Mr%20Vu%20Tan%20Phuong,%20director%20RCFEE

1
Reducing greenhouse gases through
reforestationUse of CDM in the forestry sector
The Vietnam experience

• Mr Vu Tan Phuong, director RCFEE
• Mr Vo Nguyen Dai, vice-chairman DPC A Luoi
• Presentation based on cooperation between
• FSIV, District A Luoi, JICA, VFU, MARD and SNV

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Outline of the presentation

• Introduction of CDM
• How CDM works in the forestry sector
• Potential in Vietnamese forestry sector
• Readiness of the Government
• CDM projects- focus on poverty reduction and
  biodiversity- under construction
• Hoa Binh project by FSIV, VFU, MARD and JICA
• Rung Vang project in TTHue by DPC A Luoi and SNV

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Introduction of CDM

• Definition The Clean Development Mechanism is
  the mechanism to
• quantify and sell greenhouse-gas emissions
  reduced in developing
• countries to industrialized countries that have
  to comply with
• international conventions
• Framework UNFCCC (1992) Kyoto Protocol (1997)
• Characteristics
• Reduction of greenhouse gases is secondary,
  project have other primary objectives
• Price for reduction based on international market
• Always on project basis (no national CDM program)
• Prove reduction is additional
• Before international registration, approval by
  Vietnam is needed
• Use of UNFCCC approved methodology for reduction
  calculations

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How does it work in forestry?
In case of Vietnam, definitions of forest are
(1) An area of at least 0.5ha with (2) A
minimum crown cover of 30 and (3) A minimum
tree height of 3m at maturity
For Vietnam most relevant reforestation of land
that is not qualified as forest according the
definition since 1990
Afforestation/reforestation activity fulfill
forest definition. That is why it is called
AR-CDM
by human-induced planting
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How does it work in forestry?
Forestry Projects AR-CDM Projects
Financial Source Government fund ODA fund Private fund (local/foreign) Government fund ODA fund Private fund (local/foreign)
Project Cost Seedlings Equipment and materials Labor cost Seedling Equipment and materials Labor cost Transaction cost for CDM
Monetary Benefit Forest products NTFP Forest products NTFP Carbon credit (CER)
Intangible Benefit Flood mitigation Prevention of soil erosion Water quality improvement Biodiversity conservation Flood mitigation Prevention of soil erosion Water quality improvement Biodiversity restoration Carbon sequestration
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Potential in Vietnam

• 2 projects under development in Hoa Binh and Thua
  Thien Hue
• No forestry project in Vietnam yet registered
  under UNFCCC
• Potential for Vietnam shown on
  http//www.csi.cgiar.org/encofor
• By national CDM strategy quantified as
• 52,000,000 tCO2 equivalent until 2010

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Readiness of the Government

• The Government ratified UNFCCC and KP in Nov.
  1994 and Sep. 2002, respectively (KP entered into
  force in Feb. 2005)
• MONRE was assigned as a national authority for
  implementing UNFCCC KP
• ICD of MONRE was assigned as Designated National
  Authority (DNA) for CDM in Mar. 2003
• DNA approves CDM projects
• CDM National Executive Consultative Board
  (CNBCB) was established in Apr. 2003.
• CNBCB is composed of 12 members from concerned
  ministries/agencies.
• It evaluates CDM projects based on criterion and
  endorses them to DNA

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Approval Procedure PIN
Project developer has to prepare PIN (Project
Idea Note) if investors request certification
from DNA.


Project Developer
CNA (DNA)
CNECB
Others
Approving procedure of PIN
Review and examine legal status and documents
Prepare PIN and other relevant documents
Deliberate PIN by all members
25 days
Re-consider and issue a letter of endorsement by
Minister of MONRE
Letter of endorsement
Comments
Source MONRE Circular No10/2006/TT-BTNMT dated
12th December 2006
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Approval Procedure of PDD
All CDM Projects must prepare PDD (Project Design
Document)


Project Developer
CNA (DNA)
CNECB
Others
Approving procedure of PDD
Energy and non-energy technical expert group
Prepare PDD and relevant documents
Examination of PDD and other documents
Technical review
Consider PDD by members
50 days
Meeting and evaluation (Presentation by project
developer and vote by all members)
Re-consider and issue a letter of approval by
Minister of MONRE
Letter of approval
Source MONRE Circular No10/2006/TT-BTNMT dated
12th December 2006
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Hoa Binh Project ltBackgroundgt

• JICA, DOF/MARD, VFU and RCFEE have implemented a
  Study on Capacity Development for AR-CDM
  Promotion in VN since Oct. 2006.
• About 300 ha of reforestation sites were selected
  in two communes, Cao Phong district, Hoa Binh
  province.
• The team will start formulation of a small-scale
  AR-CDM project (pilot project) in May 2007 and
  complete preparation of draft PDD by Nov. 2007.
• The team intends to implement the pilot project
  using public and private funds in order to
  encourage development of AR-CDM projects in VN
  referring to the experiences of the pilot
  project.

