Session Summaries
1. Summary of Question & Answers sessions
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Session
1: Background and setting the scene for Forestry CDM projects in India
At the end of Session 1 the chairperson opened the floor for discussions and invited queries from the house, which are summarized below:
At the end of Session 2 the chairperson opened the floor for discussions, the following queries were raised by the house and the responses are summarized below:
· Dr. H.D. Kulkarni queried regarding the extension of date of registration for CDM projects beyond 31 December 2005. It was clarified by one of the delegates that at present, the date of 31 December 2005 stands as the date of registration for CDM projects initiated as early as year 2000.
· Ms. Jessica Orrego identified the European Union, The Netherlands, Japan, Canada, Australia and UK as potential buyers of carbon in response to a general query concerning the buyers of CERs. Shri Muni Reddy who expressed his dissent, stating the smallness of the Carbon market commented upon this response stating that the EU market was not yet ready to purchase carbon.
· A concern was voiced with regard to the project site of Ms. Anandi’s Bagepalli project by Shri Reddy who informed the house about a recent amendment in Gram Panchayati Raj where in, any money for work on revenue land has to be routed through Gram Panchayats.
· Dr Pramode Kant stated that semi permanent CERs have a lower value in comparison to lCERs in response to a comment made on the cost of carbon, due to the differentiation of quality CERs and non-quality CERs in the market, by Dr. Kulkarni.
Session 3: Enabling
Environment for A&R CDM Projects
· Dr Gerald Kapp confirmed that the Biocarbon fund was not buying anymore CERs.
· In response to a query by Shri Manoj Chandran, Dr. Adrian Stott professed his inability to confirm the number of A/R projects approved by the Japanese host country authority.
· Dr. Adrian Stott opined that an artificial demand could be created for CERs, which would result in an increase of their purchase, in response to a query by Dr. Mohit Gera regarding the purchase of CERs, as the commitment period of 2008 – 12 came to an end.
· Dr Adrian Stott agreed to the opinion of Dr. Ken Andrasko that the cost of lCERs was less than half of that of normal CERs. Dr. Ken also opined that there was always a risk of lCER and tCER replacement. He also raised a query in this context, regarding the price of lCERs and tCERs.
· In response to a query by Ms. Anandi Sharan, Dr. Adrian Stott agreed on corporate responsibility and informed the house that some corporate houses were buying CERs at the rate of 4$/tonne.
· In response to a query by Dr. H.D. Kulkarni concerning the penalty for not delivering CERs, Dr. Adrian Stott clarified that ETS & Kyoto Protocol have to be treated as independent entities since the monitoring penalty imposed under ETS does not exist in Kyoto Protocol.
· In response to a query by Dr. R.L. Srivastava, Shri Mohan Reddy affirmed that institutes like FRI or IISc were better equipped to resolve the issues of methodology & definitions rather than independent consultants.
· Dr. Uma Melkania expressed her views on the role of new methodologies for the state of Uttaranchal and was of the opinion that this methodology must be uniform for different agroecological zones and should be integrable with other resources and land use systems.
· The Chairman intervened at this stage and emphasized on the need to evaluate A&R CDM potential, cutoff dates, degraded areas, use of GIS/remote sensing tools for facilitating methodology baseline development and identification of land eligibility.
· Shri Muni Reddy confirmed the availability of land use data in working plan documents and raised a query regarding land use details for lands outside forests. He further expressed his opinion that aerial photographs would be of help for this purpose.
· Dr. R.L Srivastava proposed the preparation of projects for the energy sector and commented on the risk factor associated with proving the benefits provided by the Kyoto Protocol in this context. In response, Dr. Suprava Patnaik opined that MNES program could help in this case.
· Dr. Mohit Gera affirmed that the passing of additionality test would become difficult when IRR became super, and that one could fail in common practice analysis for A/R projects.
· Shri Munni Reddy opined that IRR could not be more than 5% for environmental projects.
· Dr. Mohit Gera clarified that the PROCOMAP model would account for changes in the C pool over the years, even when rotation period for Poplar was 5 – 6 years, in response to a query voiced by Shri Paul Verghese.
· Dr. Mohit Gera sought a clarification from Ms. Anandi Sharan who opined that carbon price and sequestration should be treated as separate issues. Ms. Sharan was dissatisfied with the low price of carbon ($5/tonne) used in the PROCOMAP model..
· In response to a query by Shri H.P. Singh, concerning the involvement of poor farmers in Jatropha plantations, Shri A.K. Lohia clarified that 2 hectares of land was allotted to each farmer who was actually a landless labourer.
