NGO "ANOTHER WAY" (STICHTING BAKENS VERZET), NETHERLANDS, SUSTAINABLE INTEGRATED SELF-FINANCING DEVELOPMENT PROJECTS AND ADVANCED DEVELOPMENT TECHNOLOGIES

“The only way to ensure the resilience of forests to climate change is through zero deforestation, meaning to put an end to industrial logging of primary and intact forest landscapes, while ensuring sustainable biomass consumption and agriculture practices.” (Listen to the people – not the polluters, Greenpeace International, Policy note for COP 17 Conference in Durban, 2011, Amsterdam, November 2011.)

01. A general reference and warning on the risks of multi-project implementation.

A good up-to-date reference to Afforestation and Reforestation (AR) projects is Building Forest Carbon Projects : A Step-by-Step Guide, by J.Olander and J.Ebeling, published by Forest-Trends and the Katoomba Group, December 2010. This work includes specific aspect by aspect information boxes with references to the leading resources on the aspect in question.

Key factors which should always be borne in mind are that project areas must be under the control of the project proponent(s) and that a saving of at least 10.000 to 20.000 tonnes of CO2 per year is needed to offset the high costs of project preparation, validation, and monitoring. Pre-implementation costs can be € 100.000-250.000 and more, preparation of a methodology € 20.000-75.000 and more, and each periodic verification event between € 15.000-40.000 and more. Most of these payments are for fees and costs charged by nominated Designated Operational Entites (DOEs) (auditors) and large international (especially financial) institutions can complicate or facilitate procedures. Project proponents depend on their decisions. If the issuing organ (in the case of Clean Development Mechanism (CDM) projects, the Executive Board) makes a “negative” decision either with regard to registration or to issuance of certificates, project proponents have no remedy. In December 2010 there was still no CDM appellate body to handle appeals against the decisions of the CDM Executive Board. A preliminary discussion on this issue took place during the UNFCCC meeting in Cancun (Mexico), December 2010.

Any meaningful afforestation or reforestation (AR) project is a vast, long-term undertaking. It requires local (sustainable) water supply until the trees become “independent” of the need for irrigation and the provision of locally produced (sustainable) fertilisers. The amount of manual work needed to implement projects is mind-boggling.

Integrated development projects have multiple inherent possibilities for long-term implementation of afforestation and reforestation (AR) projects. Water and fertiliser supply, and even labour forces, may be too restricted to enable cotemporaneous implementation of all of the available AR possibilities. In those cases, integrated development project coordinators will need to make painful choices. CDM financing of projects may have to be sacrificed to the overriding energy-neutral , fully sustainable, ecological principles guiding integrated development projects.

The proposed afforestation and reforestation (AR) projects are small-scale. Most of them may therefore be seen as demonstration projects subject to phased repetition in each integrated development project area as manpower and water become available for the purpose. Large-scale projects are not practicable because they would be beyond the physical possibilities of the populations in the project areas, where there are just 50.000 people.

02. Reducing Emissions from Deforestation and Degradation in Developing Countries (REDD) projects.

REDD is a recently introduced “alternative” AR project system. REDD projects tend to be more socially based than CDM projects. They are supposed to avoid deforestation and/or degradation of existing forests, benefit local communities and promote bio-diversity. They introduce a sort of third operational sector, avoidance of further deforestation and environmental degradation, in addition to the two existing ones, being CO2 emission savings, and increase of carbon sinks. In contrast to Clean Development Mechanism (CDM) projects, REDD projects can be executed anywhere.

The applicability of REDD projects is still under discussion. A list of REDD projects submitted so far for approval can be found at the Climate, Community and Biodiversity Alliance (CBBA) website. Of the +/- 60 projects listed there, about 30 have been approved. Complete documentation for all projects can be accessed at the site. Some 14 Designated Operational Entities (DOEs) or auditors have been approved to date. Submitted projects include 18 projects from Central and South America, Asia (11), East Africa (10), United States (8), Australia and New Guinea (4), North Africa (Ethiopia) (1). Other projects were either rejected or withdrawn. Projects in the United States include the restoration of “forest legacies”, afforestation in wild-life refuges, and avoided grassland conversion of prairies.

