the noel kempff case study

AEPAEPAEPAEPAEP: American Electric Power

APOCOMAPOCOMAPOCOMAPOCOMAPOCOM: Apoyo Comunitario (Program for the Sustainable Development of Local Communities)

BABABABABAUUUUU: Business as Usual

CARCARCARCARCAR: Corrective Action Request

CCBCCBCCBCCBCCB: Climate, Community and Biodiversity standard

CDMCDMCDMCDMCDM: Clean Development Mechanism

CIBAPCIBAPCIBAPCIBAPCIBAPAAAAA: Central Indígena Bajo Paraguá (Bajo Paragua Indigenous Organization)

FFFFFANANANANAN: Fundación Amigos de la Naturaleza (Foundation for Friends of Nature)

FFFFFAAAAAOOOOO: Food and Agriculture Organization

GOBGOBGOBGOBGOB: Government of Bolivia

INRAINRAINRAINRAINRA: Instituto Nacional de Reforma Agraria (National Agrarian Reform Institute)

NK-NK-NK-NK-NK-CAPCAPCAPCAPCAP: Noel Kempff Mercado Climate Action Project

NKMNPNKMNPNKMNPNKMNPNKMNP: Noel Kempff Mercado National Park

PDDPDDPDDPDDPDD: Project Design Document

PIPPIPPIPPIPPIP: Plan Integral de la Protección (Integral Plan of Protection)

PRODECOMPRODECOMPRODECOMPRODECOMPRODECOM: Programa de Desarrollo Comunitario (Community Development Program)

REDDREDDREDDREDDREDD: Reducing Emissions from Deforestation and Degradation

SCPSCPSCPSCPSCP: Site Conservation Plan

SERNAPSERNAPSERNAPSERNAPSERNAP: Servicio Nacional de Áreas Protegidas (National Protected Area Service)

SGSSGSSGSSGSSGS: Société Générale de Surveillance (General Society of Monitoring)

tCOtCOtCOtCOtCO22222eeeee : Metric tons of carbon dioxide equivalent

TNCTNCTNCTNCTNC: The Nature Conservancy

UNFCCCUNFCCCUNFCCCUNFCCCUNFCCC: United Nations Framework Convention on Climate Change

USIJIUSIJIUSIJIUSIJIUSIJI: United States Initiative on Joint Implementation

VERsVERsVERsVERsVERs: Verified Emissions Reductions

1 hectare (ha) = 2.47 acres (ac)1 metric ton of carbon dioxide equivalent (tCO2e) = 44/12 metric tons carbon (tC)1 metric ton = 1,000 kilograms (kg) = 2,205 pounds (lb) = 1.10 short (U.S.) tons

AAAAACROCROCROCROCRONNNNNYMSYMSYMSYMSYMS

Cover image: Arcoiris waterfall at Noel Kempff Mercado National Park in Bolivia in South America. Photo credit: © Hermes Justiniano

CONVERSIONSCONVERSIONSCONVERSIONSCONVERSIONSCONVERSIONS

AAAAACKNCKNCKNCKNCKNOOOOOWLEDWLEDWLEDWLEDWLEDGEMENTSGEMENTSGEMENTSGEMENTSGEMENTS

Concept by Sarene Marshall. Research and writing by Nicole Virgilio. Design and layout by Lisa Shipley. This casestudy benefitted greatly from the contributions, review and support of Bill Stanley, Greg Fishbein, Zoe Kant, DianeFitzgerald, Natalia Calderón Angeleri, Hamilton Hardman, Duncan Marsh and Michael Wolosin.

Please cite this document as: Noel Kempff Mercado Climate Action Project: A Case Study in Reducing Emissions fromDeforestation and Degradation, The Nature Conservancy, 2009.

©2009 The Nature Conservancy.

INTRODUCTION......................................................................................................................................................PARTNERS AND CONTRIBUTORS ..................................................................................................................PROJECT OVERVIEW ...........................................................................................................................................

SITE DESCRIPTION .........................................................................................................................................PROJECT APPROACH........................................................................................................................................ON-GOING PROTECTION AND MONITORING ...............................................................................................

PROJECT STRUCTURE..........................................................................................................................................DEAL STRUCTURE ........................................................................................................................................ENDOWMENT FUND.........................................................................................................................................CARBON RIGHTS .........................................................................................................................................OFFSET COST....................................................................................................................................................

CARBON BENEFITS ..............................................................................................................................................ESTIMATED LIFETIME CARBON BENEFITS ....................................................................................................

ADDITIONALITY .................................................................................................................................................BASELINE ........................................................................................................................................................

Avoided Deforestation Baseline ............................................................................................................Avoided Degradation Baseline ..............................................................................................................

HISTORY OF PROJECT BASELINES ................................................................................................................LEAKAGE ...................................................................................................................................................................

AVOIDED DEFORESTATION LEAKAGE .........................................................................................................Estimation and Prevention of Leakage from Avoided Deforestation Activities ................................................Monitoring Leakage from Avoided Deforestation Activities .......................................................................

AVOIDED DEGRADATION LEAKAGE .................................................................................................................Estimation and Prevention of Leakage from Avoided Degradation Activities ..............................................Monitoring Leakage from Avoided Degradation Activities .........................................................................

PERMANENCE ..............................................................................................................................................................COMMUNITY BENEFITS .......................................................................................................................................

ORGANIZATIONAL EMPOWERMENT .................................................................................................................LAND TENURE AND COMMUNITY PROPERTY RIGHTS ................................................................................

LANDUSE PLANNING AND CAPACITY TRAINING ...........................................................................................ELEMENTARY AND HIGH SCHOOL EDUCATION ............................................................................................HEALTH OUTPOST .............................................................................................................................................INCOME GENERATION .......................................................................................................................................

Alternative Employment ..........................................................................................................................Sustainable Forestry .................................................................................................................................Ecotourism ..............................................................................................................................................Biotrade ..................................................................................................................................................

BIODIVERSITY BENEFITS ....................................................................................................................................MONITORING BIODIVERSITY ...........................................................................................................................

VALIDATION AND VERIFICATION ...............................................................................................................CONCLUSION .......................................................................................................................................................REFERENCES ..........................................................................................................................................................

T T T T TABLE OABLE OABLE OABLE OABLE OF CF CF CF CF COOOOONTENTSNTENTSNTENTSNTENTSNTENTS

223333444456777899111111121212131314141515151515151616161717171920

1

The Noel Kempff Mercado Climate Action Project (“NK-CAP”) is preserving the rich, biologically diverseecosystems of northeastern Bolivia’s Noel KempffMercado National Park while preventing the release ofmillions of tons of carbon dioxide over 30 years. In late1996, when the ecological integrity of almost 832,000hectares of tropical forest adjacent to the park wasthreatened by both timber harvesting and unplanneddeforestation, The Nature Conservancy and Bolivianconservation organization Fundación Amigos de laNaturaleza worked with the Government of Bolivia toterminate logging rights in the area. This land, along withthree small existing conservation areas, was added to theoriginal national park. Investments from three energycompanies helped to fund project activities, in exchangefor rights to a share of the verified carbon benefitsgenerated by NK-CAP.

NK-CAP was one of the world’s first large-scaleReducing Emissions from Deforestation and Degradation(“REDD”) projects, and is addressing the drivers of bothDs in REDD: deforestation from conversion to agricultureby local communities and degradation from loggingactivities in timber concessions. In 2005, NK-CAP wasthe first REDD project to be verified by a third partyusing rigorous standards based upon those developed forthe Kyoto Protocol’s Clean Development Mechanism.

As an early-stage REDD project, there were noprecedents for the Noel Kempff Climate Action Project tofollow. Instead, it was necessary to create new andinnovative methods to address scientific, institutional andlegal issues associated with REDD projects. Since NK-CAP was initiated, the forest carbon field has advanced inimportant ways. Remote sensing technology, for example,

has facilitated the development of more robust carbonaccounting and monitoring. With the benefit ofhindsight, it is possible to identify other areas in whichthe project could be improved, utilizing methodologies,legal arrangements, and conservation tools that were notreadily available at the time.

NK-CAP, nonetheless, serves as an example of how well-designed REDD projects can result in real, scientificallymeasurable, and verifiable emissions reductions withimportant benefits for biodiversity and localcommunities. Specifically, NK-CAP has produced thefollowing results:

- Avoided 1,034,107 metric tons of verified CO2emissions, which would have been caused by loggingand deforestation between 1997 and 2005;

- Estimated to avoid a total of 5,838,813 metric tons ofCO2 emissions over the 30 year project lifespan;

- Preserves a rich and biologically diverse forestecosystem, chosen as a UNESCO World HeritageSite for its outstanding biodiversity value;

- Facilitated indigenous communities achieving legalstatus as “Communities of Native Peoples” and inobtaining official land title;

- Provides alternative, environmentally sustainableeconomic opportunities for the local population viacommunity forestry and ecotourism;

- Raised $8.25 million in carbon financing, withadditional financing possible upon sale of theGovernment of Bolivia’s 49% share of the project’scarbon offsets;

- Established an endowment which is used to fundproject activities and preserve the park for futuregenerations.

The Noel Kempff Mercado Climate Action Project is a joint effort, to which the following partners contributed:

Project Development The Nature Conservancy (TNC), Fundación Amigos de la Naturaleza (FAN)

Project Management Fundación Amigos de la Naturaleza (FAN)

Project Investors American Electric Power Company (AEP), BP America, PacifiCorp

Country Partner Government of Bolivia (GOB)

Carbon Measurement Winrock International Institute for Agricultural Development, FundaciónAmigos de la Naturaleza (FAN)1

Validation and Verification Société Générale de Surveillance (SGS)

1 Winrock International was responsible for initial design of the measurement program; however, FAN has since taken on the responsibility of

carrying out the actual measurements.

INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION INTRODUCTION

PPPPPARARARARARTNERS AND CTNERS AND CTNERS AND CTNERS AND CTNERS AND COOOOONTRIBUTNTRIBUTNTRIBUTNTRIBUTNTRIBUTOOOOORSRSRSRSRS

2

SITE DSITE DSITE DSITE DSITE DESCRIPTIESCRIPTIESCRIPTIESCRIPTIESCRIPTIOOOOONNNNN

The Noel Kempff Mercado Climate Action Project (NK-CAP) was carried out in the northeastern section of theDepartment of Santa Cruz, Bolivia, in the Province ofVelasco (Figure 1). At the time of project scoping, a750,633 hectare protected area called Noel KempffMercado National Park (“NKMNP”) was already inexistence. Characterized by outstanding topographicalfeatures, the park was principally defined by the

Huanchaca (or Caparú) Plateau. The immediate area ofthe park consisted of natural vegetation and was devoid ofsizeable permanent human populations. Located in aclimatic transition zone between the wetter Amazonianand the drier Chaco and Cerrado eco-regions, the parkwas considered one of the most biologically diverse areasof the world.

PROPROPROPROPROJEJEJEJEJECT APPROCT APPROCT APPROCT APPROCT APPROAAAAACHCHCHCHCHProject activities consolidated threatened areas justadjacent to the park with the park itself, creating oneexpanded protected area. On December 23 of 1996 theNoel Kempff Mercado National Park was extended to itsnatural boundaries: the Paraguá River (west), the TarvoRiver (southwest), and the Itenez River (north), viapresidential Supreme Decree #24457, negotiated with theGovernment of Bolivia by TNC and FAN. In total, thepark was expanded by 831,689 hectares, more thandoubling the previous size to its current 1,582,322hectares. The expansion incorporated ecosystems notrepresented in the original park perimeter and improvedthe park’s protection by establishing natural boundaries.

Between 1996 and 1997, the project bought and retired atotal of three concessions from companies that had rightsto log the expansion area; the 187,554 hectare Moiraconcession, 152,345 hectare El Chore concession, and239,017 hectare El Paso concession (see Figure 2).Additionally, the Paragua II concession was closed, as nolegal concession title existed.

The expansion area covered the former concessions, twosmall protected areas, an existing private protected area tothe south (called “El Refugio”) and additional bufferzones. Inside the expansion zone, the area eligible forREDD (Reducing Emissions from Deforestation andDegradation) activities was 642,184 hectares of forestthat had been degraded by former logging activities, wasslated for future logging or predicted to be deforested.2 Itis this area that constitutes the carbon benefit generatingportion of the project and is what is referred to as NK-CAP (see Figure 2).

ON-GOING PROTECTION AND MONITORINGON-GOING PROTECTION AND MONITORINGON-GOING PROTECTION AND MONITORINGON-GOING PROTECTION AND MONITORINGON-GOING PROTECTION AND MONITORING

Protecting and monitoring the integrity of the parkagainst fire and illegal activities (logging, land clearing,hunting, fishing with nets) is an on-going activity. To thisend, project funds were used to hire 11 of the 27 parkrangers. New rangers’ camps have also been built, andequipment has been provided, as have the necessaryprovisions (fuel, food) to carry out the monitoringactivities. In 2008, for example, 664 river patrols, 9airborne patrols, and 4 field monitoring trips wereexecuted.

PRO PRO PRO PRO PROJEJEJEJEJECT OCT OCT OCT OCT OVERVERVERVERVERVIEVIEVIEVIEVIEWWWWW

2 Please note that the three small pre-existing protected areas within the expansion area are not included in NK-CAP (areas eligible for

REDD), as they would not qualify as additional.

Figure 1: NKMNP - in rose. Source: GIS data from FAN, cartography N.Virgilio.

NKMNPNKMNP

3

OriginalNKMNP

Pre- existing protectedarea

NK- CAP



OriginalNKMNP


NK- CAP



OriginalNKMNP


NK- CAP



Figure 2: Current NKMNP boundaries include the entire colored area.Former timber concessions are depicted in cross-hatch. Source: GIS data fromFAN, cartography N. Virgilio.

Various funding mechanisms exist for REDD projects,ranging from investment by project developers, grants,and philanthropic contributions to revenue generatedfrom the sale of verified emission reduction credits.REDD and other forest carbon projects face the sameobstacle of surmounting upfront costs. In the case ofNK-CAP, carbon revenue was provided upfront by threeenergy companies: American Electric Power Company(AEP), BP America, and PacifiCorp (see Figure 3). Inreturn, they were guaranteed 51 percent of futurecertified offsets created over the 30-year project lifetime.These investors assumed the risk that the estimatedquantity of verified carbon benefits might not be fullyrealized. The Government of Bolivia pledged support forthe project plan, closed the timber concessions, expandedthe park, and received 49 percent of the carbon benefits,which it agreed to use to fund community development,park management and other activities.

DDDDDEAL STREAL STREAL STREAL STREAL STRUUUUUCTURECTURECTURECTURECTUREFunds from The Nature Conservancy (TNC), AmericanElectric Power (AEP), PacifiCorp, and BP America, aswell as returns on the initial investment, are distributedby TNC to project partner Fundación Amigos de laNaturaleza (FAN). Project implementation costs include:the purchase and retiring of logging concessions,community development, carbon accounting, parkmanagement and protection (see Figure 4 and Figure 5).3

PRO PRO PRO PRO PROJEJEJEJEJECT STRCT STRCT STRCT STRCT STRUUUUUCTURECTURECTURECTURECTURE

Figure 3: Breakdown of investor contributions from 1997-2006. Total: $10.85million. Source: FAN.

Remote sensing technology has been used to complementfield monitoring. Landsat satellite imagery taken between1997 and 2005 shows that deforestation within NK-CAPis being effectively limited. A 237 hectare area has beenlost due to flooding of the Paragua River and 17.5 hectaresof land have been deforested near the community of BellaVista. These events were factored into and subtractedfrom the estimation of project carbon benefits (see“Carbon Benefits” section for more information).

Fires within NK-CAP are also being monitored usingMODIS satellite imagery (Rapid Response System FireResponse products). A total of 115 fires were detectedbetween 2001 and 2004, occurring mostly in savannahareas. Using this history of fire occurrence to derive arate of loss from fires, estimated carbon benefits fromreducing deforestation were discounted by 5% to coverpotential carbon losses from fire.

ENDOWMENT FUNDENDOWMENT FUNDENDOWMENT FUNDENDOWMENT FUNDENDOWMENT FUNDAn endowment fund was created to finance long-termmonitoring and protection of the park. The fund wasinitially begun with $1.5 million. As of 2006, it hadexpanded to nearly $3 million through philanthropiccontributions and returns on investments. It has beenmanaged by The Nature Conservancy since 1999 andfinances park activities in accordance with a long-termfinancial plan, which is approved by the NK-CAP Boardof Directors. FAN serves as the executor of activitiesfinanced by the fund and submits yearly reports on theactivities supported by endowment income.

After the project concludes in 2026, it is anticipated thatthe endowment will have funds remaining, which will beused for long-term benefit of the park.

CARBON RIGHTSCARBON RIGHTSCARBON RIGHTSCARBON RIGHTSCARBON RIGHTSAs per the NK-CAP Comprehensive Agreement, 51percent of the certified emission reductions were assignedto corporate investors (AEP, BP and PacifiCorp) and 49percent to the Bolivian government. The governmentagreed to earmark proceeds from the sale of it share of theoffsets in the following manner: 31 percent for theprotection of the park, 10 percent for the national systemof protected areas, and 59 percent for other purposes,including biodiversity protection activities both insideand outside the project area, improving the livelihoods ofthe indigenous communities adjacent to the park, andsupporting other greenhouse gas mitigation strategiesthroughout Bolivia. Specific allocations of this 59 percentwere not negotiated upfront and communities in thevicinity of Noel Kempff Mercado National Park arecurrently negotiating with the Bolivian Government todefine their share. As of this writing, the Boliviangovernment had not yet sold its share of the verifiedemission reductions (VERs).

4

3 In 2007, the Bolivian Tax Administration proposed that the investors’ share of the carbon offsets may be subject to tax obligations underBolivian law; the financial implications of this tax obligation were unclear as of this writing. Given the pilot nature of NK-CAP, there wereno precedents for forest carbon projects and tax obligations were not anticipated within the NK-CAP project structure or budget. TheNK-CAP project experience highlights the need to anticipate, to the extent possible, any tax or other legal obligations during project design.

Carbon monitoring, certification

7%

Management, communications,

administration9%

Budget support to the Bolivian Government

5%Indemnification of concessionaires

15%

Protection16%

Endowment Fund21%

Scientific Research5%

Biocommerce5%

Ecotourism3%

Community Development

14%

Figure 4: Project spending from 1997- 2006 totaled $11.55 million. Please note, expenditure is greater than initial funding dueto returns on the initial investment over time. Source: FAN.

Initial Investment

AEP, BP, Pacificorp$8.25MM

Funds Managed by TNC

$10.85MM

Funds distributed to FAN

Long- term Project Components(greater than 10 years)

•Carbon Monitoring and Verification•Project Endowment (ongoing operations

and post-project funding)

Short- term Project Components(less than or equal to 10 years)

•Concessionaire Compensation•Community Development (10 years)

•Ecotourism and Biotrade•Initial Carbon Accounting

Gov’t of BoliviaCommitments

Concession Cancellation Park Expansion

Park Management and ProtectionContributions

Foregone Tax Revenue 51% of Carbon Offsets

Carbon Offsets

TNC Donors $2.6MM

51%

Implementation Funding

$500,000

49%

Proceeds from offset sales

10% National protected area system

31% Noel Kempff Park protection

59% Biodiversity protection, bordering community development, Bolivian GHG mitigation strategies

Initial Investment



Funds Managed by TNC

$10.85MM

Funds distributed to FAN

Long- term Project Components(greater than 10 years)

•Carbon Monitoring and Verification•Project Endowment (ongoing operations

and post-project funding)

Short- term Project Components(less than or equal to 10 years)

•Concessionaire Compensation•Community Development (10 years)

•Ecotourism and Biotrade•Initial Carbon Accounting

Gov’t of BoliviaCommitments

Concession Cancellation Park Expansion

Park Management and ProtectionContributions

Foregone Tax Revenue 51% of Carbon Offsets

Carbon Offsets

TNC Donors $2.6MM

51%

Implementation Funding

$500,000

49%

Proceeds from offset sales

10% National protected area system

31% Noel Kempff Park protection

59% Biodiversity protection, bordering community development, Bolivian GHG mitigation strategies

Figure 5: Deal structure for NK-CAP partners. Source: G. Fishbein.