· In response to a query voiced by Shri Suresh Chandra, Shri A.K. Lohia confirmed that Jatropha was growing in poor degraded lands.
· Shri A.K. Lohia confirmed the high yield of 30 – 40% in the case of Jatropha, in response to a doubt raised by Ms. Anandi Sharan.
Session
4: Key Consideration in project development (Part A)
At the end of Session 4 the chairperson opened the floor for discussions and invited queries from the house, which are summarized below:
· In response to a query by Dr. Ken Andrasko concerning the availability of land record data of 1950, Dr. Kulkarni confirmed the availability of land record data with the revenue department after 1980 in a well documented form, this was further corroborated by Shri Panigrahi who informed the house about the availability of such records with the Department of Space and also clarified that data prior to 1980 could only be obtained from land records. The information about land records from the Revenue Department should be considered authentic. Mr. Pal from FSI corroborated that land use information was available from satellite imageries since 1990.
· Dr. Kulkarni clarified that farmers were willing for afforestation projects given that that they were presently working on marginal and low-productivity lands, in response to a query by Mrs. Melkania concerning the work of ITC on farmers’ lands.
· Dr. Kulkarni stated that a penalty would be paid by ITC, in case of cutting of trees by the farmers before the commitment period, due to a hike in wood prices, in response to a query by Dr. R.C. Dhiman regarding precautions taken to avoid such a situation.
Session 4: Key Consideration
in project development (Part B)
· A
query was raised by Dr. Gerald Kapp regarding comparative studies of the DSS
model. Dr. Neil Bird affirmed that comparisons have to be made between the
output of the DSS model and those of others. Consistency has to ensured in the
output and its limitations must be known in advance.
· Dr.
Neil Bird acknowledged that though validators may accept baseline
methodologies, GIS can be used for practical purposes as well. He also informed
the house about the use of GIS for assessing land eligibility and validation of
CDM projects in response to a query by Dr. Ken Andrasko concerning GIS based
assessment for A&R in India and whether there was a necessity to shift from
tabular methods to GIS.
· In response to a query by Dr. Mohit Gera concerning the submission of project documents or new baseline/ monitoring methodologies based on the DSS model, Dr. Neil Bird clarified that translation of other models such as COMAP etc. could be done on the line of DSS only up to the level of PDD development which could be replicated once the PDD became successful.
· Mr. V.R.S. Rawat affirmed that the MoEF is yet to come up with a clear definition of forests for India in response to a query concerning the submission of projects by individuals such as Ms. Anandi Sharan (Bagepalli Project) in the situation where there is no clear definition of forests for India, yet.
· Mr. V.R.S. Rawat reported the cost of developing a PDD to be in the range of Rupees Four to Six lakhs, which was subject to the specifics of the project.
· Ms. Florence Daviet confirmed the activity of review management and informed the house that developed projects go through very stringent internal and external reviews at WRI, in response to a query concerning the process of review management for the projects and documents at WRI.
· Ms. Florence Daviet confirmed that meeting the additionality test was crucial and informed the house that in respect to A&R projects, the requirement of this test would depend on the baseline scenario of the project, in response to a query by Dr. Mohit Gera regarding the compulsory nature of the additionality test.
· Mr. Shivananda Shetty informed the house that approximately Rupees three to eight lakhs would be spent towards the transaction costs in response to a query by Dr. Neeta Hooda, concerning the amount of transaction costs as a percentage of the total project cost.
·
Mr. Shivananda Shetty confirmed that six DOEs were operating in India
and remarked that the geographical location of the DOEs offices would not be a
barrier for providing services, in response to a query concerning the number of
DOEs operating in India. The Project developers could call for tenders to
select the DOE.
A brainstorming session was organized on June 16, 2005 after Session 2, with three breakup groups to deliberate on the matters of policy, institutional issues for promoting forestry mitigation projects in India, need for A&R strategy study and definition of ‘forests’ under CDM for India.
The outcomes of these deliberations are as below in the form of discussion points and recommendations.
Group 1: Policy Issues
Chairperson: R.B.S. Rawat, Uttaranchal Forest Department
Question 1: How could CC policy be made operative for
future commitment periods re LULUCF (i.e., pros and cons of seeking to add
additional activities like forest management, natural regeneration, etc.; and
how to do so)?
Discussion points and ideas:
1. Prepare studies of options: The history of negotiations on which LULUCF
activities will be eligible for CDM and for Article 3 for Annex I countries
indicates that a candidate activity needs to have well-researched and
well-documented analysis in case studies or otherwise, in order to appear as
credible mitigation options.
