Tito Sequeira

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Leveraging multiple environmental markets to support conservation projects in Latin America. Cartagena, COLOMBIA February 18, 2007 Presented by Cristobal (Tito) Sequeira

Kyoto Protocol (KP) pays for Reforestation or Aforestation: 

Kyoto Protocol (KP) pays for Reforestation or Aforestation It means that if somebody invests money in planting new trees where there was a forest or where there had not been a forest in recent history, he can apply for a fraction of his investment to be paid back by KP

But, If you already have a forest; keep it healthy; fend off invaders, loggers and poachers; avoid forest fires, etc.. If you do your homework: 

But, If you already have a forest; keep it healthy; fend off invaders, loggers and poachers; avoid forest fires, etc.. If you do your homework Nobody will pay you one cent !!!!

¿Why is it so?: 

¿Why is it so? When they discussed and approved the KP, they said it was difficult to assess the integrity of forests and some other reasons. Actually there were some deeply lying interests to keep it that way

But…any action generates a reaction: 

But…any action generates a reaction Some people in countries that still have natural forests and who are fighting hard to keep them healthy and safe, started a movement to change that situation

Governments of countries like Papua New Guinea, Costa Rica and others, initiated a coalition in order to obtain enough legitimacy and critical mass to apply for a reform to the Kyoto Protocol: 

Governments of countries like Papua New Guinea, Costa Rica and others, initiated a coalition in order to obtain enough legitimacy and critical mass to apply for a reform to the Kyoto Protocol It is now known as the

When a forest is logged off, carbon emissions come from combustion (if the timber is burnt) or from decay of debris and the roots underground. That is called degradation.: 

When a forest is logged off, carbon emissions come from combustion (if the timber is burnt) or from decay of debris and the roots underground. That is called degradation. The Coalition for Rainforest Nations (CfRN) is trying to obtain carbon credits for Reduced Emissions from Deforestation and Degradation (REDD)

In a tropical forest there might be 150 tons of Carbon (tC) per hectare (Ha) (1Ha = 0.01 Km²): 

In a tropical forest there might be 150 tons of Carbon (tC) per hectare (Ha) (1Ha = 0.01 Km²) At the European Union Emission Trading Scheme current prices for Carbon Credits, US$ 100/tC would be a plausible price to obtain

But, that is a high hanging fruit!: 

But, that is a high hanging fruit! Studies show that the real cost of opportunity; what the people who possess the forest gets in return after logging off their forest for the sake of agriculture or cattle ranching, is much less than that. And there is money available to pay for REDD! (If the Kyoto Protocol is reformed)

Good news! Things are starting to change!: 

Good news! Things are starting to change! The European Union has a short term goal of confining climate change to 2 deg C. That would certainly lead to prices for Carbon Credits in the region US$ 112-187/tC It means let’s say US$ 120/tC x 150 tC/Ha = US$ 18,000 US$/Ha !! Paid in a straight line way and in 30 years it means US$ 600/Ha-year

Where does the money to pay for REDD come from?: 

Where does the money to pay for REDD come from? Two possibilities From a fund set up by rich countries and managed by the World Bank From the carbon markets – REDD credits are sold in the EU ETS and other similar schemes Problem with a fund? Yes: it is limited by donations Unlikely to produce more than few hundred millions

Where does the money to pay for REDD come from?: 

Where does the money to pay for REDD come from? The ETS is a much deeper source – could provide tens of billions, which will be needed if CfRN’s proposal is to be successful Only a global carbon market has the depth to provide the scale of payments needed to reduce deforestation significantly REDD credits must trade in the global carbon market

¿Where do we stand now?: 

¿Where do we stand now? UNFCC has to agree (¿December 2007?) to go ahead in accepting the reform (they already acknowledged the existence of REDD, back in December 05 in Montreal). The World Bank is waiting for that green light from the UNFCC to disburse from a fund to initiate trading Carbon Credits from REDD, worth to be put in a futures market (for after 2012)

Conclusion: 

Conclusion REDD carbon credits can be important both As a mechanism for reducing deforestation & stabilizing the climate & As a mechanism for international redistribution, bringing forested countries a reward for the services that their main assets provide to the world

Thank you very much!!: 

Thank you very much!! Cartagena, Colombia. February 18, 2007