July 2007

Welcome!


Dear TAKG Partners,

This edition of the Tropical America Katoomba Group (TAKG) newsletter highlights some recent news articles debating carbon offsets and reviews the past few month’s activities on reduced emissions from deforestation in the climate change policy debate. We offer links to tools that have been made to counterbalance some of the criticism.

In addition, we highlight two recently completed studies on the interrelation between payments for ecosystem services (PES) and poverty alleviation.

Suggestions, opinions and questions about your projects and the work of the network are always welcome at TA-Katoomba@forest-trends.org.

-The Tropical America Katoomba Group


*Please send any materials/documents, notes and announcements over your activities to be included in future newsletters to rmiller@forest-trends.org.

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CONTENT

KATOOMBA GROUP AND PARTNER NEWS

HOT TOPIC OF THE MONTH: THE WONDERFUL WORLD OF CARBON

RELATED FOREST TRENDS PROGRAMS

NEWS & PUBLICATIONS

PES NEWS FROM ACROSS THE OCEAN

EVENTS


KATOOMBA GROUP AND PARTNER NEWS

Two Studies on the poverty reduction potential of Compensation for Ecosystem Services

The Pan-Tropical Scoping Study of Compensation for Ecosystem Services was conducted by a consortium of organizations including the African Centre for Technology Studies (ACTS), Corporación Grupo Randi Randi (CGRR), Forest Trends (with Ecoagriculture Partners and the Rights and Resources Initiative), Institute for Social and Economic Change (ISEC), The United Nations Environment Programme (UNEP), The World Agroforestry Centre (ICRAF), The World Conservation Union (IUCN) during 2006 and 2007. It resulted in five papers (linked below) discussing the diverse linkages between the increasingly utilized mechanism of PES and its potential to alleviate poverty. The Framing document reviews the evolution and fundamentals of PES (or Compensation and Rewards for Environmental Services, as designated by the study). The study was commissioned by the Rural Poverty and Environment (RPE) Program of the International Development Research Centre (IDRC) as an effort to provide an overview of relevant developments in Africa, Asia and Latin America. Recommendations for interested organizations are made in each paper. 
The scoping study produced a series of multi-authored issue papers that are downloadable for free on-line:

-Compensation and Rewards for ES (CRES) in the Developing World: Framing Pan- Tropical Analysis and Comparison.

-Exploring the inter-linkages among and between Compensation and Rewards for Ecosystem Services (CRES) and human well-being.

-Criteria and indicators for ES compensation and reward mechanisms: realistic, voluntary, conditional and pro-poor.

-The conditions for effective mechanisms of CRES.

-Organization and governance for fostering pro-poor CRES

-How important will different types of compensation and reward mechanisms be in shaping poverty and ecosystem services across Africa, Asia & Latin America over the next two decades?

-Mayor Finding and Conclusions Summary Article

Payments for Ecosystem Services: issues and pro-poor opportunities for development assistance
Danish Institute for International Studies

The Danish Institute for International Studies just published “Payments for Ecosystem Services: issues and pro-poor opportunities for development assistance” which makes recommendations to funders on promoting PES from a pro-poverty alleviation perspective.

-Read the report

Launch of the Social and Environmental Values Exchange in Sao Paulo

Brazil’s Social and Environmental Values Exchange will obtain investments to be directed to environmental projects of Brazilian NGOs focused on criteria defined by work led by TAKG Steering Committee member Prof. Mario Monzoni of the Center for Sustainability Studies of the School of Business Administration of the Getulio Vargas Foundation in Sao Paulo. The BV&SA, as it is known in Portuguese, has official support from UNESCO and is recognized by the UN as a case study to be followed by other stock markets in the world.

The projects to be benefited by the funds raised by BOVESPA will center on the areas of Education for Sustainability, Climate Change, Hydrological Resources, Biodiversity and Forests, and Sustainable Cities. Investors in this Exchange will be able to accompany the projects on the website, thus ensuring a transparent and safe process. Investments will go straight to the projects without any deductions or charges.

