The BioCarbon Fund Using the Global Market to Restore Ecosystems: New opportunity for public-private partnerships The BioCarbon Fund Using the Global Market.

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The BioCarbon Fund Using the Global Market to Restore Ecosystems: New opportunity for public-private partnerships The BioCarbon Fund Using the Global Market to Restore Ecosystems: New opportunity for public-private partnerships Benoît Bosquet The World Bank June 16, 2006

BioCF 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: 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 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) 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 CO 2 e) is low compared to project costs Carbon payments made on delivery; start-up capital is needed from other sources

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) 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) 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

Conclusions 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