3.1 Forestry Opportunities in the Asia/Pacific
3.2 Forestry Examples from Other Regions
3.3 Forestry Examples in the Asia/Pacific
Forest ecosystems are an important consideration in the development of climate change mitigation strategies because they can both be sources and sinks of GHGs. Currently the world's forests are estimated to be a net carbon source, primarily because of deforestation and forest degradation in the tropics. Temperate and boreal forests are a carbon sink because many are recovering from past natural and human disturbances and are actively managed.
There are basically three categories of forest management activities that can be employed to curb the rate of increase in atmospheric CO2. They are management for conservation, management for storage, and management for substitution. Opportunities to employ these activities will vary from country to country, based on natural resource and climatic characteristics and social, economic and political characteristics. (IPCC, 1996)
a. Management for conservation (prevent emissions). The goal of conservation management is mainly to conserve existing carbon pools in forests as much as possible through activities such as controlling deforestation, protecting forest in reserves, changing harvesting regimes, and controlling other anthropogenic disturbances such as fire and pest outbreaks. Urban tree planting and maintenance activities also fit into this category since the primary carbon benefit is to reduce emissions through energy conservation.
b. Management for storage (short-term measures over next 50 years of so). The goal of storage management is to expand the storage of carbon in forest ecosystems by increasing the area and/or carbon density of natural and plantation forests, and to increase storage in durable wood products.
c. Management for substitution (long-term measures). The goal of substitution management is to increase the transfer of forest biomass carbon into products (e.g., construction materials and biofuels) rather than using fossil-fuel-based energy products, cement-based products, and other building materials.
It should be recognized that the primary objective of these forest management activities -that is to foster carbon conservation and sequestration in forests - is but one of a variety of objectives for forest management that needs to be balanced with other objectives. Other objectives include sustainable development, industrial wood and fuel production, traditional forest uses, protection of natural resources (e.g., biodiversity, water, and soil), recreation, and rehabilitation of damaged lands. Fortunately, most forestry sector actions that promote carbon conservation and sequestration make good social, economic, and ecological sense even in the absence of climate change considerations.
In the process of identifying forestry opportunities, countries need to examine existing priorities documented in national forestry and to explore priorities in plans and programmes from other sectors which overlap with forestry, such as agriculture, energy, and environment. More specifically, forestry mitigation measures must be considered in relation to: national forestry and land-use plans, which would establish geographic priorities for various types of land use as well as land ownership patterns; national environmental plans, which might establish priorities such as creating a system of forest reserves for biodiversity protection or restoring forests on critical watersheds; economic development plans, which might set goals for industrial wood production through sustainable forest management activities; or national energy plans, which might identify priority opportunities for biomass energy production through fast-growing forest plantations (USCSP, 1996).
Biodiversity protection and conservation is an international policy objective that is being given special emphasis in discussions on forestry sector GHG mitigation measures. Fortunately, conservation strategies for protecting Biodiversity are often consistent with forest Management activities for promoting carbon storage. For example:
a. Protected area strategies in both mature and secondary forests conserve existing carbon pools in forests while also protecting habitat for Biodiversity purposes.
b. Reforestation can be used in landscapes with fragmented forest areas to create corridors between those areas, both creating new carbon sinks and critical habitat for certain wildlife and bird species.
c. Although the establishment of plantations may be less socially and politically desirable than protected area strategies, plantations can increase local Biodiversity through re-establishment of native species in the under story when they are established on highly degraded lands and are subject to no further Management (IPCC, 1996).
3.1.1 Forest Conservation/Preservation
3.1.2 Forest Rehabilitation/Reforestation
3.1.3 Improved Forest Management/Reduced Impact Logging (RIL)
3.1.4 Commercial Plantations and Community Forestry
3.1.5 Biomass Energy/Fuelwood
3.1.6 Urban Forestry
Nearly all of the forestry opportunities identified above have possible applications in the Asia and the Pacific region, and therefore could become AIJ projects. Projects associated with conservation/preservation, rehabilitation/reforestation, and improved forest management/reduced impact logging, however, seem to have gained the greatest interest in the region. The following discussions on these projects are adapted from Stuart and Sekhran (1996). Others project discussions, such as biomass energy/fuel wood and urban forestry, are included here due to increasing interest in the region.
