CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN … · for afforestation and reforestation project...

PROJECT DESIGN DOCUMENT FORM FOR AFFORESTATION AND REFORESTATION PROJECT ACTIVITIES (CDM-AR-PDD) - Version 01

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CLEAN DEVELOPMENT MECHANISM PROJECT DESIGN DOCUMENT FORM FOR AFFORESTATION AND REFORESTATION

PROJECT ACTIVITIES (CDM-AR-PDD)

CONTENTS

A. General description of the proposed A/R CDM project activity B. Application of a baseline methodology C. Application of a monitoring methodology and plan D. Estimation the net anthropogenic GHG removals by sinks

E. Environmental impacts of the proposed A/R CDM project activity

F. Socio-economic impacts of the proposed A/R CDM project activity G. Stakeholders’ comments

Annexes Annex 1: Contact information on participants in the proposed A/R CDM project activity Annex 2: Information regarding public funding Annex 3: Baseline information

Annex 4: Monitoring plan



SECTION A. General description of the proposed A/R CDM project activity: A.1. Title of the proposed A/R CDM project activity: Afforestation or reforestation project activity implemented on unmanaged grassland1

A.2. Description of the proposed A/R CDM project activity: The objective of this project activity is the afforestation or reforestation, using native species, of approximately 8,790 (eight thousand, seven hundred ninety) hectares of unmanaged grassland riparian areas, situated along the banks of five hydroelectric plant reservoirs in the State of São Paulo. From these total, 496 (four hundred ninety-six) hectares were reforested from 2004 to 2005, and the remaining 8,294 (eight thousand, two hundred ninety-six) hectares will be reforested over the course of the next 5 (five) years. All the areas are owned, controlled and operated by the project proponent, AES-Tiete S.A. AES-Tiete is part of the AES Corporation, a leading global energy company, working in electrical energy generation, transmission and distribution in 19 countries worldwide. In the State of São Paulo, AES-Tiete owns and operates 10 (ten) hydroelectric plants, with an installed capacity of 2,651 (two thousand, six hundred fifty-one) megawatts. These plants are located in Barra Bonita, Bariri, Ibitinga, Promissão, Nova Avanhandava (on the Tiete River), Mogi-Guaçú (on the Mogi-Guaçu River), Caconde, Euclides da Cunha, Limoeiro (on the Pardo River) and Água Vermelha (on the border between the states of São Paulo and Minas Gerais on the Grande River). Of these 10 (ten) hydroelectric plants, 4 (four) reservoirs—Baririr, Barra Bonita, Ibitinga and Promissão—located along the Tiete River, and one reservoir—Agua Vermelha—located on the Grande River are incorporated in the project activity. The areas along the banks of the remaining 5 (five) hydroelectric plants are not included in this project activity. In 1999, AES-Tiete participated in the privatization auction and won the concession to operate ten (10) hydroelectric plants in the State of São Paulo. The concession transferred the hydroelectric plants, as well as all associated facilities (the reservoirs, riparian areas and dams), from the São Paulo Energy Company (CESP) to the project proponent for a duration of 30 years, renewable for an equal period, by decision of the National Electrical Energy Agency (ANEEL). The reservoirs were built between 15 (fifteen) and 30 (thirty) years ago by the Brazilian government. At that time, the original riparian areas were flooded, and the grassland areas, limited to a width of 100 meters from the reservoirs’ maximum level of fillings, were expropriated. In 1985, the grassland areas around the reservoirs were legally designated Permanent Preservation Areas (APPs or Áreas de Preservação Permanente). The legal foundation for APPs is found in the National Forest Code, Law Number 4.771/1965 (Código Florestal Lei 4.771/1965). Areas situated around artificial water reservoirs were included in the APP category by Resolution 4/1985 and Resolution 302/2002, passed by the Brazilian National Environmental Council, CONAMA. It should be noted that the forest legislation and resolutions do not include the obligation to afforest or reforest APPs. Legally, the areas cannot be subject to any type of human intervention, either suppression of the vegetation or impediment of natural regeneration. Therefore, these riparian areas are unmanaged and not subject to anthropogenic pressure.

1 Unmanaged grassland, here, is defined as land that is not under any directly human-induced activity or process, such as pasture or agricultural and silvi-pastural systems. It includes areas that in the past have suffered intensive land use(s) and management practices, and are now in a steady-state level or under process of natural regeneration that is not expected to exceed the forest definition thresholds chosen by the host country.



Prior to the onset of the reservoirs, nearly 100 percent of the areas within the project boundaries were covered with aggressive grass species, which prohibit woody species from taking root, and which, for more than 30 years, have not naturally regenerated. The Tiete River basin traditionally has been a gateway to pioneering activities within the state and the center west of the country (Ref. Bibl). Since the seventeenth and eighteenth centuries these areas have undergone constant anthropogenic pressure, through deforestation and agricultural development. Through the second half of the nineteenth and beginning of the twentieth centuries, these areas were already deforested to make way for coffee, cotton and sugarcane plantations. Following the 1940’s, the region began to host cattle ranching and diversified agricultural activities. Today, the area is home to highly modernized agro-business activities. Only the areas that have been afforested or reforested, using native species, present advanced stages of regeneration. AES-Tiete has successful experience with afforestation or reforestation activities, having continued research that was initiated by CESP prior to the privatization of the hydroelectric plants and assets. CESP began researching afforestation and reforestation techniques in the 1988, and AES-Tiete continued the work with the same team of forest engineers and specialists, when the company won the concession in 1999. This team has successfully implemented small-scale reforestation, using native species, in riparian areas around the reservoirs. Since 1988, a total of 1,033.20 hectares have been planted. Additionally, AES-Tiete maintains the infrastructure and technology necessary for the project activity, and as a result of possible carbon credits arising from the project activity, has decided to increase the rate of afforestation or reforestation Within the scope of the project activity, the project proponent proposes to afforest/reforest 2,000 (two thousand) hectares per year for 4 (four) years, and 294 (two hundred ninety-four) hectares in the fifth year. (See Table 1 below for a summary of the area comprising the project boundary). Table 1: Project general data.

Within Project Boundaries (ha) Reservoir Border Length

(km)

Total Eligible

Area (ha)

Exclu-sions1

(ha)

Refores-ted2

(ha) Project Area

Already Refor-ested3

To Be Refor-ested4

Ibitinga 674 2,393 554 74 1,765 110 1,655Promissão 2,445 3,517 428 226 2,863 210 2,653Bariri 383 1,030 236 80 714 60 654Barra Bonita 783 744 104 158 482 80 402Água Vermelha 1,926 4,337 1,155 216 2,966 36 2,930Sum 12,021 2,477 754 8,790 496 8,2941 Details are shown in the Tables 4 to 8 in Section A.4.1.4. Source: Imagem Ltda

2 From 2000 to 2002, whose carbon removal will NOT be claimed. 3 From 2004 to 2005. 4 From 2006 to 2009 AES-Tiete’s decision to implement this project activity is highly dependent upon the possibility of receiving tCERs, corresponding to the CO2 removed by the initiative. This is because of difficulties that exist in maintaining the current reforestation program along the banks of AES-Tiete reservoirs at the same levels as were realized during the last (5) five years. These difficulties are related to the reduction in electrical energy consumption, and subsequent decrease in revenues, which occurred as a result of the energy shortage in 2001 and 2002. As a result of this reduction in consumption, no planting was undertaken during 2003, despite the fact that during the two earlier years, 2001 and 2002, a total of 754 hectares—and in the two subsequent years, 2004 and 2005--a total of 496 hectares were planted.



In addition to the direct financial benefits derived from the tCERs, the project activities present unquantifiable indirect benefits, such as guaranteeing clean, safe and secure energy generation, conserving and protecting the reservoirs and the environment, as well as improving the quality of life of communities and populations. The project activity will remove carbon from the atmosphere, protect hydraulic resources and local ecosystems, as well as contribute to the creation of biodiversity corridors. Protection of the riparian areas will also contribute to recuperation and conservation of the regional flora and fauna, minimize the impacts of extreme events, such as storms and increased superficial erosion, reduce soil loss and enhance ground-water recharging. The project activity will also serve as a backbone of support for a state government initiative to recuperate riparian areas. According to the São Paulo State Secretary of Environment, the riparian areas are listed among 25 hotspots of global importance because of the high degree of diversity. Only eight percent of the original Atlantic forest areas remain, and one million hectares of riparian areas, along 120,000 kilometers of unprotected waterways, have been deforested. Forty percent of this territory is subject to soil erosion. The State of São Paulo Government in conjunction with the World Bank is undertaking the four-year-long Project for the Recuperation of Riparian Areas in the State of São Paulo. The government initiative, which will be implemented by the state’s environment and agricultural secretariats, will develop instruments, methodologies and strategies to provide tools restore these areas. In addition to the environmental benefits, particularly for the climate through the removal of atmospheric carbon, the afforestation/reforestation activity will impede invasions of the riparian areas by settlers, for urban lots or any other types of construction. This is notable, given the example of the Billings Reservoir, located in the São Paulo municipal region. Studies conducted by the Brazilian Institute for Environmental Protection (Instituto Brasileiro de Proteção Ambiental) and reported in the Brazilian national newspaper Folha de São Paulo (April 26, 2005) demonstrate that the reservoir could lose more than half of its storage capacity over the next 50 years as a direct result of illegal occupation of the springs around the reservoir. The illegal occupation, which began in the 1970’s and now numbers an estimated 2 (two) million people, has degraded streams that feed the reservoir, as well as increased the quantity of pollutants released into the water, diminishing the lake bed and favoring the proliferation of microorganisms, which render the water inadequate for human consumption. Finally, it merits attention that AES-Tiete expects this project to contribute to communities, generating employment, enhancing sustainable development in the region, and highlighting the company’s proactive commitment to social responsibility, sustainable development and environmental conservation. A.3. Project participants: Project Proponent AES-Tiete S/A Rua Lourenço Marques, 158 – 2º andar Vila Olímpia – CEP 04547-100 São Paulo – Capital Contact: Dr. Demóstenes Barbosa da Silva Director of Environmental Management and Carbon Market (Diretor de Gestão do Meio Ambiente e Mercado de Carbono) Telephone: +55 (11) 2195-2303 E-mail: [email protected]

mailto:[email protected]