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Hoa Binh project ltSite Locationgt ?5 sites
selected? Xuan Phong com.3 sites Bac Phong
com.2 sites ?Sites rejected?
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Xuan Phong commune (Lake area)
Xuan Phong commune
Yen Lap commune
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Xuan Phong commune (North area)
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Xuan Phong commune (Northeast area)
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Bac Phong commune (West area)
Characteristic Vegetation (Lao Lach)
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Bac Phong commune (East area lake area)
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Hoa Binh Project ltPreliminary Plangt-subject to
discussions with communities-
Reforestation area About 300 ha
Land ownership Mostly allocated to farmers
Present land use Bush and grass land
Species planted Subject to discussions with farmers. (indigenous species mixed with early matured ones)
Baseline carbon 4.5tC/ton9.8tC/ha (preliminary figures)
Fund sources Program 661 fund private fund
Project organization Communities Cao Phong district PC with technical assistance from FVU/RCFEE
Expected effects Establishment of payment mechanism to environmental services of forests Short- and long-term income to farmers Environmental protection, biodiversity contribution, etc.
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A Luoi Project
Patchwork land use in A Luoi district
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A Luoi Project-history of project-

• A Luoi district has a lot barren land with forest
  use classification due to American-Vietnam war
  and subsequent unsustainable land use
• DPC A Luoi decided to experiment with CDM and do
  a pilot project the Golden Forest and learn
  from the experience. 38 ha reforested with 3
  models a dry-run exercise to calculate the
  amount of GHG reductions that could be realised.
• See publication Downloadable at
  www.snvworld.org
• (Forests/ SNV publications)

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A Luoi Project-project development-

• September 2006 end of pilot and start of
  initiative to combine all reforestation efforts
  in the district in one program the 5000 ha
  reforestation program 2006-2010 and attach a CDM
  component to it
• Already 700 ha reforested in 2006
• District Peoples Committee is project developer
• Project finances by individual bank loans, ADB
  (CRILP), 661, smaller donors
• Capacity building CDM component SNV Netherlands
  Development Organisation and Mitsubishi
  Securities
• Steering Committee and Working Group set-up in
  April 2007

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A Luoi Project-area facts figures-

• North-Central Vietnam - Thua Thien Hue province
• A Luoi District
• Forest land is allocated to private owners
  (mainly households)
• Total project area 5000 ha 3000 households
• 80 People belong to ethnic peoples Ta oi, Ca Tu
  and Pa Co
• 35 People live under the poverty line
• Average land area 0.8 -2.5 ha per farmer
• Mixed native species and fast-growing exotic
  species (Acacia)
• Farmer decides on tree species

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Local people in A Luoi district
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A Luoi Project-reforestation activity-
CER
CER
CER
5
10
15
20
25
30
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A Luoi Project-financing-
CDM process costs (DOE/UNFCCC)
DPC/OARD A lUOI
SMALL-HOLDER PLANTATION OWNER
tCER
PLANTATION
TIMBER AND NTFP
BANKS
PAYMENT BY SMALL-HOLDER INCOME TO
SMALL-HOLDER OTHER FINANCAL OR PRODUCT FLOW
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A Luoi Project-CDM component calculations-

• Baseline scenario
• Use of approved Methodology ARNM0010
  Reforestation of Degraded Land
• Included Carbon Pools above and below ground
  biomass of living trees. Excluded Carbon Pools
  soil carbon and carbon in herbs/shrubs
• Baseline scenario Continuing of the extensive
  slash-burn low input agriculture. No standing
  trees in the baseline baseline 0
• Project scenario
• Stratification of planted models 3-5 models of
  mixed system of Acacia with indigenous species
  based on site-suitability and farmer choice
• Actual calculation based on actual monitoring
  (carbon accounting by farmer, checked by
  independent research organisation)
• Provisional calculation of Certified Reduction
  Emissions that can be realised per hectare/year
  10 ton CO2 equivalents (10 CER/ha/yr)

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A Luoi Project-Current status and future
planning-
Project Developer
CNA (DNA)
CNECB
Others
Approving procedure of PIN
Review and examine legal status and documents
Deliberate PIN by all members
Prepare PIN and other relevant documents
Re-consider and issue a letter of endorsement by
Minister of MONRE
Letter of endorsement
December 2007
Technical review
Prepare PDD and relevant documents
Examination of PDD and other documents
Approving procedure of PDD
Consider PDD by members
50 days
Re-consider and issue a letter of approval by
Minister of MONRE
Letter of approval
Meeting and evaluation (vote by all members)
February 2008
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A Luoi Project-benefits-
National District Household
Formal Forest cover and bio-diversity increase Livelihood improvement Economic development Environmental awareness Land-title (red book) Employment and income from timber and NTFP harvests CDM revenues of 25-42/yr per small-holder
Informal Showcase project, ready for up-scaling in North Central region Reduced pressure on natural forests Increase in scenic beauty Less landslides Increase in grass-root democracy, empowerment and knowledge level through self-governance of