NGO Another Way (Stichting Bakens Verzet), 1018 AM Amsterdam, Netherlands.

 

01. E-course : Diploma in Integrated Development (Dip. Int.Dev.)

 

Edition 01: 24 January, 2011

 

(Français)

Quarter 3.

 

 

SECTION C : THE MODEL.

 

 

Study points : 05 points out of 18

Minimum study time : 125 hours out of 504

 

The study points are awarded upon passing the consolidated exam  for  Section C : The Model.

 


 

Block 8 : Economic aspects.

 

                            [Study points 03 out of 18]

[Minimum study time: 85 hours out of 504]

 

The study points are awarded upon passing the consolidated exam  for  Section C : The Model.

 


Block 8 : Economic aspects.

 

Sect. 5 : Kyoto Treaty : Analysis of  possibilities for finance. (Additional)

 

01. Executive summary.

02. Introduction.

03. Potential areas of application of CDM mechanisms to integrated development projects.

04. Small-scale CDM activities. 

05. Programmes of activities.

06. Selection of the CDM methodologies for the applications listed in section 03.

07. Information specific to afforestation/reforestation (AR) methodologies specifically applicable to integrated development projects.

08. Notes specific to the role of bamboo in afforestation and reforestation (AR) projects.

09. CDM funding indications for the selected applications and methodologies.

10. Graphs and conclusions.

 


 

Menu  for  : 09. CDM funding indications for the selected applications and methodologies.

 

09-01. CO2 savings through the reduced use of non-renewable biomass for cooking purposes through the introduction of improved stoves.

09-02. Demonstration project for the recovery of forest lands and natural parks and reserves using traditional species.

09.03. Afforestation activities in settlements as defined  for the distributed planting of fruit and nut trees and similar.

09-04. Small-scale agro-forestry activities – such as distributed bamboo plantations on grasslands and croplands.

09-05. Small-scale agro-forestry activities – distributed demonstration plantations for practical purposes for local use, including but not limited to Moringa plantations on marginal lands.

09-06. Demonstration afforestation and/or reforestation (AR) projects on wetlands using traditional species.

09-07.  Demonstration afforestation and/or reforestation projects on lands having low inherent potential to support living biomass.

09-08. Use of renewable biomass instead of non-renewable biomass with improved cook stoves.

09-09. Recycling of human waste to avoid the use of industrial fertilisers.

09-10. Methane recovery from animal waste for cooking and lighting purposes especially in pastoralist areas.

09-11. Replacement of kerosene lamps, incandescent light bulbs, and of the use of throw-away batteries by renewable energy sources (wind, solar and/or renewable bio-mass including but not limited to plant oil, gasification of biomass).

09-12. Replacement of non-renewable electrical, diesel- and battery-driven sources for mechanical equipment such as pumps and mills and, where applicable, pubic lighting systems.

09-13. Local recycling and recovery of materials from solid wastes, including but not limited to plastics.

 


 

09. CDM funding indications for the selected applications and methodologies.

 

09.03. Afforestation activities in settlements as defined  for the distributed planting of fruit and nut trees and similar.

 

Methodology AR-AMS-2  (version 2, 17 October 2008) allows for afforestation in settlements. Settlements as defined in 2006 IPCC Guidelines for National Greenhouse Gas Inventories, and in the Good Practice Guidance for Land Use, Land-use Change and Forestry, Institute for Global Environmental Strategies (IGES) for the Intergovernmental Panel on Climate Change (IPCC), Kamiyamaguchi, 2003 may include all developed land i.e., residential, transportation, commercial, and production (commercial, manufacturing) infrastructure of any size, unless it is already included under other land-use categories. Work using the preferred methodology AR-AMS-2 is carried out by the local populations under the local money system set up during an early phase of each integrated development project.