Project Participant International Bank for Reconstruction and Development as Trustee of the BioCarbon Fund, (subject to bilateral agreement between The Bank and AES Tietê). 1818 H Street, NW MSN MC4-414 Washington, DC Zip Code 20043 United States of America Phone: +1-202-522-7432 Fax: +1-202-458-5118 www.carbonfinance.orgContact: Mr. Odin Knudsen Funds Manager [email protected]: +1-202 458-5118 Phone: +1-202 522-7432 A.4. Technical description of the A/R CDM project activity: A.4.1. Location of the proposed A/R CDM project activity: >> A.4.1.1. Host Party(ies): Brazil Brazil ratified the Kyoto Protocol on 23/08/02 A.4.1.2. Region/State/Province etc.: States of São Paulo and Minas Gerais A.4.1.3. City/Town/Community etc: The Água Vermelha reservoir covers the municipal areas of Cardoso, Icem, Indiaporã, Macedônia, Mira Estrela, Orindiúva, Paulo de Faria, Pedranópolis, Pontes Gestal and Riolândia. In the State of Minas Gerais, the cities nearby the reservoir are: Campina Verde, Fronteira, Frutal, Itapagipe, Iturama and São Francisco de Sales. The Bariri reservoir covers the municipal areas of Bariri, Barra Bonita, Boracéia, Igaraçu do Tietê, Itapuí, Jaú, Macatuba and Pederneiras. The Barra Bonita reservoir reaches the municipal areas of Anhembi, Barra Bonita, Botucatu, Conchas, Dois Córregos, Igaraçu do Tietê, Laranjal Paulista, Mineiros do Tietê, Piracicaba, Santa Maria da Serra, São Manuel and São Pedro. The Ibitinga reservoir covers the municipal areas of Arealva, Bariri, Boracéia, Ibitinga, Itaju, Iacanga and Pederneiras.

http://www.carbonfinance.org/




The Promissão reservoir covers the municipal areas of Sabino, Uru, Reginópolis, Guaiçara, Cafelândia, Lins, Iacanga, Ibitinga, Pirajuí, Pongaí, Promissão, José Bonifácio, Borborema, Adolfo, Sales, Ubarana, Urupês, Novo Horizonte, Mendonça, Nova Aliança, Potirendaba and Irapuã. A.4.1.4. Detail of geographical location and project boundary, including information allowing the unique identification(s) of the proposed A/R CDM project activity: The project proponent has analyzed the areas eligible for the project activity—unmanaged protected grassland areas along the reservoir banks of its hydroelectric plants—and determined that 5 (five) of the 10 (ten) plants have areas eligible for the project activity. These riparian areas are located within the land expropriated by the government and included in AES-Tiete’s concession around the Bariri, Barra Bonita, Ibitinga, Promissão and Água Vermelha reservoirs. The precise locations of these reservoirs are listed below: Água Vermelha: is situated on the Grande River, north of the State of São Paulo and south of the State of Minas Gerais, between the parallels 19°37’ and 20°30’ south latitude and the meridians 49°05’ and 50°30’ west longitude, as can be seen on the position and location map (Fig. 1). Bariri: is situated on the middle course of the Tiete River, in the center of the State of São Paulo, between the parallels 22º28’48” and 22º09’00” south latitude and the meridians 48º45’36” and 48º38’24” west longitude, as can be seen on the position and location map (Fig. 1). Barra Bonita: is situated on the middle course of the Tiete River, in the center of the State of São Paulo, between the parallels 22º52’12” and 22º30’00” south latitude and the meridians 48º31’48” e 47º57’36” west longitude, as can be seen on the position and location map (Fig. 1). Ibitinga: is situated on the middle course of the Tiete River in the center of the State of São Paulo, between the parallels 21º 45’ and 22º 00’ south latitude and the meridians 48º 50’ and 49º 00’ west longitude, as can be seen on the position and location map (Fig. 1). Promissão: is situated on the middle course of the Tiete River in the center west region of the State of São Paulo, between the parallels 21º18’00” and 21º45’36” south latitude and the meridians 48º59’24” and 49º46’48” west longitude, as can be seen on the position and location map (Fig. 1).



Fig. 1: AES-Tiete Hydroelectric Plants and Reservoirs in the State of São Paulo A.4.1.5. A description of the present environmental conditions of the area, including a description of climate, hydrology, soils, ecosystems, and the possible presence of rare or endangered species and their habitats: Climate The region is considered a sub-tropical zone, according to the Brazilian agricultural research institute, EMBRAPA (1992). Its continental geographical aspects are relatively homogenous. According to the Meteorological Observatory at Bauru, average monthly temperatures exceed 25°C, reaching a highest absolute temperature of 41°C. During the winter months of June through September, there is virtually no rainfall. Rain commences during the summer months of October through March. Vegetation The areas within the project boundaries are comprised of nearly 100 percent aggressive grassland species. Hydrology and soils Hydromorphic and yellow-red soils are predominant in the Tiete region. Concretionary soils are found in areas around the Ibitinga and Barra Bonita dams.



Regional fauna The riparian areas surrounding the reservoirs are all comprised of aggressive grass species and do not contain important fauna because of the lack of shelter. However, by reforesting or afforesting the areas, the project proponent will be contributing to the creation of biodiversity corridors, which will enhance the habitat for river species, as well as regional fauna. A.4.2. Species and varieties selected: The riparian areas are planted with a mix of 80 (eighty) native species, combining 40 pioneers (P) with 40 non-pioneers (NP). Refer to Annex 5 for a list of the scientific name and family, as well as the classification of the species used in the afforestation or reforestation project activity. A.4.3. Specification of the greenhouse gases (GHG) whose emissions will be part of the proposed A/R CDM project activity: Greenhouse gases that are part of the proposed project activity: CO2 A.4.4. Carbon pools selected: Aboveground and belowground biomass. A.4.5. Compliance with the definition for afforestation or reforestation: Forest is defined by the host country, according to a minimum area, minimum crown cover and minimum height chosen from the range defined in Decision 17/CP.7 (Marrakech Accords), as follows: minimum area between 0.05 – 1.0 ha ; minimum crown cover between 10 – 30% ; and minimum height between 2 – 5 meters. This project is based on the assumption that the Brazilian government will choose the forest definition of minimum area of 1.0 ha, minimum crown cover of 30%; and minimum height of 5 meters. The areas to be afforested or reforested were chosen according to the following steps:

1. The bases for elaboration of the afforestation/reforestation project activity are 60-cm aerial photos, taken in the year 2000. Aerial photos taken in 1988 of the pilot area, Ibitinga Reservoir, and identifying land use change as compared to photos from the year 2000. It is assumed that between 1988 and December 1989 (Marrakech), no “new” forests appeared;

2. Identification of the areas that correspond to the forest definition in the year 2000 photos; 3. Identification of areas occupied by illegal constructions; 4. Identification of areas containing inadequate soil for planting, as a result of erosion or due to rocky

cliffs or inclinations of more than 45 degrees; 5. Identification of all remaining areas eligible for inclusion in the afforestation/reforestation project

activity.



A.4.6. A description of legal title to the land, current land tenure and land use and rights of access to the sequestered carbon: All the riparian areas within the boundaries of the proposed project activity are owned and controlled by AES-Tiete, according to the Concession Contract of Generation Number 92/99 – ANEEL, (Contrato de Concessão de Geração No 92/99 – ANEEL, Processo No 48500.004002/99-77), signed on December 20, 1999. All carbon credits arising from carbon sequestered by the project activity belong to the project proponent. AES-Tiete holds the concession for 30 years, renewable for an equal period by the national Electrical Energy Agency ANEEL. The afforested/reforested areas and all corresponding credits (tCERs) will be linked to the concession assets. As such, the afforested/reforested areas and possible credits tCERs arising from the project activity will be guaranteed. A.4.7. Type(s) of A/R CDM project activity: Afforestation/reforestation using native species of riparian areas with long term unmanaged grassland coverage. A.4.8. Technology to be employed by the proposed A/R CDM project activity: Prior to the privatization of the hydroelectric plants, CESP began researching afforestation/reforestation techniques and technologies. Beginning in 1988, a team of forest engineers and specialists were contracted and developed studies of seed collection and preparation, genetic variability and multiplication of species, as well as soil preparation. Small plots were afforested or reforested for research purposes during these years. When AES-Tiete won the concession in 1999, the company used the fruit of these studies to continue and expand small-scale afforestation or reforestation projects in riparian areas. The same forest engineers, having developed the technology over the course of more than a decade, became AES-Tiete employees and have afforested or reforested 994 (nine hundred ninety four) hectares, using native species, since the year 2000. AES-Tiete developed an infrastructure and technologies for the collection and treatment of seeds of native species from surviving forests, as well as for planting and cultivating the seedlings that are used in the afforestation/reforestation. This facility, located at the Promissão hydroelectric plant facility, has a capacity of one million buds per year of approximately 120 native species. The first step in the process is the collection and treatment of seeds from surviving forests in the region. Fruit from a variety of species are manually selected (see Fig. 2) and screened for seed removal (see Fig. 3). The seeds are treated to break dormancy, as for example, the process of scarification of the guapuruvu (Schizolobium parahyba) seeds, which are then soaked in water for one or two days. Seeds are planted in small tubes (see Fig. 4), holding 53 cm3 of substrate, composed of earth, humus produced in the nursery, carbonized rice straw and chemical fertilizer. Small tube supports, during the stages of sowing, germination and seedling growth, can hold up to 192 units (see Fig. 5). The trays are placed in suspended plant beds inside nurseries, with 50% shade cover (see Fig. 6). This manner of plantation ensures control of the sprouts’ growth conditions (see Fig. 7), including fully automated irrigation.



Fig. 2 – Manual selection of fruits Fig 3 – Screening the seeds

Fig. 4 – Trays and tubes Fig. 5 – Support structure

Fig. 6 – Shaded nursery Fig. 7 – Buds ready to be planted In some cases, when the seed needs better care in order for germination to be processed, seeds are planted in the germination nursery (see Fig. 8 and Fig. 9) before being transplanted into tubes.



