Property Rights to Carbon in the Context of Climate Change

1
Property Rights to Carbon in the Context of
Climate Change

• Grenville Barnes and Sheryl Quail
• School of Forest Resources and Conservation
• Geomatics Program
• University of Florida

March 2009
2
Structure of Presentation

• Introduction
• Understanding Carbon pools and dynamics
•  
• Climate Change Mitigation Strategies
• Who controls the major forest Carbon Pools
•   Conceptualizing Property Rights
• Defining Property Rights to Carbon
• Conclusion 
•  

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• Who owns the tree?
• How to formalize the transaction?
• What would prevent sale to others?
• How can conservation rights be
• enforced?
• What is a fair market price?

Joses 500 tree (Acre, Brazil)
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Need to define C property rights
Clarifying both property rights to forestland
and the legal rights and responsibilities of
landowners is a vital pre-requisite for effective
policy and enforcement (Stern et al. 2007
608) Only when property rights are secure, on
paper and in practice, will longer term
investments in sustainable management become
worthwhile. (OCC 2008 58) In order to create
and deliver carbon credits to a carbon offset
investor, project proponents must ensure that
landownership and formal property rights are well
defined and documented. This creates a special
risk for developing countries that have
inaccessible or costly land titling procedures.
(Randrianarisoa, Vitale Pandya 2008) time
has come for property theorists to reconstitute
property to engage with the sociological and
ecological dimensions (Boydell et al
2008) ..property rights, far from being
straightforward instruments of ownership, are
nuanced and highly important to any system that
essentially creates permits and offsets Allan
Bayliss 2005)
The reason many natural resources are not traded
efficiently in market systems is . the good or
service should be private rather than public.
(Portela et al 2008 13) Resolving the
uncertainties surrounding legal title to the
sequestered carbon is critical to securing its
market value in a CDM transaction. (Miller et al
2008 166) Many REDD systems will create a new
form of tradable commodity in the form of carbon
rights(PEP Report 2008)
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Natural Carbon Cycle
CO2 in Atmosphere
photosynthesis
Ocean uptake
respiration
Ocean loss
Forest Carbon
Ocean Carbon
runoff
Fossil Carbon
decomposition
Soil Carbon
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The Human Influence
CO2 in Atmosphere
Burning Fossil Fuels
Forest Carbon
Ocean Carbon
Warming temps Acidification
Deforestation Land Use Change
Forest clearing
Fossil Carbon
Soil Carbon
Forests cheapest option
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http//www.globe.gov/fsl/html/templ.cgi?carboncyc
leDialangesnav1
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Kyoto Protocol
Bali Action Plan REDD (2007)

• Clean Development Mechanism (1 project)
• emissions reduction from developed
• countries to developing countries
• Afforestation and reforestation (A/R) in
• developing countries

• World Bank
• Forest Carbon Partnership Facility
• funds for capacity building and project design
• BioCarbon Fund
• A/R REDD

• Joint Implementation
• emissions reductions between
• developed countries

UN-REDD Programme

• Chicago Climate Exchange (CCX)

• European Union Emissions Trading System

• Regional Greenhouse Gas Initiative (RGGI)

• New South Wales ETS

• Over the Counter (OTC) trades

Formal Markets (128 B - 2008)

• UK ETS

Voluntary Markets (331 million 2007)
Cap/trade (Signatories)
C Emitting Companies
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REDD focuses on forest carbon
Global Forest Coverage
Annual Net Change in Forest Area by Region
(1990-2005)
FAO 2005
an estimated 20 billion tons of carbon could
be released into the atmosphere over the next 20
years under a business as usual scenario in the
Brazilian Amazon alone. (Nepstad et al 2007)
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Who Owns the worlds Forests (and Forest C)?
White and Martin 2002
22 of Forests in Developing Countries is
reserved for or privately owned by communities
2008 study shows trend continues
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FOREST TENURE
2008 Latin America
2008 Africa
99.7 administered by Government
(Data source Sunderlin, Hatcher and Liddle 2008)
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Property Lenses

• Conventional western views Locke, Blackstone
  et al
• Roman Law the basis for civil law
• Common Property Resources
• Bundle of Property Rights paradigm
• Web of interests
• Layers of Rights and Interests

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Roman Law Classification of Property
Open Access
Private
State
Communal
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Web of Interests

• a set of interconnections among persons,
  groups, and entities each with some stake in an
  identifiable (but either tangible or intangible)
  object, which is at the center of the web. All of
  the interest holders are connected both to the
  object and to one another (Arnold 2002 333).