 

In developing countries “settlements” are likely to be land strips along roads and streets, waterways, parks, village squares and other public places. Such areas are often not specifically zoned in developing countries. They are often in the “public domain”. The width of the strips can be influenced  by each country’s definition of forest, which can include limitations to the width of plantations. Limitations of this type are rare. Default values for forests under the CDM are between 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. Country default values must fall within these parameters. Fairly low country definition values optimise the use of AR-AMS-2  for the planting of several rows of fruit trees and nut trees along paths and roads, in village squares, and around churches, mosques and other public places. It is therefore wise for national governments to specify minimum areas in hectares and minimum tree heights at maturity in their definitions of forests. If a minimum area for a forest is defined as one hectare (10.000 m2) and a strip along a path is just 10 metres wide, the plantation would need to be one kilometre long. If the area definition of forest is, say, 0.10 hectare, the strip would only need to be 100 meters long.     

 

Not only does application 03 for fruit trees using AR-AMS-2 provide a possibility to create carbon sinks, it also greatly increases the food security of the populations in integrated development project areas. Useful production of most fruit trees begins quite early, within about 3-5 years and can continue for 30 years and more. Some species of nut trees may produce for 100 years. Variations amongst species are enormous, so each individual project needs to be specifically developed according to the wishes of the local populations.

 

A disadvantage of many species of fruit trees is that their growth in wood (biomass) volume is sometimes limited to about 20 years, though timber density may continue to consolidate slowly after that. Regular pruning requirements also reduce annual CO2 storage increments, as these must be subtracted from the calculations of the CO2 sinks achieved. These limitations do not usually apply to nut trees. This means the area planted in fruit trees in each integrated development area will usually be larger than that planted in nut trees.  

 

Each integrated project area has about 50.000 inhabitants and is divided into about 250 local development units and about 45 intermediate development units. Operations under AR-AMS-2 would be a bundling of 250 mini-projects one at each local development unit level, together designed to provide carbon sinks for 15.000 tonnes of CO2 equivalent per annum. This is roughly 19.000 tons of dry timber mass.

 

This amounts to an annual increase of up to 19.000 tonnes/250 local development unit areas or 76 tons of dry timber for each of the 250 local development units.

 

Each local development unit would decide which trees it wants to plant. Species should be chosen to provide a wide diversification of fruit and nuts throughout the year, rather than have a flood of products during a single short season. They should be planned to meet local consumption requirements. The food value of fruit and nuts produced takes priority over CDM income from the plantations. Traditionally, orchards in many countries were coupled with grazing activities, with just 200 trees, and even less, per hectare. Modern industrial orchards may contain anything up to 1500 trees per hectare. This does not conform to the sustainability requirements of integrated development projects.

 

It is assumed that each local development unit area will develop 11-18 hectares of settlement plantations.

 

It is assumed in this part that 35 % (about 3.5-6 hectares) of each local development unit area will be planted with nut trees of various (edible) types. It is recommended these plantations also include soap-nut trees on an experimental basis. For more information on this issue, refer to Stichting Bakens Verzet’s file on soap nuts. The sapindus trifiolatus is native to southern India. While sapindus mukorossi from the Himalayan region has larger fruit and is considered to deliver better quality soap nuts than sapindus trifiolatus, the latter may be more appropriate for cultivation in drier, low altitude areas in Africa. Soap nuts start producing fruit in their ninth year. This is why they are not considered good for commercial investments. It is also why they make ideal long-term investments for integrated development projects. From the ninth year, the trees produce fruit for 90 years. Apart from their inherent value as high-quality natural soaps for local use, they can be stored for long periods. Excess products can be exported.      

 

CDM income for this first 35% of settlement area activity is comparable with that for 50% of forest recovery activities described under section 09-02. Demonstration project for the recovery of forest lands and natural parks and reserves using traditional species, with the difference that the nuts can be harvested for food and stored for longer periods, increasing the food security of the local populations. Gross CDM income from this 35% would be about 105.000 a year for up to 50 + years, therefore up to € 5.250.000 (expressed in 2010  Euros) or more per project over a 50 year period. Assuming total forest husbandry costs to be the equivalent of twelve years’ peak requirements, total work is 350.000 hours x 12 years, or 4.200.000 hours’ work. This produces a virtual gross formal money (Euro) income of about € 1.25 per hour, less DOE costs. In most developing countries today, this would be considered a satisfactory return on labour. The income is virtual because it is paid first the sub-regional project owner to reimburse the initial capital costs of the integrated development project in question. Once repayment has been completed, the funds are paid to the Permanent Cooperative for the on-going management and maintenance of project structures, which can either distribute the funds equally amongst its members or invest them to extend project structures.

