Carbon offsets in African smallholder farmsCarbon offsets in African smallholder farms- an ecological and economic way to counterbalance the global - an ecological and economic way to counterbalance the global

climate changeclimate change

Veli PohjonenVeli PohjonenTana-Beles WME projectTana-Beles WME project

2nd Sustainable Land Management 2nd Sustainable Land Management Stakeholder Workshop Stakeholder Workshop

Bahir DarBahir Dar

3.-4. February 20113.-4. February 2011

COCO22 in our air in our air

Despite climate conventions in Kyoto, Despite climate conventions in Kyoto, Copenhagen and Cancun (Mexico):Copenhagen and Cancun (Mexico):

COCO22 concentration of the air is rising concentration of the air is rising

24 per cent between 1958 – 201024 per cent between 1958 – 2010

COCO22 in Mauna Loa, Hawaiji 1958-2010 in Mauna Loa, Hawaiji 1958-2010

Two ways to combatTwo ways to combat

Through the Through the sourcessources: reduce CO: reduce CO22 emissions. Attempted for 20 years in emissions. Attempted for 20 years in the polluting countriesthe polluting countries

Through the Through the sinkssinks: increase Carbon : increase Carbon

Offsets to trees. Ecological way.Offsets to trees. Ecological way.

Carbon Offsets to treesCarbon Offsets to trees

Conserve and manage the existing Conserve and manage the existing natural forestsnatural forests

Establish block plantationsEstablish block plantations

Smallholder farmsSmallholder farms

Carbon Offsets in smallholder farms Carbon Offsets in smallholder farms

Plant treesPlant trees Count the trees in year 1Count the trees in year 1 Define the carbon stock in year 1 (= Define the carbon stock in year 1 (=

A, tn C/farm)A, tn C/farm) Recount the trees in year 2Recount the trees in year 2 Define the carbon stock in year 2 (= Define the carbon stock in year 2 (=

B, tn C/farm)B, tn C/farm) Carbon Offset = B – A (tn C/farm/yr)Carbon Offset = B – A (tn C/farm/yr)

Ato Minale Hailu, Gelawdeos, Dera: Ato Minale Hailu, Gelawdeos, Dera: A= 5.04 tn C/farm, B= 5.47 tn C/farmA= 5.04 tn C/farm, B= 5.47 tn C/farmCarbon Offset B-A = 0.4 tn C/farm/yrCarbon Offset B-A = 0.4 tn C/farm/yr

Excel model: Ato Minale Hailu AExcel model: Ato Minale Hailu A12.11.200912.11.2009

Excel model: Ato Minale Hailu BExcel model: Ato Minale Hailu B23.11.201023.11.2010

Carbon Offsets into MoneyCarbon Offsets into Money

Ato Minale Hailu’s Carbon OffsetsAto Minale Hailu’s Carbon Offsets

A = 5.044 tn C/farmA = 5.044 tn C/farm

B = 5.465 tn C/farmB = 5.465 tn C/farm

B-A = 0.421 tn C/farm/yrB-A = 0.421 tn C/farm/yr

How much in Birr is the Carbon Offset B-A ?How much in Birr is the Carbon Offset B-A ?

CER pricing principleCER pricing principle

Certified Emissions Reduction, CER (Certified Emissions Reduction, CER (http://www.ecx.eu/ ) )

Price of CER = 11.43 Euro / tn COPrice of CER = 11.43 Euro / tn CO22

Price of C = 41.91 Euro / tn C Price of C = 41.91 Euro / tn C ((factor 44/12)factor 44/12)

Price of C = 966 Birr / tn (exch rate 23.04)Price of C = 966 Birr / tn (exch rate 23.04) Value of tree farmer’s Offsetted Carbon Value of tree farmer’s Offsetted Carbon

changes with international market changes with international market (on (on 2.2.2011 it was 966 Birr / tn C)2.2.2011 it was 966 Birr / tn C)

Ato Minale Hailu: Birr value of Ato Minale Hailu: Birr value of Offsetted Carbon Offsetted Carbon

Carbon Offset in one year Carbon Offset in one year (12.11.2009 – 23.11.2010), B-A = (12.11.2009 – 23.11.2010), B-A = 0.421 tn C/farm/yr0.421 tn C/farm/yr

Price of Carbon 966 Birr / tn CPrice of Carbon 966 Birr / tn C

Value of Offsetted Carbon: Value of Offsetted Carbon: 407 Birr / 407 Birr / yr yr

