Antonio A. Ver and Angelo A. Jimenez
Situation
The Clean Development Mechanism (CDM) established by the Kyoto Protocol allows projects that reduce Greenhouse Gas (GHG) emissions to generate carbon credits called “Certified Emission Reduction” (CER). CERs are certificates of financial assets that can be sold and traded in the Carbon market.
Energy efficiency, alternative fuels and renewable energy projects provide the biggest potential for emissions reductions and carbon revenue worldwide.
Carbon credits, like the CERs, are widely traded worldwide. Transactions ballooned from US$30B in 2006 to US$80B (Euro40B) in 2007, with CDM increasing from US$5B to US$24B (Euro12B), representing an increase from 450 MM to 947MM tons of CO2 equivalent in emissions reductions.
What about our forests?
“Deforestation was clearly terrible for wildlife, for the indigenous peoples of the forests, and for the “ecosystem services,” as the modern jargon has it, which forests provide, such as climates which bring rain. But the whole process seemed so vast the huge socio-economic forces behind deforestation in the developing countries so intractable, that it seemed impossible that anything could be done to stop it or even slow it.”
Things have changed, and the change can be summarized in a single word: Carbon.
For, as the threat of climate change has become more and more clear, there has been a growing perception that the biggest benefit of all that rainforests provide is their function as a Carbon store, and the biggest danger from their destruction is the release of carbon dioxide into the atmosphere when they are cut down and burnt.
APBest[1] can help preserve forests in Lumads’ areas to become part of this burgeoning global market.
Let us build our Carbon store!
The Strategy
- The Coalition for Rainforest Nations, a grouping of 40 countries with substantial forest holdings from Costa Rica to Papua New Guinea, proposed in 2005 that there could be an agreement: We preserve our forests. You in the rich world pay us to do so. They were met with a sympathetic response.
- Strategy: We unite! All indigenous peoples, our forest villages, we, Lumads nationwide, unite and organize “Lumads Preserve Forests” or “LPF” and create our Carbon store!
APBest commits the following:
- Bring an organizing team to form the LPF into a Movement, expand the socio-economic network, build capacity, and imbibe social responsibility.
- Bring a world-class CDM consultant and engineer to prepare and design the CDM program for the Movement.
- Bring the CERs to the Carbon market!
The REDD initiative, UN’s Reduced Emissions from Deforestation and Degradation, springs from the idea of being paid to conserve forests. Reducing emissions from deforestation in developing countries (REDD) is increasingly becoming familiar as a result of the Copenhagen meeting. For REDD is now a key part of the treaty negotiating process under which, it is hoped, the developing countries will agree to tackle their own, mushrooming greenhouse gases, in return for billions of dollars of new aid.
- Strategy: Let us bring the Movement to REDD.
- Commit to do this through the Asia Pacific Basin for Energy Strategies, an energy think-tank in the United Nations in 7 months.
Overcoming Barriers
With so much money potentially at stake, banks and carbon trading firms are ramping up their interest.
But much has to be sorted out, such as how to ensure the forests aren’t cut down, how to accurately measure the amount of carbon saved over time, the best method to trade REDD credits and how to ensure indigenous communities of Lumads get a fair share of the money.
“Satellite monitoring as well as developing national carbon accounting systems will be key, and so too will be avoiding “leakage” in which preventing deforestation in one area causes logging to occur in another.”
Some conservation groups also fear rich nations will merely buy up vast amounts of REDD credits to meet their emissions targets while doing little to clean up their own industries. Europe also fears a flood of cheap REDD credits could overwhelm its existing emissions trading scheme, depressing offset prices.
“For us the main point, from a trading stand-point, where REDD projects are difficult is on their permanence,” said Trevor Sikorski, director of commodities research for Barclays Capital in London.
“If it’s about deforestation but then that deforestation goes ahead in three years then that carbon would still be released into the air. So it’s all about the reversibility of forests as carbon sinks and that’s the real core issue that has to be addressed,” he said.
Forests soak up vast amounts of carbon dioxide, acting like a set of lungs for the planet. But clearing and burning them is contributing to about 20 percent of all mankind’s carbon emissions that are warming the planet.
The United Nations aims to incorporate REDD into the next phase of the Kyoto Protocol from 2013.[2]
The idea is to complement the Kyoto scheme, Clean Development Mechanism, to allow wealthy states to invest in clean energy projects in the developing world in return for CO2 offsets called CERs. These are presently trading around 16 Euros per ton.
“Huge Market”
“The dimensions are massive. If you compare with a CDM project of 60,000 tons a year, these projects are sometimes 200 times bigger, so if this comes through, it’s going to be a huge market,” said Renat Heuberger, managing partner of global carbon project developer and advisory firm South Pole Carbon.
Indonesia has rapidly become the center of REDD trial schemes in Asia because it still has large areas of forest, despite rapid deforestation.
FFI has teamed up with Australia’s Macquarie Group to develop three REDD projects in West Kalimantan and Papua. Investment group New Forests, headquartered in Sydney, has signed a deal with the government of Papua to protect 200,000 hectares of forest that could save up to 40 million tons of CO2 being emitted over the project’s lifetime. The Australian government has pledged A$30 million as part of a scheme to protect 50,000 hectares of forest in Kalimantan and rehabilitate at least 50,000 hectares of drained peat swamp.
- United in our Movement, we can overcome obstacles and tap into grants-in-aid, banks and financial markets.
Community development is a key
Plowing part of the proceeds directly back to the estimated millions of Lumads who live around the forest to develop sustainable biofuel production, e.g., from Jatropha, biomass power generation, mini-hydro power projects as well as promote growth of alternative cash crops and a micro-finance system.
Failure to do so would mean villagers returning to illegal logging.
“If you don’t involve the local communities in either an alternative business or something that is good for them to actually preserve that forest, there’s no long-term suitability of that project,” said Pep Canadell, executive officer of the Global Carbon Project.
But there are barriers that need to be overcome. Some conservation groups fear placing a greater value on forests risks a jump in land rights abuses by governments and corporations in the rush for carbon credits, threatening the livelihoods of indigenous communities.
More than a billion people worldwide depend of forests for their livelihoods, so REDD is a huge threat to them if not managed properly, the group says.
It is claimed that the key is to limit the direct involvement of national governments in funding schemes for local communities. REDD schemes should also meet stringent verification standards to ensure permanence, community involvement and protection of forests’ biodiversity.
“If everything is vested in the national government, that’s where you will find it very difficult to have that fair level of participation at the community level,” said Jeff Hayward, of US-based conservation group Rainforest Alliance.
“Fundamental to verification criteria is who owns the carbon, what rights do they have, how they decided upon the use of those rights, how fairly are they being compensated, are they informed,” said Hayward, manager of the alliance’s climate initiative.
“APBest commits to balance national government’s role and Lumads’ community involvement, and directly deliver funds to the Lumads and their forests,” said Antonio A. Ver, APBest president. Ver has been invited to attend Cambridge University’s Climate Leadership Programme in June.
Protecting the price of carbon credits protects our Carbon store and forests
However, some observers question whether the carbon credits expected to be received will be priced high enough to make the scheme worthwhile.
One of the key parts of the Copenhagen climate agreement is a comprehensive treaty aiming to reduce deforestation rates in the developing countries by at least 50 per cent by 2020.
APBest strategy: Help structure the treaty to provide strong pricing protection.
Let us stop illegal logging and make our Carbon store make money!
[1] Asia Pacific Basin for Energy Strategies
[2] APBest shall be in the United Nations by then.