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Forest Carbon Offsets for Sale: To You and Me

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Forest Carbon Offsets for Sale: To You and Me

The People’s Climate March in New York City demonstrated that individuals are engaged in addressing climate change, demanding action not just from government and business leaders, but from themselves. A new initiative called Stand for Trees aims to tap into that energy to inspire these individuals to support avoided deforestation projects.

2 October 2014 | More than 400,000 people took part in the People’s Climate March in New York City last week – the ultimate call to arms demanding government and business leaders take action to address climate change. But many of these marchers are not just sitting around and waiting for others to act. Tthey are moving beyond advocacy and taking whatever steps they can in their personal lives to reduce emissions, perhaps driving less or improving energy efficiency in their homes and eating less or no meat .

Code REDD is hoping to harness the enthusiasm demonstrated by these marchers and like-minded individuals to tap into a new source of potential support for REDD+ (reduced emissions from deforestation and forest degradation) projects.

The organization’s strategy for increasing demand for REDD has always centered on corporate education, public policy and REDD+ community building, said Kate Dillon, Director, Membership Development, for Code REDD. “But we realized there was a piece missing and that piece was people,” she said at a Climate Week NYC 2014 event. “People drive demand. People are what motivate the private sector and the public sector decision making, so we feel it’s essential to engage the general population in forest conservation and helping them to understand the role of forests in climate regulation.”

Governments such as Norway and corporations including Disney and Microsoft have been the major buyers of verified emissions reductions from REDD+ projects. But this new initiative is premised on the notion that anyone can buy REDD+ offsets to neutralize the personal emissions that they can’t avoid.

“We realized we needed to do more than just raise awareness,” Dillon said. “We needed to inspire and we needed to provide a clear pathway to action because people want to do something. They don’t just want to talk about it.”

Code REDD has partnered with the U.S. Agency for International Development, Citizen Group – which helped produce the Risky Business report on the economic risks of climate change – and Markit for an integrated multimedia campaign called Stand for Trees. The centerpiece of this campaign will be a mobile web solution – not an app – to facilitate sales of REDD+ offsets to the general population in half tonne and tonne denominations, which would be retired under technology being developed by Markit . The partners will reach out to potential individual buyers of REDD+ offsets through video and social media, quantifying the climate challenge in ways people can understand and explaining how forests fit into the equation.
“Our goal is to connect people to forests in a personal and emotional way,” Dillon said.

A person standing on an airport security line, for example, could scroll through the mobile website to look at REDD+ project pages and purchase offsets to counter the emissions being generated by his or her trip and then share news of the purchase on their favorite social media platforms where their friends and acquaintances would learn what REDD is.

Individuals currently make up just 0.3% of demand for forest carbon offsets, according to Ecosystem Marketplace’s State of the Forest Carbon Markets 2013 report.

The mobile web solution will only facilitate sales of carbon offsets from Code REDD member projects such as Wildlife Works’ Kasigau Corridor in Kenya and South Pole Carbon and Carbon Green Africa’s Kariba REDD+ project in Zimbabwe that have been verified to the Verified Carbon Standard and the Climate, Community and Biodiversity Standard in the beginning. But the partners envision using the technology to expand the options to other REDD projects and fully scale up the initiative.

Code REDD envisions that this campaign targeting individual actions will complement its work to spur demand in the public and private sectors.

“In the interest of time and scale, we need to do everything,” she said. “We need the right public policy incentives, we need to engage the private sector, but we also need to engage individual opportunities and really take advantage of this opportunity for citizen engagement.”

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As DRC Emerges from Civil War, Government Seeks $50 Million per Year to Protect Forests from Surging Development

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As DRC Emerges from Civil War, Government Seeks $50 Million per Year to Protect Forests from Surging Development

The Democratic Republic of the Congo (DRC) has the second largest forested area in the world, and the usual threats to forests – logging and agricultural expansion – have historically been muted by the civil war that has plagued the country since the mid-1990s. However, the DRC’s increasing political stability could result in the forests falling under threat from development, so the government is launching a pay-for-performance avoided deforestation program seeking $50 million a year from the private sector.