Fig. 8 – Germination nursery right after seeding Fig. 9 – Germination nursery seedlings The riparian areas identified as eligible for afforestation/reforestation are all located within the maximum quota of the company’s concession area of 30 meters, in average, from the reservoirs’ maximum water level. Fencing is constructed and the land is demarcated with white wooden posts measuring 1 meter x 0.05 meter x 0.025 meter. The least intrusive method of mechanized clearing and preparation of the land is utilized in order to diminish, as much as possible, intervention in the soil and to avoid physical, biological or chemical degradation (Gonçalves, 1995 and Gonçalves et al., 1997). Agriculture tractors and implements are used in this process, and no burning takes place. Approximately 10 (ten) days after the land is cleared, workers, accompanied by a qualified technician and equipped with gloves and other safety equipment, treat the soil with granulated bait or pulverized liquid insecticide to control ants (see Fig. 10). The insecticide is applied throughout the area to be planted, as well as a minimum of 100 meters from the dividing fences, in order to create a system of defense in the area. Two days after the application of insecticide, the herbicide Roundup N.A. is applied by mechanized pulverization tractors for effective control of weeds. Cavities of 0.04 x 0.04 x 0.04 meters are dug in which to plant the seedlings (see Fig. 11). Each cavity is spaced 3.0 m x 2.0 m apart. The seedlings inside the tubes are placed in boxes or buckets and transported to the area for planting. A mix of 80 fast-and -slow-growing species are planted during the 4 (four) months between November and February to take advantage of the rainfall. The current model, using native species, is induced secondary succession (Budowski, 1965; Gómez-Pompa, 1971; Denslow, 1980; Braz & Pickett, 1980; Whitmore, 1982; Kageyama and Castro, 1989; among others). Knowledge of succession processes and of the ecological features of tree species present in each succession stage indicates the most adequate species to be employed for successful long-term regeneration of riparian forests. Species are identified as fast and slow growing. These groups have complementary demands, regarding the need for light. Fast growing species create a seedbed that restarts the regeneration process. They also provide shade during the initial growth phases of the slow-growing species, facilitating harmonic development of both types. The two groups are planted simultaneously and irrigated (see Figure 12). A second round of planting in the same area takes place 90 (ninety) days following the first planting. In this operation, the entire planted area is surveyed to identify dead or failed seedlings. The cavities are reopened, newly planted and closed. Each cavity is covered with dried grass to maintain soil humidity.



Fig. 10 – Cleared land on the right Fig. 11 – Open cavities for planting buds

margin of the reservoir

Fig. 12 – Irrigation Fig. 13 – Planted area around the reservoir During the first eight months following planting, the area is treated with insecticide and herbicide every two months in the same manner as it was treated prior to planting. Vines and other tropical plants that strangle the seedlings are also manually cut away and grassy areas are cut using mechanized equipment. Over the first three years following planting, intense maintenance is ongoing. Following this period, monitoring, insect control and fence maintenance continue (Fig. 13). The project proponent continues to increase efficiency and cost reductions on the process of seedlings, preparation and plantation. As part of the planning of this large scale reforestation it is scheduled a complete revision of the above described technology, including the search for alternative cost effective technologies and techniques.



A.4.9. Approach for addressing non-permanence:

Temporary CERs (tCERs) are chosen to address non-permanence.

A.4.10. Duration of the proposed A/R CDM project activity / Crediting period: The proposed project is comprised of long term-activities. Part of the project was undertaken from 2004 to the end of 2005 when 496 (four hundred ninety-six) hectares were planted. An additional 8,294 (eight thousand, two hundred ninety-four) hectares are scheduled to be planted at a rate of 2,000 (two thousand) hectares per year for 4 (four) years, with 294 (two hundred ninety-four) hectares to be planted in the fifth year. Planting has or will occur over the course of 7 (seven) years. Following planting, maintenance and ongoing monitoring continues into the future, making this a permanent activity. Twenty-year crediting period, with two renewals, is proposed to comply with the time necessary for the forest to reach a steady state level.

A.4.10.1. Starting date of the proposed A/R CDM project activity and of the (first) crediting period, including a justification: January 1, 2004 is the starting date of the project activity. From the 8,790 (eight thousand, seven hundred ninety) hectares within the project boundary of this project, 496 (four hundred ninety-six) hectares were reforested between 2004 and 2005. January 1, 2004 is the first year of the first crediting period. Only in this year there will be a significant amount of carbon removal that can be verified. A.4.10.2. Expected operational lifetime of the proposed A/R CDM project activity: Afforestation/reforestation project activities in riparian areas are permanent over the long term because Brazilian law does not permit management or conversion of Permanent Preservation Areas, as defined in the National Forest Code, Law Number 4.771/1965 (Código Florestal Lei 4.771/1965), as well as Resolution 4/1985 and Resolution 302/2002, passed by the Brazilian National Environmental Council, CONAMA. A.4.10.3. Choice of crediting period and related information: Afforestation/reforestation using native species requires long periods for forests to reach maturity when compared to homogenous commercial plantations, of pine or eucalyptus, for example. The time foreseen for the planted forest to reach its peak of atmospheric carbon removal through fixation in the biomass is more than 20 (twenty) years, as such, exceeding the year 2026. Meanwhile, the project proponent’s concession, which includes the areas to be reforested, has a duration of 30 (thirty) years, initiating in 2000 and terminating in 2030. The legal foundation of the concession allows AES-Tiete to renew it for an equal period of 30 (thirty) years, through a legal decree and approval by the Brazilian Electrical Energy Agency (ANEEL). Given the fact that AES-Tiete operates public utilities under the concession, no time lag is expected between the expiration of the current concession and renovation of the second 30-year period. The methodology adopted for this project activity is constructed so conservatively that only a parcel of the atmospheric carbon removal by the planted forest will receive CDM carbon credits. The project baseline is represented by the scenario in which the removal of atmospheric carbon occurs according to the historical rate of reforestation. As such, the verified removal in reforested areas will be reduced to what would



hypothetically occur if the company continued planting only at the historical rate. This implies that the maximum period for generating credits by this project activity is around 55 (fifty-five) to 60 (sixty) years, as can be seen in Graph 1 in Section B.2. Given the three assumptions above, AES-Tiete considers a period of 20 (twenty) years, renewable for 2 (two) equal periods, to be the best choice in the given situation, and one that provides the future opportunity for company directors to evaluate the best decision for moving forward. A.4.10.3.1. Renewable crediting period, if selected: Crediting period of twenty years, renewable for 2 (two) equal periods. A.4.10.3.1.1. Starting date of the first crediting period: January 1, 2004 A.4.10.3.1.2. Length of the first crediting period: Twenty years A.4.10.3.2 Fixed crediting period, if selected: >>NA A.4.10.3.2 .1. Starting date: >>NA A.4.10.3.2.2. Length: >>NA A.4.11. Brief explanation of how the net anthropogenic GHG removals by sinks are achieved by the proposed A/R CDM project activity, including why these would not occur in the absence of the proposed A/R CDM project activity, taking into account national and/or sectoral policies and circumstances: Under Brazilian legislation, riparian areas are designated Permanent Preservation Areas (APPs) and, as such, are supposed to be abandoned to natural regeneration, being unmanaged and prohibiting human interference. The reservoirs chosen for this project were all built in areas suffering long-term agricultural development since the eighteenth century, and the riparian areas bordering the reservoirs are comprised of aggressive grassland species, with no possibility of natural regeneration. The project activity consists of afforestation or reforestation using native species, which over the long term will result in regeneration of the land to its original forests, comprised of the shape and composition of Atlantic forests found in the highlands of Brazil. The average reforestation rate in riparian areas along the banks of the reservoirs, within the project boundaries, is 62.4 ha per year, calculated from December 1999 to December 2005. The proposed reforestation rate of 2,000 (two thousand) hectares per year (from 2006 to 2009), and 546 (five hundred forty-six) hectares in 2010, is only possible with the revenues from the tCER to be obtained by this project activity.



A.4.11.1. Estimated amount of net anthropogenic GHG removals by sinks over the chosen crediting period:

Table 2 – Estimated amount of net anthropogenic

GHG removal by sinks over the First Crediting Period Year Net (ton of CO2) 2004 -1.7232009 102.1382014 703.9632019 1.313.1102024 1.922.257


GHG removal by sinks over the Second Crediting Period Year Net (ton of CO2)2029 2.524.6582034 2.745.5962039 2.745.5962044 2.745.596


GHG removal by sinks over the Third Crediting Period Year Net (ton of CO2) 2054 2.524.6582059 2.524.6582064 2.524.658

A.4.12. Public funding of the proposed A/R CDM project activity: No public funding will be used for the proposed project activity. The project activity is financed using AES-Tiete resources. However, possible sales of the rights to the tCERs to be generated by this project are under consideration.



SECTION B. Application of a baseline methodology B.1. Title and reference of the approved baseline methodology applied to the proposed A/R CDM project activity: Baseline methodology for afforestation and reforestation project activity implemented on unmanaged grassland. B.1.1. Justification of the choice of the methodology and its applicability to the proposed A/R CDM project activity: The chosen methodology states clearly that it apllies to: “Afforestation or reforestation project activity implemented on unmanaged grassland in areas that are either protected or otherwise unlikely to convert to any other land than forest land, where the national legislation may or may not require afforestation or reforestation activities to be implemented”. The project boundary contains areas that are legally protected against deforestation, despite the fact they are grassland nowadays. Besides that, these same areas are riparian land created by the filling up of reservoirs of hydro plants. There is no other alternative but the area to be converted to forest land. Additionally, the national legislation does not state the reforestation of these areas as mandatory. B.2. Description of how the methodology is applied to the proposed A/R CDM project activity: The project activity is analyzed according to all the conditions presented in the methodology. The relevant sections of the methodology are included to facilitate this description. STEP 1. IDENTIFICATION OF THE PROJECT BOUNDARY There are two levels of identification. The first one occurs at the level of the reservoirs. Água Vermelha: is situated on the Grande River, north of the State of São Paulo and south of the State of Minas Gerais, between the parallels 19°37’ and 20°30’ south latitude and the meridians 49°05’ and 50°30’ west longitude. Bariri: is situated on the middle course of the Tiete River, in the center of the State of São Paulo, between the parallels 22º28’48” and 22º09’00” south latitude and the meridians 48º45’36” and 48º38’24” west longitude. Barra Bonita: is situated on the middle course of the Tiete River, in the center of the State of São Paulo, between the parallels 22º52’12” and 22º30’00” south latitude and the meridians 48º31’48” e 47º57’36” west longitude. Ibitinga: is situated on the middle course of the Tiete River in the center of the State of São Paulo, between the parallels 21º 45’ and 22º 00’ south latitude and the meridians 48º 50’ and 49º 00’ west longitude.



Promissão: is situated on the middle course of the Tiete River in the center west region of the State of São Paulo, between the parallels 21º18’00” and 21º45’36” south latitude and the meridians 48º59’24” and 49º46’48” west longitude. The second level of identification occurs within the borders of each one of the reservoirs. This level will be completed along the plantation process, in which, the planted areas will be identified through their geographic coordinates obtained through the use of a precise GPS equipment, The figure below exemplifies the use of this coordinates for the required identification.