OFFSET COSTOFFSET COSTOFFSET COSTOFFSET COSTOFFSET COSTWhile investor contributions to NK-CAP were notstructured on a per-ton basis, the cost of implementingNK-CAP, in 2009 dollars, has been estimated at $18 permetric ton of CO2e. This estimate was based on ananalysis of project financials, and several key assumptions,including: that 20% of the carbon benefits would beretained in a permanence buffer, that offsets from theproject would be generated and sold at routine intervals,and that investors would seek a reasonable rate of returnon the project.

Under the carbon accounting standards in place at thetime NK-CAP was initiated and underwent its firstverification, only a 5% permanence buffer was retainedfrom the avoided deforestation component. Given theevolution of carbon accounting standards, theconservative assumption was made that 20% of carbonoffsets would need to be reserved to comply with current

standards, such as the Voluntary Carbon Standard.Likewise, although the first NK-CAP project verificationoccurred in 2005, and no offsets from the project hadbeen sold at the time of publication, the assumption wasmade, based upon typical practice in the market, thatoffsets would be verified and sold periodically (i.e.,usually every five years).4

Finally, the analysis considers the project’s expenses(historic and projected, capital and operating) andprojected revenue from the sale of verified offsets,regardless of which parties bear the costs, or to whom theoffset rights and revenue accrues. A nominal discountrate of 15% was assumed as a reasonable rate of return onthe project, based upon various benchmarks. The resultsare particularly sensitive to the discount rate used: whilea 15% discount rate yields an estimate of $18 / tCO2e,applying a 13% or 17% discount rate results in estimates of$15 and $22 per ton of CO2e, respectively.

54 Offsets generated from 1997-2000 were assumed to be verified and sold in 2001. A sale in 2006 of 2001-2005 offsets was assumed, andso on for five year periods, with a final sale in 2027 of offsets from 2021-2026.

A B C D = A+B-C E F = D-E

Year

Emissions Avoided from Deforestation

(tCO2)

Emissions Avoided from Degradation

(tCO2)

Leakage Deduction

(tCO2)

Total Carbon Offsets (tCO2)

Emissions from

Project Activities*

(tCO2)

Net Carbon Offsets (tCO2)

1997 56,401 48,180 7,264 97,317 169 97,1481998 40,304 59,374 9,141 90,539 211 90,3281999 39,783 69,931 10,960 98,753 282 98,4722000 43,417 79,889 12,731 110,578 204 110,3732001 41,158 89,298 14,454 116,003 167 115,8362002 40,238 98,190 16,130 122,298 132 122,1662003 33,972 107,081 17,589 123,462 109 123,3532004 31,684 115,632 18,971 128,347 102 128,2442005 44,693 123,867 20,277 148,282 96 148,186

Total 371,650 791,443 127,516 1,035,578 1472 1,034,107* from transportation fuel use, etc.

Figure 7: Verified carbon benefits generated by NK-CAP. Source: Noel Kempff PDD.

B) Reducing EB) Reducing EB) Reducing EB) Reducing EB) Reducing Emissions from Dmissions from Dmissions from Dmissions from Dmissions from Degradationegradationegradationegradationegradation: Cessation oflogging in the former concessions that were incorporatedinto the project area avoids future timber extraction andcollateral damage due to logging. 468,474 square metersof timber slated for harvest were protected over the 1997-2005 verification period, corresponding to an avoidedemissions of 791,443 tCO2e. The baseline harvest wasmodeled using an advanced statistical model of theBolivian timber market (see “Baseline” section for adetailed description), simulating domestic/internationaltimber supply and demand at different scales: national,regional, and project level.5

As a result of both activities, the project generated a totalcarbon benefit of 1,034,107 tCO2e over the 1997- 2005verification period. The annual breakdown of thesebenefits is shown in Figure 7.

Figure 6: Generic illustration of carbon benefits (emission reductions) fromproject activities. Source: N. Virgilio.

5 Sohngen, B. and Brown, S., ‘Measuring leakage from carbon projects in open economies: a stop timber harvesting project in Bolivia as a casestudy,’ Canadian Journal of Forest Research 34 (2004), 829 – 839.

Carbon benefits resulting from REDD project activitiesare calculated as the difference between emissions fromthe without-project scenario (known as the baseline- seeFigure 6) and emissions from the with-project scenario,minus any deductions for leakage, uncertainty andimpermanence risk. Carbon benefits for a particularverification period are calculated ex-post, using actualdata from the period in question. The carbon benefitsachieved between 1997- 2005 by the Noel KempffMercado Climate Action Project were verified by SociétéGénérale de Surveillance (“SGS”) in 2005, using rigorousstandards based upon those described in the KyotoProtocol’s Clean Development Mechanism. Thisverification made NK-CAP the first forest emissionsreduction project to achieve such a standard, anddemonstrates that REDD activities are capable ofgenerating scientifically measurable, real, and verifiablecarbon benefits.

Two distinct project components are generating carbonbenefits within NK-CAP:

A) Reducing EA) Reducing EA) Reducing EA) Reducing EA) Reducing Emissions from Dmissions from Dmissions from Dmissions from Dmissions from Deforesteforesteforesteforesteforestationationationationation: Byimplementing an economic development program and anextended protection scheme, the project is avoidingdeforestation by communities inside the project area.Baseline deforestation was modeled with a spatiallyexplicit land use change model (called GEOMOD - see“Baseline” section for a detailed description), usingLandsat imagery to estimate historic deforestation ratesand modifying these rates based on monitoring from areference area with comparable socioeconomiccharacteristics. As a result of the project, 763 ha weresaved over the 1997-2005 verification period,corresponding to 371,650 tCO2e.

CARBON BENEFITS CARBON BENEFITS CARBON BENEFITS CARBON BENEFITS CARBON BENEFITS

6

Business-as-usual emissions

With-project emissions

Project Implementation

Emissions CO2e

Time

Emission Reductions

ESTIMAESTIMAESTIMAESTIMAESTIMATED LIFETIME CARBTED LIFETIME CARBTED LIFETIME CARBTED LIFETIME CARBTED LIFETIME CARBOOOOON BENEFITSN BENEFITSN BENEFITSN BENEFITSN BENEFITS

The total carbon benefits from NK-CAP are expected toreach 5,838,813 tCO2e over the life of the project (1997-2026).

The estimate of lifetime carbon benefits has beenrecalculated several times since the project began, resultingin considerable reductions from initial estimates andincreases in accuracy. These changes, driven primarily byadjustments to the baselines, reflect the pioneering natureof the project, which broke ground on methodologies forestimating baselines.

As a result of methodological advances, anticipatedlifetime carbon benefits were ratcheted down from theinitial approximation of 53,190,151 tCO2e calculated in1996, to the current estimate of 5,838,813 tCO2e calculatedin 2005. The large decrease in the lifetime carbon benefitestimate is due primarily to a shift in reliance on

interviews, secondary data sources, and referencedocuments from other parts of the world, to site-specificstudies, local field measurements and advanced statisticalmodels, which are more robust and accurate. Estimatedlifetime carbon benefits are just that – estimates. Althoughthese forward-looking estimates may change over time,verified carbon benefits, based on backward-lookingobservations of the verification period in question (in thiscase, every 5 years) will not change. Only at the end of the30 year project will it be possible to know the total lifetimecarbon benefits of NK-CAP.

See the “Baseline” section for a more in depth discussionof the current methodology being used to determinebaselines for both the avoided deforestation and avoideddegradation components of the project and the “History ofProject Baselines” section for more on changes to theestimated lifetime carbon benefits.

ADDITIONALITY ADDITIONALITY ADDITIONALITY ADDITIONALITY ADDITIONALITY

A fundamental challenge for all REDD projects is todemonstrate “additionality.” Additionality refers to theamount of carbon dioxide captured, stored or preventedfrom reaching the atmosphere compared to what wouldhappen under business as usual practices. Additionalityis an important concept to ensure that the claimedbenefits from a carbon project are above and beyondwhat would have happened anyway.

Since additionality involves assessing what would have (butdid not) happen, it cannot be measured exactly and isoften subjective. Nevertheless, there are severalsuggested tests for determining whether emissionreductions are additional, specifically: Were projectactivities required and regularly enforced by law? Wouldproject activities have been financially possibleotherwise? Were the project activities common practice?Were business-as-usual (“BAU”) emissions the same orlower than the with-project scenario? An answer of “no”to all four questions helps to establish additionality.

NK-CAP met these tests of additionality on all fourgrounds. The project was not required by Bolivian law tooccur. Although there was a pre-existing park adjacent tothe expansion area, expansion was not planned orrequired. A feasibility study, conducted prior to projectimplementation, demonstrated that the Government ofBolivia did not have the necessary funds or political willto close the forest concessions and expand the park. Thefunds provided by the project enabled changes to thestatus quo, by financing the buyout of timber concessions,the expansion of the park, and the communitydevelopment activities aimed at reducing forestconversion. Without the project, logging would havecontinued in the concessions and deforestation would

have spread around new settlements and communitieslacking land titles, as this was the common practice.Finally, the NK-CAP with-project scenario resulted infewer emissions than the baseline scenario.

BASELINEBASELINEBASELINEBASELINEBASELINE

A project baseline is the “without-project” or business-as-usual (BAU) scenario; simply put, the prediction of whatwould have happened had the project not taken place. Aswas discussed in the “Carbon Benefits” section, themethods used in determining baselines greatly influenceboth the magnitude and accuracy of carbon benefits, whichare calculated as the difference between the baseline and“with-project” scenario. It is very important for baselinesto be monitored over time and corrections to be made forsituations such as changes in policy, governance,deforestation rates, and socio-economic conditions.

