1. IMPACTS OF FOREST CARBON MARKETS
ON LOCAL LIVELIHOODS: CHINA,
MOZAMBIQUE AND AFGHANISTAN
Gary Q. Bull, Ravi Hegde, Yazhen Gong and Kijoo Han
University of British Columbia, Vancouver, Canada
October 16th, 2008
Forests, Rights and Climate Change
Oslo, Norway
3. 10/15/2008
OBJECTIVES
1. What are some key elements in contract design and
revenue distribution from forest carbon projects?
2. What is the influence of social capital on successful
project implementation?
3. Are property rights and governance systems
sufficiently in place that can adapt to payments for
ecosystems services such as carbon?
3
4. 10/15/2008
MOZAMBIQUE
• Voluntary market
• Enviro-trade
• Stern report
• CIFOR - PEN project
• Part of our work
connects to a long term
World Bank project
• Household study
• Equity issues with
carbon contracts
4
5. 10/15/2008
VILLAGE PROFILE - MOZAMBIQUE
Characteristics Nhambita Mbalawa Pungue
Location Within buffer zone Outside park On the park boundary
Main forest Own use: wild food, Own use & sale: wild Own use & sale: wild
products grass, fuel, poles & food, fuel, bamboo, food, fuel, bamboo,
limited use of clay for charcoal,poles, poles, fish & gold
pottery & timber timber & gold panning
panning
Farming Mainly subsistence; Mainly subsistence; Both subsistence &
commercial (tobacco;
vegetables)
Major Poles, wild food, clay Poles, wild food, Fish, poles, wild food,
environmental for pottery bamboo, charcoal, gold panning
resource gold panning
collected
Households 58 131 141
Sampled
5
6. 10/15/2008
RESULTS - MOZAMBIQUE
Age, income and education matters
Vulnerable households see fewer benefits
Larger land holders more likely to engage
Poorer tend to use miombo woodlands for
subsistence, while richer households use them
for cash.
Forests act as a crucial safety net against
income shocks
6
7. Result – Carbon Income
10/15/2008
Cash income composition (MTS)
crop sale, 6.56
PES income, 3.7
livestock sale, 7.62
Unprocessed forest products
Other sources, 10.22 sale, 0.09
Processed forest products crop sale
Business, 5.65 sale, 7.25 livestock sale
Unprocessed forest products sale
Processed forest products sale
Fish sale, 5.89 Fish sale
Other environmental products sale
Wage
Business
Other sources
PES income
Wage, 44.51
Other environmental products
sale, 8.48
7
12. 10/15/2008
GUANGXI STATISTICS
County Land area Land tenure type Number of
(ha) villages
Communal Individual
lands lands
(ha) (ha)
Cangwu 2000 901.6 1098.4 15
Huanjiang 2000 2000 0 12
Total 4000 2901.6 1098.4 27
12
13. 10/15/2008
GUANGXI SHAREHOLDING SYSTEM
Local forest companies
Shared income
Carbon
Capital& techniques
credits
Timber Output
Input
Land
Pine resins
Shared income
Local communities
13
14. 10/15/2008
POSITIVE RESULTS - GUANGXI
Villages were able to effectively organize
themselves
Unique share-holding system of 27 villages and
3 local forest companies was developed
Creative combination of native tree species,
(3000 ha) and exotic tree species (1000ha)
Internal rate of return is acceptable
14
15. 10/15/2008
NEGATIVE RESULTS - GUANGXI
Up to September 2007, only 55% implemented.
Regenerating degenerated and remote lands is
difficult and costly.
Income-sharing ratios between the
communities and the local forest companies
not accepted
Unresolved property rights disputes
Low levels of trust in some of the villages which
resulted in poor participation rates.
15
16. 10/15/2008
NEGATIVE RESULTS - GUANGXI
In 2008, it was determined that at least 14% of
the area slated for reforestation will not be
regenerated – infertility.
Farmers and reforestation companies have not
received any payment from the buyers.
16
17. 10/15/2008
CONCLUSIONS
What are some key elements in contract design and
revenue distribution from forest carbon projects?
Contract design
Adjust to unique community structures
Recognize biophysical limitation
Work with acceptable shareholder systems
Make payments at the appropriate time
Ensure that potential income is accessible to those with lower income,
lower education levels, older people and women.
Revenue distribution
Ensure local people understand the nature of the benefits
Sometimes indirect compensation, such as building a school, is more
appropriate.
17
18. 10/15/2008
CONCLUSIONS (CONT’D)
What is the influence of social capital on
successful project implementation?
Social capital
Analyze trust. Trust among households can greatly increase the
probability of success for a project. There are ways to measure trust and
the means to develop trust .
Create appropriate shareholder systems
18
19. 10/15/2008
CONCLUSIONS (CONT’D)
Are property rights and governance structure in place that can
adapt to payment for ecosystems services such as carbon?
Property right allocation
It has been largely sorted out, in surprising places (Nuristan)
It has impacts on the success of project implementation (China)
Governance structure
The distribution of carbon payments will have to recognize well functioning
governance structure and adapt to them.
- In Nuristan it seems people are most comfortable with village level decisions
being made by elders, not an elective process with one vote per household. The
structure also seems to work for different castes in the villages.
- In China, the development of a shareholder system was critical to project
establishment.
- In Mozambique the interplay between a shareholder system and traditional
governance needs further analysis.
19