The interest in forest conservation as a carbon offset method stems from the fact that the world's remaining primary forests, both tropical and temperate, represent huge banks of sequestered carbon. The protection of forests that otherwise would be degraded therefore presents an opportunity to immediately impact carbon flows. The avoidance and mitigation of carbon releases from these banks provides the quickest, forestry based, opportunity to slow the accumulation of carbon dioxide into the atmosphere (Thailand Environment Institute, 1995). Reforestation and rehabilitation activities have a substantially slower impact, while RIL falls somewhere in between.
Forest conservation for carbon sequestration purposes basically takes two forms; direct and indirect. Direct interventions essentially require the "locking up" of land resources into natural parks or preserves. Indirect conservation comprises a wider range of possibilities, including increasing agricultural productivity, which presumably lowers the need for slash and burn cropping and the development of local agro-forestry to meet fuel wood needs.
Proposals to prevent deforestation, however, are often complex and controversial, since they have direct effects on a particular region's poverty, population, and economic growth determinants (Thailand Environmental Institute, 1995). Economic development and growth patterns which create the pressures to cut or convert existing forests often stem from government policies. As such, the potential use of carbon offset proposals that challenge or seek to change such policies can be perceived by developing countries as patronizing or as an affront to their national sovereignty. This perception has apparently limited the use of "debt for nature swaps" as a conservation tool. It has also created an awareness among potential investors that carbon offset proposals which would "lock up" natural resources are likely to meet significant challenges in gaining the acceptance of host country governments and local communities, and in providing assurances that such strategies are credible over the long-term.
Projecting the baseline of GHG emissions is more difficult in preservation-based carbon offsets. Forest degradation has wide range of causes, including shifting agriculture, permanent land clearing for grazing and industrial timber extraction. Each requires different analytic tools to determine projected GHG releases to use as a baseline. This situation is further complicated by factoring in the makeup of the local forest resource. Put simply, project developers must establish; 1) the carbon content of the forest; 2) the area of standing forest ultimately protected due to the financial intervention; and 3) the type of degradation which is being avoided and 4) the local carbon coefficient for that particular type of forest degradation.
Despite these difficulties, direct forest conservation activities form an integral part of several robust carbon offset projects. Proposals which incorporate conservation activities should not be dismissed as unworkable. Rather, conservation can be an important component of projects with multiple environmental and developmental agendas. Due to the immediate GHG benefits which are available from conservation, it's inclusion can dramatically increase the GHG cost-competitiveness of an investment package. This framework is quite similar to the basic outlines of several USIJI projects, such as the Rio Bravo project in Belize.
In areas substantially affected by conventional industrial logging, the utilization of enrichment planting techniques may be appropriate. Failure to apply some type of treatment will likely cause regeneration of lower- value pioneer species. It will also cause decreasing carbon sequestration while increasing future risks of forest fire and agricultural conversion. However, little economic incentive exists for this type of reforestation due to short duration concessions and unenforced legislation.
AIJ investment can help pay for such rehabilitation, which can take many forms. For example, there is an ongoing carbon offset driven rehabilitation project in Sabah, Malaysia, which is planting high value dipterocarps and fruit trees in areas of logging disturbance. Other proposals have suggested using rattans as part of the rehabilitation effort. While low in biomass and carbon value, the economic activity generated by rattan would likely take pressure off potential forest conversion areas. Lastly, the ongoing research regarding grasslands rehabilitation clearly has applicability to AIJ financing scenarios.
In the Asia Pacific region vast areas of historically forested Imperata grassland exist that offer substantial opportunity for reforestation. Significant research has been conducted on how to convert such grasslands to productive forest land. A number of projects or even a regional programme could conceivably be created to convert these areas to forest.
As an alternative to locking up forests or restricting industrial logging, there is increasing interest in using carbon offset financing to implement more environmentally sensitive forest Management, particularly related to harvesting in the tropics. Conventional logging practices in the tropics release substantial GHGs through the rapid decay of trees, other vegetation, and soils damaged or disturbed during the logging process. Research by Putz and Pinard (1995) suggests that conventional logging operations in the tropics damage up to 70% of the residual trees in logging "coupes" or harvest areas.