 

Gross CDM income from the remaining 65% (7 - 12 hectares) of settlement areas should be more or less the same. Carbon storage in orchards varies according to orchard management. The annual increase in biomass in modern industrial orchards with a high density of trees per hectare tends to be reduced. After the first few years, the CO2 in the produce (fruit) together with pruning can even equal the extra annual CO2 storage in tree trunks and branches. The fruit is, hopefully, eaten. Pruned branches and twigs can be used as renewable energy for the production of mini-briquettes for stoves.

 

Notwithstanding this, carbon sinks for standard orchards are estimated to be about 30 tons of dry mass per hectare,  with an average annual increment over 20 years of 1.5 tonnes of dry mass per hectare. Multiply this by 50% to reach its estimated carbon content, which is  0.75 tons of carbon per hectare per year x 3.6663, which is the ratio of the atomic weight of CO2 ( 43,999915 to that of carbon 12,001115 – otherwise known as the 44/12 ratio). This is about 2,75 tonnes of CO2 per hectare per year. 2,75 tonnes CO2 x about € 14 per tonne (as at 14 November 2009) amounts to € 38,5 per hectare per year. The annual gross amount for each local development unit is therefore € 38,5 x minimum 7 hectares, or € 269,5, or, for 250 local administrative unit areas, about € 67.000 per project area per year. Assuming an increment period of 20 years, the total CDM income for each local development unit is € 5.390, and the total per project with 250 local development units € 1.347.500.

 

Expected total gross CDM project income from 03. Afforestation activities in settlements as defined - distributed planting of fruit and nut trees and similar is therefore about € 5.250.000 for the 35% planted with nut trees and similar, and € 1.347.500 for the 65% of settlement area planted with fruit trees, for a total of € 6.597.500. This is nearly double the initial capital cost of an integrated development in a non-pastoralist project area. Subject to the availability of settlement areas and of sufficient water and labour, the area planted with fruit trees can in theory be grossed up towards about 11 hectares per local development unit area and still remain within the limits for small-scale projects of 15.000 tonnes of CO2 savings per year.

 

Assuming the execution of up to 2500 integrated development projects for West Africa (excluding Nigeria and Ghana) the scheme for plantations in settlements would produce gross CDM income of about € 17.392.500.000. General application of the concepts in Nigeria would deliver roughly the same benefits. The amounts are subject to the deduction of  DOE (designated operational entity ) verification costs. It is assumed these can be reduced to a nominal figure within the framework of a widely applicable general convention of the type foreseen.

 

One interesting species of fruit is the butterfruit, or safou, (dacryodes edulis) which is native to west and central Africa. It grows to a height of 17 m. 

 

In humid tropical areas with high rainfall (1780 mm2280 mm), thought might also be given to planting some African oil palms (Elaeis guineensis). Exploited commercially, they can produce up to 2 tonnes of edible oil per hectare. They bear their first fruit after three-four years. For specific information on the use of palms as possible carbon sinks read Lamade E. and Bouillet J-P,  a  Carbon storage and global change : the role of oil palm,  Oléagineux, Corps Gras, Lipides  (OCL ) Vol. 12 no. 2 . John Libbey text, Montrouge, Mars-Avril 2005, pp. 155-160. Carbon storage can range from 1.5 tonnes of carbon (5.5 tonnes CO2) per hectare per year in natural forest environments to 13,4 tonnes of carbon (49 tonnes of CO2) per hectare per year in non-harvested plantations. Where national definitions of forest include palms, short term build-up of carbon sinks under the CDM mechanism over the first four years and subsequent carbon maintenance offers a very interesting option in humid tropical areas.    

