REDD+SchemeforAprilSalumeiSustainableForest Management,PapuaNewGuinea Presentedby:BiatusBito (NationalConsultant,PNG) TA7302CapturingEconomicBenefitsFrom EcosystemsServices(CEBES)

A.OverviewofREDD+InPNG

1.ExistingGovtRegulatorsandlawsofforestandland
A.Regulators

ThePapuaNewGuineaForestAuthorityworksinpartnershipwithbothlocalandinternational organizationsinachievingsustainableforestmanagement. TheDECensureenvironmentalcompliance,monitoringandguidelinesareadheredorfollowedby developers TheDept.ofLands&PhysicalPlanningdealswithlandmatters. TheNationalFisheriesAuthoritydealswithfisheriesandmarine matters

Note:TheOCCDwasestablishedtodealwithclimatechangeissuesonmitigationandadaptationbutyetto beformallyenactedasadepttofullyimplementitsfunctions

B.LawsandRegulationsgoverningterrestrialenvironment EnvironmentAct2000 ForestryAct1992(amended1996,2000,2005,2007&ForestryRegulation1993) FCA(SABL)2005 MostlandinPNGarecustomarilyownedbylandownersinclansandclangroups.Thegovernment andothersownedtheremainder

2.CDM,PES&REDD+PolicyFrameworkforPNG
PNGisasignatorytomanyinternationalandregionalconventionsandprotocolsonenvironment, conservation,biodiversityetc PNGisasignatorytoUNFCCCin1992andhasratifiedtheKyotoprotocolin1997 IntermsofCDM,aglobalDNAprocessexistsandthegovernmentisworkingtotranslatethisprocess intotheNationalLegislativeFramework. PNGdoesnothaveaPESpolicy PNGdoesnothaveaREDD+policyandlegislativeframeworktoimplementREDD+inPNGbutitis workingtowardsdevelopingoneby2012 REDD+policydevelopedwillgothroughmultistakeholderconsultationandreviewbytheTechnical WorkingGroup PNGthruOCCDistakingtime(Stepbystepapproaches)tounderstandthescience,technicalissues etctodevelopastrategyforREDD+ Ithascompleteditsphase1.TheInstitutional&TechnicalDesignPhaseofUNREDDNational DevelopmentProgramme.Trainings,operators(OCCD,PNGFA,WWF,TNC,WCS)andReviewers (UPNG,DLPPofNationalMappingBureau,Unitech,PNGFA&DEC)wereidentified TheMonitoringandMeasurementPhaseisreadyforcommencementin2012(Phase2)in conjunctionwithREDD+Demonstrationproject.

3.PNGREDD+Readinessprogress
TheNationalClimateChangeCommittee(NCCC)has approvedthePNGsREDD+readinessroadmap.This providestheguidefortheformulationofthenational REDD+system,basedontheinternationalnegotiations 1.InPhase1,PNGhasdonethefollowing DevelopedtheREDD+projectGuidelines(Benefit Sharing&DistributionSystemandFPICmanual) REDD+ReadinessPilotInitiativesGuidelines,Settingup ofaMRVsystem DevelopingaConflictResolutionMechanism DevelopingREDD+InitiativeGuidelines Ensuringthatlongterminstitutionalframeworkisin place undertakingAlternativeLivelihoodstudyforforest dependentcommunities;and undertakingaCarbonRightsStudy

4.ForestryandREDD
Government(OCCD)isincorporatingREDDintoTimberConcession ForestGovernanceby: 1 InvestigatingForestryandREDD+: OCCDiscoordinatingwithline governmentagencieslikeDAL,DEC,DLPP&PNGFAtoapprove REDD+Criteria,DevelopingaBenefitsharingModel&Compliance ReviewofSABLs 2.InvestigatingREDD+initiatives:OCCDiscoordinatingwithrelevant agenciestoimplementseveralpilotprojectsnextyear(2012) coveringfourregionsofthecountry.Theyare: ReduceimpactLoggingandsecondaryforestmanagement(e.g. Suau,MilneBayprovince) Afforestation/Reforestation(Goroka,EasternHighlandsprovince) ForestConservation(Kimbe,WestNewBritainprovince);and CommunityREDD+scheme(AprilSalumei,EastSepik&WestNew Britainprovinces)

