Carbon payments in Mexican forests - European … · Carbon payments in Mexican forests: insights...

Carbon payments in Mexican forests: insights from the national program and a flagship project

Dr Esteve CorberaSchool of International Development, University of East Anglia

Tyndall Centre for Climate Change [email protected]

Market-based instruments and Payments for Environmental Services in forestry: a real solution?Auditori de la Fundació Catalana per la Recerca i la Innovació

Barcelona, December 17, 2009

mailto:[email protected]

mailto:[email protected]

Talk outline

Talk outline

• Forests in Mexico

Talk outline


• Mexico and Payments for Environmental Services (PES)

Talk outline



• An overview of the federal PES programs

Talk outline




• Analysis of the carbon program and the Scolel Té project

Talk outline




• Analysis of the carbon program and the Scolel Té project

• Conclusions

Forests in Mexico

Forests in Mexico

• 56.9 million ha of forested ecosystems (26.4 to 33.1 million of natural tropical forests) - 35% of the country’s territory

Forests in Mexico


• Protected Areas National Commission (CONANP) manages over 23 million ha of national territory (increase of almost 70% in the last decade)

Forests in Mexico



• 59% of forestlands owned by rural communities (25% with management plan); 33.5% private forestlands; 7.5% public forestland

Forests in Mexico



• 59% of forestlands owned by rural communities (25% with management plan); 33.5% private forestlands; 7.5% public forestland

• 512,000 ha/year deforested and 457,700 ha/year degraded (1993-2002) (FCPF R-PIN Mexico, 2008)

12th with highest net annual forest loss

• Ten percent of the country’s overall emissions come from land-use change

Mexico and PES

• Early development of watershed/carbon forestry projects in the late 1990s

- Scolel Té carbon project in the state of Chiapas - 1997

- Coatepec voluntary watershed project (1998) and FIDECOAGUA (2002)

Mexico and PES




• Payments for Hydrological Services (2003) (Muñoz-Piña et al., 2008)

- Earmarked portion of federal revenues from water fees -Mexican Law of Rights-

- Forest conservation in ‘critical’ watersheds (>50% of of forest cover)

- 5-year flat payment/ha (higher for cloud mountain forests)

- Finance for technical assistance in project implementation

Mexico and PES




• Payments for Hydrological Services (2003) (Muñoz-Piña et al., 2008)

- Earmarked portion of federal revenues from water fees -Mexican Law of Rights-

- Forest conservation in ‘critical’ watersheds (>50% of of forest cover)

- 5-year flat payment/ha (higher for cloud mountain forests)

- Finance for technical assistance in project implementation

• Key issues:

- Emphasis put on supporting poor regions and communities

- ‘Low additionality’ - only in 2007 deforestation taken into account

- Preliminary research shows reduction in deforestation rates where payments accrue

- Subsidy-like payments - forest cover as ‘proxy’ for environmental service

Mexico and PES

‘First-come, first-serve’ Outreach in central Mexico

Mexico and PES

Source: Muñoz, 2009

‘First-come, first-serve’ Outreach in central Mexico

Mexico and PES

Outreach in critical watersheds Water, poverty and conservation criteria in

Mexico and PES


Outreach in critical watersheds Water, poverty and conservation criteria in

Mexico and PES

Deforestation risk + Indigenous Commission Funds ‘Regional balance’

Mexico and PES


Deforestation risk + Indigenous Commission Funds ‘Regional balance’

Mexico and PES• Payments for Carbon, Biodiversity and Agroforestry Services (2005)

- Design/implementation of forest conservation/reforestation projects

- Biodiversity conservation through specific forest management activities

- Enhancing forest cover management in shadow-coffee systems

Mexico and PES• Payments for Carbon, Biodiversity and Agroforestry Services (2005)

- Design/implementation of forest conservation/reforestation projects

- Biodiversity conservation through specific forest management activities

- Enhancing forest cover management in shadow-coffee systems

PES modality Average payment (US$/ha)* Technical assistance (US$/ha)

Watershed conservation 163 1,719 (<500 ha) - 4,528 (>1,000 ha)

Biodiversity 179 1,719 (<500 ha) - 4,528 (>1,000 ha)

Agroforestry (shadow-coffee systems) 164 1,719 (<500 ha) - 3,123 (<1,000 ha)

CarbonPayments only for project design (except for 2005/2006 rules) 12,361 (<1,500 ha) - 17,391 (>3,000 ha)

* Payments are split in 5 years, after monitoring and verification* Payments are split in 5 years, after monitoring and verification

• Key issues:

- Funding varied over time - Congress + Commission Development Indigenous Peoples

- Projects unevenly distributed, biodiversity applications steady and more numerous

- 5-year payment + technical assistance

PES federal programs• PES numbers:

- Over 4,600 communities and and private right-holders

- 3,933 projects under implementation - 2.24 million ha; US$327 million

PES federal programs• PES numbers:

- Over 4,600 communities and and private right-holders

- 3,933 projects under implementation - 2.24 million ha; US$327 million

• Forest Environmental Services Project (WB -US$45 mill.; GEF -US$15 mill.)

- Matching grant scheme - development of financially sustainable state/local projects

- 7 matching grant programs - 26,000 ha; US$5 million

- Biodiversity fund - ‘marketing’ biodiversity hotspots

PES federal programsPES hectares over time (2003-2012)

Source: CO

NA

FOR, 2009

Carbon program overview

• Participation of rural communities in international carbon markets

- Payments for project design and implementation (10US$/ton/5 years) in 2005-2006

- Payments for preparation of CDM-like projects (<18,000 US$/project)





• High rejection rates in applications and project design proposals

- Missing documentation, non-fulfilment of eligibility criteria, and lack of ‘additionality’

- Seven projects for implementation and 14 for CDM-like design (out of >450)

- 6,962 ha under implementation (0.3% of total PES area)

- Payments delivered according to forest cover and planting rates - leakage?










