Voluntary Carbon Market: Challenges & Opportunities S.U.Foronda Former National Consultant – FAO TCP/RAS/3210

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop2 Carbon Trade  Kyoto Protocol – international agreement Mechanism to reduce GHG emissions GHG emissions – CO 2, CH 4, N 2 O, HFC, PFC, SF 6 Cap emissions – 38 Annex I countries Trade to meet obligations and to profit  C allowances given/sold to industries/sectors  C credits – emission reduction generating projects Trade – buy and sell rights to release GHGs Tonnes of CO 2 equivalent – tCO 2 e

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop3 Carbon Trade  Clean Development Mechanism (CDM) Mechanism to bring in developing countries Mandated industries + developing countries Emission reduction generating projects  Sequester and store GHGs  Prevent the release of GHGs Emission reduction credits – C credits/ offsets Compliance market – tied to mandatory C reduction scheme

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop4 Carbon Trade  Voluntary Carbon Market (VCM) Result of advocacies to mitigate global warming Voluntary beyond regulatory requirements Desire/need to exercise social responsibility No caps and C allowances, C credits only Emission reduction generating projects anywhere Testing ground of C technologies CDM compliant C credits fungible in VCM VCM similar to CDM

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop5 CDM v VCM ItemsCDMVCM Coverage Annex I & partners in developing countries Any sector, industry, individual, organization in any country Structure & actors Project approval by CDM Executive Board Upon auditors’ successful certification Standards & eligible projects CDM Standards only A/R only Many Standards (ex. VCS, CarbonFix, Plan Vivo, etc) Plus AF, IFM, REDD, etc Size (in value) Many folds largerMuch smaller, growing

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop6 Forestry VCM in Philippines  VCM not adopted by Government yet, orphan  No policies, governance, structure in place  No champion to promote forestry VCM  Superficial knowledge among stakeholders  Forestry carbon projects VCM – one approved and registered project CDM – none  Forestry VCM more successful

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop7 ‘Value Chain’ in Forestry VCM Project DesignProject Implementation Stage Actors Project owners/ developers Auditors Registry Auditors Project owners/ developers Brokers/Traders/ Credit Buyers Local Clearinghouse Registry Commercialization

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop8 Challenges  Policies and governance Need to adopt VCM, basis to remove barriers  Structure Clearinghouse Project developers/ accredited third party auditors  Knowledge and knowledge systems At best superficial, no forestry VCM champion Inadequate R&D Lack of forestry VCM knowledge system

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop9 Opportunities  Rural and community-based livelihood Forest protection Tree farms and forest establishment/ expansion  National Greening Program Support mechanism Sustain forest protection activities  Employment for foresters Project developers, accredited third party auditors

21-23Sept2011SUForonda/Nat'lForesters'_SeminarWorkshop10 Recommendations  Government to adopt VCM Perhaps in IRR of EO 881  NGP to consider VCM – support mechanism  Academic and R&D institutions to focus on Knowledge and information gaps Establishing forestry VCM knowledge system  Foresters to consider becoming Project developers Accredited third party auditors