5.TypeofCarbonMarketinPNG
Compliancemarket.Inthepast,theLihirGoldMinegeothermal projectwasPNGsfirstCDMproject(20022009?)butnotnow (theagreementwasdonebetweenLGMandbuyerbutnotState andlandowner).CurrentlyNBPOLisdoingmethanecaptured CDMonoilpalmwaste). ThePNGgovernmentthroughOCCDisworkingtodevelopa complianceCarbonMarketMechanism. ThegovernmentdoesnotencourageVoluntaryCarbonmarket becauseitisnoncompliantandthereisnointernationallegal framework(risky)ascomparedtoComplianceCarbonmarket ProjectsuchasAprilSalumeiiscurrentlyunderVoluntaryCarbon marketandhopefullywilltransittocompliancemarket

6a.Paymentforperformance

6b.GovernmentsREDDfunddisbursement

6c.Howrisksandresponsibilitiesaredistributedor shared
ItisanticipatedthatPNGwouldmovethroughaphasedbased approachtothedevelopmentofafullyfunctionalREDD+ mechanismthatwilleventuallylinkedperformancebased paymentstoverifyreductions Phase1:ReadinessPhase DevelopmentofNationalClimate ChangeCompatibleDevelopmentPlan Phase2:ImplementationsupportedbyTransitionalFunding MoreadvanceReadiness focusingonpolicyimplementationand measurestoreducecarbon Phase3:PaymentforPerformance PNGiscompensatedfor verifiedreducedemissionsandenhancedcarbonstocksagreedto referencelevelunderaUNFCCCcompliantsystem
Note:Thegovernmenthasmadeacommitmentthatby2030PNGsGHG emissionswouldbehalvedandby2050PNGwillbecarbonneutral

7.MRV&TechnicalcapacitiesforREDD
PNGneedspropertechnologiesandskillstodoreliableMRVand formonitoring(e.g.constantcloudcover,variationofCin differentecosystemsandruggednessofthecountry) PNGneedsreliablePSPstodoareasonablenationalbaselineand referencepointforGHGs.Itneedsanindependentsystemthat canoperatetointegrateinformationfromothersystems Properstudiesondeforestationdriversneedtobeconducted andinternationalacceptedmethodologiesbedevelopedbecause ofvariousdataavailable JicaandFAOincludingIndiaandothershavebeenproviding technicalassistance/adviceandtrainingstoOCCDandotherline governmentagenciestoequipthemwithskillsrelatingtoMRV purposes.SkillssuchasGISandremotesensingarepromoted& encouraged.

B.AprilSalumeiSustainableForest ManagementProject,PilotREDD project

8.StudySite

Therearefourdifferentvegetationtypesfoundinthearea, whichincludethefollowing:wetlands,smallcrowned forest,Openforestandmediumcrownedforest.

9.Backgroundofprojectarea
SituatedinAmbuntidistrict,AbuntiDrekikirElectorate,EastSepikprovince Areaisleastdevelopedandisolated.WhereaverageincomeisK20K100per annum(US$1050/yr) ProjectareaiscurrentlysubjectedtoFMAorlogging EncompassesatotalGrossForestAreaof521,500ha,withatotalProduction Areaof177,200haandaNetProductionForestAreaof150,620ha Therearefourdifferentvegetationtypesfoundinthearea,whichincludethe following:wetlands,smallcrownedforest,Openforestandmediumcrowned forest. Projectareahasapopulationofapprox.7696people(2000census).Ithasa populationdensityof4pers/km2.About163ILGsgavetheirconsent 150villagesandhamletsand30languagegroup(PNGhasover800 languages)

10.Backgroundofprojectarea...Cont..
TheprojectareawasincourtandlandownerswereawardedK58millionas compensationforforegoingloggingwhengovernmentdeclaredaWildlife ManagementAreas(WMA)in1997.(LOcontinuetoseekpaymentbut from sourcessomeindividualshavereceivedcertainamountwithoutthe knowledgeofthevillagers). WasapprovedbygovernmentasPNGfirstpilotREDDprojectin2008 Projectwascertifiedbythevalidator/Verifier,ScientificCertificationSystems (SCS)ofUSAonJune13th 2011andwillexpirein5yearstimeonJune12th 2016.Certificationwasbasedusingthe14criteriasetbyClimateCommunity Biodiversity(CCB)standards.Note:Priortothis,SouthPolewasthe validator. Theprojectwouldavoidemissionsof98,441,367tonnesofCO2e over projectlifespanof25years Carbonaccountingarea=150620ha.Deforestationanddegradation assumedtobeconservativebyyear21atarateof6871ha/yrand yr22will claimremainderof6329ha=180620ha.Noclaimforyears2325.