Thus, ICFRE and other institutions could prepare studies evaluating major
candidate options – forest management, agroforestry, forest degradation,
etc.—to assess which make most sense to support from an Indian perspective.
JFM experience offers valuable potential source of such
insights and studies.
2. ICFRE and other institutions should assess
what they can offer to this debate (i.e., their comparative advantage
versus other institutions), and decide how to participate in this debate. They may need to work from their strengths
on these issues.
3. India could argue for stricter emissions
reductions targets by Parties to Kyoto Protocol in 2nd
commitment period negotiations, to increase the demand for CERs and reduce
emissions.
4. Indian analysts could evaluate “compensated
reductions” idea of India taking a target for LULUCF sector for reducing
deforestation, or managing carbon stock levels.
- Delibrations on this concept for
India are required to work out the
conditions under which the concept could be applicable.
Question 2: India’s national climate change policy should better define sustainable development criteria.
Discussion points and ideas:
1. Current general guidelines from MoEF are adequate. More specific guidelines might be restrictive and add additional burdens for projects to meet, and restrict some project types. More restrictive guidelines might place India at competitive disadvantage vs. other countries. Existing criteria are sufficient.
Question 3: Need guidelines for
eligibility of lands for AR in India.
Discussion points and ideas:
1. Detailed guidance on what lands could be eligible for AR may be too restrictive. Instead, best approach is to do studies identifying those areas in India with best potential for AR and other major potential mitigation options. Publish this and encourage investment or project development in those high-potential areas.
2.
Land tenure may be key
issue for many AR potential projects.
Projects should try to design projects on single land tenure types, or
clearly address how multiple land tenure types would be managed
administratively and legally in the project.
Projects
involving bundling of small parcels (e.g., most projects) may need to address
land tenure issues: coordination of
different land uses, legal statuses, with various landowners and users, across
various institutional arrangements, etc.
3. Definition of “forest” for India is critical issue for many of these policy questions. This definition selection must be carefully thought through.
Simple analysis may help identify if a lower threshold (10% forest cover) or higher one is most likely to encourage or discourage agroforestry or AR hectares qualifying for AR in the CDM.
4. ICFRE or others may want to study the small-scale project methodology that is expected soon from the CDM Executive Board, to assess its implications for AR project activities in India.
It may have implications for bundling small land parcels into larger projects with potential transaction cost savings, or other implications.
Question 4: Is there a need to
define a policy for financing AR projects in India?
Discussion points and ideas:
1. Idea: “India Carbon Fund”: Seek funding of seed money from sources to be identified into a capacity-building unit that could review, assess, and provide tech assistance to improve project concepts and PDDs. Could help build a portfolio of high-quality Indian AR projects.
Sources of funding: a) govt. agency? B) create a public sector unit (joint public/private entity), c) private sector?, D) bilateral or multilateral donors?
This fund could be similar in its functions to a very simple version of the BioCarbon Fund but without the high transaction costs and with no development bank role. Functions could include: 1) identify potential projects, 2) provide assistance to improve PDDs, 3) perhaps provide some form of risk reduction via a large, diversified project portfolio or other means, to reduce insurance costs; 4) perhaps set regional or state-level baselines for major potential project activities like AR, to reduce costs for small projects.
A competition could be held for a quantity of funding or tech assistance to be offered each year via the Fund.
Question 5: Synergies bet.
National Forest Policy 1988 and CDM:
Not addressed. Some
thinking is needed to address if there are cross-implicaitons between the
Policy and its implementation in the field, and CDM AR project ideas.
Group 2: Institutional Issues for promoting forestry mitigation Projects in India
Chairperson: Hwan Ok Ma, ITTO, Japan
·
Efficient work
of DNA
-TORs to further facilitate the work of DNA
·
Strengthen
institutional arrangements
-State government roles focusing on screening of projects
-Engagement of key stakeholders
·
Capacity
building programme
- Need to increase awareness of AR-CDM
- Need to conduct training of trainer programmes
- Need to assign a competent agency to promote AR-CDM
Group 3: Definition of ‘forests’ under CDM for India
and Need for A&R strategy study.
Chairperson: Mr. Pramode
Kant, Addl. PCCF, Tamil N
Discussion points and
ideas:
·
Defines
forest as a minimum area of 0.05 to 1.0 ha with tree crown cover of more than
10-30% with trees or regeneration with the potential to reach 2-5 meters at maturity.
All countries should adopt a specific value within this range.
·
Afforestation
is conversion of land that has not been a forest for at least 50 years through
planting seeding and /or human induced promotion of natural seed sources.