Fig 14 - Note the georeferenced points included in the photo (top left) X 405682, 710352 and Y 10012949, 783146 and (bottom right) X 406540, 299629 and X 10012610, 048131. STEP 2. ELIGIBILITY OF THE PROJECT ACTIVITY The riparian areas bordering each reservoir comprising parts of the project boundary were expropriated by the government when the reservoirs were created between 15 and 30 years ago. However, not all the land bordering each reservoir is eligible for the project activity, and the eligible areas are not contiguous. The areas eligible for reforestation/afforestation were designated as Permanent Preservation Areas in 1985 and land use was restricted. According to Resolution 4/1985, passed by the Brazilian Environmental Council, CONAMA, all human intervention and anthropogenic pressure is prohibited in areas designated APPs. In order to determine the non-contiguous riparian areas of unmanaged grassland eligible for reforestation/afforestation, the project proponent contracted the satellite image company, Imagem Ltda, with headquarters in the city of São José dos Campos, São Paulo State, to study the expropriated lands falling within AES-Tiete’s control. While no high resolution photos or satellite images exist to demonstrate land use for the period of 1989, a pilot area at the Ibitinga Reservoir was analyzed, utilizing a high resolution aerial photo from 1988, to determine whether the APP designation was effective in limiting land use to unmanaged grassland. The analysis demonstrated a change of only 3% in land use within the Permanent Preservation Areas, enabling the conclusion that the areas within the project boundary, which are eligible for the activity, have remained unmanaged grassland since 1989. The company utilized the following materials:



Aerial photographs of a 1:30.000 scale obtained in 2000, spatial resolution of 0.50 m of the reservoirs to be studied.

Aerial photo from 1988 of the pilot area at the Ibitinga Reservoir. Digital Terrain Models (DTMs) extracted beginning from the cartographic level of curves in the

region 1:50.000, according to the Brazilian statistical research agency (IBGE). Information about the value of quotas in the concession, from the normal maximum limit and

beginning of expropriated land. Information about the demarcated Permanent Preservation Areas (APPs)

The methodology utilized to identify the areas eligible for afforestation/reforestation is divided into five principal items:

Delimitation of the areas of interest; Thematic classification of the areas of interest; Determination of the areas potentially eligible for reforestation (year 2000); Analysis of areas potentially eligible (comparing between classes 2000-1988); and determination of

eligible areas Delimitation of Permanent Preservation Areas (APPs).

The area of interest is defined as the strip of land between the lines that represent the reservoirs` normal maximum quota and the beginning of expropriated terrain, traced utilizing the methodology for delimitation. Utilizing the materials listed above, the lines corresponding to the maximum quota and beginning of expropriation were identified. The values of both of these lines are known and are presented in Table 5 below.

Table 5: AES-Tiete quotas and expropriation values.

Quotas (m)

Max Maximum Expropriation Reservoir Normal maximum Beginning Ending Beginning Ending

Beginning of the Operation

Água Vermelha 383.300 383.300 386.000 384.000 391000 08/22/1978 Bariri 427.500 428.500 433.250 431.000 432.000 10/25/1965

Barra Bonita 451.500 453.000 453.000 453.000 453.000 05/20/1963 Ibitinga 404.000 405.000 408.500 407.500 407.500 04/20/1969

Promissão 384.000 385.300 385.300 386.000 387.000 07/28/1975



The maximum normal and beginning of expropriation lines were traced utilizing a digital model of superficial terrain (an image in tons of grey, which enables visualization of the different altitudes of superficial terrain). (Fig. 14). This model represents a group of points, with three-dimensional coordinates, which enable visualization in relief form (drainage, geographical accidents, depressions, etc.). The points were extracted from pairs of aerial photographs, superimposed and presenting a 60% overlap, of the common area where the topographic elements are photographed from two different perspectives. (Fig. 15). This then, creates a three-dimensional visualization, enabling precise extraction of the altitudes of both photographed elements. Fig. 14: Digital Terrain Model “Area de sobreposição” = overlapping area

Fig. 15: Stereoscopic pair for extraction of the quotas.



Results from the application of the methodology to determine eligible areas around the Ibitinga Reservoir The methodology described above is being applied to all riparian areas of unmanaged grassland bordering AES-Tiete reservoirs. The results of this analysis applied within the Ibitinga Reservoir are demonstrated below. Fig. 16 presents the delimitation of the normal maximum limit and beginning of expropriated land around the reservoir.

Fig. 16: Ibitinga Reservoir Key:

Maximum Normal Quota Line

Beginning of Expropriation Line

Following delimitation of the areas owned and controlled by the project proponent, the land use was classified to determine the project boundary area. These classes provide—through a process of elimination—the areas for the project activity. Table 6 below demonstrates the results of the analysis at the Ibitinga Reservoir.



Table 6: Classification of eligible and non-eligible areas within the Ibitinga Reservoir

Classes Area in hectares Forest 249.00Rocky cliffs 0.00Anthropomorphic interference 50.90Sand 0.96Erosion 9.53Water 53.92Agriculture 106.11Potentially eligible area (according 2000 photo) 1,922Forest Area (1988) over potentially eligible (2000) 83.60Eligible Area 1,839Eligible Area reforested between 2000 and 2005 184Eligible Area to be reforested between 2006 and 2010 1,655Source: Imagem Ltda Aerial photos utilized to determine land use in 1988 and 2000. The aerial photos from 1988 and 2000, utilized to classify the project boundary areas, are presented below. The forested areas in 1988 and 2000 (Fig. 17 and Fig. 18) are not included in the project boundary areas.

Fig. 17 – Forest area in 1988. Note the georeferenced points included in the photo (top left) X 405682, 710352 and Y 10012949, 783146 and (bottom right) X 406540, 299629 and X 10012610, 048131.



Fig. 18 - Forest area in 2000. Note the georeferenced points included in the photo (top left) X 405682, 710352 and Y 10012949, 783146 and (bottom right) X 406540, 299629 and X 10012610, 048131.



Fig. 19 and Fig. 10 below demonstrate the areas identified in 1988 and 2000, which remained as forest, with no land use change between these years, and the areas potentially eligible for the project activity (in yellow).

Fig. 19 – Forest over potentially eligible area in 1988. Note the georeferenced points included in the photo (top left) X 406203, 23967 and Y 10010396, 094763 and (bottom right) X 406793, 519777 and X 10009840, 413758.

Fig. 20 – Forest over potentially eligible area in 2000. Note the georeferenced points included in the photo (top left) X 406203, 23967 and Y 10010396, 094763 and (bottom right) X 406793, 519777 and X 10009840, 413758.



Areas potentially eligible for the project activity in 2000, which do not present forests in 1988, are

considered eligible for reforestation (See Figures 21 – 22).

Fig. 21 – Potentially eligible area in 1988. Note the georeferenced points included in the photo (top left) X 398776, 496882 and Y 10015188, 326393 and (bottom right) X 400487, 174524 and X 10014205, 006609.

Fig. 22 – Potentially eligible area in 2000. Note the georeferenced points included in the photo (top left) X 398776, 496882 and Y 10015188, 326393 and (bottom right) X 400487, 174524 and X 10014205, 006609.



Results of application of methodology at AES-Tiete reservoirs To determine areas potentially eligible for the project activity, the materials and methodology described above, and presented in the case of the Ibitinga Reservoir, were applied to the Agua Vermelho, Barra Bonita, Barriri, and Promissão reservoirs. Below are the results of the analysis (Tables 7-10), as well as the final results in hectares of areas eligible for afforestation/reforestation at AES-Tiete reservoirs (Table 11). Table 7: Classification of riprarian areas at the Agua Vermelha Reservoir

CLASSES AREA in HECTARESForest

277.43

0 Rocky cliffsAnthropomorphic inter

17.7372.73

0341.889.3659.61

SandDeclivityErosionWaterAgriculture

AGUA VERMELHA RESERVOIR

Table 8: Classification of riprarian areas at the Barra Bonita Reservoir

CLASSES AREA IN HECTARESForest 41.6

0Rocky cliffsAnthropomorphic inter 0.13

48.40

2.7310.830.61


BARRA BONITA RESERVOIR

Table 9: Classification of riprarian areas at the Barriri Reservoir


80.110

Rocky cliffsAnthropomorphic inte

65.22

00

0.5348.7740.05


BARIRI RESERVOIR



Table 10: Classification of riprarian areas at the Promissão Reservoir


186.68

0.2

Rocky cliffsAnthropomorphic inte 10.66

152.930

11.419.3936.82


PROMISSÃO RESERVOIR

Table 11: Total areas in hectares eligible for the reforestation project activity. RESERVOIR AREAS POTENTIALLY ELIGIBLE FOR REFORESTATION

Ibitinga 1838.80 Hectares3088.81 Hectares793.87 Hectares640.06 Hectares3181.80 Hectares

PromissãoBaririBarra BonitaÁgua Vermelha

STEP 3. ASSESSMENT OF THE NATIONAL LEGISLATION CONCERNING THE OBLIGATION TO AFFOREST OR REFOREST THE AREA WITHIN THE PROJECT BOUNDARY The Brazilian legislation regarding Permanently Protected Areas (Área de Proteção Permanente - APPs) establishes no obligation to reforest them. The APP status of any area it means these areas can not be managed or to be under any activity that can prevent its natural regeneration. STEP 4A. ASSESSMENT OF COMPLIANCE WITH THE NATIONAL LEGISLATION REQUIRING AFFORESTATION OR REFORESTATION WITHIN THE PROJECT BOUNDARY NA STEP 4B. ASSESSMENT OF COMMON PRACTICE IN THE COUNTRY OR REGION NA STEP 5A. ASSESSMENT OF RECENT AFFORESTATION OR REFORESTATION INITIATIVES UNDERTAKEN BY THE PROJECT PARTICIPANTS



