency, and produce training materials, guidelines and manuals. Successful candidates should have a minimum of eight years of proven experience in implementing such inventories, as well as two years of proven experience using remote sensing techniques, ground truthing and mapping.

– Read more about the position here.

 

INTERNSHIP IN TROPICAL FOREST CARBON RESEARCH SMITHSONIAN TROPICAL RESEARCH INSTITUTE

Based in Barro Colorado Island, Panama, the intern will assist in collecting, managing and analyzing field data on forest carbon budgets. The intern will also be responsible for data management, data quality checks, and some data analysis, and will be expected to contribute to (and coauthor) resulting scientific publications on the carbon budget of this forest. The successful candidate will have a bachelor’s degree in a relevant field, with field experience, quantitative and data management skills, and basic Spanish communication skills. Read more about the position here.

 

PROGRAM OFFICER, CONSERVATION AND SUSTAINABLE DEVELOPMENT MACARTHUR FOUNDATION

Based in Chicago, Illinois, the Program Officer will be responsible for grant-making related to implementation of the foundation’s 10-year strategy for conservation and sustainable development in the Tropical Andes region (Colombia, Ecuador, Bolivia, Peru). The successful candidate will have an advanced degree in a field relevant to conservation of natural resources and at least five years of professional experience as a conservation practitioner or doing applied conservation research. Special consideration will be given to candidates with expertise or experience in Latin America, and with expertise or experience in natural resources economics and/or forest carbon/REDD+ project development.

– Read more about the position here.

 

DEPUTY CHIEF OF PARTY: LOWERING EMISSIONS IN ASIA’S FORESTS (LEAF) PROGRAM WINROCK INTERNATIONAL

Based in Bangkok, Thailand, the Deputy Chief of Party will assist the Chief of Party (COP) in the operational and technical leadership of USAID’s LEAF program. The Deputy will also provide critical contributions to program planning and implementation, including technical guidance as appropriate; and assume administrative and supervisory responsibilities as specified by the COP. Successful candidates should have 10 or more years of experience working on donor-funded projects in a management role and be familiar with USAID regulations and forestry and/or natural resources management.

– Read more about the position here.

 

GOVERNANCE SPECIALIST, UN-REDD PROGRAMME UN OFFICE FOR PROJECT SERVICES

Based in Copenhagen, Denmark, the Governance Specialist will provide technical advice on the Participatory Governance Assessment for REDD+ (PGA). The specialist will have a particular focus on Vietnam’s PGA process, and will provide broader support as needed. Successful candidates should have at least five years of experience managing development projects and processes in tandem with counterparts at the country/local level, and strong knowledge of governance issues, REDD+ and UN programming.

– 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.
ABOUT THE ECOSYSTEM MARKETPLACEEcosystem 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.

World Bank Initiative Moves Talk On Water Energy Nexus To Action

 

13 August 2014 | Thirsty energy is a catchy phrase that encompasses the water for energy aspect of the water-energy-food nexus. It’s also the name of the World Bank’s relatively new initiative that aims to help governments face a resource constrained future by implementing integrated planning methods. The methods will address the limitations and opportunities of both water and energy.

The Thirsty Energy initiative intends to do this through policy guidance and the development of technical tools as well as spreading general awareness about the linkages between water and energy. It aims to inform the private and public sector alike on the water intensive activities of energy production.

Most importantly, the initiative seeks to gain an understanding of the water-energy nexus that goes beyond traditional connections, says Diego Rodriguez, a Senior Economist in the World Bank’s Water Unit. Ecosystem Marketplace’s Genevieve Bennett spoke with him about Thirsty Energy and all it entails.

GB: What is the story of Thirsty Energy’s genesis within the World Bank?

DR: Basically it’s an initiative that started as an internal dialogue a couple of years ago. It comes more from the energy sector than from the water side but is trying to assess all forms of water use in energy processes. We want to really understand how different forms of energy and their technologies require water. There are many functions for water in energy productions. It isn’t just an issue of quantity, but also of quality, for example. Changing temperatures of water can impact ecosystems.

So the water unit started a discussion with our energy colleagues to find real cases where water was constraining development in the energy sector.

GB: How is Thirsty Energy working to implement integrated management and nexus thinking?

DR: Basically we work in countries where a) there is enough of a problem and b) enough of a clearly-stated demand from the energy sector. The initiative helps them understand the complexities of water. Our focus is more on the macro side. We look at long-term planning and ask questions like: are the energy plans feasible with current technologies and how does water fit into the plan? If there isn’t enough water, what measures do you take to curb water use and demand?

Initially we saw energy and low carbon plans taking a very simplistic view of the complexities of hydrological cycles, of potential competition and other risks that may arise. Based on this, we started engaging with countries where we think their perspective of water resources could cause problems in the very near future.

Right now we’re working in South Africa, China, and Morocco. In Morocco there’s a lot of interest it has a very large and ambitious renewable energy expansion plan. However, there isn’t a lot of consideration on if water will be available or how competition from other sectors like agriculture or urban/municipal use will affect this expansion.

GB: It’s interesting that the initiative is seeking better understanding and management of water for energy as opposed to energy for water but is sounds like it was a strategic decision. What made you start with this aspect of the nexus?

DR: Yes. It took probably a year to define that. We were looking at the water-energy-food nexus as a whole. For us, the main challenge is how do you look at this problem, and actually try to influence major economic sectors in the way that they’re planning and investing? The more you add the more complex it is to tackle. So we said, okay, we need an entry point. And that entry point for us is the energy sector. We’re trying to ensure that we can influence the way the energy sector thinks about water. And then we also have a component in which we try to look at trade-offs across different sectors.

So we don’t ignore food and industry and other uses, but you have to have an entry point where you develop and implement analytical tools. From here, we can assess the supply and demand side of both water and energy. But as said, it’s very complex. We analyze the water and energy sectors and reach outcomes based on the assessments. If conclusions drawn from an assessment is something like the irrigation practices aren’t using a lot of water, then the analysis is finished. But if instead, the assessment brings to light increasing demands on the side of energy that may impact other sectors’ water allocations, then we implement techniques and examine trade-offs looking for a solution.

But even trying to get the energy and water actors to talk to each other is quite complex. So we’re trying to be very pragmatic and operational about our approaches.

GB: What would the ideal planning process look like? Who is involved, what factors are considered, how are decisions being made?

DR: What we’ve seen is that in most of the energy planning frameworks, there’s usually an assumption that the water that may be required by the sector is there. ‘We’ll be able to get it somehow’ is the line of thought. You get an average mean flow of water and make allocation decisions based on the assumption this supply won’t change.

What we’re trying to do slowly is change that, and say, ‘the availability of water can fluctuate based on resource flows every year causing supply to vary’. In some cases you will have water in certain basins that have been fully allocated. In certain years you might have extreme events a severe drought or flood. It becomes an issue of being much more realistic about the costs and the physical constraints of the resource for a major economic sector like energy.

GB: Do you have any examples of that approach working in practice?

DR: Very few countries have done this. We’re actually very limited in actual practice. The closest that you get is South Africa’s integrated resource planning framework about 10 years ago. The framework was limited in how it approached water resources. Basically, it included water as a necessary piece of energy production but didn’t account for water scarcity or stress that may occur and impact development. What we’re doing in South Africa is altering the energy model to incorporate the constraints of water at the basin level.

GB: I assume you’re working with both the public and the private sector. How does the private sector approach these issues and in what way are you engaging with them?

DR: We have a private sector reference group. We have partners like Electricite, Alstom and Veolia in France and Abengoa in Spain-all keen on examining the nexus. Obviously they look at it from a perspective of potential investment risk. What they are realizing also is that nowadays it’s very important for them to understand the broader context. If you decide to invest in a particular plant, you have to go way beyond what happens to that particular site. The private sector understands how you have to look larger. Potential problems within the basin, like effluent discharge, could impose additional costs even if it isn’t happening at the plant site.

And at the same time the private sector does have very good experience in building and operating plants and businesses. The idea is that with this collaboration, they can help us understand how the efficiency and consumption patterns of technologies are determined by location and climate conditions among other factors. They also have a clear understanding of existing and future challenges regarding resource constraints.

GB: So what are your plans in the coming year or two? What can we expect to see happening?

DR: The initiative was launched in January so we’re fairly new. And in the next year, we’ll be focusing on delivering results from the countries we’re working in. We started the work in South Africa we talked about. We’re starting work in China with the national energy agency to incorporate water constraints into the new national five-year energy plan for 2016-2020.

