community carbon trading: does the market pay and what is in it for intermediaries (sellers) and...
DESCRIPTION
The presentation of Kathleen Edie, of Plan Vivo, to the IIED-hosted Moving ahead with Reducing Emissions from Deforestation and forest Degradation (REDD+) workshop on 9-10 April 2014. The presentation, made in the third session on experiences from the ground and REDD+ financing, focused on community carbon trading, and examined what the market would pay and what intermediaries (sellers) and buyers could gain from REDD+. More information on Plan Vivo's work: http://www.planvivo.org/. Further details of the workshop and IIED's work on REDD+ are available via http://www.iied.org/coverage-moving-ahead-redd-prospects-challenges-workshop.TRANSCRIPT
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Plan Vivo: Improving livelihoods, restoring ecosystems
Community carbon trading: does the market pay and what is in it for intermediaries (sellers) and buyers?
• Plan Vivo approach
• Voluntary market space for community carbon
• Covering costs and sharing revenue
• Gains for resellers/buyers
• Looking forward for community carbon
• Developing institutional capacity Lessons learned on payment systems, monitoring and reporting frameworks since
1990s, can be built upon without ‘re-inventing the wheel’ • Putting sub-national financial frameworks in place PES infrastructure developed through Plan Vivo to channel funds transparently to
community level and micro-projects in different contexts • Directly supporting national level policy and strategy development Plan Vivo project coordinators involved in REDD+ development in Mozambique,
Mexico, Uganda and Tanzania, feeding in real project experience
Plan Vivo approach to REDD+ development
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Key lessons for community REDD+
1. Principle of aggregation – programmatic – interventions take time
2. Integrated objectives (social & ecosystem safeguards already built-in)
3. Meaningful & continuing incentives
– Up-front and continuing payments
– Revenues from timber, crops, NTFPs
4. Risk management and continuous improvement
5. Pragmatic and simple where possible
― Decentralisation, systems for social monitoring
Plan Vivo Addresses Key Issues of
Transparency and Local Governance for Interim REDD+ Actions
Ongoing role for Plan Vivo
Short/medium term
• Communicating Plan Vivo approach to markets
• Accessing current REDD+ Readiness funding streams
• Ensuring Standard is practical and relevant for REDD+
• Building tools and guidance based on project experience
Medium/longer term
• Adapting governance procedures so Plan Vivo System can be used within national programmes
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National govt
International carbon markets
Global readiness funds or other donor funding
Plan Vivo programme coordinator
(sub-national implementer)
Plan Vivo Certificates
used as offsets
Plan Vivo Certificates as proof of
performance
flow of funds
flow of Plan Vivo Certificates
Intermediate funding for Plan Vivo projects
REDD+ demand & supply
• Projections for REDD+ supply outstripping demand.
• IFF report quantified large gap between projected supply and demand in REDD+ sector;
Reductions 3,300 – 9,900 MtCO2e
Demand 253 MtCO2e
• 2012 REDD+ transactions totaled 8.6 MtCO2e / $70 million.
• Plan Vivo REDD+ projects ‘break even point’ not earlier year 3.
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Covering costs & sharing revenue
• Lower price commanded for REDD+ carbon credits.
• Perceptions that costs of implementing and operating REDD+ and avoided deforestation lower than other land-use interventions.
• Opportunity costs are often critical in small-holder and community systems.
• Implementation costs of well-designed projects which address key drivers often higher in small-holder and community settings.
• Opportunity for MRV costs to be lower, given community-context specific frameworks.
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Making the numbers balance when communities are equitably compensated.
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Staged
payment to
communities/
producers
$3.60
Admin’
monitoring, etc
$1.40
Verification,
marketing?
$0.60
Certification $0.40
Example
price:
$6 / tCO2
Gains and motivations for buyers
Key benefits for buyers of community carbon in voluntary sector
• Environmental sustainability goals
• CSR
• Investment in supply chain security
• Brand value
• Stakeholder engagement
• Social ROI
Other benefits
• Host country influence, case building for investments and financial capital, specific biodiversity conservation.
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Motivations of buyers
Resale (pre-compliance)
CSR
Demontrating climateleadership
Direct pre-compliance
Resale (voluntary)
Climate-driven mission
State of the forest carbon market report, 2012. Ecosystems Marketplace.
Looking forward for community carbon
• Plugging the gap in demand in REDD+ markets.
• Communicating social return on investment.
• Realistic costing of community systems.
• REDD+ income as a stimulus & challenge of ensuring equitable benefit sharing.
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• Currently community REDD+ projects operating in voluntary market; low recognition of biocarbon standards, low integration of voluntary and compliance markets, community ownership and leadership of REDD+ activities not well supported or integrated in national schemes.
Ideally
• ambitious national carbon targets,
• biocarbon standards integrated into national and sub-national schemes with recognition of community contribution.
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