 

The biggest single problem to the application of  AR-AMS-2 and with all other afforestation and reforestation (AR) initiatives in integrated development project areas is water rather than labour. Water required under  AR-AMS-2 applications is additional to the water used for bamboo-based projects under AR-AMS-0001 described in section 04 below which take first preference because they provide earlier returns and greater occupational opportunities, with a possible future potential of allowance for storage of CO2 in worked bamboo products. AR-AMS-2  applications also compete for water with projects under AR-AMS-0004 in forest areas in part 02 above and with projects in marginal areas. Integrated development projects allow for rainwater harvesting but not for large-scale irrigation. Small-scale hand-operated drip irrigation techniques can be applied where limited amounts of water can be obtained from shallow hand-dug wells, provided this can be shown to be sustainable and free from effects on the water table. This means the assistance offered by early planting of deep-rooted species is of such great importance. 

 

An advantage of growing trees in settlement areas is that rainwater harvesting off road surfaces and squares is usually easier to carry out than in forest areas and on grasslands.  Rainwater can sometimes be harvested close to where the trees are planted. The amount of water which can be sustainably harvested this way is limited, but it should be enough to extend rainy seasons for a few weeks.

 

Protection of plantations in early growth phases is a second major problem to be faced. Provided equipment can be safely guarded, electric fences operating on photovoltaic power (PV) may offer an appropriate solution to this problem.

 

In principle, CDM settlements projects are one-off projects for each integrated development area as settlement areas are often limited in size. In many integrated development project areas it may be necessary to newly define settlement areas as part of  (new) environmental planning activities. 

 

 


 

Menu  for  : 09. CDM funding indications for the selected applications and methodologies.

 

09-01. CO2 savings through the reduced use of non-renewable biomass for cooking purposes through the introduction of improved stoves.

09-02. Demonstration project for the recovery of forest lands and natural parks and reserves using traditional species.

09.03. Afforestation activities in settlements as defined  for the distributed planting of fruit and nut trees and similar.

09-04. Small-scale agro-forestry activities – such as distributed bamboo plantations on grasslands and croplands.

09-05. Small-scale agro-forestry activities – distributed demonstration plantations for practical purposes for local use, including but not limited to Moringa plantations on marginal lands.

09-06. Demonstration afforestation and/or reforestation (AR) projects on wetlands using traditional species.

09-07.  Demonstration afforestation and/or reforestation projects on lands having low inherent potential to support living biomass.

09-08. Use of renewable biomass instead of non-renewable biomass with improved cook stoves.

09-09. Recycling of human waste to avoid the use of industrial fertilisers.

09-10. Methane recovery from animal waste for cooking and lighting purposes especially in pastoralist areas.

09-11. Replacement of kerosene lamps, incandescent light bulbs, and of the use of throw-away batteries by renewable energy sources (wind, solar and/or renewable bio-mass including but not limited to plant oil, gasification of biomass).

09-12. Replacement of non-renewable electrical, diesel- and battery-driven sources for mechanical equipment such as pumps and mills and, where applicable, pubic lighting systems.

09-13. Local recycling and recovery of materials from solid wastes, including but not limited to plastics.

 


Block 8 : Economic aspects.

 

Sect. 5 : Kyoto Treaty : Analysis of  possibilities for finance. (Additional)

 

01. Executive summary.

02. Introduction.

03. Potential areas of application of CDM mechanisms to integrated development projects.

04. Small-scale CDM activities. 

05. Programmes of activities.

06. Selection of the CDM methodologies for the applications listed in section 03.

07. Information specific to afforestation/reforestation (AR) methodologies specifically applicable to integrated development projects.

08. Notes specific to the role of bamboo in afforestation and reforestation (AR) projects.

09. CDM funding indications for the selected applications and methodologies.

10. Graphs and conclusions.

 


 

Exam Block 8 :  [4 hours]

 


 

Consolidated exam : Section C. [6 hours].

 



 Eighth block : Section. 5 : Kyoto Treaty : Analysis of  possibilities for finance.

 Eighth block :  Economic Aspects.


Main index  for the Diploma in Integrated  Development  (Dip. Int. Dev.)

 List of key words.

 List of references.

  Course chart.

 Technical aspects.


 Courses available.

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"Money is not the key that opens the gates of the market but the bolt that bars them."

Gesell, Silvio, The Natural Economic Order, revised English edition, Peter Owen, London 1958, page 228.

 

“Poverty is created scarcity”

Wahu Kaara, point 8 of the Global Call to Action Against Poverty, 58th annual NGO Conference, United Nations, New York 7th September 2005.

 


 

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