Reduced impact logging is an integrated forest treatment to reduce the incidental damage and soil displacement which accompanies most industrial logging. Applying RIL techniques lessens immediate releases of CO2 and methane from the decay of dead biomass and soil carbon. Over the long term, RIL treated forests are also projected to regenerate more substantially following harvest, a facet which contributes to the overall GHG benefits generated by RIL.
Compared to reforestation/rehabilitation opportunities, RIL is an attractive carbon offset option because approximately half of the eventual GHG benefits are realized over the first few years. In addition, RIL maintains many Biodiversity values, reduces fire risks, and protects topsoil integrity. A basic attraction of RIL, however, particularly for governments seeking to realize both economic and environmental values, is that forests continue to provide economic potential through the production of timber resources.
While RIL has positive effects on the value of future forest resource, the average concessionaire sees no downstream economic benefit from undertaking such costs during the lifetime of their logging contract. Thus there is no immediate incentive to utilize such techniques. However, for governments looking for ways to maintain the long term viability of forest resources, while also gaining the economic benefits of logging, AIJ RIL offers a model. In an AIJ RIL scenario, investor funds help cover the training costs and incremental implementation costs for a variety of site specific techniques. These techniques, as practiced in a Sabah, Malaysia, pilot programme, include the following: 1:5,000 or 1:10,000 Mapping; pre-selection and marking of marketable timber; Pre-harvest cutting of climber vines; slope and riparian restrictions on logging; Weather restrictions on logging; Lowering the impact of access roads through planning; Use of directional felling techniques; Planning of skid trails; No use of bulldozer blades on skid trails.
Like any carbon offset project, RIL requires both commitment and capacity from project implementer. RIL techniques are cost intensive, must be taught and, if paid for with carbon offset money, their implementation must be closely monitored for compliance. Though RIL increases long-term forest resource values by improving the forest's regenerative capacity, this positive effect will likely create little monetary incentive for forest concessionaires to invest in RIL. This is largely because of the uncertainty that concession holders, whose rights to the concession do not extend as long as a typical 60-100 year timber-rotation, will be able to obtain the benefit associated with the incremental investment associated with RIL. This is slowly beginning to change due to increasing public and consumer demand for sustainable forest Management and products, but currently, their is a need and opportunity to identify other investors to cover the incremental costs of RIL techniques.
Lastly, RIL timber should be able to meet the most stringent guidelines for sustainably produced timber. As the industry gets ready to deal with more substantive production guidelines under the ITTO 2000 initiative, this quality performance is a secondary output from any RIL carbon offset project which should not be overlooked.
The use of monoculture mega-plantations to sequester atmospheric carbon is a concept that has been computer simulated under a variety of different scenarios. The lack of comprehensive emissions reduction policies has meant that there are no economic drivers to implement such "carbon farm" plantations. There are no examples of carbon-dedicated plantations, or even commercial forest plantations with carbon offset components built into them. It can be expected that as GHG emission regulations become more stringent, traditional forest Management players with extensive plantation experience will design more sophisticated investments, with greenhouse sequestration options built into them.
Plantations, both large and decentralized, could play a larger role as GHG regulations become more stringent. In parallel, it is generally recognized that the wood industry will need to increase its reliance on planted forests, to meet the demand for fibre. Studies indicate that current plantation developments can only meet a fraction of projected needs, leading to projections that there may be insufficient investment to take future market pressures off of dwindling primary forests.
Commercial plantation developments are difficult to classify within a AIJ context because they are responses to market forces for wood fibre. Many AIJ national programmes, such as USIJI, discourage monoculture plantations because of negative perceptions of single species plantations versus the obvious biodiversity benefits of ecological restoration and conservation projects. However, the economic challenges of plantations, which generally do not achieve positive cash flow for 5-10 years, inhibits wider-scale implementation. The high costs of capital and delayed returns leads to favouring monocultures of high-yield species, short rotations, and minimal-cost policies, all of which can be environmentally problematic.
By including AIJ finance to supplement capital flows, commercial forestry plantations might be able overcome some of these biases. AIJ investments can, theoretically, make lower growth areas financially viable, or make it possible to choose longer rotations of more mixed species plantation which could replace a portion of the monoculture eucalyptus, pines and teak which predominate plantation investments in the tropics today (FAO, 1991). Since the overall investments in an AIJ plantation could be quite large and equity driven, it is possible that the AIJ participant might become a joint venture partner in such a project, claiming a portion of downstream revenue as well as GHG benefits flowing to them (Jones and Stuart, 1996).
