Property Rights to Carbon

in the Context of Climate Change

Grenville Barnes and Sheryl QuailSchool of Forest Resources and Conservation

Geomatics ProgramUniversity of Florida

March 2009

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  

• 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?

Jose’s $500 tree(Acre, Brazil)

Need to define C property rights

“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)

“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)

Natural Carbon Cycle

Forest Carbon

Soil Carbon

CO2 in Atmosphere

Ocean Carbon

photosynthesis

respiration

decomposition

Ocean uptake

Ocean loss

Fossil Carbon

runoff

The Human Influence

Forest Carbon

Soil Carbon

CO2 in Atmosphere

Ocean Carbon

Fossil Carbon

Deforestation

Land Use ChangeBurning

Fossil

Fuels

Forest clearing

Warming tempsAcidification

Forests cheapest option…

[http://www.globe.gov/fsl/html/templ.cgi?carboncycleDia&lang=es&nav=1]

Kyoto Protocol

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

Joint Implementation • emissions reductions between developed countries

• European Union Emissions Trading System

• New South Wales ETS

• UK ETS Formal Markets($128 B - 2008)

• Chicago Climate Exchange (CCX)

• Regional Greenhouse Gas Initiative (RGGI)

Voluntary Markets($331 million – 2007)

C Emitting Companies

• Over the Counter (OTC) trades

Bali Action Plan – REDD (2007)

World Bank – Forest Carbon Partnership Facility • funds for capacity building and project designBioCarbon Fund• A/R & REDD

UN-REDD Programme

Cap/trade(Signatories)

[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)

Annual Net Change in Forest Area by Region (1990-2005)

Global Forest Coverage

REDD focuses on forest carbon

Who Owns the world’s Forests (and Forest C)?

22% of Forests in Developing Countries is reserved for or privately owned by communities – 2008 study shows trend continues…

[White and Martin 2002]

2008 – Latin America 2008 – Africa

(Data source: Sunderlin, Hatcher and Liddle 2008)

FOREST TENURE

99.7% administered by Government

• 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

Property Lenses

Tenure Regime

Definition Examples

Res Communes Things open to all by their inherent nature(CO2 )

Air, sea, atmosphere? (open access)

Res Publicae Things belonging to the public and open to the public by law (sub-soil C; forest C?)

Roads, navigable rivers(public property)

Res (Terra) Nullius

Things belonging to no-one(CO2 )

Unclaimed land, fish or game

Res Universitatis Property belonging to a private or public group in its corporate capacity (forest C in communities)

Private university, condominium (community property)

Res in Patrominium

Things that could be privately owned by an individual (forest C on private land)

Land under private ownership

Roman Law Classification of Property

Open Access PrivateState Communal

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

Property Regimes

NATURALRESOURCES

(FORESTS)

LAND

SUB-SOIL

Gaseous Phase(770G T)

ATMOSPHERE

Carbon Pools

Mining/Mineral, Oil Rights (concessions)

OCEAN

Carbon DioxideCarbon MonoxideMethane

Land Rights (title)

Timber, Extraction, Conservation Rights (concession)

Forest Carbon, Plants, Litter, Roots

Fossil FuelsSedimentary Rock

Lithosphere(66-100M T)

[http://www.oznet.ksu.edu/ctec/carbon/carboncycle.htm]

Dissolved CO2Calcium Carbonate

(38-40K T)

Soil (1.5 to 1.6 K T)

Biosphere(540 - 610G T)

Gray Carbon

Green Carbon

Blue Carbon

Territorial SeaHigh Seas

Global Commons‘Right to pollute’

STATE PRIVATE

NATURALRESOURCES

Conservation Concessions

LANDEco-Tourism

Concessions

Reforestation Concessions

SUB-SOIL

Recognized

Isolated

Titled

Untitled

Brazilnut Concessions

Titled

Forest Concessions

Intangible Area

Communal Reserves

Certified

Buffer Zone

60 % 3-5 %35-37 %

Layer of Rights and Interests - Madre de Dios (Peru)

Lotes Petroleros

Mining Concessions (gold)

NationalParks

NationalReserves

INDIGENOUSCOMMUNITIES

N

Pando - Bolivia

Tenure Situation in Communities - MAP Region

M(adre de Dios) – A(cre) – P(ando)

Brazil

Bolivia

Peru

moooooo…….

Pictures from the Amazon (2006)

Spot the Forest Carbon?

+- 37% of Forest Carbon is on Communal Land

Pando - Bolivia

Land Tenure Spectrum

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

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

Community Title Conditions

Land vs Resource Rights – Community in Pando (Bolivia)

[Source: Cronkleton and Albornoz 2007]

Family Tree Tenure

Nucleated settlement – unity of title - individual and collective tree tenure -

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.”

New Constitution – Bolivia (ratified in Jan 09)

Public interest - state ownership on behalf of the nation -C changes the scale as Public Interest could apply to international community

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.

[http://www.geocities.com/cpbolivia/texto2.htm]

Extractive Reserve -Brazil

Unity of concession – family trails – individual tree tenure – spatial extent varies by resource

Family house

Rubber Trail

Rubber Tree

Brazil nut Tree

• State owns land• 20/30 year usufruct concession

Extractive Reserve - Brazil

Unity of concession – family trails – family tree tenure – spatial extent varies on resource

Family house

Rubber Trail

Rubber Tree

Brazil nut Tree

Brazil nut Trail

Formalization of rights and transactionsA 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?

Campesino Communities (Bolivia) Extractive Reserves (Brazil)

What Rights? Titled to the community with restrictions of inalienable, indivisible, not attachable (no mortgages), irreversible, immune from prescription (adverse possession), and must be held collectively.

Community holds usufruct rights which are transferable via inheritance. The state or federal government continues to own the land under the extractive reserve and controls the use through a utilization plan.

Whose Rights? Community with de facto division of forest resources to household in some instances. State regulates use of forest resources for commercial purposes.

Government holds the land rights, while community has usufruct rights over land resources.

Time and Duration?

Initiated on registration of title and no restriction on duration.

Usufruct concession usually stipulates 20 or 30 years

How Acquired? Communal Title from government. Federal or state government grant a usufruct concession. No title issued.

Spatial Dimensions?

Field adjudicated rectilinear boundaries with physical monumentation. Cadastral plan shows dimensions of outside boundary.

Family-level use rights are tied to location of rubber trails and trails that link them.

Summary of Property Rights Attributes

Land Administration Projects – Latin America

Over $1 Billion invested in LAC on Property Formalization Projects (since 1996)

CENTRAL AMERICABelize (BID)Guatemala (BM)Honduras (BM, UE, BID)El Salvador (USAID, BM)Nicaragua (BM, MCC)Costa Rica (BID)Panama (BM, BID)

SOUTH AMERICAGuyana (BID, DFID)Colombia (BID)Ecuador (BID, BM)Peru (BID, BM, USAID)Brazil (BID)Bolivia (BM, USAID, Ned, Nordic)Paraguay (BID)Surinam (Ned, BID)

CARIBBEANJamaica (BID)Trinidad & Tobago (BID)Bahamas (BID)Republica Dominican (BID)Antigua & OECS Countries (OAS)Turks and Caicos (DFID)

Mexico (BM & BID)

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)

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..