The BioCarbon Fund The BioCarbon Fund Ellysar Baroudy, World Bank August 2009 Harnessing the carbon market to sustain ecosystems and alleviate poverty

World Bank Carbon Funds & Facilities Prototype Carbon Fund. $180 million (closed). Multi-shareholder. Multi-purpose. Netherlands Clean Development Mechanism Facility. (closed). Netherlands Ministry of Environment. CDM energy, infrastructure and industry projects. Community Development Carbon Fund. $128.6 million (closed). Multi-shareholder. Small- scale CDM energy projects. BioCarbon Fund. $91.9 million (Tranche 1 and 2 closed). Multi-shareholder. Mainly CDM LULUCF projects; some REDD and soil carbon. Italian Carbon Fund. $155.6 million (closed). Multi-shareholder (from Italy only). Multipurpose. Netherlands European Carbon Facility. (closed). Netherlands Ministry of Economic affairs. JI projects. Spanish Carbon Fund. $282.4 million (closed). Multi-shareholder (from Spain only). Multipurpose. Danish Carbon Fund. $69.4 million (closed). Multi-shareholder (from Denmark only). Multipurpose. Umbrella Carbon Facility. $737.6 million (Tranche 1 closed – 2 HFC-23 destruction projects in China). Carbon Fund for Europe. $65 million. Multi-shareholder. Multi-purpose. Managed with EIB. Total funds pledged = US$ 2.2 billion (16 governments, 67 firms)

Portfolio – First Window Forest restoration Community forestry Agroforestry Assisted natural regeneration Bioenergy plantations Timber plantations

Projects with Signed ERPAs - A/R 1. Albania Assisted Natural Regeneration 2. China Guangxi Pearl River Watershed Management I 3. China Guangxi Pearl River Watershed Management II 4. Colombia San Nicolas Agroforestry 5. Colombia Silvopastoral Rehabilitation 6. Costa Rica Coopeagri 7. DRC Ibi Bateke 8. Ethiopia Humbo Assisted Regeneration 9. Honduras Pico Bonito 10. India Improving Rural Livelihoods 11. Kenya Green Belt Movement 12. Madagascar Biodiversity Corridor 13. Mali Acacia Plantations 14. Moldova Soil Conservation 15. Moldova Community Forestry 16. Nicaragua Precious Woods 17. Niger Acacia Community Plantations 18. Trinidad and Tobago Nariva Wetland 19. Uganda Nile Basin Reforestation * UNFCCC Registered projects

Portfolio – Second Window Reducing Emissions from Deforestation & Degradation (REDD) Reduced tillage Agricultural improvements

Projects with Signed ERPAs – non-CDM LULUCF 1. Colombia San Nicolas Agroforestry 2. Honduras Pico Bonito 3. Madagascar Biodiversity Corridor Expected in next months: 1. 2 additional REDD projects Soil carbon pilots

BioCF Mandate (1/3) Putting rules into practice – Contracts signed 19 ERPAs signed for A/R – first ever under the CDM 4-5 more A/R under negotiation 3 ERPAs signed for REDD 3-5 more under negotiations for REDD and soil/ag carbon Proof of concept First two ever CDM A/R project registered (China, Moldova) More than half the ERPAs under validation with expectation for more registered projects ahead of Copenhagen COP Testing different project models Community forestry Agroforestry Plantations Ecological restorations Assisted natural regeneration

BioCF Mandate (2/3) Development of Methodologies ultimately to be able to make carbon payments Development of related Tools to help project developers A/R methodologies approved, of which the Bank was involved in 7 of 10 original First REDD methodology developed by the BioCF First soil carbon methodology developed by BioCF TARAM: Tool for Afforestation / Reforestation Approved Methodologies, calculates equations found in each A/R methodology, both for large scale and small scale projects Public domain

BioCF Mandate (3/3) Capacity building Over 25 project entities have been trained Countries have adopted forest definitions Submissions by DNAs to the UNFCCC concerning rules Lessons learned from approaches Regulatory / Land tenure / Challenges facing small holders / Financing Inclusion Rural world can participate in the CDM – recent inclusion of soil carbon Africa > 1/3 of portfolio Learning by doing Show that CDM rules can work in practice Body of experience beyond theoretical debate Suggest improvements / simplifications in rules

A/R’s Potential pre-2012 Not realized: Very small volume <1% of total CERs and ERUs by far A small fraction of the cap (1% of 1990 emissions) Reasons Rules came late; Some rules are not conducive Demand restricted: exclusion from EU ETS deterred private sector from buying Trees grow slowly What can still be done before 2012? Submissions to UNFCCC; countries need to speak up in the negotiations process leading up to Copenhagen Changes adopted now will pave way for post-2012