We’re also starting to provide assistance in Morocco with a water and energy utility there, which is a new merger of institutions. It’s very interesting. Our role is to present analytical tools that demonstrate the benefits-including financial gains- of integrated management.

Essentially, we’re meant to provide an array of processes and methods that can move the nexus approach from “blah blah blah” at the global level to real implementation that affects resource management and investment decisions.

 

This Week In Forest Carbon News…

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

 

7 August 2014 | Five years ago, the Tolo River People of northern Colombia were facing threats from all angles. Externally, wealthy businessmen in a nearby town were expanding their cattle ranches into the community’s forests. Internally, the Tolo themselves were logging the forests commercially to feed their families.

“This wood is worth around three million pesos,” about US$1,500 said Frazier Guisao, a former logger, referencing a giant centennial almendro tree on a walk through the forest with journalist Tanya Dimitrova. Guisao estimates that he could take down the tree in two hours, but today, he’s content to leave it standing.

By teaming up with US-based carbon project developer Anthrotect, Guisao and his community-based organization COCOMASUR were able to create a REDD (Reducing Emissions from Deforestation and Degradation of forests) project that would save the roughly 13,000 hectares of forests that would otherwise be lost to cattle ranching, agriculture and logging. The project verified its first emissions reductions under the Verified Carbon Standard (VCS) in 2012, and last year it sold 70,000 offsets at $9 apiece on the voluntary carbon market. These financial returns flow much slower than logging revenues, but they may be enough to pay for forest patrollers’ salaries (that’s Guisao’s new gig) and, eventually, to improve the Tolo’s community health care services and send young people to university.

“Our community will always continue trying to protect our forest with or without the project. But having the project gives us the resources to do that,” says community leader Aureliano Cí³rdoba.

Read the full story here, which is the first in a series adapted from “Modern day forest conservation: A Colombian community protecting its rainforest one carbon credit at a time,” by Dimitrova.

And, speaking of projects like these, we’re now in the final stages of data collection for our State of the Forest Carbon Markets 2014 report. This annual report is the only market-wide, freely available benchmark on the forest carbon market, providing transparent information on transactions and project developments. If you are a forest carbon project developer (or know one!) please make sure to get in your response.

The survey is available in English HERE and in Spanish AQUí. Questions? Get in touch with Allie Goldstein or Gloria Gonzalez.

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

A sour margarita

REDD remains a divisive issue in the run-up to the United Nations’ Conference of Parties climate negotiations in Peru in December, as seen by dueling proclamations issued last month. A meeting of 130 civil society organizations in Venezuela ended with the Margarita Declaration, which claimed that carbon markets are a “false solution” to the climate change problem and called market-based REDD projects “dangerous and unethical.” But a competing statement issued by NGOs and carbon market industry associations urged governments to help secure the financing needed to support REDD+, namely interim incentives for stimulating REDD+ investment during the 2015-2020 period before any new international climate agreement takes hold.

NATIONAL STRATEGY AND CAPACITY

Thank you, Mr. President

Environmental advocates have gotten their wish with the victory of President-elect Joko Widodo, who will assume the presidency of Indonesia in October, despite the fact that little is known about his views on climate change. Indonesia has recently surpassed Brazil as having the world’s highest rate of deforestation, but the country’s new REDD+ Management Agency is developing measuring and reporting metrics for REDD+ projects. Heru Prasetyo, head of the agency, urged the incoming government to ensure passage of legislation safeguarding the land tenure of indigenous groups, which hold rights to an estimated 45 million hectares of forest being misused as commercial concessions.

California thirsty for forest offsets

Severe drought conditions in California have led officials to impose criminal penalties for water wasters, but could also help make the case that the US state should allow projects aimed at curbing tropical deforestation into its carbon trading program. The potential connection between deforestation in the Amazon rainforest and the drought has caught the attention of staffers at the California Air Resources Board (ARB) who are planning to consider allowing sector-based REDD projects to supply offsets to the program. ARB staffers are also planning to recommend that the board lift its ban on forestry projects based in Alaska.

The Last Frontier going up in flames

Forest fires have taken hold across Canada’s Last Frontier. Of the 186 wildfires instigated by extremely dry conditions in Canada’s Northwest Territories this year, 156 are still burning. The acreage burned to date is six times greater than the 25-year average, according to Canadian Interagency Forest Fire Center data. Boreal forests like those in the Northwest Territories are burning at unprecedented rates, a major challenge as the combined boreal forests of Canada, Europe, Russia and Alaska account for 30% of the world’s carbon stored in land. Ecosystem Marketplace’s Forest Carbon Portal currently tracks 15 forestry projects in Canada.

PROJECT DEVELOPMENT

This is a monkey’s world

Project developer Face the Future and the Uganda Wildlife Authority have just completed the latest carbon monitoring campaign in Kibale National Park, measuring a total area of 70 hectares. The park, located in western Uganda, is known for its diversity of monkeys and great apes, but deforestation in the past 20 years has led to habitat degradation and endangerment of biodiversity.  So far, the project has restored more than 6,200 hectares and planted over 1.4 million trees. Despite complications from rain and equipment failure, the developer completed its planned monitoring work and hopes to issue VCS offsets in the third quarter of 2014.

SUSTAINABLE COMMODITIES

Failing the forests?

Two new subsidiaries of palm oil company PT Austindo Nusantara Jaya Tbk have cleared forests in areas of New Guinea that would be off-limits under voluntary zero deforestation commitments made by companies such as Wilmar that purchase the parent company’s products, according to an analysis by Greenomics Indonesia. Both of the subsidiaries, acquired in January 2013, had forest land relinquishment permits issued by the Minister of Forestry. But Wilmar, the world’s largest palm oil trader, made a zero deforestation pledge in December 2013 and the company should answer questions about the connection between the clearing of intact forest landscapes for palm oil plantations in New Guinea and its pledge, according to Greenomics Indonesia.

The best a farmer can get

Consumer goods company Procter & Gamble has partnered with the Malaysia Institute for Supply Chain Innovation for a 6-month study to uncover new options for working with small farmers to separate sustainable sources from non-sustainable sources in the production of palm oil and palm kernel oil. The company is already working with larger suppliers in its supply chain as part of its zero deforestation pledge. But working with small farmers in places such as Malaysia and Indonesia is critical because they account for 35-45% of palm oil production. Japanese consumer goods giant Kao Corporation has become the latest company to join the zero deforestation trend by committing to sustainable procurement of raw materials by 2020.

FINANCE & ECONOMICS

Will the coffee be green too?

Ethiopia’s Climate Resilient Green Economy Strategy aims to guide the country’s efforts to become a low-carbon, middle-income economy by 2025. The strategy prioritizes the implementation of REDD projects as part of its focus on protecting and re-establishing the economic value of forests and their importance to the ecosystem. The strategy also includes reducing the demand for fuel wood through the distribution and use of fuel-efficient stoves and increasing afforestation and reforestation, among other forest conservation activities. But implementing the strategy will be a pricey proposition, with an estimated $150 billion required over the next 20 years.

SCIENCE & TECHNOLOGY

Palm oil’s appeal

Fibre plantations are the main cause of deforestation in Indonesia, not the palm oil plantations that usually take the blame for the country’s skyrocketing rate of deforestation, according to new research from the University of Adelaide, Australia. Of the 14.7 million hectares of forest destroyed in the country between 2000 and 2010, 12.8% were removed for fibre plantations compared to 6.8% for palm oil plantations. In 2011, Indonesia stopped issuing permits to firms to clear forests on about 64 million hectares, but the ban did not apply to previously issued permits.

The under-story

Long-term global warming has little effect on the overall storage of carbon in tropical forest soil or the rate at which that carbon is processed into carbon dioxide, according to a new study of Hawaiian forests published in the journal Nature Climate Change. The findings dispel concerns raised by short-term climate studies showing that rising temperatures increased the rate of soil respiration. These earlier studies caused scientists to worry that global warming would decrease the amount of stored carbon in tropical soils. “If these findings hold true in other tropical regions, then warmer temperatures may not necessarily cause tropical soils to release their carbon to the atmosphere at a faster rate,” says Greg Asner of the Carnegie Institution for Science.

 

HUMAN DIMENSION

Wrestling with orangutans

Renowned conservationist and founder of Orangutan Foundation International Birute Galdikas was at first skeptical of entrepreneur Todd Lemons’ idea to use REDD to save the Seruyan Forest of Borneo. “I loved what he was saying, but I wasn’t convinced it would work,” she says. But with the peat forest slated to convert to palm oil within five years, Galdikas was out of other options. After seeing Lemons, a former college wrestler, wrangling with the orphaned orangutans and after seeing how quickly he caught onto Indonesian social cues  she decided to take a gamble on what would later become the Rimba Raya REDD project. Read Ecosystem Marketplace’s fourth installment of this series here.

