CDM reforestation activities under Kyoto Protocol, implemented on coca cultivation degraded lands of

Peruvian Amazon: risk or opportunity ?

MALTA 21/10/2011 Chiara A.R. Corradi ccorradi@unitus.it

It is provided an assessment of the feasibility and the convenience of land use change from degraded coca cultivation fields (Erythroxylum coca) and subsistence crops into sustainable agroforestry and forestry systems eligible under AR CDM, for the generation of carbon credits.

It is quantified the carbon sink gained by reforestation activities in the

Peruvian Amazon, considering a 20-year time horizon and the production of temporary carbon credits

An examination of the socio-economic profitability of CDM agroforestry

systems as new sustainable business related to the production of woody, non-woody products and the sharing of carbon credits on areas where coca cultivation is common (although not exclusive) is done.

The questions : could AR CDM play a role in the efforts of illicit crop

eradication? If so, which solution are more suitable among the proposed one?

MALTA 21/10/2011

Activities in situ

1-Participative approach of local farmers

Voluntary participation and reserach of land suitable to the project according to the national definition of forest

MALTA 21/10/2011

2- Local institutions

Università del la Selva: Supporto tecnico per campionamenti: laboratori, supporto studenti etc..

Cooperativa produttori di caffè

“la Divisoria”

Local nurserie ECOselva

University and cooperatives

MALTA 21/10/2011

3- Site selection

1. General description (location, coordinates, surveyors)

2. Land tenure status (public, private, owner’s name, ecc)

3. Present Land Use (crops, grazing land, forest, unproductive,…)

4. Additionality (information on other funded projects)

5. Present natural vegetation cover (high, pecent of cover)

6. Soil description

7. Landform description

8. Current human pressure

MALTA 21/10/2011

Potential sites

MALTA 21/10/2011

Land cover samplings

PURMA

SHAPUMBA

MALTA 21/10/2011

RABO DE ZORRO : Graminoids

PASTO DEGRADADO

MALTA 21/10/2011

PASTIZAL ALTO

LEGAL /ILLEGAL CROPLANDS

MALTA 21/10/2011

NOM_owner location

H

A

USO_1

986 USO_1989 USO_1999 USO_2004 USO_2007

Bravo Condezo

Ignacio Daniel Alomias Robles 6 Cafe

Café

Abandonad

o Pasto Pasto Pasto

Carrillo Sanchez

Gamaniel Daniel Alomias Robles 1 Pasto Pasto Coca Coca Coca

Carlos Duran Victor Daniel Alomias Robles 1 Purma Coca Coca Coca Coca

Murga Espinoza

Guilde Daniel Alomias Robles 1 Coca Coca Coca Coca Coca

Rivera Severo Limo Hermilio Valdizan 1 Pasto Pasto Pasto Pasto Pasto

Polo de Villena Niere

Felipa Hermilio Valdizan 1 Purma Pasto Pasto Pasto Pasto

Polo de Villena Niere

Felipa Hermilio Valdizan 1 Purma Pasto Pasto Pasto Pasto

Juanante Sabino Jose

AntonIO Daniel Alomias Robles 1 Cafe

Cafe

abandonad

o Purma Shapumba shapumba

Tolentino Simon

Aquilino Hermilio Valdizan 3 Purma Purma Maiz Maiz Maiz

Cjumo Vargas

Rosalio Daniel Alomias Robles 1 Purma Shapumba Shapumba Coca Coca

Cjumo Vargas

Rosalio Daniel Alomias Robles 1 Coca Shapumba Shapumba Shapumba Shapumba

Nazario Geronimo

Santiago Daniel Alomias Robles 1 Purma Platano

Purma/Intervenido,Purma

joven muy poco Papaya Pasto

Nazario Geronimo

Santiago Daniel Alomias Robles 1 Purma Platano

Purma/Intervenido, Purma

muy poco Papaya Pasto

Piñan Vargas Elias Daniel Alomias Robles 2 Platano Papaya Papaya Platano Platano

Demonstration of Land elegibility: historical and current data

MALTA 21/10/2011

Methodology AR-AMS0001: evolution Title Simplified baseline and monitoring methodologies for small-scale A/R CDM project activities implemented on

grasslands or croplands with limited displacement of pre-project activities

Version number 6

Scale Small scale

Status Active

Valid from 17 Sep 10 onwards

Sectoral scope(s) 14

…………………………………………………………………………………………………………………………………………………………………………………..