Full information on REDD can be found at the REDD Web Platform operated by the United Nations Framework Convention on Climate Change (UNFCCC). Because of the uncertainty still surrounding REDD projects at this time, they have not been used here for applications for integrated development projects.

REDD+, which is purported to take the social interests of local communities into account, is (optimistically) discussed in Angelsen, A et al, Analysing REDD+ : Challenges and choices, Center for International Forestry Research, Bogor Barat, 2012. ISBN 978-602-8693-80-6.

“Rights are only real when they are enforced….so rules that are not enforced are not rights. Likewise, safeguards that are not enforced, that are voluntary, or that protect rights that are not enforced, are meaningless.”(Ribot J and Larson A, Reducing REDD risks : affirmative policy on an uneven playing field, International Journal of the Commons, Vol .6, no. 2, Bloomington August 2012, pp. 248.)

An updated critical analysis of developments with REDD+ can be found in Protecting carbon to destroy forests : Land enclosures and REDD+ , Carbon Trade Watch, The Transnational Institute (TNI), Forschungs -und Dokumentationszentrum Chile-Lateinamerika (FDCL) Berlin. Insitute of Global Responsibility (IGO) Warsaw, for the Hands off the Land Alliance, Amsterdam, April 2013.).

“In the early 2000s, after the US rejection to the Kyoto Protocol, Europe took the lead for hosting what is today’s largest carbon market in place: the EU

Emissions Trading Scheme (EU-ETS). The first two phases of the EU-ETS (2005-2007 and 2008-2012) however proved to be a resounding failure. After seven years, the EU-ETS did not reduce GHG emissions while consistently gave generous free permits (subsidies), translated into windfall profits, to industrial polluters (citing Coelho, R., Green is the Colour of Money : The EU-ETS failure as a model for the Green Economy. (Carbon Trade Watch, Amsterdam, 2012). Research by CE Delft estimates that almost all of the cost of compliance with the EU-ETSwas passed through to consumers, reaching windfall profits of €14 billion between 2005 and 2008 ( citing S. Bruyn, et al, Does the energy intensive industry obtain windfall profits through the EU-ETS ?, CE Delft , http://www.ce.nl/publicatie/does_the_energy_intensive_industry_obtain_windfall_profits_through_the_eu_ets/1038 ).”

“The use of [carbon] offsets has resulted in an increase of Co2 emissions worldwide, displacing emissions cuts in the North in favour of projects in the South.” ( as above, p. 14).

“Unresolved technical problems [amongst others not even on the agenda] include additionality, leakage (forest destroyers moving to another area), permanence (trees will never store carbon permanently), measurement (highly complex and uncertain since it relies on biological variables, and temporality (emissions and removals may occur many years after a project happens).” ( as above p. 15)

“Across East Africa, CDM A/R projects have largely led to outright evictions of local populations. The predominance of plantation interests in A/R projects effectively supports corporate land concentration. The result is an increasing number of plantations (wrongly defined as forests) and an emphasis on enforcement of protected areas. (Citing Nel, A. and Sharife. K., The CDM in Africa cannot deliver the money, Chapter 5 : East Africa, University of KwaZulu, C.Natal Centre for Civil Society and Dartmouth College Climate Justice Research Project, South Africa and US, 2010.) (as above p. 16)

“REDD’s purpose is to isolate one of the functions of forests – its ability to capture and store carbon – and then measure how much CO2 it can capture. Once the value of the potential carbon storage of the forest has been estimated, carbon credits are issued and sold to rich countries and big corporations, who then use these to offset, or buy and sell, polluting permits in the carbon markets….. In theory, REDD provides a monetary incentive for not deforesting. In actuality, corporations purchasing credits can release into the atmosphere the amount of CO2 they paid for. In other words, carbon credits

are polluting permits for the rich.” (Solón P., Rights of Nature : Planting Seeds of Real Change, Global Exchange, San Francisco, 2012, p.9.)