STANDARDS AND METHODOLOGY

Seeking a fair shake

The second Fair Carbon Standard meeting was held in Melbourne, Australia last week, after an inaugural workshop last January. Proposed by the Aboriginal Carbon Fund, the Standard aims to promote a robust voluntary carbon market in Australia by including a minimum price (to cover costs), co-benefits and long-term relationships with buyers. “One of our great challenges will be to shift carbon credits from being a top shelf commodity to a standard commodity that is purchased routinely by ordinary consumers and corporate Australia, according to the non-profit fund, which aims to build a sustainable Aboriginal carbon industry.

PUBLICATIONS

The carbon keepers

Indigenous people and local communities currently have legal or official rights to at least 513 million hectares of forests, about an eighth of the world’s total, according to Securing Rights, Combating Climate Change, a new report by the World Resources Institute and the Rights and Resources Initiative. The study finds that two key ingredients legal land tenure and positive government action to support those land rights are key to preventing the 37.7 billion tonnes of carbon stored in community-owned forests from being released into the atmosphere. If done right, “payments under REDD+ could incentivize governments to reform their legal frameworks and strengthen community forests rights,” promoting an often “undervalued” approach to mitigating climate change, the study finds.

Under the table

Ninety-three percent of logging in Mozambique last year was illegal, costing the country $146 million in lost duties and taxes since 2007, according to a new report by the Environmental Investigation Agency (EIA). The vast majority of this illicitly logged wood was shipped to China. Mozambique has the opportunity to access $3.8 million to establish a REDD strategy to reduce deforestation, but the EIA report calls into question whether such an approach could work given the widespread crime and corruption.

All together now

As part of the United Nations REDD project in Vietnam, development organization SNV recently piloted a Participatory Subnational Planning approach in the coastal province on Binh Thuan. The organization has now released a step-by-step guide that might be adopted for any participatory REDD or land-use planning process. It walks participants through preparatory studies and training as well as safeguards analysis and monitoring workshops. The guidance aims to promote a multi-stakeholder approach that increases ownership of and transparency throughout the REDD planning process.

Jobs

Post-doctoral Research Fellow Bangor University

Based in North Wales, United Kingdom, the Post-doctoral Research Fellow will work through the School of Environment, Natural Resources and Geography on a project called “Can Payments for Ecosystem Services (PES) deliver environmental and livelihood benefits?” The key case study will be a PES program in the Bolivian highlands, established by the Bolivian NGO Fundacií³n Natura Bolivia. Candidates should have a PhD (or equivalent) in economics, sociology, geography, conservation science or a related subject and experience with field work in Latin America.
Read more about the position here

Program Manager, Greater Mekong Conservation International

Based in Phnom Penh, Cambodia, the Program Manager will work to expand Conservation International’s Greater Mekong program. The position involves developing new business and partnerships in relevant policy and programmatic subject areas, including REDD and freshwater management. The preferred candidate will have a master’s degree, at least five years of experience working with NGOs and experience monitoring and evaluating programs.
Read more about the position here

Team Leader REDD+ Project in Southern Laos “sterreichische Bundesforste Consulting
Based in Pakse, Southern Laos, the Team Leader will lead the implementation of a REDD+ project in Xe Pian National Protected Area and its buffer zone and support the government of Laos in preparing for national implementation of REDD+. The successful candidate will have an advanced degree in forestry or a related discipline and a minimum of five years relevant work experience, at least two years prior experience abroad. Knowledge of English, German and Lao Language is preferred.
Read more about the position here

Operations Manager Proforest
Based in Oxford, United Kingdom, the Operations Manager for Proforest will help manage a period of growth and change while overseeing offices in the UK, Malaysia, Brazil and Ghana. The position requires strong interpersonal skills, the proven ability to multi-task and operate in a multi-cultural environment, and a knack for seeing the big picture and prioritizing tasks. At least three years of experience working as an operations manager is required; experience with information technology systems is useful.
Read more about the position here

Forest Officer, Responsible Forest Programme World Wide Fund for Nature, Malaysia
Based in Selangor, Malaysia, the Forest Officer will promote Responsible Forestry practices to the forest managers in Malaysia through the implementation of Global Forest and Trade Network Participation and forest certification. The successful candidate will have at least two years of experience in forestry and an interest in forest resource management and the timber trade, and the way they seek to improve their management practices. Must be able to speak or write in English, Bahasa Malaysia and/or Mandarin.
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 MARKETPLACEEcosystem 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. 


Click here to read this article in its original format.

California Wildfires Kill More Than Trees, And That May Help Us Prevent Them In The Future

 

5 August 2014 | The Hetch Hetchy watershed is 160 miles from the San Francisco Bay area, but the people of the Bay rely on this granite-surrounded water supply as their drinking source.

Located in the Yosemite National Park, the Hetch Hetchy is situated along the Tuolumne River in California’s Sierra Nevada and acts as a reservoir collecting the mountain range’s melting snow. Its water travels to San Francisco through miles of pipelines and tunnels called the Hetch Hetchy Regional Water System, which supplies over 2 million people in four counties with water.

Last year, the now-infamous Rim Fire burned 250,000 acres of Sierra Nevada forestland from August 17, 2013 to October 24. But something stunning happened when it moved out of Stanislaus National Forest and into Yosemite: its intensity was immediately waned. That helped save the Hetch Hetchy and San Francisco’s water supply, but the fires still cost the San Francisco Public Utilities Commission (SFPUC) $55 million in infrastructure costs.

These damages and the fact that the fire came so close to threatening its water got the SFPUC thinking about natural losses. They wondered what the real costs of the fire were in terms of muddied water, lost pollination, dirty air, and a general loss of quality in the region and how high could those costs could go if the winds went against them.

To answer that question, they hired Earth Economics (EE), a nonprofit specializing in the economic valuation of ecosystem services to look at the cost of the Rim Fire itself not just in terms of infrastructure, but in terms of ecosystem services.

The result is The Economic Impact of the Rim Fire 2013, which EE hammered out even as the fires still burned. By incorporating the loss of ecosystem services into the equation, it showed that damage from the Rim Fire itself had been dramatically undervalued from an initial infrastructure assessment of less than $50 million to anywhere from $100 million to $736 million once ecosystem services were factored in. Governor Jerry Brown used that assessment to qualify for federal disaster aid after the state was initially turned down by FEMA (Federal Emergency Management Agency), and it shined a light on the economic return that good forest management brings.

“We believe this to be the first time environmental values have been included in an application for a major disaster declaration,” says Rowan Schmidt, a project leader at EE and report author.

EE arrived at its figures in part using the Benefit Transfer Methodology, which uses local values and past valuation studies on similar or the same services, along with satellite data. The report estimated monetary values on 10 ecosystem services on eight different land types impacted by the fire. The services valued include air quality, carbon sequestration, pollination, water regulation and biodiversity.

 EE table on Rim Fire damage

Old Fire in a New Climate

Fires aren’t always bad. In fact, they’re an important component of forest ecology, EE’s report says, because they restore natural species and the ash nourishes new growth. But climatic changes that cause higher temperatures for longer coupled with an increase in human-caused fires means the wildfire season lasts longer and burns hotter than ever before.

“California’s wildfire season never ended,” says Kim Carr, a sustainability specialist at Sierra Nevada Conservancy, a state agency designed to support preservation of the region.

On average, there are now seven times as many wildfires over 10,000 acres every year, according to the report.

There is another element practitioners in the field say heavily contributed to the Rim Fire’s intensity, and it’s one that EE’s report can now help correct. Pre-1970s, a no-burn policy in the Forest Service that suppressed all fires led to an increase in fuel loads (flammable material like underbrush). Forests became overgrown and dense, increasing their vulnerability to high intensity wildfires. And even though policy has been gradually changing since then, the buildup makes controlled burning and other techniques difficult to manage.

“When fires hit the landscape now, it does a lot of damage because it burns too hot,” Carr says.

What the West’s forests need, Carr says, are fuel thinning treatments that mechanically remove a forest’s fuel, but those cost money about $68 million in the nearby Mokelumne watershed, according to a cost-benefit analysis carried out there. That analysis, however, conservatively estimates the benefits generated from fuel treatment at $126 million.