As the emissions reductions achieved through the NoelKempff Mercado Climate Action Project were the result ofa two-pronged strategy- avoiding deforestation anddegradation- it was necessary to treat each componentseparately in the calculation of the project baseline. SinceNK-CAP was the first forest carbon project of its kind, itwas necessary for the project to create its ownmethodologies for calculating baselines. As such, bothbaselines have been re-estimated several times since theproject began, as new information, refined methods andadvanced technology became available, increasing theaccuracy with each revision (see “History of ProjectBaselines” section for more detail). Some voluntarystandards require that baselines be monitored and re-evaluated periodically, to make adjustments for possiblechanges in external factors that could influence land usepractices. Moving forward, it is planned that the project

7

baseline will be reevaluated every 5 years, and adjusted ifneeded. It is believed that the largest changes to thebaselines occurred in the beginning years of the project,when methodologies were still being refined, and futurechanges will be minimal.

AAAAAvoided Dvoided Dvoided Dvoided Dvoided Deforeforeforeforeforestestestestestation Bation Bation Bation Bation BaselineaselineaselineaselineaselineThe creation of an avoided deforestation baseline in NK-CAP required 4 steps: 1) determination of deforestationrates, 2) prediction of likely locations for futuredeforestation, 3) determination of carbon content in areaspredicted to be cleared, and 4) calculation of emissionsresulting from anticipated deforestation.

Using historical satellite imagery from 1986, 1992 and1996, it was possible to observe deforestation andcalculate deforestation rates in the project area. Thelocation of future deforestation was simulated with thespatially explicit GEOMOD land use change model usingthis historical deforestation information. The modelidentified lands in the project area that were statisticallythe most likely to be cleared in the future, based on severaldeforestation drivers (distance to roads, towns, rivers,forest edge and prior disturbance). GEOMOD resultsprovided a forecast of specific forest areas likely to becleared over the following 30 years.

While remote sensing technology and models likeGEOMOD can estimate areas of forest loss, estimatingemissions from that forest loss involves measuring thecarbon stocks of the vegetation in the area, since differenttypes of vegetation (e.g., tropical forest vs. temperateforest) contain different amounts of carbon.

In NK-CAP, the areas predicted to be cleared byGEOMOD were assigned one of five vegetation classes(e.g., high evergreen forest) using Landsat imagery andon-the-ground observations. The carbon content ofeach vegetation class was determined through fieldresearch, using time-tested, scientifically-proventechniques such as measurement of tree diameter andsoil analysis (Figure 8). To this end, 625 permanentstudy plots were established in and around NK-CAP tomeasure and monitor carbon stocks (Figure 9). Allcarbon pools – aboveground and belowground biomass,litter, dead wood, and soils to 30 cm depth – wereanalyzed for their carbon content. Once carbon stockswere determined for each vegetation class, the areaspresumed cleared in the baseline scenario were thenconverted into carbon emissions using establishedformulas.

Figure 9: Map of the Noel Kempff Climate Action Project showing thedistribution of the six forest strata and the location of the 625 permanent plots.Source: Winrock International.

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Figure 8: Foresters and young men from the local community of Florida worktogether to measure the boundaries of the forest plots where logging impacts will bemeasured over 30 years in a forest concession (Cerro Pelado) near Noel KempffMercado National Park in Bolivia. Photo credit: © Margo Burnham.

MMMMMonitoring the Bonitoring the Bonitoring the Bonitoring the Bonitoring the BaselineaselineaselineaselineaselineThe avoided deforestation baseline will be re-evaluatedevery 5 years to capture any changes in institutionalstructure, local deforestation rates, and socioeconomiccircumstances that might affect the estimated emissionsfor the remaining years of the project. A reference areawas chosen adjacent to the Park to serve as a “control” forthe estimated baseline (Figure 12). This area will bemonitored over time using Landsat data and compared tothe predicted baseline for the avoided deforestationcomponent of NK-CAP. Differences between the two willbe investigated and adjustments to the baseline will bemade where appropriate to maintain accuracy.

AAAAAvoided Dvoided Dvoided Dvoided Dvoided Degregregregregradation Badation Badation Badation Badation BaselineaselineaselineaselineaselineThe creation of the avoided degradation baselineinvolved predicting the business-as-usual emissions thatwould have been caused by the closed timber concessions.Because timber harvesting is impacted by marketconditions, the avoided degradation baseline wasdetermined using an econometric model of Boliviantimber markets, developed by Brent Sohngen and SandraBrown3, which predicts the volume of future harvests inBolivia, both within the project area and the country as awhole (important for leakage analysis), and the carbonimpacts of those harvests.

The model was based on the assumption that Bolivia is asmall open economy which is a price taker on globaltimber markets and, therefore does not significantlycontrol or effect global prices. In addition to economicparameters, the model considered many dynamics oftimber harvesting activities, including forestcharacteristics (e.g., wood density), collateral damage dueto logging, decomposition of dead wood, carbon storagein dead wood products, and the difference in regrowthbetween logged and unlogged areas. Abovegroundbiomass and dead wood were the only carbon poolsincluded in the calculations, as soil carbon andbelowground biomass (roots) were not expected tochange significantly due to harvesting activities. It isimportant to note that a 1996 change in Bolivian law,requiring concessionaires to pay a fee per hectare of land,resulted in the reduction of nationwide timberconcessions by 75%. However, when analyzed within thetimber market model, it was found that this did not resultin a significant change in timber output, asconcessionaires simply increased harvest intensity ontheir holdings.

MMMMMonitoring the Bonitoring the Bonitoring the Bonitoring the Bonitoring the BaselineaselineaselineaselineaselineIn order to accurately estimate damage due to loggingactivities and to detect potential differences in regrowthrates over time between logged and unlogged areas, 102survey plots (dubbed Carbon Impact Zones or CIZs)

6 As per SGS’s 2005 full verification report for Noel Kempff, pg. 29.

were established in the Cerro Pelao logging concessionadjacent to the project area. From these plots, it wasdetermined that over time, the difference in regrowthbetween logged and unlogged areas was not statisticallysignificant. Economic variables for the timber marketmodel (e.g., timber prices, inflation rates) are beingmonitored annually to every 5 years, depending on theparticular parameter.6

HISTORY OF PROJECT BASELINESHISTORY OF PROJECT BASELINESHISTORY OF PROJECT BASELINESHISTORY OF PROJECT BASELINESHISTORY OF PROJECT BASELINESAs mentioned in the “Carbon Benefits” section, baselinesfrom both the avoided deforestation and avoideddegradation components have been modified severaltimes since the start of the project. As a result ofimprovements in baseline methodologies and technology,the baselines have been adjusted significantly from theirstarting points in 1996. The biggest changes to the NK-CAP baselines occurred in the initial years of projectimplementation, as methodologies were still beingperfected. In particular, a change to the timber extractionrate used in the initial avoided degradation baselinedrove substantial adjustments in the early years of theproject. Plans exist to re-evaluate the project baselineevery 5 years as a part of the verification process in orderto capture any changes in government, policy,deforestation rates, and socio-economic circumstancesthat might have occurred over that time period, with thepotential to affect the business-as usual scenario forfuture years.

Although there were several modifications made to theproject baseline since the initiation of project activities,the largest adjustments occurred in 1999, 2001 and 2005.In 1999, refinements made to the timber extraction rateand the lying dead wood carbon stock estimate, as well asthe introduction of 102 permanent plots in an adjacentconcession to measure damages attributable to harvestingactivities, led to a decrease of estimated lifetime carbonbenefits from 53,190,151 tCO2e to 23,719,919 tCO2e.Most of the decrease was attributable to refined timberextraction rates used in the avoided degradationcomponent baseline, and illustrates the substantial effectthis parameter can have on calculations. In 2001, satelliteimagery and advanced models employed for the first timein baseline estimation, as well as further refinement of thetimber extraction rate, led to a reduction in estimatedlifetime carbon benefits to 13,155,079 tCO2e. Again,most of the decrease was associated with the avoideddegradation component of the project and was largely dueto further refinement of the timber extraction rate.Finally, in 2005, the GEOMOD land use change modelemployed a more conservative approach to predicting theamount of land to be deforested, using a linear rate ofdeforestation based on historical trends. Subsequently,

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7 VCS. Guidance for Agriculture, Forestry, and other Land Use Projects. November 2008, Washington, D.C. see page 21.

estimated lifetime carbon benefits decreased to 5,837,341tCO2e.

The NK-CAP experience serves as a prime example ofthe importance of moving away from baselinemethodologies founded on surveys and proxy data fromother regions/countries, to approaches that rely on fieldtesting, satellite data and site-specific information in thecalculations. Since NK-CAP was one of the first large-scale REDD projects to be implemented, there were noprecedents for project developers to follow. Theexperience gained through the NK-CAP baselinemethodology development has helped to inform TNC’sother projects and has served as a model for projectsdeveloped by other organizations, as well as in thedevelopment of project standards. For example, theVoluntary Carbon Standard, one of the most wellrespected standards for the voluntary market, refers to

Noel Kempff as an example for many of theirmethodological recommendations, including baselines.7

It is important to distinguish estimated lifetime carbon benefits,which are apt to change with each verification, and verifiedcarbon benefits, which are confirmed as the project proceeds.Unlike estimated lifetime carbon benefits, verifiedbenefits are based on backward-looking observations andwill not change, regardless of any adjustments made to thebaseline(s) for future periods (see Figure 10).

Verification Period 1



Time

EmissionRate

EmissionReductionsVerification

Period 1


Period 2


Period 3

Baseline: Verification period 1



With- project scenario




Time

EmissionRate


Period 1


Period 2


Period 3









Figure 10: General illustration of emission reductions over the course of several verification periods. Source: N. Virgilio.