In the recent past, AES Tiete it has reforested 385 ha in the 2001 year, and 369 ha in the 2002 year. Along the 2003 year the reforestation fell to ZERO as consequence of the financial losses of AES Tiete in the 2002 year. Reforestation activities were resumed by AES Tiete in 2004, when 156 ha were planted, following the decision to pursue the CDM credits for the carbon removal promoted by reforestation of reservoir borders using native species. Until the end of this year, 340 ha will be planted, completing 496 ha planted specifically within this CDM activity. STEP 5B. ASSESSMENT OF RECENT AFFORESTATION OR REFORESTATION INITIATIVES (VOLUNTARY OR MANDATED) ALREADY INITIATED OR RECENTLY CONDUCTED BY THE PARTICIPANTS, THAT ARE NOT GOING TO BE CLAIMED UNDER THE CLEAN DEVELOPMENT MECHANISM, BUT WHOSE AREAS, HAD NOT BEEN AFFORESTED/REFORESTED, COULD BE PART OF THE PROJECT BOUNDARY OF THE PROPOSED PROJECT ACTIVITY Areas reforested along the period 2001 – 2002, summing up 754 (seven hundred fifty-four) ha, could be part of the project boundary if had not been already planted. The plantation model followed the standard of a minimum of 80 natives species in a density of 1,700 trees per hectare. The average cost of this activity ranges around US$ 1,850 per hectare. The average of 377 (three hundred seventy-seven) ha can not be taken as an average to be projected to the future, as it can be seen in the next steps. STEP 6. IDENTIFICATION OF PLAUSIBLE AND CREDIBLE ALTERNATIVE LAND USES The only plausible alternative to the project activity is the maintenance of the unmanaged grassland. STEP 7. ASSESSMENT OF COMPLIANCE WITH NATIONAL LEGISLATION AND REGULATIONS CONCERNING THE PROJECT BOUNDARY AREA RELATED OR NOT TO LAND USE (except A/R legislation) There is no conflict between an area remaining as grassland and its status as APP within the Brazilian legislation, since there is no activity that can be seen as an impediment to the natural regeneration of this area. STEP 8. ANALYSIS OF INVESTMENT The main economic aspect of the reforestation with native species – in permanently protected areas – is the cost of this activity. The average of US$ 1,850 per hectare is the most common figure among the different projects around the State of Sao Paulo. This cost covers the fencing of the area, the seedling, planting. The maintainance of the planted area for the first three years, it will add another US$ 1,350 per hectare. On the side of revenues, there is no other revenue than the CERs.



Within an economic evaluation of the project activity, besides the revenues through CERs, other tangible benefits would be figured out. That refers to the reduction of the river siltation over the reservoir, the impediment of the illegal occupation of the borders. At this moment, there is no data to reliably conduct an analysis of the economic benefits from these two aspects: avoided costs on siltation reduction and no occupation of the borders. Besides it, these benefits are capturable by the company only at long term, beyond the timeframe of project activities. Less tangible benefits would be the guaranteeing clean, safe and secure energy generation, improvement of the quality of life of communities and populations, the protection of hydraulic resources and the minimization of the extreme events such as storms and increased soil erosion or the enhancement of the ground-water resources and the recuperation and conservation of the regional fauna and flora. So, at long term it is clear there is an economic advantage onto reforest all the reservoir borders, when considered all the benefits, but the difficulty is to combine this long term economic benefit to the short term lack of financial resources, in a business environment in which the attractiveness of the reforestation activity is very far from the required ROI for the company activities. AES Tiete continues to collect reliable data about all the tangible aspects refered above and expects to have for the near future figures that allow value the economic benefit of this project activity. STEP 9. SENSITIVITY ANALYSIS As there are no other financial benefit from the reforestation activity – of native species in a permanently protected area – the only applicable sensitivity analysis regards to the financial value of the CERs. The consequence of it is clear. Without them, the most probable scenario is the grassland remaining as grassland. STEP 10. ANALYSIS OF BARRIERS In the case of AES Tiete, there is a financial barrier to the project activity originated in two recent events within the Brazilian power sector. The first is the power shortage occurred in the biennial of 2001 – 2002, when a 20% reduction in energy consumption was imposed by the federal government for all the consumer classes. The immediate result was a revenue loss of the same magnitude in the 2002 year, from which the company is still recovering. The second event was a change in the exchange rate policy that affects all the company accounting results. As the new exchange rates are systematically favouring the local currency, the overall outcomes in the most common international currencies are showing results bellow the expected benchmarks. Both events result in a financial barrier to economic activities that do not produce high financial benefits at short term, as it happens with the reforestation of the reservoir borders with native species. Within a highly competitive business environment, this sort of investment tends to be considered with very low priority, if not unfeasible. The only alternative that is not prevented by the barrier is to leave the existing grassland as such. STEP 11 – EVALUATION OF THE ADDITIONALITY BY MEANS OF INVESTMENT ANALYSIS AND BARRIERS ANALYSIS



Considering both together – investment analysis and barrier analysis – it is clear that the CERs are the only new element that can change the context, since counterweights the high implementation costs and overcomes the financial barrier for the project activity. STEP 12 – EVALUATION OF THE IMPACT OF THE CDM REGISTRATION A preliminary financial approach of the reforestation activity shows that for a 2,000 ha area it will be necessary to spend approximately US$ 3.7 million along the year. Besides it, it is necessary to add the first three years of basic cares – ants, fire, weed competitors – that costs US$ 0.9 million a year, or US$ 2.7 million. Facing the unit cost of US$ 3.2 million per hectare, for a plantation with three years, the impact of the CDM registration it lies on the fact that is the only one tangible financial outcome for all this investment. Differently from other agricultural or extractive activity, there is no fruit, leaves, logs, branches or something else that can be accounted as the result of the activity. STEP 13. DEFINITION OF THE BASELINE SCENARIO The recent voluntary activities undertaken by AES Tiete results in an average reforestation of 277 ha per year, from the 2001 to 2002 year, prior to the 2003 year, when the reforestation fell to zero as a result of the financial barrier installed at the end of the 2002 year. From then, the foreseeable baseline scenario is the maintenance of unmanaged grassland. The areas reforested along the 2004 year – 156 ha – and the 2005 year – 340 ha – are already part of the project activity, and as such are included in the project boundary. STEP 14. ESTIMATION OF THE BASELINE NET GREENHOUSE GAS REMOVALS BY SINKS Step 14.1B. Quantification of the area under each grassland strata, Only long-term grassland, , exists within the project boundary. LT

iGA )(

Step 14.1C. Estimation of the peak carbon stock in aboveground biomass. The project proponent decided to use GPG/LULUCF (IPCC, 2003) (refer to Table BII.1 in Annex B.II – Estimates for standing biomass grassland), for the relevant figures in this point. Step 14.1E. Presentation of information in tabular format for each grassland type.

Grassland type

Grassland condition

Peak carbon stock in aboveground

biomass (t d.m.2 ha-1)

Expected changes in carbon stocks in

aboveground biomass (t d.m. ha-1)

2 Dry matter.



1 Long-term GipeakC )( 0

STEP 15: EX-ANTE ESTIMATION OF THE ACTUAL NET GREENHOUSE GAS REMOVALS BY SINKS, NETA Using the computer program provided by the new baseline methodology associated to this project, the following results are obtained, in tons of CO2 eq: Table 12 – Actual Net GHG removal by sinks

Year NET

2004 -1.723 2005 -3.316 2006 -18.533 2007 -6.029 2008 34.194 2009 102.138 2010 216.645 2011 338.474 2012 460.304 2013 582.133 2014 703.963 2015 825.792 2016 947.621 2017 1.069.451 2018 1.191.280 2019 1.313.110 2020 1.434.939 2021 1.556.768 2022 1.678.598 2023 1.800.427 2024 1.922.257 2025 2.044.086 2026 2.165.915 2027 2.287.745 2028 2.408.133 2029 2.524.658 2030 2.621.133 2031 2.689.888 2032 2.730.923 2033 2.744.238 2034 0 2035 2.745.596 2036 2.745.596 2037 2.745.596 2038 2.745.596



2039 2.745.596 2040 2.745.596 2041 2.745.596 2042 2.745.596 2043 2.745.596 2044 2.745.596 2045 2.745.596 2046 2.745.596 2047 2.745.596 2048 2.745.596 2049 2.745.596 2050 2.745.596 2051 2.745.596 2052 2.745.596 2053 2.745.596 2054 2.745.596 2055 2.745.596 2056 2.745.596 2057 2.745.596 2058 2.745.596 2059 2.745.596 2060 2.745.596 2061 2.745.596 2062 2.745.596 2063 2.745.596

STEP 16. ANALYSIS OF ADDITIONALITY BY MEANS OF INCREASED CARBON The table above shows that the actual net greenhouse gas removal by sinks is positive along the project activities period, what means the project activity is additional by means of increased carbon, through its removal from the atmosphere and subsequent fixation through the forest growth, STEP 17. FINAL ADDITIONALITY TEST The project activity is additional from the carbon perspective and from the economic point of view, including the barrier analysis. B.3. Description of how the actual net GHG removals by sinks are increased above those that would have occurred in the absence of the registered A/R CDM project activity: In the absence of the project activity the most probable scenario is the grassland remaining grassland. As the grassland within the project boundary are all long term grassland (more than 20 years), and then in a steady state, there is no carbon removal by it. Instead it, the reforestation of the same area using native species will promote the increase in the carbon removal along the next decades, starting with the living biomass, above and belowground, and followed by the deadwood, litter and, finally soil carbon. Following a conservative approach, only the living biomass are accounted.



The hypotheses used in this project to calculate the removals are:

Forests formed by the initial planting of 80 different species per hectare, with half pioneer and half non-pioneer species.

Forests that accumulate 70 ton of Carbon per hectare at the end of 24 (twenty-three) years (aboveground). Beginning from this age the quantity of carbon removed is considered stable. The quantity of carbon in the roots (belowground) is estimated as 26% of the carbon quantity aboveground.

B.4. Detailed baseline information, including the date of completion of the baseline study and the name of person(s)/entity(ies) determining the baseline: Table 13 – Key information and data used to determine the baseline scenario.

Data Source Value Aboveground dry biomass per hectare of grassland

IPCC 4 tons of dry biomass per hectare

Root-to-shoot for grassland IPCC 1.58 Carbon content in dry biomass

IPCC 0.5

Rate of conversion from tons of carbon to tons of CO2

IPCC 44/12

Responsible for baseline study: Dr. Demostenes Barbosa da Silva [email protected]+ 55 11 2195 3205



This template shall not be altered. It shall be complet

ed without modifying/adding headings or logo, format or font.

SECTION C. Application of a monitoring methodology and of a monitoring plan C.1. Title and reference of approved monitoring methodology applied to the project activity: Monitoring methodology for afforestation and reforestation project activities implemented on unmanaged grassland3 areas4 C.2. Justification of the choice of the methodology and its applicability to the proposed A/R CDM project activity: There is no other methodology available for afforestation or reforestation project activities implemented on unmanaged grassland areas, when the project participants have undertaken voluntary afforestation or afforestation/reforestation activities in protected areas, at a specified average annual rate5. The project proponent has maintained small-scale reforestation activities since it won the concession to operate the hydroelectric plants and reservoirs in 1999. Prior to taking control, the São Paulo Electric Company (CESP) had undertaken studies and pilot afforestation/reforestation projects since 1988. A total of 1033.20 hectares have been reforested at a rate of 62.4 hectares per year.

