Thursday, 30 October 2008

Forest preservation-carbon credit schemes in Asia

FACTBOX: Forest preservation-carbon credit schemes in Asia

Wed Oct 29, 2008

(Reuters) - U.N. climate change talks in Bali last December formally launched pilot projects for a pay-and-preserve scheme that would allow developing nations to potentially earn billions of dollars by keeping their rainforests standing.

Under the U.N.-backed process, called reduced emissions from deforestation and degradation (REDD), rich nations would meet some of their emissions reduction targets by buying carbon credits from developing nations, whose forests soak up vast amounts of planet-warming carbon dioxide (CO2).

Following are some of the REDD projects underway or announced in Asia aimed at leading to a formal integration of the process into the Kyoto Protocol's successor from 2013.

Covers 750,000 hectares as designated carbon forests. Project involves law enforcement, reforestation and community funding and development to reduce deforestation by 85 percent and prevent an estimated 3.4 million metric tons of CO2 being emitted annually, or a total of 100 million metric tons over the project's 30 year-life.

First REDD project to earn the internationally recognized Climate, Community and Biodiversity standard. Project involves Aceh government, Carbon Conservation of Australia, Merrill Lynch and International non-profit NGO Fauna and Flora International. Merrill has signed a multi-million dollar agreement to buy voluntary carbon credits in a deal running from 2008-13.

Fauna and Flora International and Australia's Macquarie Group have signed a deal to invest in six REDD projects globally, three of them in Indonesia. Two are in West Kalimantan, on Borneo island, for which MOUs have been signed with the local government and the third is in Papua province on New Guinea island. The other three projects are in Cambodia, Liberia and Ecuador.

International forestry investment firm New Forests and the government of Indonesia's Papua province have pledged to protect 200,000 ha. Initial estimates suggest the project could save up to 40 million metric tons of CO2 being emitted over 15 to 20 years. A large portion of VERs, estimated to sell for between US$4 and $10 a metric ton, are to be placed in a perpetual endowment fund for local communities in and around the preserved tracts of forest.

Australia and Indonesia last year signed the Kalimantan Forests and Climate Partnership, with total investment targeted at A$100 million. The Australian government has pledged A$30 million to the scheme over four years and the project aims to protect 50,000 ha of forest and flood and replant at least 50,000 ha of drained and cleared peat swamp. The project is aimed to help both countries learn how to design and carry out REDD schemes.

The Bank's Forest Carbon Partnership Facility aims to gather $300 million in contributions from rich nations to help more than a dozen developing countries, such as Vietnam, Costa Rica and Madagascar, prepare for REDD schemes. The program aims to help nations figure out credible estimates of their national forest carbon stocks as well as offer technical aid to design individual REDD projects.

The United Nations is running a separate REDD program to help developing nations get ready for the scheme. So far, $35 million has been committed.

(Editing by Megan Goldin)