To meet sustainable development priorities and address existing land tenure issues in some countries, community forestry options can be structured which provide GHG benefits as a by-product. In most situations involving communities, forestry projects must be structured that fit the cultural and institutional framework and provide direct economic benefits to the local people. The alternative forestry projects include improved forest management, plantations, and various agroforestry systems. Because of land tenure systems in most communities, the scale of projects and potential for GHG benefits will generally be less attractive to investors, if their primary objective is to obtain low-cost carbon. If, however, developing and demonstrating innovative approaches to carbon offset projects is a goal, community-based projects might be attractive.
Using wood and other types of biomass for fuel can slow the build-up of carbon dioxide in the atmosphere. Assuming wood used for fuel is replaced by new forest growth, a carbon cycle is created and there is no net increase in the amount of carbon dioxide released. To the extent that woody biomass replaced by new growth is substituted for fossil fuels, there is a net reduction in the amount of carbon dioxide emitted into the atmosphere as the carbon in the displaced fossil fuel remains in storage (Rinebolt 1996).
A number of countries are exploring biomass energy projects for inclusion in their national climate change action plans, and as possible AIJ proposals. In some contexts, the key interest is to provide a new and renewable energy source; in others, it is to substitute woody biomass for fossil fuels, particularly coal. One of the major challenges to successfully developing and implementing a biomass energy project is the need for close coordination between the energy and forestry sectors in particular countries.
Urban forestry has emerged in recent years as a powerful tool for urban planning and improving quality of life in metropolitan areas. Over the past decade the science relating to the benefits - particularly carbon - has made significant progress. The carbon benefits of urban forestry stem from not only sequestration in woody biomass, but more so from energy conservation through shading. Assessment and planning tools exist that can inform local policy makers and citizens about their urban ecosystem and how to improve urban environmental quality through strategic tree planting. Geographic information system (GIS) models can be used to quantify existing benefits from vegetative cover and to project the costs and benefits associated with different future scenarios. Current models can assess the following environmental parameters in urban areas:
a. Storm water Control: Trees reduce the amount and flow of Storm water in urban areas and thus reduce the need for Management infrastructure.
b. Ambient temperature: Mitigating the heat island effect that drives urban temperatures up to 12 degrees higher than surrounding areas.
c. Energy conservation: By lowering temperatures and strategically shading buildings with vegetation, less energy is needed for air-conditioning.
d. Carbon Sequestration: The ecosystem analysis can measure and predict carbon sequestration in urban trees.
e. Air quality: Urban trees filter pollutants as part of their transpiration process, and lower temperatures also reduce the formation of smog.
To date, there have not been any urban forestry projects in the region associated with GHG mitigation or carbon offsets. There has, however, been a growing interest to use the new technologies associated with urban forestry to help plan for the expansion of existing cities in the region to alleviate existing urban pressures and the development of new cities to meet the demand of rapidly growing populations and economies. To structure an urban forestry project as an AIJ project, however, it will be critical to focus on the energy conservation benefits obtainable through strategic tree planting.
3.2.1 Rio Bravo (Belize)
3.2.2 Scolel Te (Mexico)
This section discusses two forestry offset projects from Latin America which were developed as AIJ projects and received approval through the U.S. Initiative on Joint Implementation (USIJI). These project provide examples of successful efforts to develop initiatives in the forestry sector, elements of which might be replicated by countries in the Asia/Pacific.
The Rio Bravo Conservation and Management Area (RBCMA) Carbon Sequestration Pilot Project, located in north-west Belize, Central America, combines land acquisition and a sustainable forestry programme to achieve carbon mitigation. Wisconsin Electric Power Company (WEPCO) and other U.S. utility companies, and The Nature Conservancy (TNC) are the U.S. participants in this project. The host country partner is Programme for Belize (PfB). Participants currently are soliciting additional private funding to implement the project, and are finding that USIJI acceptance has encouraged private sector interest.