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Leakage comes in two forms: activity-shifting (primary)leakage and market (secondary) leakage. Activity-shiftingleakage occurs when a project directly causes carbon-emitting activities to be shifted to another location,canceling out some or all of the project’s carbon benefits.Market leakage, on the other hand, occurs when a projectchanges the supply-and-demand equilibrium, causingother market actors to shift their activities. For example,if a project constrains commodity supply, market pricesmay rise and other producers may increase their activitiesin response.

Credible carbon projects must attempt to prevent, analyzethe risk of, calculate, compensate for and monitor leakagein order to accurately calculate carbon benefits.

Since it was possible that NK-CAP project activitiescould displace emissions elsewhere, every attempt wasmade to quantify potential leakage, while specificsafeguards were also built into the project design to avoidleakage. As there were two emissions reduction activitiesoccurring in the project (avoided deforestation anddegradation), they were treated separately in the leakageanalysis.

AAAAAVVVVVOOOOOIDIDIDIDIDED DED DED DED DED DEFEFEFEFEFOOOOORESTRESTRESTRESTRESTAAAAATITITITITIOOOOON LEAKN LEAKN LEAKN LEAKN LEAKAAAAAGEGEGEGEGEEEEEEstimation and Pstimation and Pstimation and Pstimation and Pstimation and Prrrrrevention of Levention of Levention of Levention of Levention of Leakage freakage freakage freakage freakage from Aom Aom Aom Aom Avoided Dvoided Dvoided Dvoided Dvoided DeforeforeforeforeforestestestestestationationationationationAAAAActivitiesctivitiesctivitiesctivitiesctivitiesSince the establishment of the project, the largest short-term risk for activity shifting leakage existed fromsubsistence agricultural expansion by the communitiesliving along the border of the extended park area. Assuch, the project incorporated extensive leakage

LEAKAGELEAKAGELEAKAGELEAKAGELEAKAGE

OriginalNKMNP


NK- CAP

TCO

Active harvest areas

TCO forest managementarea



OriginalNKMNP


NK- CAP

TCO

Active harvest areas

TCO forest managementarea



prevention activities, in the form of communitydevelopment programs including: educational campaigns,workshops in sustainable agriculture, assistance insecuring legal status and land tenure, and development ofa management plan for ancestral lands. See the“Community Benefits” section for detailed informationon the program.

Perhaps the most successful aspect of the avoideddeforestation leakage prevention program was the legaldesignation of a 360,565 hectare indigenous ancestralterritory (“TCO”) for border communities, whichofficially granted them property rights. Communitieshelped design the Bajo Paragua Native Communal LandNatural Resources Management Plan for the landsadjacent to the project and sustainable forestry activitiesundertaken in the TCO are lessening pressure to deforestwithin project boundaries.

As a result of these activities, it was anticipated that therewould be no activity-shifting leakage from the avoideddeforestation component of the project. Similarly, as thethreat of deforestation came from subsistence agriculturalexpansion and not commercial agricultural expansion, nomarket leakage was expected.

NOTE: The sustainable harvesting activities occurring inthe TCO are NOT being counted as activity-shiftingleakage. As the TCO’s forestry use lies almost completelyinside the area of former timber concessions and outsidethe NK-CAP area (see Figure 11), these activities do notconstitute an increase in emissions as a result of the

Figure 11: The sustainable forestry activities carried out by border communities fall almost entirely within the former timber concessions (cross- hatch). Source: GISdata from FAN, Cartography from N. Virgilio.

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project; logging would have occurred there anyway as itwas BAU within the former concessions. The communityforestry activities actually result in fewer emissions thanwould otherwise occur in the baseline scenario, sinceprevious harvesting activities in the former concessionswere more intense and did not operate according to asustainable management plan.

MMMMMonitoring Lonitoring Lonitoring Lonitoring Lonitoring Leakage freakage freakage freakage freakage from Aom Aom Aom Aom Avoided Dvoided Dvoided Dvoided Dvoided Deforeforeforeforeforestestestestestation Aation Aation Aation Aation ActivitiesctivitiesctivitiesctivitiesctivitiesAlthough no leakage was expected from this aspect ofNK-CAP, project developers still monitored for anyunanticipated activity shifts. The project designed a 15km control area around the borders of the NK-CAP zoneto capture possible activity shifts (see Figure 12). Therationale behind the chosen buffer width was based onbehavioral theory; it was highly unlikely that subsistencefarmers who were originally deforesting within theproject area, without access to cars or other personaltransportation, would travel large distances to deforestelsewhere.

A baseline deforestation scenario for the buffer zone wascreated in the same manner as for the NK-CAP itself. Ifleakage were occurring, the deforestation rate in thebuffer area would increase from its baseline scenario andthe difference between the two would be the leakage. Areference area adjacent to the buffer served as a controlfor the baseline deforestation rate and any detectedleakage would be standardized by changes in overalldeforestation rate captured by the reference area.

Subsequent monitoring has revealed that deforestation inthe buffer zone is actually lower than that which waspredicted in the buffer baseline, confirming theprediction that no activity-shifting leakage would occurfor the avoided deforestation aspect of the project.

AAAAAVVVVVOOOOOIDIDIDIDIDED DED DED DED DED DEEEEEGRADGRADGRADGRADGRADAAAAATITITITITIOOOOON LEAKN LEAKN LEAKN LEAKN LEAKAAAAAGEGEGEGEGEEEEEEstimation and Pstimation and Pstimation and Pstimation and Pstimation and Prrrrrevention of Levention of Levention of Levention of Levention of Leakage freakage freakage freakage freakage from Aom Aom Aom Aom Avoided Dvoided Dvoided Dvoided Dvoided DegregregregregradationadationadationadationadationAAAAActivitiesctivitiesctivitiesctivitiesctivitiesThe risk of leakage from the avoided degradationcomponent of the project was two-fold: thatconcessionaires themselves would relocate, but continuetheir activities elsewhere (so-called activity-shiftingleakage) and that the reduction of timber supply causedby closing concessions would affect prices, resulting inincreased harvesting elsewhere. The project employedseveral methods to prevent, quantify and monitor leakage.

The closing of sawmills, and the purchasing and retiringof harvesting equipment from concessionaires by projectdevelopers (as part of the overall concession buyout) wasa key leakage prevention activity undertaken for NK-CAP. Many concessionaires take out loans whenpurchasing equipment, thus must harvest to generateincome and pay off the loans. Purchasing and retiring theequipment took away the pressure for concessionaires toshift harvest activities elsewhere by taking away the debt

associated with the equipment. Furthermore, it preventedthe possibility for equipment to be sold inexpensively toother harvesters when the indemnified concessionairesleft the business. As a result of these equipmentpurchases, as well as expense and activity tracking of theindemnified concessionaires (explained below), it wasestimated that there was no risk of activity-shiftingleakage from the avoided degradation component of theproject.

In estimating potential market leakage from the avoideddegradation component of NK-CAP, project developersemployed the national timber model developedspecifically for Bolivia by Brent Sohngen and SandraBrown (see “Baseline” section for a detailed description).The model represented a landmark achievement inquantifying leakage on a national scale, particularlyimportant for the scaling up of REDD mechanisms in thefuture.

The difference between the modeled total annual timberproduction for all of Bolivia “without-project” wascompared with the modeled total annual timer productionfor all of Bolivia “with-project.” Various scenariosexplored the interdependence between price and demandfor timber, as well as upfront cost constraints, resulting inestimates of 14-44% leakage from the avoided degradationcomponent of the project. The higher leakage estimateswere for scenarios in which prices are highly sensitive tochanges in supply. Because it was determined that timberprices in Bolivia are NOT highly sensitive to supply

Figure 12: Map of NK-CAP project area, original NKMNP, buffer zone ( forleakage analysis), and reference area ( for baseline monitoring ). Source: NK-CAP PDD.

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changes (the country is considered a “price-taker” not“price-setter” on international markets), a final leakageestimate of 16% of avoided emissions from degradation(11% of total project carbon benefits) was used. Thistotaled 1,012,337 tCO2e for the lifetime of the project,which was subtracted from the emissions reductions fromthe project, resulting in an estimate of lifetime carbonbenefits for the project of 5,838,813 tCO2e. Calculatedmarket leakage from the 1997-2005 verification periodtotaled 127,515 tCO2e and was subtracted from the verifiedcarbon benefits, resulting in the final number of 1,034,107tCO2e (see Figure 7).

MMMMMonitoring Lonitoring Lonitoring Lonitoring Lonitoring Leakage freakage freakage freakage freakage from Aom Aom Aom Aom Avoided Dvoided Dvoided Dvoided Dvoided Degregregregregradation Aadation Aadation Aadation Aadation ActivitiesctivitiesctivitiesctivitiesctivitiesAlthough no activity-shifting leakage was estimated fromthe avoided degradation component of the project, theactivities of the concessionaires were tracked after theyrelinquished their holdings. The Agreement to Preventthe Displacement of NK-CAP Environmental Benefits,signed on January 16, 1997 by the former concessionaires,prevented the former concessionaires from initiating new

logging activities for a period of five years, and allowedFAN to track their activities outside the project area.

FAN closely tracked the expenditures of formerconcessionaires, most importantly to determine ifindemnification funds were reinvested into otherconcessions. This monitoring revealed that the majorityland holder left the timber industry entirely, while theminority holder re-invested a small amount (7.3% of theindemnification funds) into a nearby concession, whichunderwent harvests in 1997 and 1998. This was notcounted as primary leakage in the analysis because aportion of the harvests had already been modeled in theBolivian timber model, thus to count them here would bedouble-counting.

In the case of market leakage, economic variables used inthe timber market model to calculate leakage are beingmonitored periodically.

PERMANENCE PERMANENCE PERMANENCE PERMANENCE PERMANENCE

Permanence refers to how robust a project is to potentialchanges that could reverse the carbon benefits of theproject at a future date. Although all sectors have thepotential for impermanence, forest carbon projects faceparticular scrutiny due to a perceived risk that poormanagement, fire, pests, etc. can lead to the destruction offorest and the subsequent release of emissions. Variousstrategies can be used to avoid and safeguard against therisk of impermanence.