Such treatment makes it safe to re-introduce fire that will burn at a lesser intensity. The less intense fires will continue to remove understory and increase its overall health.

“More fuel treatment is needed on a larger amount of acres,” says Carr.

“We can’t keep throwing money at suppression; we want to get to a point where we’re not just suppressing fires but proactively managing and restoring forest.

The Natural Buffer

The fire burned below Hetch Hetchy so its water wasn’t under as much of a threat had the fire started closer to the reservoir. Also, there is less vegetation to burn around Hetch Hetchy compared to other areas. The huge granite structures surrounding the water acted as a buffer against the fire as well. However, both Carr and Manager of SFPUC’s Natural Resources and Land Management Division, Tim Ramirez, say the overall greater health of Yosemite’s forests contributed to the reduced damage reiterating Carr’s contention that good forest management pays off over the long run.

“The National Park Service doesn’t fight fires,” says Ramirez. “And as a consequence, the Rim Fire in Hetch Hetchy wasn’t catastrophic.”

And that, say scientists from the non-profit organization, Point Blue Conservation Science, is why the Rim Fire ran out of steam upon moving out of Stanislaus and into Yosemite’s forests.

Water Comes from the Forests

As of right now, San Francisco’s water supply doesn’t need to be filtered. It’s treated but the high quality nature of the source allows exemption from the Environmental Protection Agency’s filter regulations.

But the huge threat of wildfires means this unique source of water-and others throughout the western US-are at risk. The Sierra Nevada Conservancy and other organizations are looking at potential investors in the needed fuel reduction treatments that will lower the risk of wildfire and initiate healthier forests.

One group of investors they’re targeting is water utilities. Raising peoples’ monthly utility bill by just a dollar or so, Carr says, could fund fuel treatments on a large scale.

As of right now, there isn’t any policy in development for this scenario to play out in the Sierra Nevada, but initiatives like it are happening elsewhere. In Arkansas, for instance, the utility that services Little Rock implemented a “Watershed Protection Fee,” which funds acquisition and conservation of land near Lake Maumelle-Little Rock’s drinking water source. It also funds environmental regulation and water quality monitoring activities.

Another example operating similarly is in North Carolina’s capital, Raleigh. A monthly watershed protection fee of about 45 cents is added on to ratepayer’s bills. The funds are used to purchase land near the water source and conserve it.

And there are many more cases. The Forest to Faucet Partnership between the utility, Denver Water, and the US Forest Service uses additional fees to practice forest treatment and watershed protection. It’s a well-known initiative that other municipalities are looking closely at. Wildfire risk was a prime reason Denver Water thought it smart to invest in a watershed protection project that enhances forest health.

And with the Rim Fire’s heavy economic and natural losses fresh in everyone’s mind and also the knowledge that the fire came within a hair of contaminating a huge water supply, the communities of San Francisco and perhaps all of California might look at programs such as Denver’s with a new-found interest.

Stunning High-Resolution Map reveals Secrets Of Peru’s Forests

A colorful map of Peru’s landscape has been drawn from research assessing the nation’s aboveground carbon stock. The map portrays carbon density with different colors allowing viewers to see the diversity of Peru’s land in a whole new way and also see the value in preserving its ecosystems.

This article was originally published on mongabay.com. Click here to read the original.

 

4 August 2014 | Peru’s landmass has just been mapped like never before, revealing important insights about the country’s forests that could help it unlock the value healthy and productive ecosystems afford humanity.

The research — involving scientists from the Carnegie Institution for Science at Stanford University, Wake Forest University, and Peru’s Ministry of Environment (Minam) — assessed the aboveground carbon stock of all vegetation types across the country using a combination of data from satellites and Carnegie’s advanced laser-based carbon detection system, ground-truthed with data from field studies.

The resulting map is a stunning kaleidoscope of color, ranging from deep red in carbon-dense forests of the Amazon to the cold dark blue of areas devoid of vegetation like heavy gold mining areas and Andean peaks.

 The new map reports all of Peru's ecosystems.

The new map reports all of Peru’s ecosystems.

 

But beyond its visual appeal, the map provides critical information at a one-hectare scale relevant for policymakers and scientists. The study found that vegetation in Peru stores some 6.9 billion metric tons of aboveground biomass, or roughly equivalent to nearly twice the combined annual carbon emissions of the U.S. and China, and documented ecosystem gradients that underpin the country’s rich biodiversity. For example, it found that the lowlands of southern Peru harbor significantly less carbon compared with other rainforest areas due to extensive areas of bamboo. Terra firme forests store more than twice as much carbon as active floodplain forests.

 The report compares the carbon storage of different vegetation types

The report compares the carbon storage of different vegetation types.

The research tied vegetation data to administrative units and protected areas, including national parks and communal reserves. It found that Loreto contains more than half the country’s total aboveground carbon stock, while Peru’s protected areas store a combined 26 percent of its carbon. That means nearly three-quarter’s of Peru’s carbon is found outside protected areas, underscoring the importance of maintaining those carbon stocks, according to the authors.

“The international community wants to use a combination of carbon sequestration and emissions reductions to combat climate change,” said Carnegie’s Greg Asner, the study’s lead author, in a statement. “Our cost-effective approach allows us to accurately map the carbon in this incredibly diverse country for the first time. It opens Períº’s door to carbon sequestration agreements and is an enormous boon to conservation and monitoring efforts over vast areas for the long term.”

 Carbon maps for four regions in Peru

Carbon maps for four regions in Peru.

The findings could also help place a value on Peru’s conservation efforts, added co-author Miles Silman of Wake Forest University.

“Now every person in private enterprise and decision makers in regional, local, and national government has an estimate of carbon content for every place in Períº. It should ignite the imaginations of ecologists and earth scientists, and provide a road map for decision makers,” Silman said. “The report also adds another exclamation point to the value of protected areas. If you choose carbon as your currency, parks in Amazonian Períº are the banks, and the bigger the area, the closer it gets to being Fort Knox.”

The carbon mapping process
The carbon mapping process. The report says the map can be used to measure deforestation and degradation using free Landsat imagery and forest cover monitoring software like as CLASlite, which was also developed by Carnegie. New field plot data can also be added to the map as it becomes available.

 

CITATION: Gregory P. Asner et al (2014). The High-Resolution Carbon Geography of Períº. A Collaborative Report of the Carnegie Airborne Observatory and the Ministry of Environment of Períº. July 2014.

 

Rhett Butler is the founder, president and head writer for Mongabay.com.

Study Says Carbon Finance Saves Forests By Promoting Indigenous Rights

 

31 July 2014 | José Maria Arara, Almir Surui, and Aureliano Cí³rdoba all have three things in common: each is the leader of a traditional forest community of the Amazon; each lives in a country that nominally recognizes their rights to their forests; and each has used carbon finance to exercise and reinforce their rights. And they’re hardly alone, according to a new study called “Securing Rights, Combating Climate Change“, which was published jointly by the World Resources Institute (RRI) and Rights and Resources International (RRI) this week.

High Praise for REDD Finance

More than a year in the making, the study provides deep, clear, and compelling evidence that indigenous people and traditional forest dwellers act as guardians of the forest but only if they have clear land rights. An earlier study, “Stopping Deforestation: What Works and What Doesn’t“, also found a high correlation between the presence of indigenous people and good land stewardship, but it found little correlation between deforestation rates and land tenure. That was published in May by the Center for Global Development.

Both studies reinforce earlier analysis showing that community rights can be strengthened through mechanisms that use carbon finance to reduce greenhouse gas emissions from deforestation and forest degradation (REDD+).

“Many countries with REDD+ strategies identified strengthening community forest rights as part of their own strategy, the WRI/RRI report states. “In addition, respect for the rights of local communities and Indigenous Peoples is an internationally agreed safeguard to ensure REDD+ does not harm people or the environment.

The RRI/WRI report contends that successful implementation of a REDD+ strategy depends on community rights.

“If a community.s forest rights are weak or nonexistent, then the community will also likely lose their rights to carbon in the forest,” it says. “This will undermine their ability to engage in REDD+ initiatives equitably, effectively, and independently.”

It also singles out REDD+ as a bright spot among development efforts.

“With the exception of some international initiatives to reduce emissions from deforestation and degradation (REDD+), development agencies, governments, and others have failed to give enough weight to the connection between strengthening community forest rights and mitigating climate change, it says.

Not a Panacea

Still, the report says, REDD without rights won’t deliver environmentally, economically, or socially.

