4.1 Increasing Receptivity Toward AIJ in the Region
4.2 Forestry Sector Challenges
Signs have recently emerged in the Asia/Pacific which indicate an increasing receptivity by governments, private industry and NGOs toward AIJ. A number of developing country governments in the region have expressed interest in supporting the development of pilot projects under AIJ to gain more experience. They are particularly interested in learning whether they can actually provide the local development and environment benefits that developing countries want. Information gained from experience - which is the ultimate purpose of AIJ - will help determine what next steps to take toward the creation of a more formalized international system for trading GHG emission credits. This new openness toward AIJ does not suggest that the concerns of these governments, regarding issues such as commitments by developed countries to reduce their GHG emissions and eco-colonialism, will be easily overcome. It does suggest, however, that these countries are more willing to explore AIJ opportunities than before, and to experiment with pilot projects. It should be expected that many of these countries will want to develop their own domestic AIJ programme to ensure that they can guide these pilot projects to meet their national priorities.
As general interest in AIJ grows, a couple of challenges appear to be emerging specific to the forestry sector. First, as AIJ proposals in the forestry sector receive greater attention, NGO concerns are likely to increase that such projects might lead to greater forest destruction or degradation, as many previous initiatives that were purported to be sustainable have done. The intense interest of domestic and international NGOs in the forestry sector - particularly in tropical rainforests in this region - requires careful consideration and could make forestry projects more complex or problematic than projects in other sectors. Second, proponents of energy sector projects have been promoting energy efficiency and renewable energy projects in the region, capturing the attention of government officials and the private sector. This - combined with international concerns about the sustainability and measurability of projects which include forests as carbon "sinks" - appears to have created a bias in favour of energy sector initiatives as proposals compete for scarce resources and support.
The recent approval, in January 1997, by the government of Indonesia of the region's first forestry sector USIJI proposal in the region indicated a shift in policy toward AIJ, both in Indonesia and the region. Further indications were apparent in statements delivered during the January 8-10, 1997, Conference on Activities Implemented Jointly (AIJ): Developing Country Perspectives in New Delhi by countries such as India, Vietnam, and Sri Lanka. Other countries, such as the Philippines, Thailand, and Cambodia, made public statements in support of JI during the same period, although some of the statements were qualified by comments reinforcing the need to meet the objectives of developing nations in the region.
Within the context of these statements, or based on potential actions identified in their country studies or national action plans, these countries recognized opportunities in their forestry sectors, consistent with the types of opportunities discussed in Section 3 of this report. Most often, however, the opportunities focused on forest conservation/preservation and reforestation/rehabilitation. For example, in a paper entitled Expectations and Opportunities for AIJ Projects in Sri Lanka, presented at the New Delhi conference, Sri Lankan officials recognized the opportunities through AIJ for local entrepreneurs in Sri Lanka to partner with foreign investors in ways that would help fund forestry activities which would otherwise not be undertaken because they would not provide a sufficient rate of return on investments. The paper identified forestry activities such as: reforestation of new and unproductive land; conservation of natural forests; conservation of forest soils; harvesting with minimum disturbance of degraded agriculture land to improve soil carbon content; Management of plantations and forests to optimize sequestration; and training of Forest Officers in preventing and controlling forest fires.
In addition, the paper discussed opportunities for timber utilization or increased use of wood products to substitute for concrete in construction: "Hence, replacing concrete structures with timber could achieve a double saving, reducing CO2 during cement manufacture and sequestering carbon in the timber. While these projects by themselves may not appear to be economically viable, AIJ investments could convert them into viable projects."
In the opening address of Dr. S. Venugopalachari, India's Minister of State for Power and Non-Conventional Energy Sources, at what he called the "first conference on AIJ for developing countries" in New Delhi, he noted that the forestry sector was an important area for AIJ activities in India. "Forests offer an ideal opportunity for investments and direct mitigation initiatives." He also noted the other social and environmental benefits of forestry projects: "When we take care of the forests, other related issues like soil erosion, land degradation, biodiversity, wildlife, and people's access to livelihood resources, are addressed."
The New Delhi conference focused on developing country perspectives concerning AIJ, and it included many participants from the Asia/Pacific as well as representatives from developed country programmes and private investors interested in promoting AIJ in the region. The conference statement, which was endorsed by all participants, described the context for AIJ by recognizing the need for "urgent action to accelerate implementation of agreements already reached by Parties [under the FCCC] and for evolution of cooperative mechanisms at the international level to encourage development activities that also serve to mitigate climate change." It also noted the relatively small number of AIJ projects, about 30, since the inception of the pilot phase and the need for more experience and empirical information to provide the basis for a rational decision on how, or even whether, to move forward beyond the pilot phase." The statement suggested, however, that there is a "growing optimism and interest in testing AIJ through partnerships on the ground." This was based on the increasing number of AIJ projects being designed in various parts of the developing world - a trend that is also evident in the Asia/Pacific region.