3 Unmanaged grassland, here, is defined as land that is not under any directly human-induced activity or process, such as grazing or agricultural and silvi-pastural systems. It includes areas that in the past have suffered intensive land use(s) and management practices, and are now in a steady-state level or under process of natural regeneration that is not expected to exceed the forest definition thresholds chosen by the host country. 4 Legally protected areas, here, refer to areas within a property that are object of specific national legislation due to their role in maintaining the sustainable use of natural resources, the conservation and rehabilitation of ecological processes, the conservation of biodiversity, and the protection of the native fauna and flora. Deforestation activities in these areas are prohibited. 5 The annual average afforestation or reforestation rate is the mean area afforested or reforested since January 1990.


C.3. Monitoring of the baseline net GHG removals by sinks and the actual net GHG removals by sinks: In accordance with the proposed monitoring methodology, the baseline will be not monitored. C.3.1. Actual net GHG removals by sinks data: C.3.1.1. Data to be collected or used in order to monitor the verifiable changes in carbon stock in the carbon pools within the project boundary resulting from the proposed A/R CDM project activity, and how this data will be archived: ID number (Please use numbers to ease cross-referencing to table D.3)

Data variable

Source of data

Data unit

Measured (m), calculated (c) or estimated (e)

Recording frequency

Proportion of data to be monitored

How will the data be archived? (electronic/ paper)

Comment

C.3.1.1.1 Projectboundary area

Remotely sensed data

ha (e) once 100 Electronic

C.3.1.1.2 Area perstrata


ha (e) once Electronic

C.3.1.1.3 Peak carbonin aboveground biomass

Local or IPCC

t d.m./ha (e) once 0 Electronic Data per grassland type

C.3.1.1.4 Root-to-shoot ratio

IPCC GPG t d.m./ha tonne d.m./tonne d.m.

once 0 Electronic Data per grassland strata

C.3.1.1.5 Area offorest land strata

Remotely Sensed data

ha (e) once 100 Electronic

C.3.1.1.6 Parameter ofallometric equation

Sampled trees

Dimensionless

(e) Once electronic If project specific

C.3.1.1.7 Diameter atbreast height

Harvested trees

cm (m) Once electronic



C.3.1.1.8 Abovegroun

d biomass Harvested trees

t d.m. (m) Once All harvested trees

electronic Results from laboratory

C.3.1.1.9 Aboveground biomass

Allometric equation

t d.m (e) Once All destructively trees

Electronic Results from allometric equation

C.3.1.1.10 Differencebetween estinmated and measured biomass

B.2.1.9 – B.2.1.8

t d.m. (c)

Once Alldestructively harvested treees

Electronic

C.3.1.1.11 Diameter atbreast height

Trees in permanent plots

cm (m) 5 years 100 Electronic All trees with diameter greater than 5 cm

C.3.1.1.12 Changes incarbon stock in aboveground biomass

Allometric equation

t.d.m. (e) 5 years 100 Electronic For forest land

C.3.1.1.13 Root-to-shoot ratio

IPCC GPG tonne d.m./tonne d.m.

(e) once Electronic

C.3.1.1.14 Area plantedper strata

Records and remotely sensed data

ha (e) annually 100 Electronic

C.3.1.15 Carbonfraction of dry matter

IPCC/GPG

tonne C/tonne d.m.

(e) once Electronic

C.3.1.1.16 Area affectedby unexpected events


ha (e) 5 years

C.3.1.1.17 Areaconverted per strata

Project recods

ha (e) annually 100 Electronic



C.3.1.2. Data to be collected or used in order to monitor the GHG emissions by the sources, measured in units of CO2 equivalent, that are increased as a result of the implementation of the proposed A/R CDM project activity within the project boundary, and how this data will be archived: ID number (Please use numbers to ease cross-referencing to table D.3)

Data variable

Source of data

Data unit


Recording frequency



Comment

C.3.1.2.1 Number ofvehicles per type and fuel

records (e) monthly 100 Electronic

C.3.1.2.2 Amount offuel used

records liters (e) monthly 100 Electronic Per type of fuel

C.3.1.2.3 Averageamount of fuel per km

records l/km (e) monthly 100 Electronic

C.3.1.2.4 Emissionsfactors

IPCC (e) Electronic CO2 emission only

C.3.1.3. Description of formulae and/or models used to monitor the estimation of the actual net GHG removals by sinks: The estimation of the actual net greenhouse gas removals by sinks includes changes in carbon stocks in living biomass in the afforested or reforested areas within the project boundary; and increases in emissions of greenhouse gases that are expected to be increased as a result of the implementation of the A/R CDM project activity. The changes in carbon stocks in aboveground biomass in forest land, per hectare, are represented by , where: LT

F DGR −

( ) =•+= FFF AARSGR 1 annual increase in living biomass, per hectare; increases in belowground biomass derive from the annual increases in aboveground biomass; , using a root-to-shoot factor, . in t d.m. haFAA FRS FGR -1 yr-1



( ) =•+= G

peakGG CRSD 1 annual decreases in carbon stocks in grassland living biomass, from conversion of grassland to forest land; changes in carbon

stocks in belowground biomass derive from those in the aboveground biomass using a root-to-shoot ratio, . is the peak carbon stock in grassland

aboveground biomass, per hectare. in t d.m. haGRS G

peakCGD -1 yr-1

The changes in carbon stocks in the forest land, until the peak carbon stock in aboveground biomass is reached at time are: t

GPBFPB DAtGRA •−••

where: =t number of years until all the afforested or reforested area reaches the peak carbon stock in aboveground biomass = ( ) ( )projPBF AAAAC +max ; yr

=G

peakC peak carbon stock in aboveground biomass in forest land, per hectare; t d.m. ha-1

=PBA project boundary area; ha

=projA annual area afforested or reforested under the A/R project activity; ha

The changes in carbon stocks (in tC) in the living biomass from the afforestation or reforestation project activity are equal to ( ) CFDtGRA G

FPB •−•• , where CF is the carbon fraction of dry matter = 0.5 (tonnes C)(tonnes d.m.)-1. The conversion of tonnes of carbon (t C) to t CO2 results in:

( ) ⎟⎠⎞

⎜⎝⎛••−••

1244CFDtGRA G

FPB

The estimation of the actual net greenhouse gas removals by sinks results from the changes in the carbon stocks in living biomass and increases in emissions of greenhouse gases that are expected to be increased as a result of the implementation of the A/R project activity, GHG, as follows:

( ) ∑−⎟⎠⎞

⎜⎝⎛••−•• GHGCFDtGRA LT

FPB 1244



=GHG increases in emissions of greenhouse gases within the project boundary, t CO2 equivalent

and increases in emissions of greenhouse gases that are expected to be increased as a result of the implementation of the A/R CDM project actiThe following elements in the estimation of the actual net greenhouse gas removals by sinks are monitored:

• area afforested or reforested under the A/R CDM project activity; it shall correspond to the project boundary area o the area is monitored from use of the remotely sensed data acquired prior to each verification, and the project records of the annual area

afforested or reforested

• average annual increase in carbon stock in aboveground biomass: the increases are assumed constant until the entire forest land reaches the peak carbon stock in aboveground biomass; the changes in carbon stock estimated using the local or national allometric equation, provides changes in carbon stocks in 5 year periods. The annual carbon stock change corresponds to the mean carbon stock change in the period, i.e. sum of changes in carbon stocks divided by 5.

• decreases in carbon stocks from conversion: the decreases are not monitored. They correspond to the area afforested or reforested.

C.3.1.3.1. Description of formulae and/or models used to monitor the estimation of the verifiable changes in carbon stock in the carbon pools within the project boundary (for each carbon pool in units of CO2 equivalent): The following elements are monitored:

• area of grassland converted to forest land; • area afforested or reforested under the A/R CDM project activity; • increases in carbon stocks in aboveground biomass in forest land; and • increases in emissions of greenhouse gases

Monitoring of the areas (area annually afforested or reforested) is conducted by cross referencing the data and information in the annual project records with the remotely sensed data acquired prior to verification. The total area reported by project developers shall be contrasted with that estimated from the remotely sensed data and visits to the areas recently planted (if the spectral response in the satellite imagery does not allow differentiation between areas recently afforested or reforested from degraded grassland). The increases in carbon stocks in aboveground biomass are monitored in a number of permanent plots defined by Equation 1:



⎟⎠

⎞⎜⎝

⎛⎟⎠

⎞⎜⎝

⎛⎟⎟

⎠

⎞

⎜⎜

⎝

⎛= ∑∑∑

==h

L

hhh

L

hhhh CsWCsW

A

tn

11

2

2α

through use of project specific or nationally available allometric equations that relate aboveground biomass with diameter at breast height. Increases in emissions of greenhouse gases in the estimation of the actual net GHG removals by sinks include only those expected from fuel combustion within the project boundary, associated with the use of tractors and staff systematic visits to the afforested or reforested sites and monitoring purposes. The monthly records maintained by the project developers (including number and type of vehicles, type of fuel used) shall be verified for consistency with the area already planted and the area planted annually. This consistency check is part of the quality control of this monitoring methodology.



C.3.1.3.2. Description of formulae and/or models used to monitor the estimation of the GHG emissions by the sources, measured in units of CO2 equivalent, that are increased as a result of the implementation of the proposed A/R CDM project activity within the project boundary (for each source and gas, in units of CO2 equivalent): Increases in emissions of greenhouse gases in the estimation of the actual net GHG removals by sinks include only those expected from fuel combustion within the project boundary, associated with the use of tractors and staff systematic visits to the afforested or reforested sites and monitoring purposes. The monthly records maintained by the project developers (including number and type of vehicles, type of fuel used) shall be verified for consistency with the area already planted and the area planted annually. This consistency check is part of the quality control of this monitoring methodology. C.3.2. As appropriate, relevant data necessary for determining the baseline net GHG removals by sinks and how such data will be collected and archived: ID number (Please use numbers to ease cross-referencing to table D.3)

Data variable

Source of data

Data unit


Recording frequency



Comment

C.3.2.1 Area ofgrassland under process of natural regener.