11.PeopleandCulture(photosbyWWFSepik&Biatus)

12.Landscape(photosbyWWFSepikproject)

13.Livelihood(photosbyWWFproject)

14.Biodiversity(photosbyBiatusBitoandothers)

15.Carbonbaseline
UsingTier1ofIPCCmethodologyanddefaultvaluetheprojecthasanest.AGB of350tonnes.d.m/ha(usingTropicalrainforestofAsiadata(Insular).Theratioof BGBis1.37.TheCarbonFractiondefaultValueis0.47.Lessthe grasslandstrata, theareaholds114,612,751tonnesofCor420,284,957CO2e BGB=350tonnesd.m/haX1.37ratio=479.5tonnesd.m/ha.Theappliedcarbon factorof0.47=225.365tonnesC/ha Loggedoverforest=59tC/ha.HenceCcontentperlogging=225.365 59tC/ha= 166.365tC/haislostinselectedlogged/degradedareas.Therefore25,147,310 tonnesofCarbonisthatcouldbeemittedisconserved. Initialharvesting Volumeis5,831,705m3 (grossvolumeperha=55.312m3/ha less30%defects=38.718m3).Hence,theemissionsrateis9.63kg/m3 could produce56,159,319kgCO2 or56156tCO2e Carbonstocklost(20%)duetolandconversionis30232hawouldrelease 1,844,164tC(usingglobalwarmingpotential(3.66)ofC=6,762,550tCO2e 1Itisprojectedthat1.4tCwillbesequestrated/ha/yearfromlandconversion suchaslogging

16.PossibleBenefitsfromthisREDDProject
REDDprojectshavefivekeybenefits: 1.ReductionofGHGemissions. 2.Protectionofglobalforestresourcesand environments. 3.Protectionofvaluablebiodiversity. 4.Preservationofforestcommunities culturesand societies. 5.Investmentofcapitaltoalleviatepovertyandcreate socialequitythroughsustainabledevelopment.

17.Economicbenefitstolandowners
Creditingperiodstartingdate:December20th 1996(termstartofFMA agreement).Duration:Until19Decemberof2046butmostlikelyfor35years accordingtoFMAcuttingcycle. Approx.550,000hawasdemarcatedfortheAprilSalumeiREDD+project.Almost 300,000,000Co2 e wascalculated.Landownersweretoldalmost200,000,000 tCo2 e wassoldandkeptintheAprilSalumeiFoundation.Theamountofcarbon perhaisapprox.363.64tCo2 e.US$5pertonofC,AprilSalumeiexpectsto generateapprox.US$1billionperannum Theproposedpercentageforlandownershopeforthisprojectis: 1.Monetary:70%tolandowners,10%togovernment&20%toprojectdeveloper 2.Development(TheDevelopersperspective) a.Sustainablelanduseactivities agriculture,NTFP,roads,health,schoolsetc b.Futureinvestmentfunds c.Monetary(littleandnoteverythingtosustainlocalneedslikeschoolfees,food, basicservicesetc) Note:Thegovernmentsbenefitsharingmechanismisstillunderdevelopmentto determinethepercentage

18.Whoarethebeneficiaries(landownermodel)

19.CorporateStructureofHunsteinRange Holdings

20.WhoaretheCbuyersforPNG&AprilSalumei SustainableForestManagementProject?
Privatecompaniesandbrokersalikehaveshowninterestsin developingCarbonprojectsinPNG.CompaniessuchasNuppon PNGLimited,EarthSky,NBPOL,etc. MostpotentialCbuyersarefromdevelopednationsinAustralia andEurope. Currently,Earthsky,anaffiliatetotheSwissBankregisteredinthe CaymanIslandistheprojectdeveloperforAprilSalumei EarthskyisworkingwithRainforestManagementAlliance(an internationalcompany)whoistheprojectconsultanttodevelop theprojectandselltheCcredits(atthisstagethebuyeris unknowninthisstudy) Atthisstage,thereisnoknowledgewhotheCarbonBuyeris accordingtothisstudy(probablytheBuyerisfromEurope)

