The BioCarbon FundThe BioCarbon Fund

Using the Global Market to Restore Using the Global Market to Restore Ecosystems: New opportunity for Ecosystems: New opportunity for

public-private partnershipspublic-private partnerships

Benoît BosquetThe World BankJune 16, 2006

BioCF in a NutshellBioCF in a Nutshell

Purchase carbon credits from high-quality agro-forestry projects

Demonstrate that forestry can play a role in climate change mitigation

Allow rural communities to access global carbon market

Realize atmospheric benefits with livelihood and environmental improvements

Tranche 1: ParticipantsTranche 1: Participants 14 Participants: $53.8 million

Okinawa Electric Government of Canada Government of Italy Tokyo Electric Eco-Carbone Agence Française de Développement Government of Spain Government of Luxembourg Idemitsu Kosan Sumitomo Joint Electric Power Co. Sumitomo Chemicals Japan Petroleum Exploration Japan Iron and Steel Federation Suntory

What Can Extractive Industries What Can Extractive Industries Do?Do?

Reforestation of old mining land

Reforestation of riparian zones along rivers or around hydro reservoirs

Restoration of abandoned, logged over forests

Restoration of mangroves near shrimp farms

Establishment of community woodlands using species with commercial value

Jatropha curcas for oil

Acacia senegalensis for gum arabic

Fruit trees

Revegetation of drylands using non-tree species

Project Example (1)Project Example (1)

Reforestation of tin mining land in Malaysia

Soil contaminated by aluminum and magnesium

Proposed by large German power company (no presence in Malaysia)

Employment of local communities Planting phase Timber production

Idea dropped due to costs Value of carbon ($4/t CO2e) is low

compared to project costs Carbon payments made on delivery;

start-up capital is needed from other sources

Project Example (2)Project Example (2)

Use of effluent water from shrimp farm to grow mangroves and halophytes in Mexico

Water help green costal desert and is filtered in the process. No more raw water discharge into the sea

Production of fodder and sea asparagus

Principle can be extended to use of waste water from homes or industry in dry areas (e.g. Egypt).

Project currently on hold due to lack of upfront financing

Project Example (3)Project Example (3)

Acacia senegalensis community woodlots in Mali and Niger

Private gum arabic producers/exporters acting as carbon aggregators on behalf of outgrowers’ communities

Model can be expanded to Sudano-Sahelian belt, e.g. oil industry in Chad and Sudan

Project under preparation with IDA credit support

Community Action Project in Niger Agricultural Competitiveness and

Diversification Project in Mali

Project Example (4)Project Example (4) Jatropha curcas plantation in India

Production of vegetable oil by poor women’s groups

Women can use oil for lighting, cooking, making soap or

powering local equipment sell oil to local plant to produce biodiesel

Carbon credits from Carbon sequestration in biomass + soils Replacement of fossil fuel with biodiesel

Several such projects under way or in preparation

http://www.jatropha.de/

ConclusionsConclusions Extractive industry could foster carbon

sequestration projects that help communities and restore ecosystems

Financing is an issue: carbon finance is typically paid upon delivery

Institutional capacity may need to be supported (who will prepare the proposal, plant, monitor, aggregate the carbon, and dispatch the payments?)

Extractive industry could finance project pay carbon upfront fund capacity building

World Bank-managed Carbon Funds could buy credits

www.carbonfinance.org

www.biocarbonfund.org

bbosquet@worldbank.org