harnessing the carbon market to sustain ecosystems and alleviate poverty biocarbon fund overview...
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Harnessing the carbon market to sustain ecosystems and alleviate poverty
BioCarbon Fund BioCarbon Fund OverviewOverview
BioCF Project Training SeminarWashington, DC
July 11, 2005
World Bank Carbon Finance World Bank Carbon Finance ProductsProducts
Italian Carbon Fund. $80 million (open to Italian participation). Italian Multi-shareholder. Multipurpose.
Netherlands Clean Development Facility. ~ $172 million.
Netherlands Ministry of Environment. CDM energy & infrastructure projects.
BioCarbon Fund. $51.3 million (open).
Multi-shareholder. JI and CDM LULUCF projects.
Community Development Carbon Fund. $128.6 million (closed).
Multi-shareholder. Small-scale CDM energy projects.
Prototype Carbon Fund. $180 million (closed).
Multi-shareholder. Multi-purpose.
Total funds pledged: ~ US$937 million
Netherlands ECF
Netherlands European Carbon Facility. ~ $40 million with IFC.
Netherlands Ministry of Economic Affairs. JI projects.
Spanish Carbon Fund. ~ $220 million (open to Spanish participation). Spanish Multi-shareholder. Multipurpose.
Danish Carbon Fund. ~ $64 million (open to Danish participation). Danish Multi-shareholder. Multipurpose.
BioCarbon Fund: RationalesBioCarbon Fund: Rationales
Improved land use is part of the solution to climate change (deforestation causes 20% of CO2 emissions)
Open carbon market to rural communities (excluded if CDM restricted to energy & infrastructure)
Inform debate (so far too ideological, not enough based on facts)
Create synergies among Conventions (money channeled through UNFCCC can foster sister conventions) UNCCD
GoalsGoals
Atmospheric: Reduce GHG concentrations over baseline
Cost-effective: Buy low-cost climate change mitigation opportunities
Social: Improve livelihoods (employment, income, know-how)
Environmental: Conserve biodiversity, rehabilitate land
Adaptation: Increase social and ecological resilience of local communities
Two WindowsTwo Windows
Second Window
Explore “beyond Kyoto”
CDM: Forest management, revegetation, agricultural land management
No carbon credits
First Window
Kyoto-compatible
CDM: Afforestation /Reforestation + Biofuels
Carbon credits to meet Kyoto obligations
Tranches and WindowsTranches and Windows
Second WindowFirst Window
Tranche One (operational)
Land Restoration Tranche (to be opened)
Marine Tranche?
Portfolio – First WindowPortfolio – First Window
In-fill planting for forest restoration
Community forestry
Agroforestry
Biofuels
Portfolio – Second WindowPortfolio – Second Window
Forest restoration & conservation
Reduced tillage
Revegetation
Project PortfolioProject Portfolio
~ 140 Project Idea Notes received
At ~ $50 million, BioCarbon Fund needs ~ 20 projects
21 leading candidates identified and under further preparation (Carbon Finance Documents)
~ 12 Mt CO2e by 2017 (including Windows 1 & 2) Enough for a fund of ~ $60 million!
17 projects cleared
17 Projects Cleared 17 Projects Cleared
Albania Assisted Natural Regeneration Brazil Reforestation around Hydro Basins China Pearl River Watershed Management Colombia San Nicolas Agroforestry Colombia Silvopastoral Rehabilitation Costa Rica Coopeagri Dominican Republic Rio Blanco Reforestation East Africa Small Group and Tree Planting Honduras Pico Bonito Madagascar Biodiversity Corridor Mexico Seawater Agroforestry Nicaragua Precious Woods Niger Acacia Community Plantations Philippines Watershed Rehabilitation Trinidad and Tobago Nariva Wetland Restoration Uganda Nile Basin Reforestation Ukraine Chernobyl Reforestation
Participation & TimelineParticipation & Timeline
Tranche One operational since May 2004
13 Participants: $51.3 M Okinawa Electric; Government of Canada; Government of Italy;
Tokyo Electric; Eco-Carbone; Agence Française de Développement; Government of Spain; Government of Luxembourg; Idemitsu Kosan; Sumitomo Joint Elec. Power Co.; Sumitomo Chemicals; Japan Petroleum Exploration; Japan Iron and Steel Federation
2.5% catch-up payment from March 31, 2005
1-2 more Participants for Tranche One by August 31, 2005
Closure of Tranche One and opening of Tranche Two by August 31, 2005
How the Fund WorksHow the Fund Works
Industrialized Governments
and Companies
EITs and Developing Countries
$$TechnologyTechnology
FinanceFinance $$TechnologyTechnology
FinanceFinance
CO EquivalentCO Equivalent22
Emission Reductions
CO EquivalentCO Equivalent22
Emission Reductions
GovernanceGovernance
International Bank for Reconstruction and Development is Trustee of the BioCF; BioCF does not have legal entity
Fund Manager = Bank Staff, heading the Fund Management Unit
Participants (investors) represented by a Participants’ Committee approving projects, budgets, and giving general guidance
Fund Management Committee = 5 Bank managers screening projects
Host Country Committee for all Carbon Funds
BioCF Website BioCF Website
Website will be used intensively to communicate with Participants, project sponsors and public
Contains a description of each cleared project Contains a FAQs section on the BioCarbon Fund Will contain a discussion of some of the LULUCF
specific issues, as they arise in the various projects (additionality, leakage, permanence, social and environmental benefits and risks)
Contains a page on “Useful LULUCF Resources,” which links to other organizations, market information, methodological and regulatory aspects, etc.