21.Whatsworkingornot
Almost100%ofcontractualagreementbylandownercompany(HunsteinRange Holdings)wasattained.However,theyclaimedalmost80%ofthe contractual agreementbyEarthskyisyettobeattained EarthSkyisthedeveloperbutRainforestManagementAlliancewantstobethe projectdeveloper.Anotherdeveloper,PNGNewbandisalsoassisting landownersinsomewaybutisnotsocommitted.Therecouldbeconflictof interestandleaglrepercussions. Landownersarecaughtupinbetweendifferentdevelopersandthiscouldcause aseriousrepercussiononeitherofthepartiesinvolve SinceASSFMprojectwascertifiedonJune13,2011,theprojectdeveloperand nowthedeveloperanditsagentswentintohiding Notransactionwasdoneafter90daysasstipulatedinthecontractbetweenHRH andEarthsky.(Thedevelopermaystillbelookingforthebuyer?) TheAprilSalumeiprojectisyettobelegallyrecognisedbythe government (certifiedbyDNAorOCCD)tobecomeacompliancemarketoriented Expectationsarealreadyraisedafterthecertificationandrecognitionofthe projectasgovernmentpilotproject.Failuretoreceivebenefitswillaffectthe landownerssignificantly

22.Developersproposedinvolvementwith stakeholders

23.MRV
CarbonpoolstobemonitoredincludeAGBandBGBexcludingsoil carbonanddead materialsorlitters(expectedtobeconstant) MonitoringofcarbonwillbefromaCDMA/Ractivity Preliminarymeasurementwasdoneusingstratificationsamplingofthemainstrataof projectarea(plus30temporalplots)togetstandarddeviations foreachvalue measured Valuestoberecordedincludedbh,ht(>3m),no.oftrees,speciesclassification, assessmentofabnormalities(logging,treemortalityetc) Plotscentermarketpermanently,GPSandof1015mradiusandcostcalculatedfor final,permanentmonitoringframework Groundtruthingofremotesensingdatawillbeconductedtodeterminebaseline vegetationstrata Leakagemonitoringwillbeconductedannuallytobuildlocalcapacitybutfor verificationpurposes,itwillbedoneevery5years Remotesensingdatausingavailableinternationalstandardswill beusedtodoMRV forcarbonbythedeveloper

24.Monitoringplan
Amonitoringplaninclude: Monitoringatlocallevelbyforeststewards Communityreportingbyforeststewards Allreportingwillbedoneaccordingtothenatureof thethreatsorimpactoccurringintheprojectsite immediate,quarterlyandannual Thestewardswillbemonitoringillegallogging, traditionallanduses,anyclearing,PSP measurements,climatemonitoring,reportingon forestfires,identifyanysoilerosionandreportingto theirsuperintendentandsupervisors

25.Challenges
CloudcovermayhinderMRVwork,especiallysatellite HighcostsofdoingMRV&groundtruthing,andexpertise&technologyis lackingetc RuggedterrainandvarietyofCarbonsinkecosystem(differentfrom lowland,hillforest,montane,karstetc).Needaverygoodsystemand methodology Landownershipissuesandmeetinglandownersdemandsand expectations Benefitsharingmechanismsmustbedevelopedfullytoavoidstallingof project Meetingcontractualobligationsbyallparties (landownersaresemiliterateorilliterateandlackinternationalbusiness knowledgeandinformation) MostcontractsareinEnglishandlegaltermsandbulky.OftenLOsjust signedwithoutfullyunderstandthedocuments

25.Conclusion
ThefutureofREDD+isuncertain AprilSalumeiSustainableForestManagementProject couldbeascambecauseVoluntaryMarketisrisky Landownersareilliterateorsemiliterateandcanbe easilybemanipulatedbydevelopersand middleman REDD+maybringconservationanddevelopment howeveritdependsoninternationalnegotiationsand incountrypolicesandlegislations

26.TakeHomeMessage
Becarefuloffraudulentdealswithoverseascarbontradersorfraudters Properandeffectiveawarenessisnecessaryandmustbedonetoeducatelocalsand landownercompanyreps. Neverraiseexpectationsandmakepromisestopeopleinnegotiationsorwritingcontracts becauseitmaybackfirewhenlandownersarenothappy Voluntaryandcompliancemarketforcarbontradehasitsownloopholesandthisneedto berectifiedsoallpartiescanbenefit Weneedcollectiveactionsbyall governmentsandinstitutions toassisttheworldspoor anderadicatepovertythusmeetingtheUNsMillenniumDevelopmentGoal WeneedtoconserveourforestasamajorcarbonsinkforGHGsandatthesametime improvethelivelihoodofforestsotheycanmaintainorenjoytheenvironmentalservices theforestprovidesforthem Withoutagovernmentlegislativeframeworkorpolicy,REDDwontworkbecauseitwill stillcompetewithotheralternativelanduses. WeneedgoodandeffectiveMRVmethodstomonitortheprojectoveritslifespan

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