In creating the BVS&A, BOVESPA strengthens the concepts of “socio-environmental investor” and “socio-environmental action”. Apart from education and sustainable cities projects, activities that aim to:
-reduce greenhouse gases or develop renewable sources of energy, or analyze vulnerabilities of the country and Payment for Ecosystem Services
-increase hydrological availability, manage hydrological watersheds, conserve and recuperate springs and streams and Payment for Ecosystem Services
- projects to obtain biological corridors, create nature reserves, Payment for Ecosystem Services and protection of species under threat of extinction and productive systems that substitute use of agrotoxins with sustainable management.

For more inforation: Assessoria de Imprensa Bovespa Telefones: (55 11) 3233 2372 /2093/2025/2498  E-mail: bimprensa@bovespa.com.brhttp://www.bovespa.com.br/SalaImprensa.htm


HOT TOPIC OF THE MONTH: THE WONDERFUL WORLD OF CARBON

The Debate on Carbon Offsets

Recent months have seen increased scrutiny from the media on the practice of carbon offsetting, with concerns about the credibility of offsets schemes making headlines around the world. The concerns are centered on both the regulatory and voluntary markets and bring to light some of the challenges to be addressed by those engaging in these markets. In the midst of the media scrutiny, those involved in carbon offsets continue to provide information and strive to provide buyers and sellers of carbon with helpful guidance and tools.

The following articles highlight some of the concerns surrounding the carbon market:

-London Observer article: Is carbon offsetting the solution? (Or part of the problem?) June 10, 2007
“Is carbon offsetting the solution or part of the problem? We burn fossil fuel in the developed world - and plant much-needed trees in Africa to 'off set' our emissions. It sounds like a win-win situation. But is it?...”

-The Economist article: Trading Thin Air June 2, 2007
Centering on a main argument against the growth in use of carbon offsets, this article acknowledges that the carbon market is working in terms of being a market, while highlighting the failure of the market to produce expected innovations to decrease total emissions.

-The Guardian article: Abuse and incompetence in fight against global warming June 2, 2007
Even the institutions in place to ensure high quality offsets and credibility of the CDM are investigated, as in this article, especially focusing on problems surrounding the companies that validate and verify CDM projects.

-New York Times article: Carbon-Neutral is Hip, but Is It Green? April 29, 2007
General overview of some of the pitfalls and promises of the carbon market.

Meeting the requirements of additionality for carbon projects is fundamental to ensuring “new” additional sequestration: 

-Financial Times article: Industry caught in carbon ‘smokescreen’ April 25, 2007
In depth investigation into the question of ‘additionality’ and the issue of profits from carbon credits.

-Business Week article: Another Inconvenient Truth March 26, 2007
The article looks at three specific carbon offset projects, tracing the projects to their roots with a critical eye to the issue of additionality.

In the face of these concerns, a proliferation of tools and reports highlight some of the most recent efforts to make carbon offsets credible, accessible and able to address critical questions in the development and implementation of carbon offset projects. Although many tools are directed to those in the regulatory carbon market, they can also be useful for those designing carbon projects for the voluntary market.


Offsetting Emissions: A Business Brief on the Voluntary Carbon Market
The Ecosystem Marketplace and Business for Social Responsibility, 2007

This report provides clear stepwise guidance for businesses interested in engaging in the voluntary carbon market, addressing many of the critical questions that arise in the decision to undertake a program of carbon offsets.

-Read the report

Template for open-source agreement for CDM Projects
The new Certified Emission Reductions Sale and Purchase Agreement (CERSPA) for CDM projects was released at Carbon Expo in May 2007. The CERSPA is a simple open-source agreement intended to help buyers and sellers in the carbon market draft, understand and negotiate contracts, and intends to balance the interests of all involved parties.

-More information

Tool for ex ante estimations in AR-CDM project activities
The World Bank Carbon Finance Unit

Critical to understanding the feasibility of engaging in forest carbon projects are informed analyses and estimates of carbon before engaging in the costly process. This tool helps project developers with accurate estimations of afforestation and reforestation ex ante project activities that is specifically designed for use with CDM projects.

-Download tool

Guidebook to Markets and Commercialization of Forestry CDM Projects
Neeff, Till and Sabine Henders, CATIE, 2007.

The guidebook is aimed at developers of CDM afforestation and reforestation projects from the LULUCF sector and seeks to strengthen capacity by providing information on the potential of projects to generate revenues from the commercialization of carbon credits. The guide provides an overview of the CDM and carbon markets, and makes specific recommendations for project developers.