Remotely sensed data and auxiliary data

ha (e) once 100 Electronic Area per grassland strata

C.3.2.2 Peakaboveground biomass

IPCC GPG t dm ha-1

(e) once Electronic Data per grassland type

C.3.2.3 Root-to-shoot ratio

IPCC GPG t d.m./t d.m.

(e) once Electronic For grassland

C.3.2.4 Carbonfraction of dry matter

IPCC GPG (tonnes C/tonnes d.m.)

(e) once Electronic

C.3.2.5 Areaannually reforested

PDD ha (e) annually 100 electronic For GG

C.3.2.6 Areaannually

PDD ha (e) Annually 100 electronic For grassland converted to forest land



converted

C.3.2.7 Averageannual increase in aboveground biomass

IPCC/GPG t dm. ha-1 yr-1

(e) once Electronic For grassland converted to forest land

C.3.2.8 Peakaboveground biomass in forest land

National literature or reports

t dm ha-1 (e) once Electronic For grassland converted to forest land

C.3.2.9 Root-to-shoot ratio

IPCC/GPG tonnedm./tonne dm.

(e) once Electronic For forest land

C.3.2.10 Area of long term grassland

Remotely sensed data + auxiliary information

ha (e) Once3 Electronic Area per grassland strata



C.3.2.1. Description of formulae and/or models used to monitor the estimation of the baseline net GHG removals by sinks (for each carbon pool, in units of CO2 equivalent): The changes in carbon stock in the grassland living biomass, under the scenario grassland remaining grassland, are not monitored. Under the baseline scenario grassland converted to forest land, the estimated changes in the carbon stocks in the afforested or reforested areas is calculated from the estimated annual area reforested under the baseline scenario [reforestation at rate r(*)] and an average annual increase in aboveground biomass. The baseline is not monitored. Assume that the verifiable changes in carbon stocks under the project scenario applies to the baseline scenario. C.4. Treatment of leakage in the monitoring plan: Leakage results from fossil fuel combustion outside the project boundary, and is monitored by monthly records of number of vehicles used, type of fuel, average amount of fuel per kilometer, and other constant factors. C.4.1. If applicable, please describe the data and information that will be collected in order to monitor leakage of the proposed A/R CDM project activity: ID number (Please use numbers to ease cross-referencing to D.3)

Data variable

Source of data

Data unit


Recording frequency



Comment

C.4.1.1 Numberof kilometers run outside project

Project records

(e) monthly 100 electronic Per type of fuel and vehicle

C.4.1.2 Amount offuel used

Project records

l (e) monthly 100 electronic

C.4.1.3 Averageamount of fuel per km

Project records

l/km (c) monthly 100 Electronic

C.4.1.4 CO2emissions factor

IPCC GPG

(e) once Electronic



C.4.2. Description of formulae and/or models used to estimate leakage (for each GHG, source, carbon pool, in units of CO2 equivalent: The emissions of carbon dioxide from fuel combustion are calculated as the sum of annual CO2 emissions from each type of fuel , as follows: j

610/1868.4

)/2(calJEFCVAFC

yrtCOE jjjj

•••=

where:

=jE annual CO2 emissions from fuel , t COj 2 yr-1

=jAFC annual consumption of fuel j=jCV lower heating value of fuel j=jEF CO2 emission factor of fuel j

and jjj

j

cknnConsumptio ••= ∑where:

=jn number of vehicles using fuel type j=jk annual distance travelled using fuel type , km j=jc average number of litres of fuel type per kilometer , l/km j

C.4.3. Please specify the procedures for the periodic review of implementation of activities and measures to minimize leakage: Every six months, the project proponent will require all sub-contractors to present updated documentation that all vehicles are maintained, and that alcohol is used as fuel whenever possible. C.5. Description of formulae and/or models used to estimate net anthropogenic GHG removals by sinks for the proposed A/R CDM project activity (for each GHG, carbon pool, in units of CO2 equivalent): This template shall not be altered. It shall be completed without modifying/adding headings or logo, format or font.


The estimate of net anthropogenic GHG removals by sinks is:

−⎟⎠⎞

⎜⎝⎛••

⎟⎟⎠

⎞⎜⎜⎝

⎛−−•⎟

⎟⎠

⎞⎜⎜⎝

⎛

••=1244

2

12)( CF

AAt

AA

GRAtNet proj

PB

proj

PB

Fproj

( )

( )

( )OUTproj

PBBASBASproj

proj

PBeqCO

INSproj

PBBASBASproj

proj

PBeqCO

Gproj

PBBASBASproj

proj

PB

BAS

PB

BAS

PB

FBAS

AAtAAA

AAE

AAtAAA

AAE

CFGRAAtAAA

AA

CFAAt

AA

GRA

⎥⎥⎦

⎤

⎢⎢⎣

⎡⎟⎟⎠

⎞⎜⎜⎝

⎛−•−−•−

−⎥⎥⎦

⎤

⎢⎢⎣

⎡⎟⎟⎠

⎞⎜⎜⎝

⎛−•−−•−

−⎟⎠⎞

⎜⎝⎛•••

⎥⎥⎦

⎤

⎢⎢⎣

⎡⎟⎟⎠

⎞⎜⎜⎝

⎛−•−−•−

−⎟⎠⎞

⎜⎝⎛••

−⎟⎟⎠

⎞⎜⎜⎝

⎛−•⎟⎟

⎠

⎞⎜⎜⎝

⎛

••−

2

2

1244

1244

2

]12[

where:

=)(tNet net anthropogenic greenhouse gas removals by sinks, t CO2

=PBA project boundary area; ha =projA annual area afforested or reforested under the A/R project activity; ha




C.6. Quality control (QC) and quality assurance (QA) procedures are being undertaken for data monitored: Data (Indicate table and ID number e.g. 3.-1.; 3.2.)

Uncertainty level of data (High/Medium/Low)

Explain QA/QC procedures planned for these data, or why such procedures are not necessary.

Field plot measurements And breast height

Low Steps to ensure reliable collection of data for plot measurements and breast height include training of field teams; checking of measurements by qualified personnel; use of standard procedures in the field; and checking the entries in the appropriate tables developed for data collection.

Remotely sensed images

Low All remote sensed images, used for monitoring in the reforested area, will be treated equally or more stringently than those used to define the project boundary and areas eligible for the project activity. All materials will cross-checked and archived.

C.7. Please describe the operational and management structure(s) that the project operator will implement in order to monitor actual GHG removals by sinks and any leakage generated by the proposed A/R CDM project activity: A monitoring manager will be contracted by the project to implement and accompany the monitoring plan. This manager will be accountable to the project activity manager. C.8. Name of person/entity determining the monitoring methodology:

Dr. Thelma Krug [email protected]+55 12 9723 9076 Dr. Luiz Gylvan Meira Filho [email protected]+55 11 8202 2407



PROJECT DESIGN DOCUMENT FORM FOR AFFORESTATION AND REFORESTATION PROJECT ACTIVITIES (CDM- AR-PDD) - Version 01


SECTION D. Estimation of net anthropogenic GHG removals by sinks: D.1. Estimate of the actual net GHG removals by sinks: The table 14 below presents the estimates provided by the methodology for the following measurable amounts Table 14 – Actual net GHG removals by sinks (ton of CO2)

Year NET

2004 -1.723 2005 -3.316 2006 -18.533 2007 -6.029 2008 34.194 2009 102.138 2010 216.645 2011 338.474 2012 460.304 2013 582.133 2014 703.963 2015 825.792 2016 947.621 2017 1.069.451 2018 1.191.280 2019 1.313.110 2020 1.434.939 2021 1.556.768 2022 1.678.598 2023 1.800.427 2024 1.922.257 2025 2.044.086 2026 2.165.915 2027 2.287.745 2028 2.408.133 2029 2.524.658 2030 2.621.133 2031 2.689.888 2032 2.730.923 2033 2.744.238 2034 0 2035 2.745.596 2036 2.745.596 2037 2.745.596 2038 2.745.596 2039 2.745.596 2040 2.745.596



2041 2.745.596 2042 2.745.596 2043 2.745.596 2044 2.745.596 2045 2.745.596 2046 2.745.596 2047 2.745.596 2048 2.745.596 2049 2.745.596 2050 2.745.596 2051 2.745.596 2052 2.745.596 2053 2.745.596 2054 2.745.596 2055 2.745.596 2056 2.745.596 2057 2.745.596 2058 2.745.596 2059 2.745.596 2060 2.745.596 2061 2.745.596 2062 2.745.596 2063 2.745.596

D.2. Estimated baseline net GHG removals by sinks: Table 15 – Estimated baseline net GHG removals by sinks.

Year BL

2004 0 2005 0 2006 0 2007 0 2008 0 2009 0 2010 0 2011 0 2012 0 2013 0 2014 0 2015 0 2016 0 2017 0 2018 0 2019 0 2020 0



2021 0 2022 0 2023 0 2024 0 2025 0 2026 0 2027 0 2028 0 2029 0 2030 0 2031 0 2032 0 2033 0 2034 0 2035 0 2036 0 2037 0 2038 0 2039 0 2040 0 2041 0 2042 0 2043 0 2044 0 2045 0 2046 0 2047 0 2048 0 2049 0 2050 0 2051 0 2052 0 2053 0 2054 0 2055 0 2056 0 2057 0 2058 0 2059 0 2060 0 2061 0 2062 0 2063 0

D.3. Estimated leakage:



Table 16 – Leakages from the project activities

Year L

2004 0 2005 0 2006 0 2007 0 2008 0 2009 0 2010 0 2011 0 2012 0 2013 0 2014 0 2015 0 2016 0 2017 0 2018 0 2019 0 2020 0 2021 0 2022 0 2023 0 2024 0 2025 0 2026 0 2027 0 2028 0 2029 0 2030 0 2031 0 2032 0 2033 0 2034 0 2035 0 2036 0 2037 0 2038 0 2039 0 2040 0 2041 0 2042 0 2043 0 2044 0 2045 0 2046 0 2047 0 2048 0



2049 0 2050 0 2051 0 2052 0 2053 0 2054 0 2055 0 2056 0 2057 0 2058 0 2059 0 2060 0 2061 0 2062 0 2063 0



D.4. The sum of D.1 minus D.2 minus D.3 representing the net anthropogenic GHG removals by sinks of the proposed A/R CDM project activity: Tale 17 – Net anthropogenic GHG removals by sinks.