29 September 2014 |The forests in the Democratic Republic of the Congo (DRC) do not get nearly as much attention as those in Brazil and Indonesia, even though the DRC’s forests rank right in the middle of those countries on the list of the top three forested areas in the world. The DRC holds 155 million hectares of forests, more than 50% of all of Africa’s forests, and the country’s iconic Congo Basin is second only to Brazil’s Amazon forest in size – roughly 540 million hectares – and is larger than the 90 million hectares of forests in Indonesia.

Brazil and Indonesia are both beneficiaries of pledges potentially valued at up to $1 billion from Norway to support their efforts to conserve their forests. But the DRC has yet to receive that level of commitment from either donors or the private sector, in large part because the civil war that led to the deaths of six million people in the country also perversely protected the DRC’s forests from widespread destruction. In late 2013, however, the main armed rebel group agreed to a peace treaty, which paves the way for increasing political stability in the country. With that political breakthrough comes much-needed development, and with development come increased risks to the DRC’s forests, which, if destroyed, could potentially release 140 billion tonnes of greenhouse gases.

Now, donors and investors have a unique opportunity to prevent widespread deforestation before it occurs. To counteract potential forest destruction, the DRC government is launching a new pilot program to safeguard nearly nine million hectares – 10% of the DRC’s forests in an area the size of England – in the districts of Mai Ndombe and Plateau using the UN REDD+ (reducing emissions from deforestation and forest degradation) mechanism.

Bonobos, our closest relative

Bonobos, our closest relative

The area to be protected from deforestation is home to more than 1.8 million people and endangered species – some living in Salonga National Park – such the bonobo, the great ape that is the closest relative to humans and lives only in the DRC. It is also the site of the largest wetlands on the Ramsar List of Wetlands of International Importance, which originates from the global convention governing the sustainable use of wetlands. The area is the closest forest area to Kinshasa, the capital city, meaning it is also under threat from the growing charcoal, timber and food needs of nearly 10 million people, in part because of transportation infrastructure improvements making the forests more accessible.

“Our country believes with good regulation we can participate fully in the solution to climate change,” Minister N'sa Mputu Elima, Minister of Environment, Conservation of Nature and Tourism for the Democratic Republic of the Congo, said during a Climate Week NYC 2014 event.

Where’s the money?

The DRC receives funding from Norway and the World Bank to support its REDD+ development efforts, including $3.6 million in REDD readiness funding from the World Bank’s Forest Carbon Partnership Facility (FCPF). In April, the DRC drafted an Emission Reduction Programme Idea Note (ER-PIN) in pursuit of emissions reduction payments of about $60 million up to 2020 under the FCPF’s Carbon Fund program, which helps pay selected forest nations for reducing emissions from deforestation. In June, the DRC was accepted into the fund’s pipeline, but a final decision on whether it receives funding has not been made.

The ER-PIN’s stated proposal is for FCPF’s Carbon Fund to enter into an Emissions Reductions Purchase Agreement (ERPA) for 10 million tonnes of carbon dioxide equivalent (MtCO2e) over five years. But the FCPF process is a competitive one, with several other countries in the mix, and there has not been a formal commitment made to the DRC’s program. And even if the DRC is selected, the country will need to find additional funding to fully scale its planned program, to generate the targeted emissions reductions of 29 MtCO2e emissions reductions from 2016-2020.

The DRC is now seeking $20 million in start-up financing, and the government is looking mainly to philanthropic donors. This is because it is too difficult to make the business case for commercial investment, said Mike Korchinsky, Founder and President of Wildlife Works, which is a partner in the DRC’s REDD+ effort. Starting in Year Two, however, the program would shift into a pay-for-performance model in which private sector companies would pay the DRC government about $50 million for verified emissions reductions, with a target reduction of 7-10 MtCO2e per year. These revenues would be generated if and only if the country is able to reduce deforestation below historical rates. Proving emissions reductions against a baseline will take a major effort, since the DRC does not have high historical deforestation rates to begin with, he said.