“Governments and companies often have legal rights to forests, but communities do not,” the report says. “If REDD+ payments for carbon begin to flow in such a legal environment, governments and companies rather than communities will capture the benefits.”

 To protect forests, give your traditional communities legal rights to them, and then enforce those rights

To protect forests, give your traditional communities legal rights to them, and then enforce those rights.

Recommendations

The report offered “five practical, evidence-based recommendations to donors, governments, civil society, and other stakeholders working on climate change, land rights, and forestry, which we have reprinted verbatim below:

1. Provide Indigenous Peoples and local communities with legal recognition of rights to their forest. Attention must be given to the millions of forested communities without legal rights to their forest. In Indonesia, where communities generally have no or weak legal rights, new legislation is pending to recognize communities ownership of their forests. Where communities have some legal forest rights, governments and their partners should strengthen these rights. While this recommendation applies to all relevant countries, those that are heavily forested and have weak community forest rights are of critical importance. In addition, stakeholders should support strengthening community forest rights as part of a future agreement on REDD+.

2. Protect the legal forest rights of Indigenous Peoples and local communities. Governments and their partners should help protect community forest rights by, for example, mapping community forest boundaries, helping to expel illegal loggers, and not granting commercial concessions over community forests. In Brazil, the government maps and registers indigenous community forests, helps communities remove illegal settlers, and is generally barred from granting commercial use of community forests to companies. Governments and their partners should commit funds and invest in supporting communities and their civil society partners. In addition, governments and donors should include programs to support community forest rights in their climate change strategies

3. Support communities with technical assistance and training. Governments, donors, and civil society should provide training and technical assistance to communities and should undertake capacity-building activities. For example, in Mexico some communities receive training and support from the government to improve sustainable forest use and market access. In addition, governments, donors, and civil society should help ensure that people and local communities are able to participate genuinely in the development of legal and policy frameworks related to REDD+.

4. Engage forest communities in decision-making on investments affecting their forest. Governments and businesses should work together to ensure that government planning is consistent with international standards and that investments do not violate community forest rights. In Peru, the government’s failure to comply fully with international standards contributes to high deforestation of indigenous community forests. For example, national laws should require that the status of Indigenous Peoples and local community forest is determined well in advance of any decisions affecting the community. Also, if legal commercial extraction of subsurface minerals does occur on indigenous or local community forestlands, ensure that the extraction is conducted in the least invasive way possible and only after free, prior, and informed consent of the affected communities.

5. Compensate communities for the climate and other benefits provided by their forest. Governments and their partners should commit funds and invest in supporting communities and their civil society partners to increase the economic incentives for communities to manage their forests sustainably. In addition, stakeholders should support strengthening of community forest rights as part of a future agreement on REDD+. Ensure that communities receive payments for protecting their forests as part of the design and implementation of REDD+.

Does Brazilian Deforestation Drive Drought In The United States?

 

28 July 2014 | Severe drought conditions in the US state of California have led state officials to impose criminal penalties for water wasters. The drought could also help make the case that California should allow projects aimed at curbing tropical deforestation into the state’s carbon trading system.

California’s State Water Resources Control Board approved an emergency regulation to force water agencies, their customers and state residents to increase water conservation in urban settings by reducing outdoor water uses such as washing down driveways and watering landscapes or face possible fines of up to $500 a day. What brought on this surge in water regulation? The fact that California residents are using more water than last year with urban water use in May up 1% over the monthly average for the previous three years despite two drought emergency declarations by Governor Jerry Brown and his January plea for residents to voluntarily reduce their water use by 20%.

What may seem like a local problem could have its roots in the tropical deforestation that has occurred in Brazil and other countries. Researchers found that total deforestation of the Amazon rainforest could reduce rainfall in the Pacific Northwest by 20% and cause a 50% reduction in the Sierra Nevada snowpack, a crucial source of water for California, according to a major scientific study published in the Journal of Climate last year.

Although it is difficult to quantify whether specific weather patterns such as the current drought are directly tied to deforestation, data trends indicate that deforestation has a direct impact on rainfall in California, according to Rajinder Sahota, Chief of the Climate Change Program Evaluation Branch of the California Air Resources Board (ARB), who spoke at an ARB board hearing on Thursday. But it remains difficult to convince residents of any possible connection, especially when they dealt with mudslides and floods in the state last year, she said.

“People tend to latch on to the most recent events as an indication of what’s going on, Sahota said.

The role of tropical deforestation and the possible connection to California’s drought arose in the context of an update that ARB staff was providing regarding its planned consideration of sector-based offsets, specifically from projects that reduce emissions from deforestation and forest degradation (REDD). ARB’s legal counsel Jason Gray discussed the multiple co-benefits of REDD projects, including protection against decreased precipitation from forest loss, which could be of interest given the current drought situation.

Keep reading on the Forest Carbon Portal (for free).

Three Images That Illustrate The Challenge Of Life On A Managed Planet

This piece originally appeared on The AnthropoZine. The views are those of the author, and not of Ecosystem Marketplace. You can view the original here.

 

22 July 2014 | Earlier this year,  the US Climate Assessment  warned of parched prairies and flaming forests if we don’t reel in climate change right now. Sixteen retired US admirals and generals then  warned that droughts and other climate disruptions were about to make the world a very dangerous place. Now the  United Kingdom’s weather service, the Met Office, has tried to put the basic science in a simple, poster-sized product called the Human Dynamics of Climate Change, which you can download  here  (PDF,  12 MB). Supplementary information is also available  here  (PDF,  629 kB).

The map is actually a teaser to and a summary of a much more detailed technical report, but at first glance even this simple illustration is an ungainly thing with seven world maps and a large block of text:

 The Met Office's Poster for

The Met Office’s Poster for “Human Dynamics of Climate Change.

On closer inspection, it’s a fairly simple starting point for people new to the climate dilemma, although the name is something of a misnomer, because it barely touches on the human dynamics of climate change. Instead, it offers a very clear and simple starting-off point for those interested in exploring the realities of life on a managed planet, as this sequence of images illustrates.

The first image provides a consensus map extrapolated from a variety of climate models, and it shows what they all show: more droughts and higher temperatures.

 Climate Change Brings Higher Temperatures And Longer Droughts

Climate Change Brings Higher Temperatures And Longer Droughts.

The second shows an increased demand for irrigation worldwide:

 Climate Change Makes Mass Irrigation A Necessity

Climate Change Makes Mass Irrigation A Necessity.

The third  – and this one is bound to rightly draw intense scrutiny  – shows the winners and losers on the crop yield front, but only if we implement the irrigation measures highlighted above:

 Some Will Win; Some Will Lose

Some Will Win; Some Will Lose.

These projections come from a synthesis of 35 models  that were compiled last year by NASA scientist  Cynthia Rosenzweig and others. Those authors, however, made it clear that the projections were incomplete and highly uncertain. They don’t include the positive effects of carbon fertilization  – or plants growing faster because of excess carbon in the atmosphere  – but they also don’t capture the impact of long-lasting periods of high temperature on crops.

On top of that, they don’t reflect the devastating impact that climate change will have on our planet’s living ecosystems  –  the wetlands and forests that provide the bulk of our green infrastructure  – and they don’t reflect the way climate varies locally. The chart shows winners and losers on a macro scale, but even regionally, changes will shift productivity from low-lying areas to higher elevation areas and from underpopulated land to places where cities are now. I can’t imagine a scenario under which that transition happens peacefully, especially since we don’t really know where the productive areas will emerge.

The full technical report  does offer much more detail into changing crop yields, fish catches, and changes in transportation patterns  – but even that is merely a brief reminder of the challenge we face, and the fact that we cannot return to Eden. Even if we manage to keep the food supplies going, tomorrow’s earth will be a lot different from the one we grew up on.

The landing page also provides links to both a ‘business as usual’ greenhouse gas concentration scenario (RCP8.5) that excludes mitigation actions and a ‘middle of the road’ socio-economic scenario (SSP2) for population change. It also provides a link to questions and answers related to the map here (PDF, 70 kB) Alternative version of the map (copied directly from the MetOffice HDCC landing page) An alternative version of the map is available here: HDCC alternative map (PDF, 8 MB), and a similar version under an ‘aggressive mitigation’ greenhouse gas concentration scenario (RCP2.6) is also available for comparison here: HDCC alternative map mitigation (PDF, 7 MB). The following document details the differences between these two versions and the version at the top of the page: HDDC map alternative version information (PDF, 35 kB) For more detail on the present-day and future change information used to produce the ‘Human dynamics of climate change’ map, follow the links below.

