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Carbon Breakout - Potential

Carbon Breakout - Potential. Regulatory is bounded by 1% in 2008-2012 for sequestration In Africa, there is significant degraded/deforested land prior to 1990 7% of Africa is on the grid, so there is need for small scale energy (pro poor)

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Carbon Breakout - Potential

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  1. Carbon Breakout - Potential • Regulatory is bounded by 1% in 2008-2012 for sequestration • In Africa, there is significant degraded/deforested land prior to 1990 • 7% of Africa is on the grid, so there is need for small scale energy (pro poor) • Carbon payments go further in Africa to provide incentives • Many African communities and industries depend on wood for fuel • Some industries depend on diesel so there is a potential for fuel switch • 2002-2012: 42 M tC across Africa for forest restoration • 2002-2012: 168 M tC across Africa for avoided deforestation • Now: $25-50M tons delivered from LULUCF & community-friendly energy • Future: 2B tCO2 under Kyoto, 15% is CDM, Africa obtains 5% of CDM = 15 M tCO2 @ $5 = $75-100M 2008-2012 • (Only some of the $100M will not be ‘pro poor’ projects) • Voluntary Market: Now: < $1M per year, Future: $20-40M (2008-2012) • Voluntary market may hold more potential for Africa and ‘pro poor’ benefits

  2. Carbon Breakout - Potential Theoretically $300M Technically Economically Market Regulatory Feasible $100M Kyoto $20-40M Volun.

  3. Carbon Breakout - Barriers • Transaction costs are quite high including bundling small scale projects • Lower transaction costs in the voluntary market • Projects must be large scale to recover transaction costs • High transaction costs detracts from sustainable community benefits • Getting out competed by large scale projects outside of Africa • Lack of information sharing and scientific data availability (for methodologies) • Projects are taking a long time • Lack of access to upfront capital both in regulatory and voluntary markets • Inadequate infrastructure • CDM rules (Methodologies, additionality start date) • Governments find it difficult to demonstrate sustainable development benefits • Capacity of institutions at many levels • “First mover penalties” – lots of visibility from many stakeholders delays project activities • Corruption • Market development is needed for the voluntary market

  4. Carbon Breakout - Regulatory • The CDM rules are onerous and require significant time • The complexity of PDDs requires hiring consultant, which increases the transaction costs, so there is a longer learning curve • Original CDM objectives for sustainable development benefits are not being achieved • Potential exists to improve small-scale rules and bundling in particular to help links to sustainable development • Potential to reduce transaction costs is important • Mismatches in local legal titling laws and forestry laws (e.g. participatory forest management and forest reserves) • Difference between property rights and carbon rights, so management agreements and concession fees must be consistent with carbon projects • Carbon/land/title rights are difficult to sort out • Costs and time to get surveys affects ability to access land titling • Can get recognized title through de facto land management or concessions • However there is limited access to ‘large’ concessions • Group/community mgmt/ownership has new conflicts and opportunities & changes relationships • The voluntary market may have less restrictions, but still has issues

  5. Carbon Breakout - Capacity • Demands on local project sponsors are high for carbon emissions delivery caused by the private sector expectations • We must analyze which stakeholders need what type of capacity • Regulatory market needs more government involvement and capacity • Capacity development is more effective when coupled with projects • Links are needed between local actors/NGOs and market needs like risk management • Civil society needs more awareness to aid governments in passing sound laws and civil society can act as watch dogs for quality projects • Capacity building not properly tailored for specific action plans • Capacity for legislators, decision makers and local government is key

  6. Carbon Breakout - Institutional • Increase partnering with experienced institutions • Leverage experiences from participatory forest mgmt • CARE and WWF can bring some on the ground experience to this • We could develop a pooled ‘marketing’ of projects for Africa

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