The price for the emissions reductions would be dictated by the voluntary carbon markets, but the partners have assumed a price of $6 per tonne although they understand that there is no proof that the markets will support a minimum price, Korchinsky said. “We welcome some stability as long as it’s a fair price,” he said.

The program is potentially of great interest to corporations that need to show a reduction in their net carbon footprints and have done all they can to reduce their carbon emissions internally, Korchinsky said. The partners have started having conversations with corporations operating in the DRC to urge them to take responsibility for their emissions.

“But in the end, the vast majority of industrial emissions are created in the Northern hemisphere so it’s corporations in the Northern hemisphere that should carry responsibility for financing these activities in the long run,” he said. “The scale of this program is within the means of individual corporations whose emissions are far larger than this program is trying to reduce.”

A better alternative

Brazil and Indonesia receive a lot of attention for their forests mainly because of the very high historical deforestation rates they experience because they – like many developed countries – use their forests to increase the wealth of their countries, Korchinsky said. Brazil has per capita income of about $12,000 per year while Indonesia’s per capita income is about $3,500 per year. In comparison, the DRC’s per capita income is roughly $300-400 per year because the country has not had the opportunity to destroy its forests for growth, but the country must now make a decision about future development, he said.

“Can it learn from the lessons of Indonesia and Brazil and find a different way to protect its forests and still grow its economy?” Korchinsky asked.

The DRC’s forests are already facing intense new pressures from agricultural commodities such as palm oil. In 2009, Congo Oil & Derivatives SARL was awarded a 10,000-hectare concession to develop a new palm plantation in Muanda territory – despite the fact that the concession falls within two forest reserves. As of November 2013, the plantation was still in its early stages of development.

Post civil war, DRC's forest dependant communities are vulnerable

DRC’s forest dependant communities are vulnerable

One way to make sure that standing forests are valuable in the DRC’s economy is to ensure the REDD+ program creates as many jobs as possible. In the short term, REDD+ will not be able to employ as many people as activities leading to deforestation such as logging, Korchinsky admitted. However, the program intends to train community residents to perform much of the measuring and reporting work needed to verify that the promised emissions reductions are actually being generated. And it will invest in local education to give residents more options for employment in the future.

More than 70% of the start-up financing will be invested in programs in communities to convince them to participate in the program, with the balance going toward technical support, policy framework and legislation and changes in land tenure.
“In the end, this program will succeed because communities see the value,” he said.

What does the future hold?

The DRC government will soon hold a public national workshop to officially launch the design phase, with input coming from all stakeholders, including civil society organizations and the private sector. The design document will be presented in June 2015 to the World Bank, with the intention that the DRC and the World Bank would sign the ERPA by the end of the year.

The government has committed to copying this program in other parts of the country if the pilot works.
“It really is a pilot for the future of the Congo Basin,” Korchinsky said.

There are eight other countries in the Congo Basin facing the same challenges in stopping deforestation without having an adverse impact on their communities, said Victor Kabengele wa Kadilu, national REDD coordinator. “If it works in the DRC, it’s going to work in the other Congo Basin countries,” he said.

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Unilever CEO: “Capitalism is fine. Capitalism leaving too many people behind isn’t fine.”

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Unilever CEO: “Capitalism is fine. Capitalism leaving too many people behind isn’t fine.”

More and more leading consumer goods companies are taking “Zero Deforestation pledges – vows that have made for some strange bedfellows, but are also leading business, government and indigenous community leaders to find the advantages to working together.