 

Biodiversity Backers Continue Push For Convergence In June

New guidance from the Center for Biological Diversity aims to integrate biodiversity safeguards into sustainability standards while a study finds REDD+ isn’t delivering the positive outcome for wildlife as originally thought. Also, Ecosystem Marketplace continues to unfold its series on saving Indonesia’s forests and orangutan habitat from palm oil development.  

This article was originally posted in the Mit Mail newsletter. Click here to read the original.

21 July 2014 | When world-renowned primatologist Biruté Galdikas learned that palm oil company PT Best was about to destroy Borneo’s Seruyan Forest, she began frantically trying to raise money for her organization, the Orangutan Foundation International, in efforts to stop the slaughter of orangutans in the forest. One day, her phone rang.  

“I remember it clearly,” she says. “This man says he’s calling from Shanghai, China, and he won’t stop talking, won’t let me get a word in edgewise, and then he asks me – and I’ll never forget this – he asks me if there’s a forest that needs to be saved.”

 

The man’s name was Todd Lemons, a serial entrepreneur from the United States who’d grown up listening to his grandfather’s tales of his adventures in the Amazon and reading National Geographic. It was on the magazine’s October, 1975 cover that he first encountered Galdikas.

 

“He started going on and on about how trees capture carbon and people would pay us to save the trees to stop global warming, and I thought to myself, ‘Oh, a carbon cowboy.'”

 

Still, something kept her on the phone. Maybe it was his knowledge of forestry. Or maybe it was just curiosity on her part. Whatever it was, when they hung up, she’d pegged him as sincere and knowlegeable about the timber trade – but naí¯ve about the rest of the world.

 

He called again about a week later, this time from his home in Hong Kong, and caught her on her way to Los Angeles International Airport.

 

“I was in a hurry,” Galdikas says. “So I told him that if he was serious, he’d have to come and visit me in in Pangkalan Bun.”

 

About a week after that, she heard a knock on her door. It was Lemons.

 

 

In this month’s Mitigation Mail, we highlight a new special reporting series from Ecosystem Marketplace that takes us deep into Indonesia’s forests, where biodiversity advocates, carbon financiers, and sustainable commodity certification developers are joining forces to save the country’s forests from clearing for palm oil.

 

It’s a signal of eco-markets’ maturation that cross-cutting stories like these are becoming more common. More than ever before, conservationists and entrepreneurs have a range of financing strategies and tools at their disposal to protect important places – consider how the Bethlehem Authority that manages the forested watershed of Pennsylvania’s Pocono Mountains recently struck a deal with Disney to sell forest carbon offsets from a 20,000-acre project. The authority estimates that the sale of offsets will bring in $140,000 to $170,000 annually, which it will use to improve the aging water system and protect the forest.


Of course, work needs to be done to make sure that all the benefits promised are actually being captured. An article this month from Mongabay finds that REDD+ projects aren’t delivering expected wildlife conservation outcomes. A step in the right direction is the CBD’s new guidance on integrating biodiversity safeguards into sustainability standards and certifications, discussed below.


It’s also been an…interesting month in the US wetland and conservation banking space – check out our Mitigation Roundup below for stories on a lawsuit over a South Carolina bank’s plan to convert freshwater wetlands to salt marsh, a proposal to sidestep mitigation requirements by raising and releasing lesser prairie chickens in Kansas, and the uncertain fate of blueberry general permits in Michigan.


Finally, if you enjoy your monthly MitMail, help us keep the lights on: consider making a small donation. As a not-for-profit organization, it’s our mission to provide top-notch, freely available information on environmental markets and conservation finance, and we rely on our supporters to be able to do so. Just $150 gets you a place of honor on our sidebar for a year. Click here to donate.

—The Ecosystem Marketplace Team

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


EM Exclusives

Examples, dialogue, and clearer policy need in biodiversity offsetting

In early June, 280 individuals from 32 countries met in London at the To No Net Loss of Biodiversity and Beyond conference to discuss how to ensure that development is planned to achieve no net loss or preferably a net gain in biodiversity. They explored international experience and policy on no net loss and a net gain of biodiversity, and everyone was searching for practical solutions to reconcile development with environmental protection and social fairness.

 

“There is a real genuine interest in the topic of no net loss of biodiversity now,” says BBOP Director, Kerry ten Kate. “People want to discuss it and share ideas and hear different perspectives from around the world.” Many useful lessons were shared throughout the two days and recommendations sprang from every session. However, a number of cross-cutting, key issues emerged as major themes – including strengthening protections, clarifying policy, and considering offsets only within the context of a mitigation hierarchy.

Keep reading.

How a primatologist, an industrialist, and an ecosystem entrepreneur took on big palm oil and won

When world-renowned primatologist Biruté Galdikas learned that palm oil company PT Best was about to destroy Borneo’s Seruyan Forest, she thought all was lost. Then she met ecosystem entrepreneur Todd Lemons and industrialist Rusmin Widjajam. Here’s how they blended cutting-edge finance and old-fashioned moxie to outmaneuver Big Palm Oil and save the forest.


We all use palm oil every day, and nearly half the world’s supply comes from Indonesia – with devastating results for the country’s forests, wildlife, and the global climate. Fixing it is no easy matter.

Keep reading.


Mitigation News

Comment period extended for proposed rule clarifying CWA jurisdiction

Last month, the US Environmental Protection Agency (EPA) announced that it’s extending the public comment period on a proposed rule clarifying jurisdiction over waters of the United States, until October 21, 2014. The proposed rule, developed by EPA and the Army Corps of Engineers, aims to provide a consistent definition of the scope of waters protected under the Clean Water Act, after years of muddled interpretation and ad-hoc decision-making. The EPA says the extension is in response to the volume of comments already received and signs that the rule is not being interpreted as intended. “There’s a lot of concern among agricultural interests in their states and what the industry has read into it,” EPA Administrator Gina McCarthy told reporters. “We need some time to get out there and, if need be, write the rule in a way so the intent is understood.”

Read the public notice.
Learn more about the proposed rule.

Study finds unequal balance between carbon stocks and species richness

While the primary objective of the market mechanism REDD+ (reducing emissions from deforestation and degradation) is to reduce carbon emissions coming from forest loss, preserving vital habitat for wildlife was thought to be a valuable byproduct. However a new study found that forests rich in carbon that are being conserved through REDD+ don’t necessarily contain the same richness in wildlife. The mechanism may even propel species toward extinction. Research for the study took place in Antioquia, Colombia where researchers found deforestation activities simply moved from the fuller forests to the more sparse areas where a higher number of endemic species live. The study does note the overall success of REDD+ in reducing emissions and deforestation, but encourages a more comprehensive approach when selecting areas for protection.

Mongabay has coverage.

Mitigation roundup

Here’s what happened in the US mitigation world this month:

 

The first conservation bank in Santa Barbara County just opened its doors, with the 853-acre property offering credits for the threatened California tiger salamander.

 

In Colorado, the Summit Board of County Commissioners has asked the Army Corps of Engineers to exclude it from the proposed service area for a new wetland bank, citing elevation differences that would make inclusion inappropriate.

 

The US EPA says that a general permit for blueberry farming in regulated wetlands in Michigan violates section 404 of the Clean Water Act – meaning that mitigation requirements could come into play.

 

Biologists are raising eyebrows at Kansas Gov. Sam Brownback’s recent proposal that the state begin raising and releasing lesser prairie chickens – an idea first floated by energy companies looking for a way to avoid high mitigation fees for impacts to LPC habitat.

 

A lawsuit against a mitigation banker over his plans to convert rare freshwater wetlands in South Carolina to salt marsh habitat in order to sell bank credits has been dismissed, on the grounds that saltwater had already infiltrated the area.

 

A Diversion Authority in Cass County North Dakota has sticker stock from the $587,180 needed for mitigation of a ring dike projects – working out to $34,000 an acre.

 

CBD releases guidance on biodiversity safeguards for standards & certs

In June the Convention on Biological Diversity (CBD) released guidance on improving biodiversity and ecosystem services safeguards in voluntary standards and certifications. The document, part of CBD’s Technical Series, was written in collaboration with the UN Environment Program’s World Conservation Monitoring Center (UNEP-WCMC). It aims to introduce standard-setting organizations to key concepts like the mitigation hierarchy or a ‘landscape approach’, and outline best practice for safeguards.

Learn more and get a copy of the guidance.