-Download tool

Paso Pacifico and Carbonfund.org Develop Carbon Offset Project to Help Endangered Tropical Forests and Mitigate Climate Change in Nicaragua

A recent project applying these tools in practice.

-Read the article

During the past two months, several important meetings related to ecosystem services and the further development and strengthening of PES took place throughout Latin America and other parts of the world. Katoomba members who participated in or organized these meetings have reported back to the TAKG on the outcomes. It is exciting to see many groups designing PES strategies and practices. We hope to continue the high level of cooperation in this space to compile ideas, learn together and provide foundations for the exchange of the Rapid Response Teams.

Reduced Emissions from Deforestation (RED) / Avoided Deforestation
Amidst the debate on carbon offsets, we turn to the issue of forest carbon and land use, land use change and forestry (LULUCF) that has gained more attention in the last months on an international scale. Recent convenings have produced positive movement and support for the RED Initiative. While discussions between members are active, a concrete decision for use in UNFCCC negotiations has not yet been taken. In addition, much literature has recently been published on the topic, ranging in themes from general overviews, to technical economic reports and in-depth policy research. We present some of the most recently published reports below. The debate is moving quickly and the next few months are a critical time for those involved in the issue to make breakthroughs on key issues. 

Reducing Emissions from Deforestation in Developing Countries Workshop
Cairns, Australia, March 2007

This second workshop on Reducing Emissions from Deforestation in Developing Countries (RED-DC) focused on policy approaches, technical and methodological requirements, and improved understanding of reducing emissions from deforestation from developing countries. The group of 140 participants from around the world agreed on a list of key outcomes, with topics that include capacity building, financing, integrity of process and compatibility with future emissions schemes. The outcomes from this meeting were used in the May meeting in Bonn, Germany, and will be used to inform the decisions at COP-13 in Bali.

-Main points summary

-Conference information (including presentations, etc)

UNFCCC meeting (SB 26 & SBSTA)
Bonn, Germany, May 2007

The REDD initiative incited substantial discussion, with a plenary session, several contact groups and at least nine side events addressing the topic. Though there is agreement on the need for a mechanism to deal with REDD that includes baselines and monitoring (based on recent good practice guidelines), many written conclusions from the meeting remain ‘bracketed’ or without consensus. Conference participant Joerg Seifert-Granzin noted that there is substantial momentum to implement a mechanism, specifically amongst parties engaged in the Coalition for Rainforest Nations. However, there is still a significant lack of a regional consensus, specifically when discussing India, China and Brazil (see “Integrating Forest Protection in Climate Change Mitigation” editorial below). The discussions also brought to light some tactical differences between countries in the REDD approach.  Among the issues that are still under discussion: an agreement on national reference emissions levels; pilot activities that address drivers of deforestation; and the inclusion of forest stabilization and conservation. A follow-up SBSTA meeting was agreed upon, which will continue the discussion on outstanding issues prior to the 29 SBSTA session (December 2008). More information on the follow-up meeting is not yet available.

-UNFCCC website on Bonn meeting

-SBSTA conclusions on RED from meeting

-Earth Negotiations Bulletin Daily Reports
-Specific section on REDD

- Dr. Brent Swallow, Global Coordinator of ASB - Partnership for the Tropical Forest Margins, presented ASB's new policy focus -'Avoided Deforestation with Sustainable Benefits: A Simple Way to Reduce Carbon Emissions from Deforestation and Forest Degradation (REDD)' at a side event:

-More information on the topic of avoided deforestation may be found at the Partnership for the Tropical Forest Margins website


RELATED FOREST TRENDS PROGRAMS


Communities and Markets

The Communities and Markets program hosted a panel session at the International Funders for Indigenous Peoples conference, held in San Francisco in May 2007. The session addressed the topic of Payments for Ecosystem Services: A Tool for Empowering Indigenous Peoples and Protecting the Environment, highlighting the potential of PES to positively impact indigenous communities’ conservation strategies, while also addressing the current obstacles that communities face in the development of PES schemes. Beto Borges, director of the Communities and Markets program was joined in the panel by Ole Petenya Yusuf, a Maasai leader from Kenya and Enrique Ortiz and Kirsten Silvius from the Moore foundation. More information may be found at the IFIP website

The Communities and Markets program is putting together a series of video and radio interviews with PES practitioners to introduce basic PES concepts and explain the development of ecosystem services markets and transactions for community members. The first three test interviews are with Rubens Born of Vitae Civilis in Brazil, Ole Petenya Yusuf, a Maasai leader from Kenya, and Pati Ruiz Corzo from Grupo Ecológica Sierra Gorda, Mexico.

