Category Archives: Volume 33 No. 1 (2011) (ACIAR Special Issue)

The Economic Drivers and Environmental Outcomes of the Clean Development Mechanism in Vietnam


Author(s): Leonard Smith1, Paul Dargusch2 and Sebastian Thomas1

Abstract

The Clean Development Mechanism (CDM) is the principal source of carbon offsets in the global market, and is intended to be a key driver of sustainable development and technical transformation in developing countries. The distribution of CDM projects by country has been skewed, with over 75% of registered projects having taken place in just four countries, namely China, India, Brazil and Mexico. A change in this pattern of development may be occurring, however, as smaller developing countries become increasingly active in the carbon market. An example of this is the rapid rise in the number of CDM projects based in Vietnam since early 2009. This paper investigates factors contributing to the growth of CDM projects in Vietnam and describes some of the key features of the projects that have been developed. Hydropower projects are found to dominate new CDM project development in Vietnam. It is suggested that CDM project development in Vietnam may be a tool to support domestic energy security rather than being primarily driven by the intended climate change mitigation and sustainable development objectives of the CDM. It is also possible that Vietnam is emulating the development strategy of China, and may serve as a model for other members of the Least Developed Countries group. A country’s domestic policy choices are critical in determining its attractiveness as a host country for offset projects, and Vietnam’s policy strategies are successfully harnessing synergies between domestic agendas and regulated foreign markets.

Keywords : carbon markets, Asia-Pacific, climate policy, CDM, renewable energy

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Why Are There So Few Carbon Offset Projects in Pacific Island Countries?


Author(s): Paul Dargusch1, Shaun McMahon1, Sebastian Thomas2 and Ray Collins1

Abstract

This article examines reasons for the lack of Clean Development Mechanism (CDM) projects registered in Pacific Island Countries (only two of the 1699 projects registered as of 1 July 2009 were located in such countries) and assesses the potential for new project development in the region. Two groupings of CDM projects are analyzed. First, features of the eight CDM projects located in Small Island Developing States and Territories that were registered as of 1 July 2009 are examined to identify what factors have characterized successfully registered CDM projects. (No new projects have been registered in SIDS since this date, although there are more projects currently being validated.) Second, the 122 agricultural-based CDM projects registered as of 1 July 2009 are analyzed to consider how agricultural and bioenergy projects – which seem the most suitable form of CDM projects for the Pacific Islands region – can be best developed in the region. Analysis reveals that agricultural CDM projects that generate electricity have strong potential for development in the Pacific Islands. Policy options to support electricity generation projects are discussed, including the establishment of a regional CDM body, the possibility of Pacific Island countries engaging in unilateral CDM projects, and the role that ‘regional economic leaders’ such as Australia could play to assist project implementation.

Keywords : small-scale projects, clean development mechanism, CDM, SIDS

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Production of Carbon Offsets Using Conservation Agriculture Practices


Author(s): Jean-Francois Rochecouste and Paul Dargusch

Abstract

This paper examines opportunities for the United Nations Framework Convention on Climate Change (UNFCCC) to consider financial mechanisms for the uptake of conservation agriculture (CA) practices in developing countries to reverse the loss of soil organic carbon. Conservation agriculture, commonly described as the reduction of tillage, maintaining soil cover and introducing crop rotations, is currently being promoted by the United Nations Food and Agriculture Organisation as the most sustainable form of farming into the future. It was found that the increasing uptake of CA practices by developed countries improved soil organic carbon benefit and reduced energy inputs. Furthermore industrial agriculture has evolved a range of new technologies that can be adapted in developing countries to improve food security, increase environmental benefits and provide carbon offsets. This is in line with the climate change mitigation strategy of putting atmospheric carbon back in the soil to increase soil organic carbon. It is also noted that recognising conservation agriculture methodologies in carbon offset schemes would require the development of alternative economic instruments specifically to support small landholder changes in farming practices such as exist for hydrological and biodiversity ecosystem services schemes. Some of the constraints for small landowners providing agricultural carbon offsets are investment capital and an established trading mechanism that recognises the inherent issues of agriculture. Adaptation of conservation agricultural practices from industrialised agriculture to developing countries is examined along with current offset schemes being proposed in developed countries. A review of the literature examines Payment for Ecosystem Services (PES) and suggests a number of methodologies for consideration as part of an offset market. It was found that the two main obstacles in market terms are the acceptance of a level of soil carbon sequestration that can be easily calculated and the degree of attached liability for farmers in selling the equivalent of a Certified Emission Reduction unit from a highly volatile system.

Keywords : payments for ecosystem services (PES), market instruments, soil organic carbon (SOC), climate change policy, greenhouse gas emissions, clean development mechanism (CDM), developing countries

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Will Indonesia be Successful in Reducing its Greenhouse Gas Emissions with REDD+?: the Threat of Organizational Fragmentation


Author(s): Medrilzam, Paul Dargusch and John Herbohn

Abstract

REDD+ schemes are likely to be important components of climate change mitigation strategies for developing countries in a post-Kyoto framework. Many tropical forest countries have been preparing their REDD+ structures in anticipation of the requirements for REDD+ investment. Indonesia, as one of the main REDD+ supporters, is struggling to establish its REDD+ governance framework and REDD+ infrastructure while waiting for the REDD+ mechanism to be ready for implementation at the global level. Demonstration activities are being conducted and several policy documents and regulations have been released since 2007. However, some issues remain outstanding, including organization fragmentation, raising concerns as to whether a REDD+ scheme can be implemented to effectively reduce Indonesia’s greenhouse gas emissions. This paper examines Indonesia’s efforts in preparing the REDD+ scheme through evaluations of climate change and REDD+ policy products from various government organizations. Descriptive analysis involving observations on various climate change and REDD+ products is used to reveal complexities that exist within the relationship among government organizations. This paper exposes six lessons learned from Indonesia’s experience and concludes that reduction of organization fragmentation on REDD+ is to be the highest priority action for Indonesia in the short term. With a clear organization framework, REDD+ implementation will be easier to manage and potentially increase investor confidence in REDD+ projects in Indonesia.