Australia deliberates over land offsets

A recent review of Australia’s offsetting policy has led the Senate’s environmental committee to recommend offsets only be used as a ‘last resort.’ Industries, such as mining, use offsets when damage to natural lands from development can’t be avoided. Advocates argue the mechanism acts as an integral method to preserve valuable land. But the Gladstone Bund Review questioned the management of offsets and if regulators had the capacity to ensure they’re being done properly. The government will review the committee’s report and decide what further action to take.

Read more from the Gladstone Observer.

EIP takes on big project restoring Louisiana wetlands with mitigation banking

Louisiana has lost an area of wetlands equivalent to the size of Delaware in the last 80 years. And while all wetlands provide valuable services, Louisiana’s coastal areas protect against the powerful hurricanes that pass through year after year, making restoring these marshes crucial to the state’s economy and prosperity. The private equity firm Ecosystem Investment Partners (EIP) aims to deliver some much-needed restoration work and generate a profit while doing it. So far, the company has purchased over 16,000 acres of swampland along Louisiana’s coast to develop mitigation bank credits. Mitigation banking is a commonly-used method for offsetting development impacts – but normally on a much smaller scale. EIP’s project is on a whole new level in terms of scope and of ambition.

The New York Times has the story.

New protocol will act as natcap accounting guide for businesses

A new development from the Natural Capital Coalition (NCC), a platform promoting natural capital accounting, will add to the resources available to help the private sector shift away from ‘business as usual’ scenarios and towards sustainable development. The NCC is establishing the Natural Capital Protocol (NCP). The Protocol will be developed by two consortia made up of academics, businesses, financial institutions and NGOs – one led by the World Business Council for Sustainable Development (WBCSD) and the other by the International Union for Conservation of Nature (IUCN).


The WBCSD will work to create one framework that includes the many methodologies existing today on the impacts and dependencies companies have on and with nature. The IUCN consortium will translate the Protocol into sector-specific guides – one for apparel and another for food and beverage. In addition, the IUCN will lead pilot testing of the Protocol among businesses.

Read a press release.

Asking more of offsets in Madagascar

Research recently published in the Journal of Environmental Management suggests that Rio Tinto’s offset methodology for mining impacts in Madagascar could be strengthened. In particular, additionality of the offset may have been weak in places: “In Madagascar, Rio Tinto did not take into account the fact that the potential deforestation its offsetting project aimed to avoid was partly inflicted by the company itself, through road-building, arrival of migrant workers, and other factors,” writes the study’s author Malika Virah-Sawmy in a summary article.

 

Virah-Sawmy does not suggest that there is no place for offsets in conservation planning, but rather that scientific basis and transparency need to keep improving. Additionality and leakage in particular are “poorly dealt with in existing biodiversity offset projects – and as a result, they are much less effective than they could be.”

Read more at Phys.org.

Better biodiversity conservation more costly – but needed, study says

Four years ago, the Center for Biological Diversity laid out new goals to prevent biodiversity loss that envisioned expanding the area of land protected in order to halt the extinction of species. But these new objectives are expensive and achieving them is proving difficult. A study released in the journal PLOS Biology found many protected areas are conserving land with little economic value and failing to protect the biodiversity on more valuable ground.

 

“Our study shows that existing protected areas are performing very poorly in terms of protecting the world’s most threatened species,” said Dr. Oscar Venter, lead author of the study. “This is concerning, as protected areas are meant to act as strongholds for vulnerable species, which clearly they are not.” And while Venter concedes making improvements to biodiversity conservation is expensive, he also says that small increases in cost can have a large impact on preservation.

Learn more.

Delivering environmental context for businesses with natural capital and ecosystem services

In order for businesses to properly measure their natural risks and prospects, Sissel Wage of BSR, the nonprofit based on business sustainability, says natural capital, ecosystem services and green development must continue to move into actual practice. Each can drive investments towards the natural infrastructure the private sector depends on to conduct business. And environmental measures without these functioning parts can lead to misguided actions and unintended consequences.

Read more at The Guardian.

Florida panther payments would give endangered species a little breathing room

A program proposed by the US Fish and Wildlife Service would compensate Florida landowners for protecting panther habitat. The endangered Florida panther is not particularly popular with ranchers and landowners, but wildlife officials hope that incentives will do the trick. The program would pay landowners around $22 an acre to maintain habitats. “It’s really about buying us some time,” Kevin Godsea, manager for the Florida Panther National Wildlife Refuge tells The Guardian. “We are never going to be able to purchase all the land that we are going to need to recover the species.”

 

Get the full story.

How does media coverage of climate change affect biodiversity?

The topic of climate change gets the majority of media attention when it comes to environmental issues. But researchers at the University of Kent are urging that a growing public interest in climate should be used to leverage more support and action towards other important areas like biodiversity conservation. Kent released a study attempting to determine if climate change coverage has deflected attention away from biodiversity. Essentially, the study found biodiversity coverage -and funding from organizations like the World Bank – has remained consistent, while reporting and funding on climate change has accelerated.

 

 

Learn more.

EVENTS

 

Conference on Ecological and Ecosystem Restoration

CEER is a Collaborative Effort of the leaders of the National Conference on Ecosystem Restoration (NCER) and the Society for Ecological Restoration (SER). It will bring together ecological and ecosystem restoration scientists and practitioners to address challenges and share information about restoration projects, programs, and research from across North America. Across the continent, centuries of unsustainable activities have damaged the aquatic, marine, and terrestrial environments that underpin our economies and societies and give rise to a diversity of wildlife and plants. This conference supports SER and NCER efforts to reverse environmental degradation by renewing and restoring degraded, damaged, or destroyed ecosystems and habitats for the benefit of humans and nature. CEER is an interdisciplinary conference and brings together scientists, engineers, policy makers, restoration planners, partners, NGO’s and stakeholders from across the country actively involved in ecological and ecosystem restoration. 28 July – 1 August 2014. New Orleans, LA.

Learn more here.

16th Annual BIOECON Conference: Biodiversity, Ecosystem Services and Sustainability

The BIOECON Partners are pleased to announce the Sixteenth Annual International BIOECON conference on the theme of “Biodiversity, Ecosystem Services and Sustainability”. The conference will be held once again on the premises of Kings College Cambridge, England on the 22nd -23rd September 2014. The conference will be of interest to both researchers and policy makers working on issues broadly in the area of biodiversity, ecosystem services, sustainable development and natural capital, in both developed and developing countries. 21-23 September 2014. Cambridge, United Kingdom.

Learn more here.

ACES 2014 Conference: Linking Science, Practice, and Decision Making

ACES: A Community on Ecosystem Services represents a dynamic and growing assembly of professionals, researchers, and policy makers involved with ecosystem services. The ACES 2014 Conference brings together this community in partnership with Ecosystem Markets and the Ecosystem Services Partnership (ESP), providing an open forum to share experiences, methods, and tools, for assessing and incorporating ecosystem services into public and private decisions. The focus of the conference is to link science, practice, and sustainable decision making by bringing together the ecosystem services community from around the United States and the globe. ACES 2014 will bring together leaders in government, NGOs, academia, Native American communities, and the private sector to advance the use of ecosystem services science and practice in conservation, restoration, resource management, and development decisions. We hope you will make plans to join more than 500 ecosystem service stakeholders in this collaborative discussion to advance use of an ecosystem services framework for natural resource management and policy. 8-11 December 2014. Washington DC, USA.

Learn more here.

JOBS

 

Senior Manager, Climate and Biodiversity Finance Policy

Conservation International – Arlington VA, USA

The Sr. Manager for Climate and Biodiversity Finance Policy will work as part of the International Policy team and will be responsible for leading cross-institutional dialogue to develop and implement CI strategy to achieve climate and biodiversity financing policy outcomes. S/he will track all relevant financing negotiations, new and emerging financial mechanisms and funds to inform strategy, and convey relevant information back to CI staff engaged in these issues. The Sr. Manager will also be charged with developing partnerships and coalitions with like-minded organizations to develop and promote joint policy positions, provide policy advice to decision makers and support and collaborate with CI Field Programs to engage their governments on financing issues through the production of high-level policy briefs, presentations, tools and engagement in relevant on-the-ground initiatives. In addition, the Sr. Manager will lead the Biodiversity Policy team, which is responsible for developing CI’s institutional strategy, priorities and positions on the CBD, IPBES and related international fora. S/he will support regional and national programs in engaging their governments to influence these forums and achieve policy objectives.

Learn more here.