First and foremost, it is important that all stakeholderinterests (government, communities, business, etc.) arealigned with the long-term project objectives. Specificapproaches, such as the purchase of conservationeasements, creation of protected areas, communitydevelopment, establishment of endowments for projectmanagement and monitoring, and the use of carbonbuffers can also help ensure permanence. Ultimately,strategies must be tailored to the particular project siteand situation.

Permanence of carbon benefits generated by the NoelKempff Mercado Climate Action Project is safeguarded bylegal, financial and institutional means. The project areahas been incorporated into a national park, as legallydesignated by the Government of Bolivia in a bindinglegal document (Supreme Decree #24457), with effectiveprotection under the auspices of the National Service ofProtected Areas (SERNAP) and FAN Bolivia as theproject administrator.

The Bolivian Government has a financial stake in theproject’s success and continuity, as it is entitled to 49% ofthe verified emissions reductions from the project.Through the project, an endowment has been establishedto fund the protection and management of the expandedNoel Kempff Mercado National Park, including rangers,equipment, and infrastructure to protect the park. It isexpected that funds will be left in the endowment whenthe project’s 30-year lifespan comes to completion, andthese funds must be used for the benefit of the NoelKempff Mercado National Park according to the legalendowment fund agreement.

The robust community development aspects of the projectare meant to result in long-term conservation by thecommunities adjacent to the park. Provided with newincome opportunities, land tenure and a sustainable land-use management plan, it is expected that communitymembers will permanently refrain from clearing withinpark boundaries for subsistence agriculture.

Risk of fire was considered in the calculation of projectcarbon benefits, using the actual occurrence of fires from1997-2005. As a result, 5% of the estimated avoideddeforestation carbon benefits were deducted as asafeguard against the risk of fire. There are no additionaldiscounts or reserves being held for other types ofimpermanence risk.

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By conserving forests that local people rely on, well-designed REDD projects can provide importantecological, cultural, and economic benefits tocommunities. Some times, as was the case with NoelKempff, local communities themselves are responsiblefor the forest loss that REDD activities aim to prevent.Community development and involvement is oftencrucial to lessening pressure on forest conversion andobtaining long-term commitment and support for theproject. The use of standards such as the ClimateCommunity and Biodiversity (CCB) standard, whichsupports community involvement in the design ofclimate change mitigation projects, can help safeguardadequate consideration of community concerns.

As of 1996, there were seven communities adjacent tothe NKMNP – Florida, Porvenir, Piso Firme,Cachuela, Bella Vista, and Esperancita de la Frontera –with a total population of 1,025. Traditionally, thesecommunities sustained themselves through subsistenceagriculture; with women and children in charge ofgathering firewood, fruits and medicinal plants, and menseeking income through seasonal work in sawmills, fieldclearing, hunting and fishing. Men working in sawmillscould be expected to earn between $66- $133/month.9

Prior to project implementation, the communitiesgenerally did not have public services; rivers providedwater, health centers were in poor condition, roads wereseasonally impassable, public transportation was non-existent and schools lacked adequate supplies, space andteachers.

Community development activities undertaken as part ofthe project, including organizational empowerment,capacity building, improvement of basic services, anddevelopment of income generating activities, are likely toresult in overall long-term enhancement of livelihoods.8,9

In 2005, FAN conducted a socioeconomic impactassessment which examined Human Capital, NaturalCapital, Physical Capital, and Financial Capital asmeasurements of community well-being and concludedthat, on average, the communities were benefitting fromthe project.

To enhance livelihoods in the communities adjacent topark, strengthen their organization and aid in leakageprevention, two sequential programs were initiated withproject funds. The Program for the SustainableDevelopment of Local Communities (Spanish acronymAPOCOM) ran from 1997-2001 and improved access to

basic services such as health, education, andcommunication. The Community Development Program(Spanish acronym PRODECOM), undertaken from2002-2006, emphasized community development bysecuring land titling, assisting self-organization, andsupporting income generating activities such ascommunity forestry and micro enterprise. A CommunityDevelopment Action Plan was carried out from 2006-2008 with the goal of raising the standard of living forthose communities affected by the project to levels at orabove those at which they resided prior to projectimplementation. It is expected that the Government ofBolivia will carry on future community developmentactivities with a portion of the income it receives frommarketing its share of verified carbon benefits from theproject. Thus far, however, the government has notcommercialized its share nor has it designated how muchof the proceeds will go back to the communities borderingthe park. Project developers and community leaders areworking with the Bolivian Government to resolve theseissues.

OOOOORGANIZARGANIZARGANIZARGANIZARGANIZATITITITITIOOOOONNNNNAL EMPOAL EMPOAL EMPOAL EMPOAL EMPOWERMENTWERMENTWERMENTWERMENTWERMENTOver the course of NK-CAP’s evolution, the importanceof deeply involving communities in project design,ensuring adequate sharing of the project benefits, andrespecting and bolstering indigenous rights has been clear.Those analyzing the project with a critical eye might citelack of community involvement at the earliest stages ofproject development as a weakness in project design.9 Inpractice, community involvement can be difficult to

COMMUNITY BENEFITS COMMUNITY BENEFITS COMMUNITY BENEFITS COMMUNITY BENEFITS COMMUNITY BENEFITS

8 Calderón Angeleri, Natalia. Livelihood Impact Assessment: NK-CAP, Bolivia, November 2005. Annex 6 of PDD. “Livelihood” comprisesthe capabilities, assets (including both material and social resources) and activities required for a means of living.9 Asquith, N.M., et al. 2002. Can forest protection carbon projects improve rural livelihoods ? Analysis of the Noel Kempff MercadoClimate Action Project, Bolivia. Mitigation and Adaptation Strategies for Global Change 7: 323- 337.14

Figure 13: Chiquitano children living in one of the local communities just outside theborder of Noel Kempff Mercado National Park in Bolivia. Photo credit: © HermesJustiniano.

achieve if there is a lack of community/organizationalstructure, as was initially the case with the communitiessurrounding the Noel Kempff Mercado National Park.

As such, part of the project focused on assistingcommunities in creating an official indigenousorganization with legal status. Project developers helpedcommunities to access the correct government officialsand prepare paperwork to group themselves into theofficial Central Indígena Bajo Paraguá (CIBAPA), aregistered organization with legal standing representingthe indigenous communities around the park. As a groupwith legal standing, CIBAPA was eligible to file for landtenure with the National Agrarian Reform Institute(Spanish acronym INRA).

As communities became increasingly organized, they wereable to take a more and more active role in the projectplanning. They fully participate in the managementcommittee of the Park, where all operational aspects of thepark are discussed.

LAND TENURE AND COMMUNITY PROPERTYLAND TENURE AND COMMUNITY PROPERTYLAND TENURE AND COMMUNITY PROPERTYLAND TENURE AND COMMUNITY PROPERTYLAND TENURE AND COMMUNITY PROPERTYRIGHTSRIGHTSRIGHTSRIGHTSRIGHTSPrior to project initiation, none of the communitiesbordering the park had rights to the land on which theyhad historically resided and which they had traditionallyused for hunting, logging, rubber exploitation, etc. Articlesix of Supreme Decree #24457, which expanded theNKMNP, recognized and guaranteed the subsistence useand exploitation of renewable natural resources withinthe expansion zone by communities, subject to the parkmanagement plan. Yet, the park management plan wassomewhat ambiguous as to activities allowed in the park.10

In order to further protect community members’ access totimber, plants and animals, FAN facilitated CIBAPA’sclaim to 360,565 hectares of indigenous territory adjacentto the expansion area in 1998, and this claim was acceptedby the INRA (see Figure 11). In June 2006, the officialtitle for the indigenous territory (“TCO”) was granted toCIBAPA.

LANDLANDLANDLANDLANDUUUUUSE PLANNINSE PLANNINSE PLANNINSE PLANNINSE PLANNING AND CAPG AND CAPG AND CAPG AND CAPG AND CAPAAAAACITYCITYCITYCITYCITYTRAININGTRAININGTRAININGTRAININGTRAININGTo enhance livelihoods and to mitigate leakage, the projectfinanced the creation of a land use plan for the newly-titled indigenous territory (TCO). Through the efforts ofa consultancy team, FAN, CIBAPA and NKMNP, the BajoParagua Native Communal Land Natural ResourcesManagement Plan was developed and four communitieswere trained in sustainable community forestry.Agricultural promoters were educated and 5 universityscholarships in strategic areas (business administration,tourism, agricultural and forest engineering) werefinanced, along with 7 awards for polytechnic level study.

ELEMENTELEMENTELEMENTELEMENTELEMENTARARARARARY AND HIY AND HIY AND HIY AND HIY AND HIGH SCHGH SCHGH SCHGH SCHGH SCHOOOOOOOOOOL EDL EDL EDL EDL EDUUUUUCACACACACATITITITITIOOOOONNNNNSchools in the communities of Florida, Piso Firme, andBella Vista were refurbished and, through an agreementwith the project, the Municipality of San Ignacio paid thesalaries of two teachers. Significant quantities ofeducational supplies were also purchased. Scholarshipswere given to 120 primary and secondary school studentsto continue their studies in courses which were notavailable in the communities.

