The Peru Carbon Fund:
A Peruvian Standard For Peruvian Forests

Katherine Hamilton

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

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

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

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

KH What is the Peru Carbon Fund?

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

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

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

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

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

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

Why is PCF creating its own internal standard?

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

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

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

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

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

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

How does PCF manage transaction costs?

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

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

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

What is your experience in working on reforestation?

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

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

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

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

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

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

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

And what gets you to the office each day?

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

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

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