Generating income from mangroves through climate change mitigation Dr. David J. Ganz Chief of Party USAID’s LEAF Program, Bangkok [email protected]
Overview Possible climate change mitigation activities Carbon financing Income for Coastal Communities for Mangrove Protection and Conservation
Introduction Increasing interest in marketing carbon from forests Markets for other environmental services are emerging but slow to develop (ex. PFES) Mangroves contain large amounts of carbon and have high sequestration rates in comparison with other forest types and land uses. A high proportion of carbon is contained in the soil and released with mangrove conversions.
Possible mitigation activities REDD+ (reducing emissions from deforestation and degradation, conserving and enhancing carbon stocks and SFM) Afforestation and reforestation Increased use of harvested wood products for increased carbon stocks and fossil fuel substitution
Carbon financing Voluntary Carbon Markets Corporate support REDD+
Compliance mechanism Clean Development Mechanism (CDM) only allows afforestation and reforestation, not REDD+ CDM does not include soil carbon for small projects (<16 000 tonnes CO2eyr-1 or ~500ha) Changes to hydrology not allowed for small projects Kyoto regime extended for 8 years to 2020 Validation and registration costs are very high (~$160,000 + $14,000 every 5 years for verification)
Voluntary carbon markets The Voluntary Carbon Standard (VCS) is the best recognised of the voluntary standards Includes REDD+ and agriculture Carbon credits verified under the VCS fetch higher prices than ETS systems that allow forest carbon. Soil carbon can be included in small projects. Peat rewetting methodology is now available so project should be able to take advantages of hydrological cycle changes (ex. Deserted fish ponds).
Key considerations Value of carbon credits may not exceed $200/ha/yr even under the best conditions (>1000+ha to break even); Value probably significantly less as up to 60% of credits may need to be kept in a ‘buffer’ depending on risk (10% of buffer is released every 5 years if risk proves to be low); Costs of setting up institutional mechanism and distributing benefits also need to be considered; and Policy and legislative support and carbon credit ownership needs to be clarified with relevant agencies.
Key considerations Cap and trade markets do not admit forest carbon credits and motivation for detailed quantification and accreditation remains low REDD projects in threatened degraded mangrove areas with deep soils should generate most carbon credits Projects on abandoned fish ponds may also make sense Methodologies still need to be refined and carbon sequestration and storage is highly variable between and within mangrove areas and not well understood
Key considerations Demand for CC mitigation and conservation remains and forest carbon initiatives have often been aimed at conservation and socio-economic development anyway Investments associated with establishing community forestry in Cambodia average $54,900 per site
Corporate Support Selling bundled services, a ‘sustainable development product,’ may represent a better opportunity Direct CSR helping local communities Popular in SE Asian context.
Mangroves for the Future (MFF) Food and Agriculture Organization (FAO) USAID’s Lowering Emissions in Asia’s Forests (USAID LEAF) Income for Coastal Communities for Mangrove Protection Thailand Vietnam Pakistan
Rationale Mangroves contain large amounts of carbon Coastal communities need support for alternative livelihood development Carbon prices are low and may not increase much in the medium-term Cap and trade markets do not admit forest carbon credits and motivation remains low
Project Objective To develop a low cost mechanism enabling corporate investors to responsibly promote mangrove conservation, carbon emissions reduction and sustainable development through the provision of funding to local communities for livelihood diversification, resource enhancement and coastal protection.
Project Rationale Mangroves contain large amounts of carbon Coastal communities need support for alternative livelihood development Carbon prices are low and may not increase much in the medium-term Costs of entry into carbon markets is prohibitive for small scale forestry projects Demand for CC mitigation and conservation remains Direct market mechanisms are needed.
Project Approach Work in conjunction with existing project/s to develop mechanism for wider replication. Seek broad institutional support to increase robustness and build confidence.
Output 1 – Improved understanding of conditions for establishing mangrove carbon and livelihoods projects Activity 1.1 Inception WS/ Expert meeting Activity 1.2 Assessment of funding availability Activity 1.3 ‘Develop model that assesses the role of mangroves in carbon storage and sequestration’ – bypass measurement expenses.
Output 2 – Target communities identified, engaged and supported Output 3 – A mechanism to incentivise mangrove conservation and benefit adjacent communities Output 4 – Costs quantified and financing options developed Output 4 – Implementation partners for regional replication