The project has two components: Component A involves the purchase of a parcel of endangered forest land, thereby expanding RBCMA's existing protected forest areas. Component B involves the development of a sustainable forestry Management programme that will increase the level and rate of carbon sequestered within a portion of the RBCMA, including the purchased parcel. The remaining RBCMA lands will be left undisturbed as controls, as well as for conservation and research purposes. After the sustainable forestry Management practices developed on the RBCMA are proven successful, the participants plan to extend the project beyond the RBCMA boundaries.
The objective of the project is to demonstrate an optimal balance between cost-effective carbon dioxide sequestration, economically sustainable forest yield and environmental protection. The sustainable development component is, moreover, central to ensuring that this objective is met on a long-term basis.
The RBCMA project was developed from the outset in conjunction with an electric utility, WEPCO. After WEPCO screened more than 20 potential projects being planned by TNC's Latin American and Caribbean partner organizations, WEPCO and TNC agreed that the Rio Bravo was the most suitable. Together they approached PfB to sign a Memorandum of Understanding agreeing "to develop a joint proposal for a pilot carbon sequestration project" for submission to the USIJI. On October 17, 1994, in response to the Rio Bravo Pilot Project, the Government of Belize ratified the FCCC, and issued a letter to US Under secretary of State Tim Wirth endorsing the project and the concept of carbon offset trading (USIJI, 1995).
In addition to GHG benefits, the project will generate a number of other benefits. These include the protection of Biodiversity and wildfire habitat, improvements in soil stability, water and air quality, the creation of local jobs, and long-term improvements in the local economy through the development of minor forest product industries.
The Scolel Té project is a pilot-level demonstration of sustainable forestry and agro-forestry (tree/crop system) Management practices in nine Mayan indigenous communities, in the humid lowland and drier hill forest-cropland mosaics of north-east Chiapas. About 2,400 ha of individual farm and communal lands have been identified by the villagers as suitable for improved practices chosen by farmers through their rural agricultural credit union. Plans call for a 3-year start-up phase, then 27 years of social, economic, environmental and carbon benefits, totalling 230,000 metric tones of carbon if fully funded and implemented. Scolel Té seeks to develop a model for delivering technical assistance from the project coalition, and income from investors seeking potential GHG reduction benefits, to farmers increasing carbon sequestration. It also is developing protocols for the administration, monitoring, and evaluation of larger-scale land use sequestration programmes for low-productivity lands in southern Mexico, through its strong research and monitoring components. Project activities should help conserve Biodiversity, and reduce human migration to the critical Lacandon forest frontier undergoing deforestation. Several strategies exist for projects to sequester carbon:
a. Tree plantations can be established on pasture land, increasing carbon storage by approximately 120 tones per hectare;
b. Agro-forestry projects will intersperse timber and fruit trees with annual and perennial crops, sequestering about 70 tones per hectare;
c. Restoration of degraded forests can increase storage by about 120 tones per hectare, and protecting threatened forests can prevent emissions of up to 300 tones per hectare.
Organizational partners in the Scolel Te project include the University of Edinburgh, Union de Credito Pajal, El Colegio de la Frontera Sur, American Forests and Econergy International. These organizations play different and complementary roles in the development, marketing, and implementation of the project. The project has been particularly innovative in developing and testing mechanisms to facilitate the receipt of investor dollars for carbon benefits and distributing these funds to farmers who have committed to particular Management regimes for their lands.
3.3.1 Indonesia: Reduced Impact Logging
3.3.2 Malaysia: Tropical Forest Rehabilitation
3.3.3 Malaysia: Reduced Impact Logging
3.3.4 Fiji: Community Forestry Pine Plantations
3.3.5 Solomon Islands: Natural Forest Management
3.3.6 Papua New Guinea: Integrated Conservation and Development
There are only a few examples of forestry sector carbon offset projects in the region, and only one that has been approved by USIJI - a reduced impact logging (RIL) project in Indonesia. This section briefly discusses these projects. Besides the Indonesian project, at least four other forestry sector proposals have been submitted to USIJI from the South Pacific. Two of the proposals were in Fiji, one in the Solomon Islands, and the other in Papua New Guinea (PNG). These proposals continue to be viable in their own right, as well as providing examples for other efforts. In addition, there are two forestry projects in the region that have been implemented through an AIJ approach: A forest rehabilitation project in Sabah, Malaysia, supported by the FACE Foundation (Section); and, an RIL project in Sabah, supported by New England Electric Systems.