To view the interviews:
-Rubens Born (English)
-Rubens Born (Portuguese)
-Ole Petenya Yusuf
-Pati Ruiz Corzo (English)

Ecosystem Marketplace

Check out the Katoomba Group’s Ecosystem Marketplace at www.ecosystemmarketplace.com for the latest PES news, opinion pieces, feature articles and profiles.  You are always invited to contribute opinion pieces you have written relating to PES, as well as provide recommendations of people for the Ecosystem Marketplace to profile. Please send your articles in English, Spanish or Portuguese, to Rachel Miller at rmiller@forest-trends.org.

The Ecosystem Marketplace has launched a new newsletter: W.E.T. (Water/Environment/Trading), which is centered on global attempts to use markets and market-like instruments to address environmental issues related to water.

Newsletters:
-Community Forum
-V-Carbon
-Mitigation Mail
- W.E.T.  Water Environment Trading

Thanks to Katoomba partners for sending their editorial contribution that was posted on the Ecosystem Marketplace on June 18th: Integrating Forest Protection in Climate Change Mitigation Editorial by Mark Lutes, Rubens Born, Paulo Moutinho.
- Read the article

-Selected Profile: Shaun Paul: The Angel Investor by Cameron Walker
“For the last fifteen years, Shaun Paul has been connecting local communities to global sources of technology and funding. The Ecosystem Marketplace finds out why the co-founder of EcoLogic Development Fund thinks global environmental solutions must respond to local needs…”
- Continue reading

-Taking Stock: Assessing Ecosystem Services Conservation in Costa Rica by Cameron Walker
After one decade of Payments for Environmental Services in Costa Rica, there is evidence that the program has not significantly affected deforestation rates in the country; nonetheless, the Costa Rican program has generated other positive outcomes.
- Continue reading

-State of the Voluntary Carbon Markets:2007
The Ecosystem Marketplace in partnership with New Carobn Finance, this week launched the State of the Voluntary Carbon Markets report in London and New York. The report gives a quantitative analysis of the voluntary carbon markets that includes estimated size, ratio of project types, use of standards and predictions for growth for the markets.
-Download the full report


NEWS & PUBLICATIONS

NEWS


Ecuador Seeks Compensation to Leave Amazon Oil Undisturbed

“The government of Ecuador will wait up to one year to see if the international community offers to compensate the country for not developing a major oil field in the heart of the Ecuadorian AmazonEcuadorian President Rafael Correa and his government say that if the international community can compensate the country with half of the forecasted lost revenues, Ecuador will leave the oil in Yasuni National Park undisturbed to protect the park's biodiversity and indigenous peoples living in voluntary isolation.”

-Continue reading

Site for carbon credit project starts with support from the Brazilian Commodities and Futures Exchange

Sao Paulo- Terra and DiarioNet launched the site “Carbon Market” with the support of the Commodities and Futures Exchange (Bolsa de Mercadorias & Futuros - BM&F). At the site, web surfers can access information in Portuguese, English and Spanish about business in the environment, sustainable development, and GHG emissions reductions, including environmentally responsible projects. The editorial focus of Carbon Market, produced by DiarioNet is the dissemination of existing mechanisms in the market that can help businesses and agribusinesses find solutions to minimize polluting agents, as well as greenhouse gasses.
One highlight is for CDM projects (system created in the Kyoto Protocol to help the process of reducing emissions of GHG, or carbon sequestration) via negotiation of carbon credits in BM&F. The Site will be a vehicle for all who want to develop non-polluting projects and who wish, in transparent mechanisms, to inform potential investors.

- Visit the website

PUBLICATIONS

Business, Biodiversity and Climate Change
Secretariat of the Convention on Biological Diversity, May 2007

The recently published newsletter of the CBD Secretariat took the opportunity to highlight International Biodiversity Day, which focused this year on climate change. The newsletter highlights many critical issues in the climate change debate, including carbon offsets, climate change financing and carbon forestry.