“REDD-plus is a false solution to climate change promoted by the UN, the World Bank and climate corporate criminals, such as Shell, that allow polluters to expand fossil fuel development and not reduce their emissions at source. REDD-plus is a pillar of the global agenda for the privatization and financialization of nature, and constitutes a worldwide land grab and carbon offset scam.” (Goldtooth, T., Rights of Nature : Planting Seeds of Real Change, Global Exchange, San Francisco, 2012, p. 24.)

03. Some definitions.

Under the Clean Development Mechanism (CDM), each host country must have adopted its own threshold parameters for forest coverage. If it has not done so, and some countries have not, it is not possible to apply for CDM funding for an AR (or any other CDM) project there.

Some important definitions (source : Decision -/CMP.1 Land use, land-use change and forestry ) for afforestation and reforestation (AR) projects are:

(a) “Forest” is a minimum area of land of 0.05–1.0 hectare with tree crown cover (or equivalent stocking level) of more than 10–30 per cent with trees with the potential to reach a minimum height of 2–5 metres at maturity in situ. A forest may consist either of closed forest formations where trees of various storeys and undergrowth cover a high proportion of the ground, or open forest. Young natural stands and all plantations which have yet to reach a crown density of 10–30 per cent or tree height of 2–5 metres are included under forest, as are areas normally forming part of the forest area which are temporarily unstocked as a result of human intervention such as harvesting or natural causes but which are expected to revert to forest. Before a country can host a CDM AR project, its Designated National Authority (DNA) must have approved its own definition of forest within the parameters indicated in the foregoing definition. Countries may also change their definition if required. The importance of extending country definitions to cover woody grasses, such as bamboo, and palm trees, which can play an important role as carbon sinks is fully explained in Yiping L. Yanxia L. et al, Bamboo and Climate Change Mitigation, International Network for Bamboo and Rattan (INBAR), Beijing, 2010.

“ ….until a DNA provides clarification that the definition of forest as reported by them to the Board includes palm (trees) and/or bamboos it shall be deemed that the definition does not include palms (trees) and bamboos” [Report of the 27^th meeting of the afforestation and reforestation working group, UNFCCC Headquarters, Bonn, Germany 17.19 February 2010.].

Carbon sequestration in agricultural crops and soils is not eligible for sale under the CDM in the first commitment period (CP) 2008-2012. This is a handicap for bamboo, two-thirds of the carbon sequestration of which is underground.

(b) “Afforestation” is the direct human-induced conversion of land that has not been forested for a period of at least 50 years to forested land through planting, seeding and/or the human-induced promotion of natural seed sources.

(c) “Reforestation” is the direct human-induced conversion of non-forested land to forested land through planting, seeding and/or the human-induced promotion of natural seed sources, on land that was forested but that has been converted to non-forested land. For the first commitment period, reforestation activities are limited to reforestation occurring on those lands that did not contain forest on 31 December 1989.

For the CDM mechanism, land degradation is defined as a long-term decline in ecosystem function and productivity and measured in terms of net primary productivity. All forms of land degradation will ultimately lead to a reduction of soil fertility and productivity. The general effect is reduced plant growth, which in turn causes loss of protective soil cover and increased vulnerability of soil and vegetation to further degradation (e.g. erosion).

04. The importance of afforestation and reforestation (AR) in integrated development projects.

Afforestion and reforestation (AR) activities are potentially very interesting for integrated development projects. The level of on-going degradation of existing woodlands in developing countries is appalling nearly everywhere. The main cause of this is the ruthless exploitation (theft) of the existing timber resources of developing countries for the benefit of large private commercial industrial interests. (See Block 1 of , Section 1 of the course : 08. In depth : Financial leakage : theft of resources. ) A second cause is degradation through non-sustainable use of woodlands for cooking fuel and charcoal production. Many developing countries also have vast areas of marginal lands.

