NATIONAL FORESTRY ACTION PROGRAME

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Climate Change Mitigation Projects in India
Policy Issues
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• The 1997 Kyoto Protocol rightly recognises
• land use change and forestry as
• both part of the problem and
• part of the solution to
• greenhouse gas reductions.

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• Forestry provides significant opportunities for
  carbon sequestration
• COP-6 decided to give the go-ahead to sinks
  though the concept remains somewhat flawed.
• COP-7 went on to define sinks as the
  afforestation and reforestation of degraded
  lands prior to 1990

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• Standards or protocols for monitoring,
  verification, legal contracts, trade
  documentation etc. are not yet in place.
• Markets for GHG-emissions trading are emerging
  around the world despite uncertainties regarding
  the Kyoto Protocol

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• At the 2000 World Economic Forum, participants
  identified climate change as one of the most
  important future variables for business.
• Perhaps 200 million tons of CO2e have been traded
  in the past five years

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• This opportunity to profit in the
  emissions-trading market (by selling emission
  credits to those entities who find it less costly
  to outsource part of their emission-mitigation
  commitment) provides a new source of funding for
  activities that will also protect biological
  species.

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• In the offset market, companies will get credit
  for emission reductions at home by developing-or
  buying credits for offsetting projects abroad.
  These will generate Certified Emissions
  Reductions (CERs).
• The goal is to make CERs and ERUs (Emission
  Reduction Units) readily tradable financial
  instruments.

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• In some countries, governments are even promoting
  the creation of markets where none existed
  before.
• A major deal was signed between the Govt. of
  Costa Rica (through the National Biodiversity
  Institute) and Merck Pharmaceuticals that
  covered payments for the collection of species
  samples and sometimes for refining them, and to
  provide royalty payments on any products that
  might be developed from such samples.

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• Norway negotiated the capture and fixation of
  200.000 tons of carbon and paid 2 million
  dollars to Costa Rica which issued Certified
  Tradable Offsets(CTO). The country assumed the
  commitment to provide the service of
  sequestration of carbon by 25 years in a area
  of approximately 142 sq kms. Costa Rica,
  through this mechanism recover part of the
  400.000 hct. Of degraded lands. This was funded
  thro public-private partnership.

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• The World Bank supported Costa Ricas
  Ecomarkets project, landowners in rural areas
  receive a payment (provided for in Costa Ricas
  forestry law) for conserving and managing forests
  that provide four key services water capture,
  biodiversity protection, scenic beauty and carbon
  sequestration. The payment is currently set at
  40.00 ha-1 yr-1. Initially, these payments were
  financed through a tax on gasoline.
• The Ecomarkets project aims at developing a true
  market in which consumers of these four
  environmental services pay for them through a
  government intermediary .

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• clean-development mechanism (CDM), refers to
  projects in developing countries, for instance,
  replacing kerosene lamps in India with solar
  panels. The offset market could provide a
  powerful incentive to replace dirty power with
  clean technology.

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• CDM enhances opportunities for sustainable
  forest management including afforestation,
  reforestation, revegetation etc..
• McCarl Schneider (2001) calculate that a carbon
  price of 50 per tonne could prompt nearly 5
  million hect of afforestation efforts in the U.S.

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• Potential of various land management activities
  to mitigate global emissions of CO2 by
  increasing carbon sink potential
• (IPCC Assement)
• Tropical afforestation 15
• Tropical agroforestry 6
• Tropical regeneration 18
• Slowing deforestation 14
• Temperate afforestation 13
• Temperate agroforestry 1
• Agricultural management 33

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• Foresters and farmers can not only sell a new
  crop in the international carbon market
  through agro-forestry, they can also help solve a
  problem that threatens their own livelihood.
• It is likely that in future, relative prices may
  favour carbon sequestration over food
  production.

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• Financing and management of protected areas
  remain the responsibility of the public sector
  however, severe cutbacks in the availability of
  public resources has undermined the effectiveness
  of such strategies.
• Given the lack of public funding, biodiversity
  conservation must start to pay for itself,
  otherwise biodiversity and perhaps even the human
  race, are in jeopardy.

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• Market mechanisms can encourage environmental
  protection and promote greater economic
  efficiency while saving tax payers money.
• Need to take advantage of opportunities for
  biodiversity conservation that might arise
  from free-market approaches to sustainable land
  use and management.

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• Many natural forests are both major stores of
  carbon and areas of valuable biodiversity
• Conserving these areas will yield both carbon and
  biodiversity benefits.
• However, biodiversity enhancement is not always
  a corollary of carbon sequestration, as the
  later involves planting of biodiversity poor
  monocultures.

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Concerns

• Crediting for AR projects in CDM raises the
  prospect of net negative impacts to biodiversity
  by increasing the financial attractiveness of
  plantations relative to maintaining or restoring
  native forests.

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• Whether CDM crediting for AR will act as an
  incentive to clear natural forests for the
  purposes of establishing carbon plantations
• Indeed, precedents exist in which timber
  companies have pursued plans to clear native
  vegetation and establish timber plantations that
  generate carbon credits.

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• Plantations established on degraded lands and
  managed according to internationally recognized
  certification standards can provide both
  environmental and social co benefits.
• But there is potential for carbon premiums to
  accelerate deforestation by financing the
  clearing of forests to be replaced with
  plantation monocultures.

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• a carbon market could fuel deforestation in
  developing countries through CDM AR projects.
• Acceleration of forest degradation and
  deforestation by enhancing incentives through
  carbon financing strongly suggests that Parties
  should act to eliminate these incentives.

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• Conservation of natural forests is not included
  in the Kyoto Protocols definition of sinks.
• Instead, the creation of sinks through the
  establishment of fast growing monocultures may
  lead to biodiversity losses if natural forests
  and degraded lands are cleared

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• Forest harvesting and management have also been
  omitted for now, but may still get included by
  later COPs.

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• The potential scale of impacts to native forests
  and biodiversity in developing countries is not
  clear.

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• To strike a balance between
• carbon sequestration and
• biodiversity conservation,
• we need to have a clear understanding of
  potential synergies among
• UNFCCC,
• UNCBD,
• UNCCD,
• UNFF and
• also among other international trade and
  economic agreements such as WTO

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• The other biodiversity related conventions have
  not gained the same level of global political
  and private sector interest as the UNFCCC.
• UNFCCCs much higher international profile may
  provide the much needed economic incentives for
  conservation.

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• Need to ensure that biodiversity issues are fully
  mainstreamed into discussions relating to the
  accounting methods, mitigation frameworks,
  definitions and implementation, occurring under
  the Kyoto Protocol.

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• Capacity building at national level to tackle
  and manage these synergies on the ground.
• This would involve identifying areas that are of
  both high biodiversity and high carbon value.
• Projects and activities aimed at maximising both
  objectives could then be targeted specifically
  within such areas.

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Thank You