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Plan Vivo: Improving livelihoods, restoring ecosystems

Community carbon trading: does the market pay and what is in it for intermediaries (sellers) and buyers?

• Plan Vivo approach

• Voluntary market space for community carbon

• Covering costs and sharing revenue

• Gains for resellers/buyers

• Looking forward for community carbon

• Developing institutional capacity Lessons learned on payment systems, monitoring and reporting frameworks since

1990s, can be built upon without ‘re-inventing the wheel’ • Putting sub-national financial frameworks in place PES infrastructure developed through Plan Vivo to channel funds transparently to

community level and micro-projects in different contexts • Directly supporting national level policy and strategy development Plan Vivo project coordinators involved in REDD+ development in Mozambique,

Mexico, Uganda and Tanzania, feeding in real project experience

Plan Vivo approach to REDD+ development

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Key lessons for community REDD+

1. Principle of aggregation – programmatic – interventions take time

2. Integrated objectives (social & ecosystem safeguards already built-in)

3. Meaningful & continuing incentives

– Up-front and continuing payments

– Revenues from timber, crops, NTFPs

4. Risk management and continuous improvement

5. Pragmatic and simple where possible

― Decentralisation, systems for social monitoring

Plan Vivo Addresses Key Issues of

Transparency and Local Governance for Interim REDD+ Actions

Ongoing role for Plan Vivo

Short/medium term

• Communicating Plan Vivo approach to markets

• Accessing current REDD+ Readiness funding streams

• Ensuring Standard is practical and relevant for REDD+

• Building tools and guidance based on project experience

Medium/longer term

• Adapting governance procedures so Plan Vivo System can be used within national programmes

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National govt

International carbon markets

Global readiness funds or other donor funding

Plan Vivo programme coordinator

(sub-national implementer)

Plan Vivo Certificates

used as offsets

Plan Vivo Certificates as proof of

performance

flow of funds

flow of Plan Vivo Certificates

Intermediate funding for Plan Vivo projects

REDD+ demand & supply

• Projections for REDD+ supply outstripping demand.

• IFF report quantified large gap between projected supply and demand in REDD+ sector;

Reductions 3,300 – 9,900 MtCO2e

Demand 253 MtCO2e

• 2012 REDD+ transactions totaled 8.6 MtCO2e / $70 million.

• Plan Vivo REDD+ projects ‘break even point’ not earlier year 3.

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Covering costs & sharing revenue

• Lower price commanded for REDD+ carbon credits.

• Perceptions that costs of implementing and operating REDD+ and avoided deforestation lower than other land-use interventions.

• Opportunity costs are often critical in small-holder and community systems.

• Implementation costs of well-designed projects which address key drivers often higher in small-holder and community settings.

• Opportunity for MRV costs to be lower, given community-context specific frameworks.

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Making the numbers balance when communities are equitably compensated.

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Staged

payment to

communities/

producers

$3.60

Admin’

monitoring, etc

$1.40

Verification,

marketing?

$0.60

Certification $0.40

Example

price:

$6 / tCO2

Gains and motivations for buyers

Key benefits for buyers of community carbon in voluntary sector

• Environmental sustainability goals

• CSR

• Investment in supply chain security

• Brand value

• Stakeholder engagement

• Social ROI

Other benefits

• Host country influence, case building for investments and financial capital, specific biodiversity conservation.

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Motivations of buyers

Resale (pre-compliance)

CSR

Demontrating climateleadership

Direct pre-compliance

Resale (voluntary)

Climate-driven mission

State of the forest carbon market report, 2012. Ecosystems Marketplace.

Looking forward for community carbon

• Plugging the gap in demand in REDD+ markets.

• Communicating social return on investment.

• Realistic costing of community systems.

• REDD+ income as a stimulus & challenge of ensuring equitable benefit sharing.

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• Currently community REDD+ projects operating in voluntary market; low recognition of biocarbon standards, low integration of voluntary and compliance markets, community ownership and leadership of REDD+ activities not well supported or integrated in national schemes.

Ideally

• ambitious national carbon targets,

• biocarbon standards integrated into national and sub-national schemes with recognition of community contribution.

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Thank you

Kathleen Edie Programmes Manager kathleen@planvivofoundation.org www.planvivo.org