Keywords : climate change policy, organizational fragmentation, UNFCCC

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Peat forest Rehabilitation in Central Kalimantan and REDD+: Conflicting Roles of Government Agencies


Author(s): Farwiza Farhan1, Medrilzam2 and Sebastian Thomas3

Abstract

Peat forests are considered to be one of the largest reserves of terrestrial carbon in the world, and play an important role in storing atmospheric carbon. Indonesia is home to nearly half of the world’s tropical peatlands, and as the country with the world’s second-highest deforestation rate (after Brazil), these peatlands are being severely degraded. This paper uses the former Mega Rice Project area of Central Kalimantan to explore the role of government agencies in the development and implementation of Reduced Emissions from Deforestation and forest Degradation (REDD) schemes in Indonesia. The Indonesian Government is committed to reducing emissions from deforestation, as well as rehabilitating degraded forest areas. As Indonesia’s legislative system is still maturing, policy and regulatory decisions are often made without thorough planning, and frequently conflict with one another. The research presented here identifies contradictory regulations and overlaps in the responsibilities of government agencies directly involved in elements of REDD+ policy, principally in regard to forest governance and land tenure in project areas.

Keywords : deforestation, Indonesia, carbon offsets, sustainable development, climate policy.

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An Assessment of Potential Benefits to Smallholders of REDD+ Components in the Philippines


Author(s): Rodel Lasco1, Florencia Pulhin2, Leonida Bugayong2 and Marlo Mendoza3

Abstract

Many sectors in the Philippines are looking at the potential of Reducing Emissions from Deforestation and Forest Degradation-plus (REDD+) under the UN Framework Convention on Climate Change (UNFCCC) to help finance forest protection and rehabilitation in the country. However, one major problem is that there is little information on the potential benefits the country can expect under REDD+. Specifically, it is not known how each component activities of REDD+ can benefit smallholder farmers. Thus, this paper assesses the potential benefits of activities under REDD+ to smallholder farmers in the country. The key question is what the potential of REDD+ in the Philippines is for improving the sequestration potential of the forest sector and to serve as a form of supplemental livelihood for rural forest dwellers? The main approach of the paper is to summarize what is known about: the historical pattern of deforestation and degradation, the driving forces behind them, community-based forest management (CBFM), tenure and rights, and to analyze the implications of Copenhagen and Cancun meetings for the Philippines. The main finding of the study is that depending on which REDD+ activity is implemented, smallholder farmers under CBFM areas would have varying roles and potential benefits. Smallholder farmers will benefit the most from avoiding forest degradation and enhancing of forest stocks activities because these activities pose the highest potential carbon credits. Due to the rising total forest cover of the country, very few carbon credits are expected from avoiding deforestation. This implies that government policies and programs could focus on preparing local communities and institutions for activities that decrease forest degradation and enhance carbon stocks. In addition, there are many uncertainties and information gaps remaining. For example, the rate of biomass degradation in Philippines forests and the drivers of forest degradation are still unknown. The ability of government agencies to implement REDD+ is still inadequate. A strong capacity building program is therefore essential.

Keywords : climate change mitigation, REDD, forest conservation, climate policy

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Definition of Forest for REDD+: an Unresolved Issue


Author(s): Medrilzam and Paul Dargusch

Abstract

Debate over arrangements for REDD+ in a post-Kyoto climate policy framework has been continuing in United Nations Framework Convention on Climate Change (UNFCCC) negotiations; however, no review of the applicability of the existing forest definition to future REDD+ implementation has been undertaken. This paper highlights the need to review the definition of forest, and examines proposals to improve existing definitions. The impacts of the current forestry definition are discussed with reference to Indonesia as a case study. It is concluded that careless definition of selected forest-related terms has had a negative impact on Indonesia’s involvement in the implementation of Clean Development Mechanism (CDM) afforestation and reforestation (A/R) projects. In the global context, this paper concludes that there should be clear definitions for definition of forest that are flexible enough to accommodate the various interests of UNFCCC parties. At the national level, each country should specify their forest definition carefully, taking into consideration the guidance provided at the global level and its own forest characteristics and management. Failing to do so can limit the involvement of these nations in future REDD+ schemes and reduce their capacity to mitigate climate change impacts.

Keywords : deforestation, degradation, CDM A/R, UNFCCC

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Progress in Natural Resource Based Emission Reduction Activities in the Tropics


Author(s): Sebastian Thomas

Abstract

In this introduction to the Annals of Tropical Research special issue on natural resource based carbon offsets a framework is provided for describing the architecture of global climate policy instruments and market mechanisms, and the relationships between these components of the international climate change mitigation and adaptation landscape is discussed. The principal constraints and enabling factors for natural resource based offset projects are identified as issues of capacity, finance, governance and regulation. These concerns provide the rationale for a proposed research agenda, comprising conceptual research and capacity building, both of which can be enacted through the implementation of pilot project activities.

Keywords : carbon markets, offsets, CDM, REDD, conservation agriculture, carbon forestry, climate policy

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