Communications Manager, Ecosystems

Environmental Defense Fund – Various locations, United States

EDF is seeking a Communications Manager to develop and implement communications plans and media outreach strategies that further the goals of the Ecosystems Program, particularly in the area of agricultural sustainability.This position requires an understanding of and keen interest in conservation and agricultural issues. Reporting directly to the program’s Communications Director, the Communications Manager will write, edit and produce a range of communications materials while securing positive media coverage of the program’s work in top-tier, regional and ag trade outlets.

Learn more here.

Sustainable Fisheries Initiative Program Assistant

—The Ecosystem Marketplace Team

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

EM Exclusives

Examples, dialogue, and clearer policy need in biodiversity offsetting

In early June, 280 individuals from 32 countries met in London at the To No Net Loss of Biodiversity and Beyond conference to discuss how to ensure that development is planned to achieve no net loss or preferably a net gain in biodiversity. They explored international experience and policy on no net loss and a net gain of biodiversity, and everyone was searching for practical solutions to reconcile development with environmental protection and social fairness.

 

“There is a real genuine interest in the topic of no net loss of biodiversity now,” says BBOP Director, Kerry ten Kate. “People want to discuss it and share ideas and hear different perspectives from around the world.” Many useful lessons were shared throughout the two days and recommendations sprang from every session. However, a number of cross-cutting, key issues emerged as major themes – including strengthening protections, clarifying policy, and considering offsets only within the context of a mitigation hierarchy.

Keep reading.

How a primatologist, an industrialist, and an ecosystem entrepreneur took on big palm oil and won

When world-renowned primatologist Biruté Galdikas learned that palm oil company PT Best was about to destroy Borneo’s Seruyan Forest, she thought all was lost. Then she met ecosystem entrepreneur Todd Lemons and industrialist Rusmin Widjajam. Here’s how they blended cutting-edge finance and old-fashioned moxie to outmaneuver Big Palm Oil and save the forest.


We all use palm oil every day, and nearly half the world’s supply comes from Indonesia – with devastating results for the country’s forests, wildlife, and the global climate. Fixing it is no easy matter.

Keep reading.


Mitigation News

Comment period extended for proposed rule clarifying CWA jurisdiction

Last month, the US Environmental Protection Agency (EPA) announced that it’s extending the public comment period on a proposed rule clarifying jurisdiction over waters of the United States, until October 21, 2014. The proposed rule, developed by EPA and the Army Corps of Engineers, aims to provide a consistent definition of the scope of waters protected under the Clean Water Act, after years of muddled interpretation and ad-hoc decision-making. The EPA says the extension is in response to the volume of comments already received and signs that the rule is not being interpreted as intended. “There’s a lot of concern among agricultural interests in their states and what the industry has read into it,” EPA Administrator Gina McCarthy told reporters. “We need some time to get out there and, if need be, write the rule in a way so the intent is understood.”

Read the public notice.
Learn more about the proposed rule.

Study finds unequal balance between carbon stocks and species richness

While the primary objective of the market mechanism REDD+ (reducing emissions from deforestation and degradation) is to reduce carbon emissions coming from forest loss, preserving vital habitat for wildlife was thought to be a valuable byproduct. However a new study found that forests rich in carbon that are being conserved through REDD+ don’t necessarily contain the same richness in wildlife. The mechanism may even propel species toward extinction. Research for the study took place in Antioquia, Colombia where researchers found deforestation activities simply moved from the fuller forests to the more sparse areas where a higher number of endemic species live. The study does note the overall success of REDD+ in reducing emissions and deforestation, but encourages a more comprehensive approach when selectin

Additional resources

Examples, Dialogue And Clearer Policy Needed In Biodiversity Offsetting

 

15 July 2014 | On the third and fourth of June, 280 individuals from 32 countries met in London at the To No Net Loss of Biodiversity and Beyond conference to discuss how to ensure that development is planned to achieve no net loss or preferably a net gain in biodiversity. They explored international experience and policy on no net loss and a net gain of biodiversity, and everyone was searching for practical solutions to reconcile development with environmental protection and social fairness.

Hosted by Forest Trends, the Business and Biodiversity Offsets Programme (BBOP), the UK Department for Environment, Food and Rural Affairs (Defra), and the Zoological Society of London (ZSL) at ZSL, the representatives came from companies in the extractive, energy, infrastructure, agriculture, forestry and retail sectors, from governments and intergovernmental organizations, from financial institutions, NGOs, civil society, universities, research organizations and from consultancies and small businesses.

“There is a real genuine interest in the topic of no net loss of biodiversity now,” says BBOP Director, Kerry ten Kate. “People want to discuss it and share ideas and hear different perspectives from around the world.”

Many useful lessons were shared throughout the two days and recommendations sprang from every session. However, a number of cross-cutting, key issues emerged as major themes from the two days’ discussions, as summarized below:

  • Strengthen protection: Activities, policies and frameworks to mitigate impacts on biodiversity, including those related to biodiversity offsets, must strengthen and not weaken biodiversity protection. Improving the application of the mitigation hierarchy and working towards no net loss and a net gain of biodiversity is intended to ensure greater rigour and a better outcome for conservation than under current systems, and not to undermine them.
  • Clear policy: For NNL/NG to become a realistic prospect in a country, clear and unambiguous policy requirements that establishes high standards are needed.  Many participants doubted whether voluntary systems are enough to encourage a big enough proportion of developers to plan for no net loss, nor landowners to invest in conservation activities as offsets. All participants accepted that government has a critical role to play, levelling the playing field, reducing uncertainties for business, ensuring good outcomes for people, and keeping standards high.
  • Biodiversity offsets in context: There is general recognition that biodiversity offsetting can be challenging and controversial, but that when offsets are used, they must be discussed and included within the broader mitigation framework, and not raised as an isolated issue.
  • High standards: In any impact mitigation programme (including biodiversity offsets), in order to enable good outcomes for biodiversity and people, it is critical to apply the mitigation hierarchy consistently according to high standards, such as those reflected in the BBOP Standard and IFC Performance Standard 6. In the course of negotiations with governments and companies over the design of a mitigation programme, emphasis should be placed first on discussions related to avoidance, minimization and on-site restoration. Flexibility in the approaches taken to achieve no net loss was encouraged, but clarity on the biodiversity outcome was felt to be important. Standards need to strike a balance between being too prescriptive to be practicable and being too flexible to be credible or to offer assurance of outcomes.
  • Landscape level planning: Assessing proposed project development and mitigation of impacts in the context of spatial plans undertaken at a landscape or national scale is important to support sound land use decision-making. For instance, it informs where development should or should not take place. No net loss planning should be integrated within broader planning and policy frameworks. Where possible, guidelines to identify “no-go” zones and areas of high biodiversity value suitable for conservation efforts through offsets should be identified as a matter of policy and not relegated to case-by-case decisions.
  • Capacity building and training:   There is a shortage of people with the right expertise to understand and to undertake the assessments and planning needed for no net loss, and to interpret and use the results.   This is an important limitation and needs to be corrected by training of staff from government agencies, companies, consultancies and civil society and research organisations. Certification of trained individuals would help build confidence that professionals are using high standards.
  • Examples: More examples of best practice with successful approaches and outcomes are needed to build confidence in the concepts of no net loss, net gain and the quality of mitigation measures, including biodiversity offsets. Examples that are independently verified against agreed international standards would be the most convincing.
  • Monitoring, verification and enforcement: These are vital for the quality and integrity of mitigation measures including offsets, and have often been neglected in the past.
  • More dialogue: International, multi-stakeholder discussion involving people with very different opinions about the merits of mitigation measures and biodiversity offsets is needed in order to reach and promote wide societal agreement on the necessary standards for mitigation measures and associated land-use planning. Even those with apparently opposing positions were able to move a little closer through an exchange of ideas during the conference and such dialogue should be continued.

The final conference report is available here and provides a summary of discussions at the conference.

 

Videos of the Event

Highlights of the To No Net Loss of Biodiversity and Beyond’ conference

Official Welcome and Opening Plenary

Reflections and Experiences with No Net Loss

Plenary Debate Opportunity or Peril

Session 2 Establishing a NNL System – Design

Session 3B Net Loss and Net Gain on the Ground

Session 5 Establishing a NNL System – Implementation

Session 6B – No Net Loss and Net Gain on the Ground

Day 2 Opening Plenary – Keynote by Gabon M. of Environment

Government Roundtable

Business Roundtable

Session 7 Safeguards and Tools

Session 9 – Implementation Mechanisms

Session 10 Learning from Global Standards

Session 12 – Challenges for impact assessment practitioners

Sessions 13, 14 and Concluding Remarks and Next Steps

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.