• Funding for ES intermediaries and lost in unsuccessful proposals










• Funding for ES intermediaries and lost in unsuccessful proposals

• Research at project-level shows:

- Interest in forest management and future timber revenues

- Household income increase varies depending on community and project size

- Collective action strengthened and new skills gained

• Scolel Té Project in the Mexican states of Oaxaca and Chiapas, selling carbon offsets in voluntary markets

Scolel Té project


Scolel Té project


Scolel Té project


Scolel Té project

• Single farmers plant trees on household plots and rural communities plant or protect community forests - “Plan Vivo” management system

677 plantation/conservation sites, 7,500 hectares


Scolel Té project

• Carbon buyers/sold:

International Automobile Federation, Carbon Neutral Company, Tetra Pak...

Up-front payments (2.7-10.38 US$/tCO2) - 154,000 tCO2 sold to date




Scolel Té project






• Project developer funds plantation establishment and development with 60% of total sequestration value of each contract - 40% covers management costs

Landholders maintain rights over future timber revenues

Carbon liability falls upon the project developer (buffer fund)


Scolel Té project






• One single external audit/verification in 2002 - Annual reports reviewed by Plan Vivo Foundation - Monitoring systems verified by Rainforest Alliance 09

• Project developer funds plantation establishment and development with 60% of total sequestration value of each contract - 40% covers management costs

Landholders maintain rights over future timber revenues

Carbon liability falls upon the project developer (buffer fund)

• Analysis of project’s origins, management approach and impacts at community level during 2002-2003 (Brown and Corbera, 2003; Nelson and de Jong, 2003; Corbera et al., 2007; Corbera and Brown, 2008)

Scolel Té - management outcomes



• Apparent trade-offs between environmental & development objectives

Biodiversity: seedlings delivery bottleneck

Enhanced inequalities in access to carbon funding due to land endowments

Insufficient knowledge transfer

Increasing prioritisation of forest management skills



• Limits imposed by the carbon market

Insufficient carbon funding

Networks/complementary funding critical

• Apparent trade-offs between environmental & development objectives

Biodiversity: seedlings delivery bottleneck

Enhanced inequalities in access to carbon funding due to land endowments

Insufficient knowledge transfer

Increasing prioritisation of forest management skills

Scolel Té - community development

• ‘Individual’ carbon

Lack of collective action - property rights historical changeAccess/participation influenced by:

- Legitimacy of rural organisation- Property rights fears: “I don’t want to sell my land to foreigners”- Household land endowment

Gendered nature of productive spaces and resource use not considered












• ‘Collective’ carbon

Strong collective action (commons conservation)Access/participation influenced by:

- Rural organisation seen as legitimate- Property rights conflicts with neighbouring communities- Carbon investment in collective goods

Very limited understanding of project activitiesGendered nature of the commons ignored

Conclusions

• Mexico’s experience with PES is mounting, and national programs have improved government/local technical capacities over time

Conclusions


• PES programs based on weak causal relationships and more a subsidy than a reward

- Sustainability subject to actual local/regional markets

- REDD to become a sustainable funding source for PES?

- PES reduce deforestation > 600 < 46,800 ha/year (González Guillén et al, 2008)

Conclusions


• PES programs based on weak causal relationships and more a subsidy than a reward

- Sustainability subject to actual local/regional markets

- REDD to become a sustainable funding source for PES?

- PES reduce deforestation > 600 < 46,800 ha/year (González Guillén et al, 2008)

• Carbon program shifted towards project design and marketable offsets, but has proved to be the least successful and more challenging

- Early funded/designed projects may become in sub-national REDD/CDM projects (if they count with adequate technical/marketing support)

- Carbon (and PES) projects are not ‘neutral’ - they change access relations over land, resources and ecosystem services; they can generate positive and contested outcomes

ReferencesBrown K, Corbera E, 2003, “Exploring equity and sustainable development in the new carbon economy” Climate Policy 3(S1) 41-56.CONAFOR, 2009, “Programa de Pago por Servicios Ambientales” Séptima Expo Forestal, 24-26 de Septiembre, Ciudad de México.Corbera E, et al, 2007, “The equity and legitimacy of markets for ecosystem services” Development and Change 38(4) 587-613.Corbera E, Brown, K, 2008, “Building institutions to trade ecosystem services: Marketing forest carbon in Mexico” World Development 36(10): 1956-1979.Corbera E, et al, 2009, “Institutional dimensions of Payments for Ecosystem Services: An analysis of Mexico’s carbon forestry programme” Ecological Economics 68 743-761.González Guillén MJ, et al, 2008, “Evaluación externa de los Apoyos de Servicios Ambientales” Colegio de Posgraduados, CONAFOR. Muñoz-Piña C, 2009, “Programa de Pago por Servicios Hidrológicos de los Bosques” D.G. Investigación en Economía y Política Ambiental. Instituto Nacional de Ecología INE, SEMARNAT.Muñoz-Piña C, et al, 2008, “Paying for the hydrological services of Mexico’s forests: Analysis, negotiations and results” Ecological Economics 65 725-736.Nelson KC, de Jong BHJ, 2005, “Making global initatives local realities: carbon mitigation projects in Chiapas, Mexico” Global Environmental Change 13 19-30.

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