·
Reforestation
is raising forest on lands not containing forest since 31.12.1989.
·
This
definition is solely for the purpose of Kyoto protocol and does not affect
anything else.
·
Option
chosen by a country cannot be changed.
·
If we take 30%
cover as the definition then all open forests in the country that had 30% cover
or less on 31.12.1989 are eligible for reforestation.
·
But if we adopt
10% then no open forest in the country could be taken up for reforestation
because these would be seen as forests as on 31.12.1989 and hence be ineligible.
·
But 10% would
enable agro-forests raised with 10% tree density to be also considered as
forests raised and thus earn carbon credits.
·
On the other
hand a higher range will not help agro-forestry.
Further deliberation is required with analysis of options proposed
before finalizing the definition.
A&R strategy studies are required for
specific models that may be viable in India. Some other points for
considerations are mentioned below:
·
Institutional
mechanism for channelizing benefits to local
communities
·
Selection of species
·
Identify district-wise potential of CDM driven
afforestation.
·
Bamboo for afforestation. Whether definition of forests
include bamboo or not?
· National consultation process for prioritization of issues related to A&R.
Panel Discussion: Action
points for Policy, Research and Capacity Building Needs
Discussants:
1. Shri R.P.S Katwal, Addl. D.G. (WildLife) (Chairman)
2. Shri G.K. Prasad, D.G., ICFRE
3. Dr. Paul Verghese, TERI
4. Dr. Florence Daviet, WRI
5. Dr. Gerald Kapp, Freiburg University
6. Dr. Jessica Orrego, ECCM, UK
7. Dr. Hwan Ok Ma, ITTO, Japan
8. Dr. Emily Boyd, UK
Issued raised by Panelists during
Panel Discussion of Mitigation Workshop (16th – 17th June
2005)
· A/R CDM – demystify terms & terminologies
· Monitoring C stocks, transparent & foolproof contacting procedures
· Provision for pilot studies to be funded by MoEF, baseline and monitoring methodologies. Local institutional mechanisms to be strengthened.
· Guidelines regarding ownership of CERs where community involved in projects is envisaged. Develop guidelines/MOU on using JFM guidelines as the basis.
· Certain issues already raised with Ministry of Environment and Forests, GOI such as definition of forests for CDM
· Availability of land records has to be ensured.
· This conference as a path-breaking conference in this direction and follow up action should be based on this
· Meeting expectations of project developers & purchasers is a key concern for A & R projects.
· Formation of ‘Indian Carbon Fund’ is desirable to promote A & R projects
o Financing them Govt.?
· Forest Definition
o To establish the definition of forests scientifically, a research project should be undertaken and modeling with tree height, area & crown cover be carried out to determine the optimum criteria for purpose of definition
· Lack of international acceptance of A/R projects by NGOs. Unlike the notion there is wide scope in rural areas in India. Could social NGOs & environmental NGOs be brought together on this issue?
· Next commitment period
o India may consider taking on commitments in the second period
· Promote composite A/R projects - fuelswitch & A/R in normal development aid projects. Interdisciplinary projects should be promoted.
· Bottom up projects may be promising in the A & R scope.
· Incentives for projects that have gone through the CDM EB registration process
o Provide technical assistance to selected A/R projects/fuelswitch projects
· Ability to have network:- easy link to information provided in this conference & future ones to follow.
· Integrated planning methodology from top down options, baseline, cost effectiveness, maximize livelihood benefits.
· Application of GIS tools:- bottom up approach
· Role of State Forest Departments & their training & capacity needs be made specific and mainstreamed.
· Investment in A & R projects:- as pointed out by Mitsubishi Securities delegate, lower risks associated with non delivery of tCERs.
· ITTOs New AR-CDM project proposal
o Building capacity to develop A &R projects
· Manual for A/R CDM projects may made exhaustive for extensive use
· Assist in raising finance
· Forest management as an option
o 80% of emission reduction achieved would be offset due to deforestation
Compensated reduction
o Extend CDM to natural forests. Role of ICFRE in A/R in South Asian Region is promising and full potential should be realized
· System of learning & e-networking needs to be put in place with ICFRE and ICFRE like institutions.
· Long history of forest management – asset, but scale of A/R projects is important to consider
· Balance of biodiversity, conservation in A/R projects.
o Translating technical language to other participants
· Capacity development at state level
· Institutional link between States & DNA
Annex I countries to take risk of A/R projects, rather than push the agenda to non-Annex countries in response to Dr. Gerald’s suggestion that India may consider taking on emission reduction commitments in the second commitment period.