One of the major barriers to such projects in the region has been the lack of host country support for AIJ. Without host country endorsement, there is little chance that a project will be approved by an international programme like USIJI, and without such approval, there is a much smaller chance that a project will achieve investment. To date, the Indonesian RIL proposal and a PNG proposal have been the only ones able to receive host country acceptance. Another challenge for such projects has been a difficulty in calculating carbon emission baselines. The PNG project took the step of hiring an outside consultant from Australia to establish some estimation parameters for a baseline. Still another challenge relates to the level of commitment of project developers and implementers to fully develop these proposals as carbon offsets. The basic problem is that implementer groups are reluctant to provide their scarce resources and energy in developing proposals unless they are convinced that investors can be found; but, on the other hand, investors are only attracted to solid project proposals, which have credible, committed project developers and implementer groups, as well as effective marketing. A final issue for individual countries is regional politics which further delay AIJ activities, making it difficult for individual countries - even if they are enthusiastic about AIJ - to decide whether to break from regional positions.
This project is the first forestry sector proposal in the Asia/Pacific to receive approval from the USIJI. As such, it succeeded in overcoming a number of challenges that face AIJ forestry projects in the region, particularly obtaining host country approval. In many respects, this project replicates the Sabah, Malaysia, RIL project discussed in Section 4.2.3 and 4.4.3 and is particularly interesting in that it represents a "South-South" technology transfer, reflecting the training and transfer of RIL techniques between two developing countries, Malaysia and Indonesia.
The project will implement RIL techniques to reduce GHG emissions associated with logging practices in East Kalimantan, Indonesia. RIL will be introduced on 600 hectares of forest land within the Kiani Lestari (private) and Inhutani II (parastatal) logging concessions in East Kalimantan, on the island of Borneo. The forests are lowland dipterocarp rain forest, have not been previously harvested, and are not densely populated. The project will include developing guidelines and procedures for implementation of RIL techniques, on-site training in directional felling, and implementing RIL techniques on the 600 hectares. Many logging operations in the tropics damage a significant percentage of the residual forest. It is estimated that logging damage to the remaining biomass can be reduced by as much as 50% through pre-cutting vines, directional felling, and planned extraction of timber on properly constructed and utilized skid rails. Project developers estimate that this project will generate cumulative savings of 56,400 tones of carbon over the 40-year life of the project.
Concessionaires in Indonesia realize that their harvesting standards must improve to meet ITTO 2000 guidelines. The project will allow private concessions to gain further experience in sustainable forestry management. Without outside financing for lower impact logging the incentive for concessionaires to expend resources on improved management is minimal. A carbon investment would provide training as well as pay for the various reduced impact logging activities such as better planning, mapping, road construction and so on. The project also has public relations value both for the concessions and any potential investor. It is the project developers hope that the experience will demonstrate that reduced impact logging makes good economic sense.
Organizational partners in the project include COPEC, the Centre for International Forestry Research (CIFOR), the Association of Indonesian Forest Concession Holders (APHI), and the Kiani Lestari and Inhutani II concessionaires.
The Forests Absorbing CO2 Emissions (FACE) Foundation focuses on reforestation in the tropics, Eastern Europe and Holland with 85% of the capital committed to tropical projects. In Sabah, Malaysia FACE is currently funding a tropical forest rehabilitation project (Innoprise-FACE Foundation Rainforest Rehabilitation Project). It involves enrichment planting with indigenous dipterocarp species on 5,000 hectares of logged over land thereby helping to restore the original structure of the forest. It may be extended to cover 25,000 hectares. The rights to the downstream timber belong to Innoprise Corporation, the concessionaire, and the carbon benefits belong to FACE. When Innoprise harvests the trees it is also obliged to use RIL techniques to maintain the integrity of the carbon pool.
A rolling contractual relationship between the Massachusetts-based New England Electric System (NEES), and Innoprise in Sabah, a Malaysian timber concern, provides a wholly different offset paradigm. This project is doubly interesting in that it appears to be the first project to be re-negotiated for continuance beyond the experimental phase. While New England Electric is still substantially involved, the expansion of the project is now officially sponsored through the Edison Electric Institute's Utility Forest Carbon Management Programme.