Two major conclusions that emerged from the New Delhi conference, among nine conclusions in the conference statement were:
1. "Far more AIJ projects are needed during the pilot phase, in many different sectors and countries, to provide for the post pilot phase regime," and;2. "Developing countries should establish policy frameworks that give them a proactive edge in establishing national AIJ programmes and developing project proposals."
4.2.1 NGO Environmental Concerns
4.2.2 Bias toward energy sector proposals
There is a clear sense of increasing interest in AIJ in the Asia/Pacific, and this interest includes the forestry sector. However, the forestry sector AIJ proposals are facing some challenges, not necessarily related to this region alone.
Early discussions surrounding the FCCC characterized forestry sector carbon offsets as relatively low-cost, no regrets activities - such as reforestation, improved forest Management, and forest conservation - that provided environmental, economic, and social benefits, and made sense regardless of their GHG benefits. More recently some NGOs have raised issues which are worth noting. Concerns of developing countries and environmental NGOs focus on issues related to eco-colonialism - i.e., developed countries seeking to offset their GHG emissions by simply investing in forestry activities in developing countries, essentially locking up the forests as carbon sinks, restricting their use for development purposes, and deriving low-cost GHG benefits from them. Other areas of concern are associated with potential "leakage", which is the possibility that GHG impacts addressed by a project, such as deforestation, are transferred somewhere else, beyond the project boundary. Another concern is based on one of the aspects that makes forestry projects attractive as AIJ projects - their ability to integrate economic, environmental, and social benefits. This ability to integrate has become a focal point of environmental NGOs because of a perceived history of exploitation of forest resources under sustainable forestry experiments that attempted to address broad concerns but failed.
In a paper presented at the New Delhi AIJ conference, Aisyah Erawati Sileuw and Tri Nugroho of the Indonesian Tropical Institute (LATIN) point out that "AIJ in the forestry sector has added to the complexity of global forest problems." This doesn't mean there is no hope, they suggest, but that forestry opportunities are complicated because they pose significant threats to the environment if mismanaged. The authors describe a history in which highly productive forests are exploited, local people are ignored, and benefits go to the central government. Not until the forests have been degraded, they suggest, do ideas such as social forestry, community forestry, and agro-forestry, appear to rehabilitate lands, with the help of the local people. A central concern of NGOs is that AIJ - despite intentions to improve the global environment while providing environmental and economic benefits to local people - will become another failed experiment, a mechanism for further degrading the environment. They argue for the critical need to prepare principles and methodologies for AIJ in the forestry sector that focus on sustainable forest Management and build on guidelines that have been developed by the International Tropical Timber Organization (ITTO) and the Forest Stewardship Council (FSC). In addition, NGOs have a strong concern about the rights of indigenous people, and the need to ensure that local people receive a fair share of project benefits. These types of concerns make it more difficult to develop projects in the forestry sector relative to other sectors. They also tend to favour forestry activities such as forest conservation/preservation and rehabilitation/reforestation, since they have less direct impact on forests than opportunities which involve forest Management and timber harvesting.
Another emerging challenge for forestry projects in the region - as well as elsewhere - is a perceived bias toward developing energy sector projects. The reasons for this stem partially from the growing environmental concerns associated with forestry projects, as discussed above, and the complexity of quantifying and verifying GHG benefits from forestry projects. More importantly however, the majority of the attention among governmental officials and private-sector investors on potential AIJ projects in the region seems to be focusing on the energy sector, since that is where the largest current and future policy issues related to GHG emissions are located. Advocates for forestry sector projects continue to stress the opportunity for low-cost, no regrets actions, but there is a need to go further and to address the comparative advantages of forestry projects relative to energy sector projects. One way to do this is to differentiate between forestry and energy sector projects in terms of time-frame, scale, cost, and other benefits, and discuss how the projects in the two sectors are compatible from a policy perspective. Officials in Mexico, for example, discuss how there are significant low-cost opportunities for project development and investment in the forestry sector which could sequester or reduce significant GHG emissions, as well provide other social and environmental benefits, and they could be implemented in the short term while the policy framework and technologies necessary for the larger actions in the energy sector are put in place.
