Maximising opportunities for sustainable development with A&R CDM projects in Uruguay

1. Maximising opportunities for sustainable development with A&R CDM projects in Uruguay Walter Oyhantçabal Ministry of Agriculture Uruguay Bonn, June 5, 2003 woyha@mgap,gub.uy

2. Or: Trying to make very high quality projects (VHQP)Or: How to play a win-win game. A High Quality CDM Project is one in which: Host country wins and Annex I countries win respecting the environmental integrity of the KP

3. We know what is climate change... • 30 % more rain compared to 40 years ago !!!!

4. Martino et al., sin publicar

5. Land use in Uruguay (2002, Ha) • Native forests: 810.812 (4,6%) • Area with planted forests: 714.081 (4,0%) • Effective area planted: 514.038 • Crops: 673.000 (3,7%) • Pastures: 14.000.000 Ha. (87,7%) • Country with Reduced Forest Cover (CRFC): less than 10% (Teheran Process)

6. Natural characteristics of Uruguay and potential for forests • Area:17,8 million ha. • Subtropical/temperate climate: pp 1300 mm • Mean tº 20-16º C • NPP of planted forest ecosystems: medium to high (16 to 30 m3/Ha/yr with Eucaliptus) • 3,3 M Ha classified and identified in cartography as forest use priority. • Degraded Lands: 360.000 Ha.

7. National forest policy • Objectivs: • Conservation of natural forests through management plans • Enhance planted forest base in zones of low productivity for other agricultural uses. • Instruments: • Tax exemptions • Subsidies to plantation costs (50%) • Credit • R+D • Extension

9. Japanese co-operation: a key of Uruguayan forest development • 1980: JICA-LATU: R&D equipment • 1985: JICA-MGAP agreement, Master Plan for plantations and use of wood. • 1990: JICA-MGAP, Forest 5 year Plan • (in that early time the plan already estimated that 100.000 Ha. would remove CO2 equivalent to 25% of the national emissions of this GHG) • 1991: JICA-INIA, Tree breeding program.

10. Main achivements: 1990 2000 Native forest w/management plans (ha) 14.000 107.000 Total effective area planted (ha) 45.000 514.000 Annual rate of plantation (ha) 3.000 52.000 Exports (millions of U$S) 13 86 Number of firms 178 1083 Investment (millions of U$S ) <150 >900 Employment (N° of persons) 1.000 14.000 G forest P/G Agric. P 4 14

11. Evolution of the area annually afforested (in Ha.)

12. Perspectives for ´00: • Annual new areas decrease sharply after ´97 • Tendency to stop growth • Foreign investment in the sector diminishes • Challenge of industrialization • Progressive elimination of subsidies to 2007 • Need for new and additional incentives ¿CERs?

13. Proposals for a portfolio of high quality/clearly A&R and bioenergy additional projects • Plantations in degraded/severely eroded lands. • Plantations in grasslands of low productivity with no current forest practices. • Associative afforestation in livestock areas to intensify and diversify income and labour (reaching scale) • Combined heat and power generation from sawmills wastes and rice husks.

14. Strengths of Uruguay to produce high quality CERs: • National Board for Climate Change Projects • Guidelines and Procedures for CDM project submission and National approval available. • List of criteria and indicators to estimate contribution to sustainable development. • Good Forest Management Practices being elaborated for planting, management and harvesting. • All forest projects with management plans and registered in the Ministry of Agriculture. • Climate and soils make possible to remove in the order of 300 ton CO2/Ha in 20 years.

15. (Strengths of Uruguay to produce high quality CERs:) • Uruguay is part of the Montreal Process and covers now 20% of the 67 indicators. • Important process of certification under FSC. • Long tradition in fire insurances and low primes (0,2% of the value of the plantation) • Lack of conflict for the land. • Deforestation of natural forests forbidden by the law and effectively controlled. • Most firms show concern for protecting the environment and biodiversity in particular. • Information available to calculate carbon stocks and CO2 fluxes in the baseline with reasonable accuracy.

16. Some weakness also: • Lack of capital to start projects • Lack of forest culture between cattle farmers. • Insufficient availability of biomass coefficients and growth models. Must be completed to avoid use of default values. • More studies are needed on aspects of nutrients and water dynamic in soils under plantations..

17. Focus on the key issues to design high quality A&R CDM projects Going to national circumstances in Uruguay.....

18. 1. Non permanence: • Non accounting tools: • Good Practices for Forest Sustainable Management, to minimise risk of C losses by fires, pests and other disasters, following IPCC GPG. • Use of insurance • Diversification of sites to minimise losses. • Legal guarantees and respect of contracts. No risk of illegal human deforestation. • Monitoring of losses. • Accounting modalities: option to use tCERs

19. 2. Additionality: • Projects must demonstrate that they are not the baseline. • Identification of barriers. • The forest area of the country tends to stabilise. • Projects provide new technology and capacities to farmers.

20. 3. Leakage: • Uruguay is a country of Low Forest Cover. • There is very little chance of negative leakage by activity shifting. Moreover, afforestation may induce intensification of meat production in the non afforested area of the farms, through improved pastures, increasing C stocks in soils. (not credited in 1º CP)

21. 4. Socio-economic impacts: • Contribution to sustainable development could be seen in: • Diversification and increase of sources of income, in farms dedicated only to livestock production, may help retain farmers in the country. • Direct and indirect employment generation over the baseline (extensive livestock production). • Replicability • Technological spill-over • Capacity building • Increase of participation in associative forms. • Promotes innovation process • Social acceptance • Care of landscape and ecoturism

22. 5. Environmental impacts: • Project design shall follow national criteria and indicators. • EIA and mitigation measures implemented. • Monitoring of relevant indicators following check list. • Afforestation is made on soils of low native grassland productivity, or degraded lands. Minimum tillage is adopted to minimise erosion and emissions of CO2. • Some evidences show that in Uruguay well managed forests might favour wildlife, creating new refugees.

23. Measures to preserve biodiversity, including: • Use of more than one species in monoespecific patches. • Leaving not less than 30% of the area with native vegetation • Preserve refugees of native animal species. • Monitor biodiversity evolution. • Use of native species to the possible extent. • Respect completely native forests areas. • Use IPM and minimise use of contaminant pesticides.

24. To finalize: • We can agree that the challenge is to identify and implement A&R CDM projects of high quality in terms of socio-economic and environmental co-benefits. • But we need to learn by doing. Uruguay, among other countries, accept the challenge.And we want to start now.

25. Thank you very much !!!! Comments are welcomed to woyha@mgap.gub.uy