Summary of 8 sample farmsSummary of 8 sample farmsall measured twiceall measured twice

Principle of Carbon Offset paymentPrinciple of Carbon Offset payment

Year A gives the baseline value (tn C/farm)Year A gives the baseline value (tn C/farm) If B-A > 0, payment is doneIf B-A > 0, payment is done B becomes new baseline valueB becomes new baseline value

If B-A < 0, payment is not doneIf B-A < 0, payment is not done The payment is done in the year when new The payment is done in the year when new

carbon stock exceeds the baseline value carbon stock exceeds the baseline value

Calculation chainCalculation chain

Expected Carbon payment to farmersExpected Carbon payment to farmers

Fair price would be CER = 966 Birr / Fair price would be CER = 966 Birr / tn Ctn C

In real trade at least two levels of In real trade at least two levels of middlemen are presentmiddlemen are present

Would the price to farmer drop to Would the price to farmer drop to one third? That is 322 Birr / tn Cone third? That is 322 Birr / tn C

What was paid in Humbo project?What was paid in Humbo project? 245 Birr / tn C (4 USD / tn CO245 Birr / tn C (4 USD / tn CO22))

How to organize Carbon Offset trade?How to organize Carbon Offset trade?

Ato Minale Hailu and co-farmers group Ato Minale Hailu and co-farmers group into Forest Producers Organization (FPO)into Forest Producers Organization (FPO)

FPO buys once a year the Carbon FPO buys once a year the Carbon Offsets from member farmersOffsets from member farmers

FPO sells the Carbon Offsets to FPO sells the Carbon Offsets to Ethiopian Carbon Offset Export AgencyEthiopian Carbon Offset Export Agency

The Export Agency sells the Carbon The Export Agency sells the Carbon Offsets to International Carbon Trade Offsets to International Carbon Trade markets markets

Challenges for M & EChallenges for M & E

Defining the carbon stock, Defining the carbon stock, development of the Excel modeldevelopment of the Excel model

Monitoring & Evaluation (M &E) of Monitoring & Evaluation (M &E) of the Carbon stock in Forest Producers’ the Carbon stock in Forest Producers’ Organization and in the single farmsOrganization and in the single farms

Use of IT – technology (mobile Use of IT – technology (mobile phones, GPS) in carbon data phones, GPS) in carbon data communication, carbon payments communication, carbon payments and M & Eand M & E

Ecological advantagesEcological advantages

Carbon Offsets trade encourages Carbon Offsets trade encourages farmers to plant more treesfarmers to plant more trees

Planting of trees further away from all Planting of trees further away from all weather road increasesweather road increases

Planting of trees on most eroded sites Planting of trees on most eroded sites increasesincreases

Perpetuum Mobile (PM) – Plantarum Perpetuum Mobile (PM) – Plantarum MobileMobile

Economic advantagesEconomic advantages

Farmers get added value from planted treesFarmers get added value from planted trees The value of The value of atanaatana-based smallholder -based smallholder

forestry increases annually by about 10 per forestry increases annually by about 10 per centcent

Player’s are many (e.g. 12.2 mill. Player’s are many (e.g. 12.2 mill. smallholders in Ethiopia)smallholders in Ethiopia)

Carbon offsets are to be understood as a new Carbon offsets are to be understood as a new export commodity from forestry, like export commodity from forestry, like exporting exporting atanasatanas to Sudan to Sudan

A new export commodity is added to A new export commodity is added to Ethiopian international trade Ethiopian international trade

Model to other AfricaModel to other Africa

Smallholder tree planting is on a good drive in Smallholder tree planting is on a good drive in Ethiopia, especially in Amhara regionEthiopia, especially in Amhara region

Farmers are motivated especially after Farmers are motivated especially after successful steps in land tenure and certificationsuccessful steps in land tenure and certification

Forestry training in universities and colleges has Forestry training in universities and colleges has long traditions in Ethiopialong traditions in Ethiopia

Ethiopia is already converting into Carbon Tower Ethiopia is already converting into Carbon Tower of Africa. This accelerates with Carbon tradingof Africa. This accelerates with Carbon trading

Ethiopia can thus be the model for the other Ethiopia can thus be the model for the other AfricaAfrica

Carbon Tower of African HornCarbon Tower of African Horn

Thank youThank you

veli.pohjonen@gmail.com

http://veli.pohjonen.org