NEES/EEI have agreed to pay for the assessed incremental cost in implementing RIL techniques (see Section 4.2.3) on an allocated portion of the concession's annual harvest area. The pilot stage of this project lasted three years and covered an overall test area of 1,400 hectares, which was scientifically monitored in comparison to the standard, or "freestyle" logging. The calculated GHG benefit results were positive enough to warrant extending the contract between NEES and the concession for up to 9,000 hectares of RIL over the coming three years. For 1996, NEES placed the project into the EEI Utilitree consortium, which will pay for performing 1,000 hectares of RIL. The approximate cost, based upon GHG savings, is around US$1.40 per tonne of CO2.
An interesting component of the NEES-Innoprise contract is the creation of an independent Environmental Auditing Committee (EAC), who "grades" the concession on the quality of its implementation of RIL techniques. This helps guarantee NEES-EEI that the performance contracting they are paying for is occurring to specification.
Innoprise is a subsidiary of the Sabah Foundation. The Foundation was created by the Sabah state government and is charged with promoting the sustainable development of the state. Thus, Innoprise is different from other private concessions operating in Sabah in that they have more of a social and sustainable development mission. Innoprise was more receptive to introducing RIL techniques on their concession because of their mission. The concession, the Sabah state government and indeed the investor have all reaped significant public relations benefit. The financing has allowed the concession to test the RIL concept in a relatively small area, but has more importantly lead to an improvement in the logging standards throughout the concession through leakage of the technology.
In Fiji, Fiji Pine Ltd. (FPL) and the Department of Energy collectively submitted a proposal to extend FPL's community forestry extension programme of planting small pine plantations. The project has traditionally been financed through a combination of Fijian government money and outside aid, using Fiji Pine's capital resources. The USIJI submission proposed approximately 400 hectares of distributed plantings every year. Since that time, the proponents have decided in principle to upscale the proposal to approximately 1000 hectares a year so that more economies of scale can be accessed and so the project is more attractive as an offsetting vehicle. It is anticipated that this proposal will eventually be recast for another investment review, if formal governmental approval can be received.
Also in Fiji, the Native Land Trust Board has recognized that carbon offset funding could be used as a funding mechanism for the preservation of the Sovi Basin, on Viti Levu. Sovi Basin is an enclosed amphitheatre formation of approximately 20,000 hectares which has been at the centre of a logging dispute for nearly 20 years. Local landowners have at times appeared willing to forego logging the Basin, if they can be guaranteed a comparable stream of income form alternative sources. While there are a number of possibilities in this regard, including eco-tourism, a trust fund based on the carbon content of Sovi Basin could be an innovative form of carbon offset project. The AIJ component of this project remains on hold while negotiations between landowners and NLTB continue.
In the Solomon Islands, UNDP/FAO South Pacific Forestry Development Programme and the Solomon Islands' Department of Forestry proposed that a carbon offset funding component could be built into a proposed natural forest Management programme. This project was designed to implement RIL techniques and begin quantifying the GHG savings available from such an implementation in typical Melanesian forests. As a forest Management proposal, this project was quite advanced; however, it has not advanced as a carbon offset project because of difficulty identifying the AIJ point of contact within the government.
Lastly, in PNG, the Department of Environment and Conservation, in conjunction with the GEF-supported Biodiversity Conservation and Resource Management Programme, put forth a proposal for carbon offset financing as part of an Integrated Conservation and Development Programme in Lak, New Ireland. This proposal combined elements of preservation, forest rehabilitation, plantations and low impact logging of primary forests, as well as some value added timber processing which was not formally part of the carbon offset prospectus. This is by far the most sophisticated South Pacific USIJI submission to date and appeared likely to achieved acceptance and even investment, had on-the-ground difficulties not forced the project proponents to re-evaluate their position in the project area and choose to withdraw their support. Stuart and Sekhran (1996) thoroughly describe and discuss the project in their recent UNDP publication.
The Department of Forestry of the Republic of Vanuatu has expressed enthusiastic interest in JI mainly because it represents a promising source of funding in a traditionally cash-strapped department. The department has proposed five AIJ project ideas, but progress toward fully developing the proposals for submission to USIJI has been slow for two reasons. First, developing a proposal requires substantial resources, which are unavailable; and, second, the government is still trying to identify a point of contact for JI related activities.