HEALHEALHEALHEALHEALTH OTH OTH OTH OTH OUTPOSTUTPOSTUTPOSTUTPOSTUTPOSTPrior to project implementation, operators of the Moiraconcession provided the community of Florida with theservices of a medical doctor for half a day/week, as well asdiscounts on medicine.9 In order to compensate for theloss of these services, project developers refurbished andexpanded a pre-existing health clinic in the community ofFlorida, which was in very poor condition, to includeliving quarters for a resident nurse. Another outpost, inPiso Firme, was expanded and converted into a micro-hospital, with a delivery room, laboratory, and dentalservices. Project funds were used to purchase medicinewhich is administered by community members, and adoctor was hired to live in Piso Firme and make periodicvisits to all of the communities.10

INININININCCCCCOOOOOME GENERAME GENERAME GENERAME GENERAME GENERATITITITITIOOOOONNNNNAt the time NK-CAP was initiated, sustainable logging,extraction of non-timber forest products, ecotourism, andbio-prospecting were all perceived to be promisingavenues for alternative income generation for forest-dwelling communities. The project employed all of theseefforts to help raise the standard of living of surroundingcommunities, to varying degrees of success. While asocioeconomic impact assessment concluded that, onaverage, the communities were benefiting from theproject, the community of Florida still maintained anegative financial impact due to loss of jobs from theMoira sawmill. 10

AAAAAlternative Elternative Elternative Elternative Elternative EmploymentmploymentmploymentmploymentmploymentOne of the more significant initial negative impacts of theproject on the communities, particularly the communityof Florida, was the loss of jobs from closed timberconcessions and sawmills. In total, 20 men from Floridalost their jobs in the Moira sawmill.9 Project developersattempted to compensate for these losses by creatingopportunities for alternative employment. For example,approximately 80 community members have workedsurveying forest resources both inside and outside of theexpansion area.9 Of the 26 full-time park guards, 10 arefrom the local communities. Furthermore, six communitymembers were trained as tourist guides.

10 Calderón Angeleri, Natalia. Livelihood Impact Assessment: NK-CAP, Bolivia, November 2005. Annex 6 of PDD15

SSSSSustustustustustainable Fainable Fainable Fainable Fainable ForororororestryestryestryestryestryProject developers supported the establishment of asustainable community forest concession within the TCO(see Figure 11). Community members have approval bythe Superintendant of Forestry to exploit heart of palm on11,000 ha of the TCO, as well as practice sustainableforestry in 90,000 hectares of the TCO. Today, CIBAPAis running its own sawmill and is the first indigenouscommunity with a timber selling point in the capital of theDepartment of Santa Cruz. Although the sawmill is notcurrently turning a profit, money generated from theseactivities are going directly back into the communities,and help to offset employment losses from the Moiraconcession.

EEEEEcotourismcotourismcotourismcotourismcotourismA visitor center was constructed with the aim of fosteringincome generation through tourism activities, whichwould work in combination with the project endowmentto fund post-project activities. Cabins were built andrepaired in several communities, boats and equipmentpurchased, and a pontoon bridge constructed for vehicletransportation. Two communities participated in tourismactivities by offering guidance, lodging, and otherservices. Unfortunately, it became apparent that theremote location of NK-CAP would make travel to thesite by tourists both difficult and expensive. Thus, therealized benefits via ecotourism have been fewer thanoriginally anticipated.

BiotradeBiotradeBiotradeBiotradeBiotradeA program aimed at expanding the scientific capacities ofFAN, while identifying marketable wild plants andproducts, was started. The GermoFAN laboratory wasestablished with the goal of producing in vitro nativeplants, such as orchids, that would generate incomethrough their sale, to be funneled back into projectactivities and help fund post-project activities.GermoFAN has commercially produced ornamental,medicinal and edible species. In addition, the largestscientific collection of live-plant ornamental Bolivianspecies was established through NK-CAP. Today, itincludes 2,500 species, 52 of which were identified as newto science, and 18 of which were sponsored for furtherresearch.

Further enterprises in Biotrade have been carried out, butdid not prove viable. This included the creation of“Canopy Botanicals,” a company whose aim was todevelop products, supplied by the communities, in threemarket sectors: organic foods (coffee beans, cocoa,mushrooms, and Brazil nuts), botanicals (medicinalplants) and ornamentals (orchids). The companypromoted sustainable development as well as theequitable distribution of economic benefits to suppliercommunities. Unfortunately, the venture ultimately faileddue to low returns on its investments, and the investorsincurred costs to dissolve the company. The NK-CAPexperience underscores the need for robust advancebusiness planning to determine the viability of economicdevelopment strategies and avoid losses on investments.

Figure 14: Park guards for Noel Kempff Mercado National Park in Bolivia. Photo credit: © Hermes Justiniano.

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BIODIVERSITY BENEFITS BIODIVERSITY BENEFITS BIODIVERSITY BENEFITS BIODIVERSITY BENEFITS BIODIVERSITY BENEFITS

Beyond climate mitigation, forest carbon projects have thepotential to conserve important biodiversity, if designedwith this element in mind. As high biodiversity increasesecosystem resiliency in the face of climate change, the twostrategies complement and enhance each other. The useof standards, such as the Climate Community andBiodiversity (CCB) standard, which support biodiversityconservation in the design of climate change mitigationprojects, can help secure this co-benefit.

The Noel Kempff Mercado National Park is located in oneof the few areas in South America where several differentecosystems converge; the evergreen forest of the highlands, the cerrado’s savannas, the savanna’s wetlands andthe forest’s wetlands, making the park one of the richestareas for its heterogeneity of habitats and prompting itsinclusion on UNESCO’s list of World Heritage Sites.11

The biodiversity of the area is one of the highest in theneotropics, with 4,000 species of vascular plants, 139species of mammals, 621 species of birds, 75 species ofreptiles, 62 species of amphibians, 250 species of fish and347 species of insects. Rare and endangered speciesinclude tiger, puma, Brazilian tapir, jaguar and caiman,among many others.12

The Noel Kempff Mercado Climate Action Project wasdesigned to have beneficial impacts on biodiversity andhabitats in both the expansion area and original park.Local information suggests that there are many speciespresent in the expansion area which were not present inthe original park area, including 64 species of birds, themaned wolf and marsh deer. 13 This is likely due to majordifferences in habitat and vegetation between the twoareas.

Despite these differences, there is generalacknowledgment of an ecological interdependencebetween the original park and expansion area.13 Migrationof fauna between the two areas is responsible for

11 IUCN. 2000. World Heritage Nomination – IUCN Technical EvaluationNoel Kempff Mercado National Park (Bolivia). See: http://whc.unesco.org/en/list/967.12 Killeen, T.J. and T.S. Schulenberg (Editors). 1998. A biological assessment of Parque Nacional Noel Kempff Mercado, Bolivia. RAPWorking Papers 10, Conservation International, Washington, D.C.13 Halloy, S. 1994 Study to determine the biological value of the area west of the Noel Kempff National Park as a basis for its inclusion in thepark. Technical Report.

significant dispersion of flora. For example, it has beendocumented that parrots and macaws migrate between theareas on a daily basis, nesting in one and feeding in theother, and subsequently spreading seeds between both.Aquatic and marsh fauna are found in both areas andthese populations are expected to increase significantlydue to the added protection of marshlands and lagoons inthe expansion area. Furthermore, several large speciesmigrate annually between the areas, following the seasonalflow of water.

MONITORING BIODIVERSITYMONITORING BIODIVERSITYMONITORING BIODIVERSITYMONITORING BIODIVERSITYMONITORING BIODIVERSITYKey species populations (aquatic turtles, endemic wolves,amongst others) are monitored in the park through a SiteConservation Plan (SCP), which identifies keyconservation sites and targets. The Integral Plan ofProtection (Spanish acronym PIP) follows the guidance ofthe SCP and monitoring is carried out by park guards aswell as external entities, with the authorization of theNational Service of Protected Areas (Spanish acronymSERNAP).

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Figure 15: Blue and yellow macaw at Noel Kempff Mercado National Park inBolivia, South America. Photo credit: © Hermes Justiniano.

VVVVVALIDALIDALIDALIDALIDAAAAATITITITITIOOOOON AND N AND N AND N AND N AND VERIFIVERIFIVERIFIVERIFIVERIFICACACACACATITITITITIOOOOONNNNN

To ensure that the benefits claimed by carbon projects arereal and objectively measurable, a two-step process existsfor independent, third-party review and confirmation ofcarbon project results. The first step, validation, is aprocess designed to confirm that the Project DesignDocument (PDD) meets the stated requirements and

identified criteria of the specific voluntary or compliancemarket project standard under which the project has beendesigned. Verification is the second step, a process bywhich claimed carbon benefits from a validated project areconfirmed.

14 The PDD is available at:http://conserveonline.org/workspaces/climate.change/ClimateActionProjects/NoelKempff/NKPDD/PDDZip/view.html15 SGS UK Ltd. Validation and Verification Report Noel Kempff Climate Action Project. Summary Only. PROJECT NO. VOL 0001 DATE:27 NOVEMBER 2005.

When the Noel Kempff Mercado Climate Action Projectwas first begun in 1996, there were not any specificationsfor carbon project design or validation. However, theUnited States, as a signatory to the United NationsFramework Convention on Climate Change(UNFCCC), had begun a program called the UnitedStates Initiative on Joint Implementation (USIJI). NK-CAP was submitted under the USIJI guidelines andreceived approval in 1996. After the U.S. failed to ratifythe Kyoto Protocol, the USIJI system became obsolete.Since REDD projects were also excluded from the KyotoProtocol’s Clean Development Mechanism, it was notpossible to validate or verify NK-CAP under acompliance regime.

Thus, in 2004-2005, NK-CAP underwent an ex-postvalidation and verification assessment for the voluntarymarket. The validation and verification processes wereexecuted by Société Générale de Surveillance (SGS),registered as a Designated Operational Entity to theClean Development Mechanism (CDM).

As no REDD voluntary or compliance standard existed,against which the project could be assessed, the projectdeveloped its own methodology, based upon the relevantCDM guidelines for afforestation/reforestation projects(as defined October 2005), adapting them for REDD asnecessary. SGS used this methodology, as detailed in theProject Design Document (“PDD”)14 as the basis for itsvalidation and verification processes.

In particular, SGS assessed the project’s additionality,baseline, potential leakage, monitoring plan,environmental and social impacts against the relevantUNFCCC and Kyoto Protocol requirements (whereappropriate), host country criteria and the guidingprinciples of completeness, consistency, accuracy,transparency and scientific appropriateness.