Previous Versions

• Title: Simplified baseline and monitoring methodologies for small-scale afforestation and reforestation project

activities under the clean development mechanism implemented on grasslands or croplands

Version number 5

Validity Valid from 17 Oct 08 to 16 Sep 10

Requests for registration can be submitted until 17 Mar 2012 23:59:59 GMT

•Title: Simplified baseline and monitoring methodologies for small-scale afforestation and reforestation project

activities under the clean development mechanism implemented on grasslands or croplands

Version number 4

Validity Valid from 10 Aug 07 to 16 Oct 08

MALTA 21/10/2011

Baseline scenario

Stratification according to land use/ land cover: - grazing lands, - coca fields and croplands, -degraded lands(shapumba and rabo de zorro)

• Satellite Images 1990-2000-2006 • Direct Intervews (about 200 families to get 300 ha

MALTA 21/10/2011

Project scenario

agroforestry with cacao for flat areas

ESPECIE SÍMBOLO Nº

Linderos

Bolaina 100

Capirona

100

Caoba

31

Sombra

Permanent

e

Guaba 93

Shihuahu

co 31

Moena

Alcanfor 31

Agricola Cacao 1111

TOTAL 1504

MALTA 21/10/2011

Project Scenario: agroforestry with coffea, on slopes

MALTA 21/10/2011

Project Scenario: tree plantation for wood production

MALTA 21/10/2011

Carbon Flux calculation ASSUMPTIONS

The application of this methodology is based on two assumptions: -the baseline net GHG removals by sinks is assumed to be zero because in the long term it is expected a progressive degradation of the soil due to the overexploitation of lands with a decrease of the C stock in the soil and in the living biomass. The baseline carbon stocks in the carbons pools is constant at the level of the existing carbon stock measured at the start of the project activity, by using a conservative approach; - the leakage is also assumed to be zero, because it is expected that A/R CDM agroforestry system will provide at least the same good and services of the pre-project conditions, by an increase of the productivity of highly valuable products (coffea, cacao and wood).

MALTA 21/10/2011

- C sinks from 5 pools, but SSC meth allows to calculate only LIVING BIOMASS

- Emissions generated by the project (CO2 e non-CO2)

MALTA 21/10/2011

EX-ANTE calculation

The agroforestry and forestry systems

adopted have a carbon sequestration

capacity between 18,1 and 66,9 tCO2/ha/y,

according to the growth rate of the species

and the differentiated age of harvesting.

tree density Mean growth

rate

wood

density

tree above

ground

biomass

increment

total

biomass

increment

total carbon

increment

Total CO2

increment

Scientific name P/ha m3/tree/year (t/m3)

t

dm/tree/year t dm/ha/year C/ha/year CO2/ha/year

Guazuma crinita 100 0,0429 0,41 0,026 3,744 1,872 6,86

Calycophylum spruceanum 100 0,0053 0,76 0,006 0,858 0,429 1,57

Inga edulis 93 0,0160 0,51 2,173 1,086 3,98

Cedrela odorata 31 0,0347 0,42 0,022 0,961 0,481 1,76

Ocotea costulata 31 0,0620 0,46 0,043 1,883 0,942 3,45

Clarisia racemosa 31 0,0347 0,59 0,031 1,351 0,675 2,48

Coffea arabica 3333 0,004 0,002 0,01

TOTAL 3719 10,97 5,49 20,12

MALTA 21/10/2011

GROSS GHG SEQUETRATION – BASELINE - LEAKAGE =

NET ATHROP. CO2 SINK OF THE PROJECT

-10000

5000

20000

35000

50000

65000

80000

95000

110000

1 3 5 7 9 11 13 15 17 19 21

CO2 storage in the pre-project scenario ACTUAL NET GHG REMOVALS BY SINKS

NET ANTHROPOGENIC REMOVALS BY SINKS

MALTA 21/10/2011

Wood biomass for domestic usei (pruning and programmed cuts)

Valuable wood at the end of rotation cycle

Coffea/cacao production

Annual crops (not acconuted in to KP estimetes)

Carbon Credit generation

RESULTS MALTA 21/10/2011

Socio-economic analysis

A socio-economical evaluation is based on the analysis of alternatives.

CDM agroforestry vs COCA crops

Other subsistence crops similarly cultivated do not provide real profit to the families, but only a regime of low quality food, therefore are not considered for this analysis. The cost-benefit analysis concerns 3 parallel assessments, each one evaluating a specific area of the sustainable development. •The economic sphere: comparison of costs and benefits of the components excluding environmental externalities and induced effects on the general economic system. Net Present Value (NPV), Benefit/Cost ratio (CB ratio) and internal rate of return (IRR) are calculated for each land use scheme •A social dimension is evaluated by comparing the different levels of employment produced by single alternatives; •A simple environmental analysis based on the evaluation of biodiversity and carbon stock, and a more qualitative examination of linked factors.