Of particular interest:

  • Forest Trends’ Business and Biodiversity Offsets Program (BBOP) in News in Brief
  • “Marrying two loves: business and nature” by Ricardo Bayon, Director of the Katoomba Group’s Ecosystem Marketplace
  • “Biodiversity and climate change linkages: advancing the protection of forests” by Yvo de Boer
  • “Biodiversity and global finance” by Paul Clements-Hunt
  • “Raising the bar for carbon forestry projects” by Toby Janson-Smith

And many more interesting articles!

-Download newsletter

Climate Change 2007: Mitigation of Climate Change
Intergovernmental Panel on Climate Change, Working Group III Summary for Policymakers, May 2007

The third and final working group report of the IPCC focuses on the mitigation of climate change from scientific, technological, environmental, economic and social perspectives. The report provides an action oriented approach to the discussions on climate change and outlines many of the critical issues, discussing ways to decrease climate change based on a set of short and long-term assessments. The report also offers policy implementation suggestions to mitigate climate change, including the possibility of halting deforestation.

-Read the Working Group III Summary for Policymakers

Thanks to Katoomba partners for sending their editorial contribution that was posted on the Ecosystem Marketplace on June 18th: Integration of Forest Protection and Climate Change Mitigation Editorial by Mark Lutes, Rubens Born, Paulo Moutinho.
- Read the article

Tropical Forests, Climate Change and Climate Policy
Gullison, et al. 2007.
A leading group of experts recently published this report, stressing the critical opportunities for climate change from reducing emissions from deforestation. The authors stress the timeliness of including the model in the ongoing negotiations and the great potential that RED has for curbing emissions while creating an economically viable alternative to deforestation for some developing countries.

-Read the brief in Science

-Read the Mongabay.com news summary

Incentives to Reduce GHG Emissions from Deforestation: Lessons Learned from Mexico and Costa Rica
Karousakis, Katia, OECD, May 2007

This new report from the OECD analyses two well known PES schemes in Mexico and in Costa Rica focusing on how reduced emissions from deforestation might be operationalized broadly into a market-based strategy for reducing greenhouse gas emissions. In the report, the author addresses central questions in the discussion of the inclusion of RED and AD credits on an international scale byexamining the six critical topics of 1) legal framework, 2) institutional structure, 3) financing, 4) baseline, additionality and leakage, 5) monitoring, reporting and evaluation, and, 6) compliance, penalties and enforcement.

- Read the report
- Also, read the Ecosystem Marketplace feature articleTaking Stock: Assessing Ecosystem Services Conservation in Costa Rica by Cameron Walker

Predicting the Deforestation Trend Under Different Carbon Prices
Kindermann, Obersteiner, Ramesteiner, McCallcum, March 2007

A technical piece, this report first uses modeling to evaluate the physical and socio-economic land uses, and then estimates how carbon prices and incentive schemes would affect the amount of deforestation that occurs. The authors evaluate the impact of imposing a tax on activities that change the landscape versus the potential for incentive schemes that pay to keep the forest intact, basing predictions and calculations on a range of market prices for carbon. 

-Read the report

-Presentation on the report

An Interview with Dr. Daniel Nepstad: Amazon rainforest at a tipping point, but globalization could help save it
Rhett Butler, mongabay.com, June 4, 2007

Dr. Daniel Nepstad, Katoomba partner and researcher with The Woods Hole Research Center and IPAM, takes the reader through the potential benefits of the Reduced Emissions from Deforestation (RED) Initiative and the real possibilities for climate change benefits, maintaining ecosystem service benefits, and the safeguarding of biological diversity.

-Read the article


PES NEWS FROM ACROSS THE OCEAN

PRESA: Pro-poor Rewards for Environmental Services in Africa

PRESA is an IFAD-funded and ICRAF-led initiative, designed to pilot pro-poor rewards for environmental services in three or four core sites in East and West Africa. It is a product of ICRAF's strategic goal of expanding RUPES approaches and methodologies to Africa and Latin America. Specifically, PRESA is aimed at facilitating negotiated agreements designed to benefit hundreds of thousands of smallholder farmers and residents in East and West Africa through fair and effective agreements between the stewards and beneficiaries of ecosystem services.