23 September 2014 | Within the last year, the world’s three largest palm oil suppliers – Wilmar, Gold Agri-Resources, and Cargill – all made commitments to purge deforestation from their supply chains. The pledges cover 60 percent of globally traded palm oil, which translates into $30 billion in annual sales. The turnaround came about in part because of pressure from the consumer goods companies that buy most of this palm oil – companies such as Unilever, Nestlé and Kellogg’s that are in turn under pressure from non-governmental organizations (NGOs) and consumers.

At an event yesterday hosted by the Ford Foundation and the Climate and Land Use Alliance that previewed the United Nations Climate Summit today, Unilever CEO Paul Polman spoke about business’s role in a climate-changed world.

“It is very clear, increasingly, [to] the business community as well, that although capitalism is fine, capitalism leaving too many people behind isn’t fine,” he said. “Capitalism defined very narrowly as GDP (gross domestic product) growth or profit-and-loss growth while we end up not being able to breathe the air or create sufficient jobs for everybody or [we] have these issues with food security or hunger simply isn’t fine.”

Polman serves on the board of the Consumer Goods Forum, an industry association representing $3 trillion in annual revenues that in 2010 pledged to eliminate deforestation from its supply chains, addressing forest-encroaching commodities such as palm oil, soya, beef, timber and pulp and paper. Unilever launched a traceability and reporting platform last March and has so far entered 120 palm oil suppliers representing about 1,000 mills into the database.

Destruction of tropical peat forests in Indonesia and other countries for palm plantations releases a huge amount of greenhouse gases. The peat soils of Southeast Asia store an amount of carbon comparable to the aboveground vegetation of the Amazon rainforest, so keeping those forests in tact is critical to keeping global average temperature rise in check.

“If we don’t fix this, then I think we are increasingly being rejected. Rejected by the same citizens that came out with 400,000 people yesterday on the streets of New York and many other places in the world demanding climate justice,” Polman said, referring to the Peoples Climate March that clogged the streets of Manhattan on September 21.

Kids were hoisted on shoulders at the Peoples Climate March in New York City last Sunday.

A scene from the Peoples Climate March.

Unilever sells products under more than 1,000 brands, including Dove, Vaseline, Ben & Jerry’s, and Lipton – household products that will be in increasing demand as billions of more people move into the global middle class. Speaking later on a panel, Jeff Seabright, Unilever’s chief sustainability officer, said that the company’s efforts on reducing deforestation fall not under a corporate social responsibility strategy, but rather as a business strategy. However, he admitted that NGO pressure has certainly prompted companies to speed efforts on addressing deforestation from palm oil expansion, and its associated emissions.

“I would be remiss if I didn’t acknowledge that some measure of the sense of urgency was a result of Greenpeace showing up at Unilever headquarters in London five years ago and scaling the walls,” he said. “That has an impact, and I don’t think we’d be where we are at this stage without Greenpeace playing the role that they played.”

In the wake of the recent murders of Ashaninka leaders in Peru, activists say that securing legal land rights and de-facto protection for indigenous peoples is perhaps the key step to saving forests from the chainsaw and the plow. Abdon Nababan, secretary general of AMAN (the Indigenous People’s Alliance of the Archipelago) and a Toba Batak from North Sumatra, says that the 70 million indigenous people in Indonesia control about 150 million hectares of the country’s land area. Indigenous-controlled forests in Indonesia store roughly 43 Gigatonnes of carbon, he estimates.

“We want to save the forest, but there is no protection for the people who protect the forest,” he said. “Can you protect the forest from Washington, from New York, from London? I don’t think so.”

Nababan sees a new paradigm emerging in which communities are increasingly holding companies accountable, often by civil action such as blocking roads leading to illegal land concessions. In the past, companies could ask the Indonesian government to mobilize the military or the police, he says, but that doesn’t happen much anymore. He called for ‘advocacy partnerships’ – rather than business partnerships – between communities and companies, both of which are at a disadvantage when policies don’t define clear land rights.

“Doing business in a better way, that’s the only choice,” Nababan said. “The world is more democratic now.”

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