MALTA 21/10/2011

The monetary value of alternatives

To corroborate in objective manner the comparison between pre-project coca cultivation practice (H0) with the project scenario alternatives under CDM activities, are here reported the

results of the monetary approach

Present value

of expenditures and

revenues

H0 discount rate 10%

COCA

Agroforestry Wood plantation

Cacao Coffea Forestry low terrace

Wood and non wood products $17.909,98 $24.493,98 $25.263,81 $47.696,70

Carbon sequestration 0 $425,98 $330,32 $444,93

Production costs

$8.971,99 $4.306,96 $4.725,01 $2.267,66

Public funds 0 $635,44 $727,65 $501,96

MALTA 21/10/2011

If we analyze the revenues, the alternatives proposed by CDM project are more convenient that the coca cultivation since this crop is very much demanding of soil inputs to maintain an acceptable productivities of

leaves. Coca cultivation is also penalized by the fact that the carbon credits generated by the growth of plants (even thought they are limited) cannot be accounted

.

Investments analysis (discount rate 10%)

Indicator

H0 H1

Coca Agroforestry Wood plantation

Cacao Coffea Forestry low terrace

NPV $8.937,99 $19.352,5 $20.538,8 $45.429,0

CB ratio 1,99 4,49 4,34 21,03

IRR 270,9 64,64% 165,47% not calc.

The investment analysis shows that all the considered CDM alternatives are acceptable at financial level (NPV>0). Each one would have a very different capacity to generate profits, as shown by the indicator Cost/Benefit ratio, being the forestry system the more profitable one.

MALTA 21/10/2011

Social evaluation

The assessment of social development in the project area before CDM implementation (H0) and after CDM implementation (H1).

Days of work of generated by pre-project activities (H0) and by CDM alternatives (H1)

Alternatives

Total Yearly average

Absolute value H1-H0

Yearly average H1-H0

H0 Coca cultivation 1.383 0 69 0

H1

Agrof. Cacao 1.455 72 73 4

Agrof Coffea 1.871 488 94 24

Forestry low terrace 746 -638 37 -32

Dynamic flux of work (in absolute value) related to each alternative to coca cultivation. The more convenient solution in term of quantity of work deliverable is the coffea plantations (94

days of work per year), whilst the system which provides minor work employment is the forestry system (only 37 days of work). The other alternatives are comparable.

MALTA 21/10/2011

Environmental evaluation

All the CDM models implemented contribute to higher biodiversity: six indigenous

species each model against monoculture of coca.

The implementation of the A/R CDM project activities is able to interrupt the

persistent overexploitation of the deforested lands, rather than coca field which

are monospecific cultivation and causes soil desertification.

All the CDM alternative proposed are sustainable in the long term, and all three

proposed systems are being re-establishing the tree cover and the vertical

structure of the vegetation, as well as the potential growth for epiphytes and

lianas plants which will arise the local biodiversity, in a new ecosystem

equilibrium.

Forest canopies filter the solar radiation, the rainfall, the wind speed , and

facilitate the return of local flora and fauna able to live in the several niches of

the forest layers (return of birds, insects, micro and macro mammals). The

landscape will be slowly restored and risk of soil erosion minimized, too .

MALTA 21/10/2011

Additionality of CDM project

Despite this socio economic analysis indicate that profits achievable by carbon credits are limited in comparison to other profits from fruit and wood, nevertheless the implemented CDM and the generation of tradable carbon credits provide the additionality required by Kyoto Protocol rules for a number of other non-financial aspects. Analysis of Environmental and Social barriers (LULUCF guidelines).

1 -Technological barriers:

The AR CDM project fund provide planting materials that otherwise would not be available in the project area due to the absence of local nurseries.

MALTA 21/10/2011

2 - Barriers due to local ecological conditions (a)The overexploitation of soil due to migratory agriculture and coca cultivations generate the irreversible degradation of lands and impoverishment of the natural ecosystem. (b) The practice of slash-and-burning of existing vegetation which is cyclically repeated by the landowners (on average every 4 years) causes the irreversible loss of the tree cover and the substitution of forest ecosystems into impoverished and unproductive grasslands and croplands.

3- Barriers due to social conditions: lack of skilled and/or properly

trained labour force AR CDM project ensure long term benefits by the introduction of productive and sustainable agroforestry, under the assistance of United Nation support (UNODC expertise). Local communities would never be able to convert their (illegal) activities spontaneously because of fear of threats and lack of technical knowledge on models of alternative development. Farmers are trained directly in their fields by UNODC personnel.

MALTA 21/10/2011

Paper

WEAKNESS of economic/CDM analysi

Transaction costs not considered

STRENGHTS of economic/CDM analysis

Thanks!!!

Chiara A.R. Corradi ccorradi@unitus.it

MALTA 21/10/2011