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VVVVValidation Falidation Falidation Falidation Falidation FindingsindingsindingsindingsindingsSGS’ opinion is that the project does currently meet the relevant criteria for CDM project activities and

fulfills the principles detailed above.SGS validation statement, Executive Summary, November 2005

VVVVVeeeeerification Frification Frification Frification Frification FindingsindingsindingsindingsindingsSGS’ opinion is that the project has implemented a monitoring plan and prepared a monitoring report that determines

additional sequestration and emissions reductions due to the project’s activities in a manner consistent with the principlesdetailed above. Consequently, SGS verifies the voluntary emissions reductions claimed by this project as outlined in the

Schedule of Achieved Voluntary Emissions Reductions (SAVER) that accompanies this verification opinion. SGS verification statement, Executive Summary, November 2005

SGS’s first validation and verification review resulted inseveral Corrective Action Requests (CARs), 2 major and8 minor. These included requests to improve the PDDand to develop an action program to address the needs ofthe communities adjacent to the park. The requestedcorrections were made to the PDD, a socioeconomicimpact assessment was conducted by FAN to determinethe needs of the communities, and a communitydevelopment action program was developed, whichrequires the “establishment of a conditioned benefitsharing mechanism based on a participative approach”that would help to “to raise the standard of living as aminimum up to the level that the communitiesexperienced before the commencement of the project.”15

These CARs were subsequently closed out and the projectreceived validation and verification from SGS in 2005with a total of 1,034,107 metric tons of CO2 verified bySGS for the period of 1997- 2005 (see “Carbon Benefits”section for details).

It is important to note that although all CARs associatedwith the first validation and verification review wereclosed out to SGS’s satisfaction, future verifications maybe in jeopardy. As of this writing, key milestones in thecommunity development action program have not beenreached. The program called for the GOB to establish thenecessary legal instruments to commercialize the GOB’sshare of the carbon credits, to commercialize the carboncredits, and to assign carbon credit revenue according tothe earmarks set out in the NK-CAP ComprehensiveAgreement (which include community development – seeFigure 5). Given turn over of government officials andother obstacles, the GOB has yet to complete thesemilestones. The NK-CAP experience brings to light theneed for strong local government capacity to establish thenecessary legal, financial, and institutional means tomanage carbon revenue and benefit sharing.15

CONCLUSION CONCLUSION CONCLUSION CONCLUSION CONCLUSION

FFFFFor more inforor more inforor more inforor more inforor more information contmation contmation contmation contmation contact:act:act:act:act:

Natalia Calderón Angeleri, Coordinator Noel Kempff Climate Action ProjectFFFFFundación Amigos de la Nundación Amigos de la Nundación Amigos de la Nundación Amigos de la Nundación Amigos de la Naturaleza (Faturaleza (Faturaleza (Faturaleza (Faturaleza (FAN BAN BAN BAN BAN Bolivia)olivia)olivia)olivia)olivia)Casilla 2241Phone: +591-3-3556800Fax: +591-3-3547383Email: [email protected]

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The Noel Kempff Mercado Climate Action Project (NK-CAP) is one of the world’s most ambitious endeavors toprotect tropical forest, fight climate change by loweringcarbon emissions, and contribute to the sustainablelivelihoods of local people. The project was broughtabout through the forward-looking partnership of TheNature Conservancy, the Bolivian government, localconservationists, and three U.S. energy companies, whobought out logging concessions to expand Noel KempffNational Park and worked with local communities todesign economic development activities for the benefit ofboth people and forest health.

Initiated in 1996, in the earliest days of the globalmovement to recognize the power of tropical forests tofight climate change, the Noel Kempff project pioneeredmany of the approaches and methodologies that underpintoday’s most rigorous forest carbon projects. In doing so,it became the world’s first large-scale Reducing Emissionsfrom Deforestation and Degradation (REDD) project toscientifically prove that carbon benefits could be achievedby protecting standing forest. In 2005, NK-CAP becamethe first REDD project to be verified by a third partyusing rigorous standards based largely on those developedfor afforestation/reforestation projects under the KyotoProtocol’s Clean Development Mechanism. Thisverification underscores the fact that well-designedREDD projects like NK-CAP can produce real,measurable emissions reductions as well as importantbenefits for biodiversity and local communities. In fact,since its inception, NK-CAP has:

- Avoided over 1 million tons of CO2e from being emittedinto the atmosphere;

- Helped local communities achieve legal recognition andtitle over their traditional lands;

- Doubled critical habitat for threatened species such asthe Brazilian tapir and jaguar;

- Provided funding for education and healthcare servicesin the region;

- Created an endowment to support Noel KempffMercado National Park for future generations.

Despite its success on many fronts, NK-CAP is notwithout opportunities for improvement. In the years sinceNK-CAP was initiated, carbon markets, forest carbonscience, and conservation approaches have all evolved inimportant ways. As with any early-stage project, NK-CAPbroke important ground in these fields, but also holdslessons for other project developers and policy-makers tobe able to improve upon the NK-CAP experience.

Notably, the methods for predicting future deforestationand calculating carbon benefits are more sophisticatedthan they were in the late 1990s. As is evident from therefinements made to the estimated lifetime carbonbenefits from NK-CAP, newer, advanced approaches thatblend remote sensing data and statistical modeling withtime-tested field measurement techniques are able toproduce more reliable calculations than were possible atthe start of the project.

In addition to the technical advances that have comeabout since NK-CAP began, new thinking has emergedon the design of forest carbon projects. Innovative legalinstruments (e.g., conservation easements) and creditbuffers – which were only employed to guard against firerisks in the case of NK-CAP – are now seen as additionalways to address the risk of impermanence in carbonprojects. The application of a nation-wide timber modelto estimate leakage from cancelled timber concessions inNK-CAP helped underscore the importance of moving tonational-scale carbon accounting, which many now see asa critical step to addressing leakage and achievingemissions reductions at the scale needed to avert theworst impacts of climate change.

There have also been new developments in community-basedconservation and governance approaches. The use ofmechanisms for involving local people, such as participatoryplanning processes, and benefit-sharing arrangements (e.g.,trust funds) has expanded dramatically since NK-CAP wasbegun, and such approaches are being employed with successaround the world to facilitate improved livelihoods andimproved environmental outcomes. Awareness of theimportance of community participation in every stage of forestcarbon project design has reached new heights, although it isclear from the Noel Kempff experience that communityorganization and capacity are critical pre-conditions for success.

Zoe Kant, Carbon Finance SpecialistThe NThe NThe NThe NThe Nature Conseature Conseature Conseature Conseature Conserrrrrvavavavavancyncyncyncyncy4245 N. Fairfax Drive, Suite 100Arlington, VA 22203 USAPhone: +1-703-841-5371Email: [email protected]

REFERENCES REFERENCES REFERENCES REFERENCES REFERENCES

Aukland, L., Sohngen, B., Hall, M., Brown, S. 2001 Analysis of Leakage, Baselines and Carbon Benefits for the NoelKempff Climate Action Project, Arlington: Winrock International, 2002.

Asquith, N.M., et al. 2002. Can forest protection carbon projects improve rural livelihoods ? Analysis of the NoelKempff Mercado Climate Action Project, Bolivia. Mitigation and Adaptation Strategies for Global Change 7: 323- 337.

Brown, S., Delaney, M. and Pearson, T. Carbon Monitoring and Verification Protocols for the Noel Kempff ClimateAction Project, Arlington: Winrock International, 2003.

Brown, S., Burham, M., Delaney, M., Powell, M., Vaca, R., and Moreno, A. Issues and Challenges for Forest-basedCarbon Offset Projects: A Case Study of the Noel Kempff Climate Action Project in Bolivia, Arlington: WinrockInternational, 1999.

Calderón Angeleri, Natalia. Livelihood Impact Assessment: NK-CAP, Bolivia, November 2005. Annex 6 of PDD.

FAN Bolivia. Project Design Document of Noel Kempff Mercado Climate Action Project (2005), accessible athttp://conserveonline.org/workspaces/climate.change/ClimateActionProjects/NoelKempff/NKPDD/PDDZip/view.html

FAN. NK-CAP Technical and Financial Report. November 2008.

FAN, TNC and AEP. The Noel Kempff Mercado Climate Action Project: A United States Initiative on JointImplementation Pilot Project. October 1996. Submitted for consideration under the 1996 accelerated USIJI reviewprocess.

Halloy, S. Rapid Ecological Evaluation of the Expansion Area for Noel Kempff Mercado National Park. Manuscriptprovided to FAN, 1996.

IUCN. World Heritage Nomination – IUCN Technical Evaluation Noel Kempff Mercado National Park (Bolivia),2000.

Killeen, Timothy J. Vegetation Map for Noel Kempff Mercado National Park and Zones of Influence, a detailedreport, 1996.

Killeen, T.J. and T.S. Schulenberg (Editors). 1998. A biological assessment of Parque Nacional Noel Kempff Mercado,Bolivia. RAP Working Papers 10, Conservation International, Washington, D.C.

Sohngen, B. and Brown, S., ‘Measuring leakage from carbon projects in open economies: a stop timber harvestingproject in Bolivia as a case study’, Canadian Journal of Forest Research 34 (2004), 829 – 839.

Pinard, M and Putz, F. E. Retaining Forest Biomass by Reducing Logging Damage, 28 BIOTROPICA 3 (1996).

Pontius, R. G., Huffaker, D. and Denman K., ‘Useful techniques of validation for spatially explicit land-change models’,Ecological Modelling 179 (2004), 445–461.

Pontius, R. G. et al. 2007, ‘Comparing input, output, and validation maps for several models of land change’, Annals ofRegional Science, in press, accessible at:http://www.clarku.edu/~rpontius/pontius_etal_2007_ars.doc, accessed 6 October 2006

SGS UK Ltd. Validation and Verification Report Noel Kempff Climate Action Project. Summary Only. PROJECT NO.VOL 0001 DATE: 27 NOVEMBER 2005.

VCS. Guidance for Agriculture, Forestry and other Land Use Projects. November 2008, Washington, D.C.

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