Property Object
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Property Regimes
Carbon Pools
Carbon Dioxide Carbon Monoxide Methane
Global Commons Right to pollute
ATMOSPHERE
Blue Carbon
Gaseous Phase (770G T)
NATURAL RESOURCES (FORESTS)
Timber, Extraction, Conservation Rights
(concession)
Forest Carbon, Plants, Litter, Roots
Green Carbon
Biosphere (540 - 610G T)
LAND
Land Rights (title)
Soil (1.5 to 1.6 K T)
Mining/Mineral, Oil Rights (concessions)
Fossil Fuels Sedimentary Rock
SUB-SOIL
Lithosphere (66-100M T)
Gray Carbon
Territorial Sea High Seas
OCEAN
Dissolved CO2 Calcium Carbonate
(38-40K T)
http//www.oznet.ksu.edu/ctec/carbon/carboncycle.
htm
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INDIGENOUS COMMUNITIES
STATE
PRIVATE
Conservation Concessions
Eco-Tourism Concessions
Reforestation Concessions
Intangible Area
60
3-5
35-37
Buffer Zone
Forest Concessions
NATURAL RESOURCES
Brazilnut Concessions
Communal Reserves
National Parks
National Reserves
Titled
Untitled
Certified
Recognized
Isolated
Titled
LAND
Mining Concessions (gold)
SUB-SOIL
Lotes Petroleros
Layer of Rights and Interests - Madre de Dios
(Peru)
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Tenure Situation in Communities - MAP Region
Pando - Bolivia
N
Brazil
Peru
Bolivia
M(adre de Dios) A(cre) P(ando)
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Pictures from the Amazon (2006)
moooooo.
Spot the Forest Carbon?
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Pando - Bolivia

• Land Tenure Spectrum
• State (Parks/Fiscal)
• State (forest concess)
• Peasant Communities
• Indigenous Communities
• Private individual

Community Title Conditions

• Inalienable
• Indivisible
• Imprescriptible
• unattachable
• irreversible
• collective

- 37 of Forest Carbon is on Communal Land
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Land vs Resource Rights Community in Pando
(Bolivia)
Family Tree Tenure
Nucleated settlement unity of title -
individual and collective tree tenure -
Source Cronkleton and Albornoz 2007
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New Constitution Bolivia (ratified in Jan 09)
Art. 348 natural resources minerals in any
form, hydrocarbons, water, air, soil and
sub-soil, forests, biodiversity, the
electromagnetic spectrum and all of those
elements and physical forces susceptible to use
(aprovechamiento). These natural resources
are regarded as strategic in character and of
public interest for the development of the
country. Art. 349 further qualifies these
natural resources as the indivisible,
imprescriptible, direct property and dominion of
the Bolivian people, with the administration of
the collective interest being the responsibility
of the state. The state will recognize,
respect and authorize individual and collective
property rights to the land, as well as use and
improvement rights to other natural resources.
Art. 386. Natural forests and forest soils have a
strategic character for the development of the
Bolivian people. The state will recognize use
rights to the forest in favor of communities and
private operators. It will also promote
conservation and sustainable use, the generation
of gross value to its products, and the
rehabilitation and reforestation of degraded
areas.
Public interest - state ownership on behalf of
the nation - C changes the scale as Public
Interest could apply to international community
http//www.geocities.com/cpbolivia/texto2.htm
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Extractive Reserve -Brazil
Family house
Rubber Trail
Rubber Tree
Brazil nut Tree

• State owns land
• 20/30 year usufruct concession

Unity of concession family trails individual
tree tenure spatial extent varies by resource
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Extractive Reserve - Brazil
Family house
Brazil nut Trail
Rubber Trail
Rubber Tree
Brazil nut Tree
Unity of concession family trails family tree
tenure spatial extent varies on resource
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Formalization of rights and transactions

• A cadastre and registry is a land information
  system that provides legal security, public
  notice and a current, comprehensive record of
  property rights within a jurisdiction. It answers
  the following specific questions with respect to
  property rights
• WHAT is the nature of these rights?
• WHO holds them?
• WHEN were they acquired and duration?
• HOW were they acquired?
• WHERE are they located and what are their
  dimensions?

Could a carbon cadastre be applied to C
property rights ?
Could this be operated at a decentralized level?
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Summary of Property Rights Attributes
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Land Administration Projects Latin America
CARIBBEAN Jamaica (BID) Trinidad Tobago
(BID) Bahamas (BID) Republica Dominican
(BID) Antigua OECS Countries (OAS) Turks and
Caicos (DFID)
Mexico (BM BID)
SOUTH AMERICA Guyana (BID, DFID) Colombia
(BID) Ecuador (BID, BM) Peru (BID, BM,
USAID) Brazil (BID) Bolivia (BM, USAID, Ned,
Nordic) Paraguay (BID) Surinam (Ned, BID)
CENTRAL AMERICA Belize (BID) Guatemala
(BM) Honduras (BM, UE, BID) El Salvador (USAID,
BM) Nicaragua (BM, MCC) Costa Rica (BID) Panama
(BM, BID)
Over 1 Billion invested in LAC on Property
Formalization Projects (since 1996)
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Lessons from Land Cadastre Initiatives

• Tenure dynamics
• inheritances
• sales
• rentals
• subdivisions
• Rapid De-formalization following titling (no
  buy in)
• Narrow focus on individual, marketable
  property
• Poor baseline data
• Too much focus on land as opposed to key
  resources
• Ladder of formal rights not just title
• Tenure pluralism (indigenous vs colonial)

Conventional cadastres treat community-based
tenure as a homogeneous polygon that assumes all
internal rights are shared equally
(Ankersen Barnes 2004)
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Conclusions

• Carbon flows across all property regimes
• Weak government capacity and enforcement may
  change government
• property into open access
• Communities become key stakeholders in CC
  mitigation
• CC hastens need to look beyond just land to key
  natural resources
• How can we design programs that address CC and
  poverty alleviation

Thanks to Rights and Resources Initiative (RRI)
for Support of this work..