The expected outcomes of PRESA include:

  • setting up workable environmental service agreements that provide fair rewards to ecosystem stewards,
  • enabling private companies to become increasingly involved in a range of initiatives for ecosystem management, including policy dialogue with public agencies and fair contracts for ecosystem management, and,
  • facilitating improved quality and increased number of environmental service reward mechanisms in place and operational

ICRAF will engage with a number of organizations during implementation of PRESA, including Katoomba Partners such as Nature Harness Initiatives and ECOTRUST in Uganda.

Currently, ICRAF (Nairobi) in conjunction with RUPES Asia is in the process of setting up the 'mechanics' of the project. Implementation will start in the second half of 2007.

For more information, contact Thomas Yatich at t.yatich@cgiar.org

Shompole Community Trust in the 2006 UNDP Equator Initiative Prize Winner!

The Equator Prize is awarded to recognize and celebrate outstanding community efforts to reduce poverty through the conservation of biodiversity. Since 1979, the Shompole Ranch, spanning over 62,000 hectares of Kenya’s grasslands and savannahs, has preserved and restored the local environment. Re-emerging and thriving wetlands have attracted an increasing number of tourists. Revenue from ecotourism has been invested through the Shompole Community Trust in protecting and restoring the environment, as well as in funding healthcare services, education, water supply, and school fees. The trust, a legally recognized corporation, is owned by the Maasai people and addresses issues of socio-economic development on behalf of the community. The Shompole Ecotourism Lodge is located on the floor of the Great Rift Valley between the alkaline lakes Magadi and Natron. It is situated on the Kenya–Tanzania border and is inhabited by the Loodokilani section of the Maasai.

For more information, please contact Ole Yusuf Petenya; Email: yuspet@yahoo.com and visit http://www.shompole.com; or http://www.undp.org/equatorinitiative/equatorprize/EquatorPrize2006/2006-finalists.htm#africa4

Anticipating the Growing Interest in PES Scheme in Cidanau
RUPES E-News Issue 7, May 2007

The most recent RUPES newsletter takes a look at a watershed conservation scheme in Bangladesh initiated in 2002 that uses a PES transaction mechanism to link farmers in upland areas to companies downstream. Recently, many entities have expressed a willingness to pay and farmers are becoming more engaged and interested in the PES mechanism. A management body is currently being set up to help facilitate buyer and seller interactions, with an eye towards issues of accountability, transparency and good governance.

-Read the full article



EVENTS

Payments for Ecosystem Services – Issues and Pro-Poor Opportunities for Development Assistance
Poverty Environment Partnership, Copenhagen, Denmark, 18-20 June 2007

ESAKG Coordinator Alice Ruhweza attended this event, where PES was discussed as an infrastructural investment within the broader development framework and as a potential opportunity for participation of the poor at the local level. Participants worked in break-out groups to discuss key topics including capacity building and private sector engagement in PES. Follow-up steps include convening a session on the private sector, environment and poverty at the next PEP meeting, and, a series of information sharing events and documents on the topic of avoided deforestation and poverty.

-More information

International conference on community forest management and enterprises: global issues and opportunities
International Tropical Timber Organization, Acre, Brazil, 16-20 July 2007

Forest Trends and the Katoomba Group are presenting a workshop on PES to obtain inputs from community leaders on their experiences, expectations and recommendations for better application of this instrument. These insights will be fed back to the network and incorporated into community-focused PES materials.

-More information

International Conference on Poverty Reduction and Forests: Tenure, Market and Policy Reforms
Bangkok, Thailand, 3-7 September 2007

This conference aims to support discussion and exchange on the critical factors surrounding forests and poverty and current efforts to reduce poverty through forest management and use. It will strengthen existing, and help build new, strategic networks of key stakeholders to advance tenure, market and policy reforms in support of poverty reduction. Based on the evidence and experiences shared at the conference, participants will be invited to craft a common agenda of priorities to strengthen reforms for poverty reduction and forests in Asia.

For more information about how to submit abstracts, register for the conference and other conference details see the conference website or contact conference@recoftc.org.

Right to Water
Asociación Iberoamericana de Derecho del Trabajo y de la Seguridad Social, Oro Azul, Lima, Peru, 18-20 July 2007

If any Katoomba partners attend, please send Rachel Miller (rmiller@forest-trends.org) the highlights from the event.

Latin America Carbon Forum
Lima, Peru, September 5-7, 2007

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