The least developed countries in particular “suffer” from lack of existing energy consumption. Since most of the 15 Clean Development Mechanism (CDM) system operational sectors set out in section 02. Introduction refer to reduction of existing energy use or the substitution of non-renewable energy sources with renewable energy ones, low energy consuming nations with few existing energy applications are seriously handicapped. Operational sector 14 “Afforestation and reforestation” refers instead to an increase in carbon sinks. In this sector, the least developed countries have wider margins for manoeuvre though they are still handicapped in relation to emerging economies by serious lack of financial means.

Greenhouse gas emissions calculations for afforestation and reforestation (AR) projects are particularly complex. Some of these projects have been highly criticised in international circles. Refer, for example, Silverstein D., A method to finance a global climate fund with a harmonized carbon tax”, Munich University, MPRA paper 27121, 03 December, 2010.

Biomass default tables are given in annex 3A.1 of the Good Practice Guidance for Land Use, Land-use Change and Forestry, published by the Institute for Global Environmental Strategies (IGES) for the Intergovernmental Panel on Climate Change (IPCC), Kamiyamaguchi, 2003.

05. Risks.

Long-term and permanent certified emission reductions (ICER) and (CER) for afforestation and reforestation (AR) projects are more vulnerable than those for other CDM sectors. Natural disasters such as fire or floods may wipe out many years of investment in a few hours. Where this happens, CDM funds received during the build-up of the carbon sinks have to be repaid, because the carbon sinks have been lost. This risk is in principle insurable, but the cost of insurance is very high and represents financial leakage from the integrated development areas where the AR projects are situated. Regional level project owners ( for instance UEMOA in West Africa) may be in a position to supply guarantees of coverage against these risks. This problem is not an issue with temporary or short-term credits (tCER) which, however, are valid only for credit period during which they are issued. That is why short-term credits command much lower prices.

Where bamboo plantations are used, flowering of the bamboo plants should be avoided. Like other grasses, flowering may lead to the end of the life cycle of some bamboo species and may lead to death of the plant and loss of the sequestered carbon. However the average flowering interval of bamboo is in the region of 30 years. If the bamboo plantations are systematically harvested, risk of flowering can usually be avoided.

Grazing in plantations is another risk. All of the species preferred for afforestation and reforestation (AR) projects, with the exception of Jatropha, are attractive to animals. This means chosen areas must be carefully protected to avoid damage by animals. In some cases photovoltaic (PV) fencing systems may offer a solution provided they in turn can be protected against theft.

Strong governance of forest areas is required to stop poaching and illegal harvesting and use (theft) of wood products, the loss of which would offset (cancel) the value of any carbon credits. Strong government means the absence of corruption amongst those responsible for the administration of the forest areas, and the real availability of coercive means to enforce environmental policy where necessary.

The biggest problem of all is the risk of lack of sufficient water supply and labour. Both are limited in integrated development project areas. Labour is limited because project areas have just 50.000 inhabitants, which means a call can be made on just +/- 37.500 adults. Water is limited because integrated development projects do not provide for large-scale irrigation initiatives. This is echoed in the section of limitation of land-use for bio-energy cropping in The Energy Report : 100% Renewable Energy by 2050, World Wide Fund for Nature (WWF), Gland, January 2011 ( ISBN 978-2-940443-26-0), page 164 of which argues for use of “ land suitable for rain-fed agriculture…..without requiring additional water uses.”

There is no point starting an afforestation or reforestation (AR) project without adequate water and labour. The proposed AR projects may compete with each other in both or either of these areas. Where work- and water-supply loads are excessive, choices need to be made. These could lead to the need to phase projects over a longer period of time.

One advantage of afforestation or reforestation (AR) projects in developing countries is that traditional farming work is often carried out there during rainy seasons. Trees in afforestation and reforestation projects (AR) need less attention during that period. The work load is instead intensified during the dry seasons.

06. Contract forms for forest carbon purchases.

Refer to Hawkins S. et al, Contracting for Forest Carbon : Elements of a Model Forest Carbon Purchase Agreemeent, published by Forest-Trends and the Katoomba Group, December 2010.