Year ACTUAL

2004 -1.723 2005 -3.316 2006 -18.533 2007 -6.029 2008 34.194 2009 102.138 2010 216.645 2011 338.474 2012 460.304 2013 582.133 2014 703.963 2015 825.792 2016 947.621 2017 1.069.451 2018 1.191.280 2019 1.313.110 2020 1.434.939 2021 1.556.768 2022 1.678.598 2023 1.800.427 2024 1.922.257 2025 2.044.086 2026 2.165.915 2027 2.287.745 2028 2.408.133 2029 2.524.658 2030 2.621.133 2031 2.689.888 2032 2.730.923 2033 2.744.238 2034 0 2035 2.745.596 2036 2.745.596 2037 2.745.596 2038 2.745.596 2039 2.745.596 2040 2.745.596 2041 2.745.596 2042 2.745.596 2043 2.745.596



2044 2.745.596 2045 2.745.596 2046 2.745.596 2047 2.745.596 2048 2.745.596 2049 2.745.596 2050 2.745.596 2051 2.745.596 2052 2.745.596 2053 2.745.596 2054 2.745.596 2055 2.745.596 2056 2.745.596 2057 2.745.596 2058 2.745.596 2059 2.745.596 2060 2.745.596 2061 2.745.596 2062 2.745.596 2063 2.745.596



D.5. Table providing values obtained when applying formulae above: I (proj) – Project activity GHG removal by sinks BL – Baseline GHG removal by sinks D – GHG emission by the grassland log L - Leakage GHG – emission outside the project boundary Actual – Actual GHG removal by sinks NET – Actual net GHG removal by sinks Table 18 – Summary of the net GHG removals promoted by the project activities.

Year I(proj) BL D L GHG ACTUAL NET

2004 0 0 1.697 0 26 -1.723 -1.723 2005 2.162 0 5.396 0 83 -3.316 -3.316 2006 9.037 0 27.154 0 416 -18.533 -18.533 2007 43.631 0 48.912 0 749 -6.029 -6.029 2008 105.946 0 70.670 0 1.082 34.194 34.194 2009 195.980 0 92.428 0 1.415 102.138 102.138 2010 313.735 0 95.626 0 1.464 216.645 216.645 2011 435.564 0 95.626 0 1.464 338.474 338.474 2012 557.394 0 95.626 0 1.464 460.304 460.304 2013 679.223 0 95.626 0 1.464 582.133 582.133 2014 801.053 0 95.626 0 1.464 703.963 703.963 2015 922.882 0 95.626 0 1.464 825.792 825.792 2016 1.044.711 0 95.626 0 1.464 947.621 947.621 2017 1.166.541 0 95.626 0 1.464 1.069.451 1.069.451 2018 1.288.370 0 95.626 0 1.464 1.191.280 1.191.280 2019 1.410.200 0 95.626 0 1.464 1.313.110 1.313.110 2020 1.532.029 0 95.626 0 1.464 1.434.939 1.434.939 2021 1.653.858 0 95.626 0 1.464 1.556.768 1.556.768 2022 1.775.688 0 95.626 0 1.464 1.678.598 1.678.598 2023 1.897.517 0 95.626 0 1.464 1.800.427 1.800.427 2024 2.019.347 0 95.626 0 1.464 1.922.257 1.922.257 2025 2.141.176 0 95.626 0 1.464 2.044.086 2.044.086 2026 2.263.005 0 95.626 0 1.464 2.165.915 2.165.915 2027 2.384.835 0 95.626 0 1.464 2.287.745 2.287.745 2028 2.505.223 0 95.626 0 1.464 2.408.133 2.408.133 2029 2.621.748 0 95.626 0 1.464 2.524.658 2.524.658 2030 2.718.223 0 95.626 0 1.464 2.621.133 2.621.133 2031 2.786.978 0 95.626 0 1.464 2.689.888 2.689.888 2032 2.828.013 0 95.626 0 1.464 2.730.923 2.730.923 2033 2.841.328 0 95.626 0 1.464 2.744.238 2.744.238 2034 0 0 0 0 0 0 0 2035 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2036 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2037 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2038 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596



2039 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2040 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2041 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2042 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2043 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2044 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2045 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2046 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2047 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2048 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2049 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2050 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2051 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2052 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2053 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2054 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2055 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2056 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2057 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2058 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2059 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2060 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2061 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2062 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596 2063 2.842.686 0 95.626 0 1.464 2.745.596 2.745.596



SECTION E. Environmental impacts of the proposed A/R CDM project activity: E.1. Documentation on the analysis of the environmental impacts, including impacts on biodiversity and natural ecosystems, and impacts outside the project boundary of the proposed A/R CDM project activity: Currently, all the area within the project boundary is long-term unmanaged grassland. The area is neither used nor inhabited by wildlife. The project activity should contribute to the creation of biodiversity corridors, which will restore the forests and enhance conditions for wildlife recovery in these areas over the long term of between 15 (fifteen) and 20 (twenty) years. No significant impacts are expected outside project activity boundary. E.2. If any negative impact is considered significant by the project participants or the host Party, a statement that project participants have undertaken an environmental impact assessment, in accordance with the procedures required by the host Party, including conclusions and all references to support documentation: Although no negative impacts are expected from the project activity, permits for afforestation/reforestation in protected areas are required and will be issued by the State of São Paulo environmental authority. E.3. Description of planned monitoring and remedial measures to address significant impacts referred to in section E.2. above: Not required SECTION F. Socio-economic impacts of the proposed A/R CDM project activity: The project activity will increase training and short-term employment opportunities. During the 6 (six) years of planting, the project proponent will train and contract an additional 120 (one hundred and twenty) technicians to conduct planting during the rainy season between November and February. Currently, two companies are subcontracted by the project proponent to implement planting and maintenance activities within the project boundaries. These companies will benefit from the increased rate of planting. Additionally, a community outreach professional and a monitoring manager will be hired to participate in the project activity. F.1. Documentation on the analysis of the socio-economic impacts, including impacts outside the project boundary of the proposed A/R CDM project activity: No negative impacts are expected. F.2. If any negative impact is considered significant by the project participants or the host Party, a statement that project participants have undertaken a socioeconomic impact assessment, in accordance with the procedures required by the host Party, including conclusions and all references to support documentation: No negative impacts are expected.



F.3. Description of planned monitoring and remedial measures to address significant impacts referred to in section F.2 above: SECTION G. Stakeholders’ comments: AES-Tiete has a strong commitment to transparency and social responsibility in all its actions. The process of developing this Product Design Document included extensive workshops and meetings with scientists, governmental officials, as well as non-governmental organizations. Following approval of the proposed methodology and monitoring plan, the company will undertake a formal process to solicit and incorporate additional stakeholders’ comments. G.1. Brief description of how comments by local stakeholders have been invited and compiled: >> G.2. Summary of the comments received: >> G.3. Report on how due account was taken of any comments received: >>



Annex 1

CONTACT INFORMATION ON PARTICIPANTS IN THE PROPOSED A/R CDM PROJECT ACTIVITY

PROJECT PROPONENT Organization: AES Tietê Street/P.O.Box: Rua Lourenço Marques 158 – 2 andar Building: Edificio Brasiliana City: Sao Paulo State/Region: Sao Paulo Postfix/ZIP: 04547-100 Country: Brasil Telephone: 55 11 2195 2303 FAX: 55 11 2195 2300 E-Mail: [email protected] URL: www.aestiete.com.br Represented by: Demostenes Barbosa da Silva Title: Director Salutation: Mr. Last Name: da Silva Middle Name: Barbosa First Name: Demostenes Department: Environmental Management and Carbon Market Mobile: 55 11 9635 8236 Direct FAX: 55 11 2195 2300 Direct tel: 55 11 2195 2305 Personal E-Mail: [email protected]




Project Participant

Organization: International Bank for Reconstruction and Development as Trustee of the BioCarbon Fund, subject to bilateral agreement between The Bank and AES Tietê.

Street/P.O.Box: 1818 H Street, NW Building: MSN MC4-414 City: Washington State/Region: DC Postfix/ZIP: 20043 Country: United States of America Telephone: +1-202 458-5118 FAX: +1-202 522-7432 E-Mail: [email protected]: www.carbonfinance.orgRepresented by: Odin Knudsen Title: Funds Manager Salutation: Mr. Last Name: Knudsen Middle Name: First Name: Odin Department: Mobile: Direct FAX: +1-202-522-7432 Direct tel: +1-202-458-5118 Personal E-Mail: [email protected]


http://www.carbonfinance.org/




Annex 2

INFORMATION REGARDING PUBLIC FUNDING

No public funding will be used for the project activity.

Annex 3

BASELINE INFORMATION

Areas reforested by AES-Tiete between January 2000 and January 2006 (in execution)

HEU (*)

Up to 1990 (**)

1990 to 2000 (**)

2001 2002 2003 2004 2005 ha Há ha ha ha ha ha Barra Bonita 79 79 0 0 80Bariri 38.6 35.2 40 40 0 30 30Ibitinga 242.5 37 37 0 30 80Promissao 407.4 113 113 0 60 150 Água Vermelha 116 100 0 36 0 TOTALS 688.5 35.2 385 369 0 156 340

(*) HEU: Hydroelectric utility (**) by CESP (Companhia Energética de São Paulo)

Annex 4

MONITORING PLAN

Technical justification for the non-monitoring of the baseline net greenhouse gas removals by sinks The baseline net greenhouse gas removals by sinks in not monitored for the following reasons:

• Monitoring of the aboveground biomass pool, if carried out, would most likely lead to overestimates of the changes in the aboveground biomass pool, since:

o the implementation of the project activity assumes that the project participants will protect the project boundary area by restricting access of people and/or animals;

o this protection most likely prevents the occurrence of incidental fires and/or other human-induced land-cover damage; it allows for a much more vigorous process of natural regeneration, since grazing from animals in the neighborhood is not expected to occur.

• the establishment of forest land through the afforestation or reforestation CDM project activity

creates a natural seed bank, inducing the process of natural regeneration to the original land-cover. Without the establishment of the forest land, the process of natural regeneration would most likely not lead to a similar regeneration process.

• the implementation of the project activity will naturally promote a natural habitat for animals,

which are vectors of seed dispersion.



From these considerations, it is very unlikely that the monitoring of the changes in carbon stocks in the aboveground biomass pool provides a reliable reflection of the changes in carbon stocks that would occur in the absence of the proposed afforestation or reforestation project activity. Possible alternatives could include:

• creation of a buffer area around the permanent plots to monitor the baseline net greenhouse gas removals by sinks, to prevent interference from the established forest land. This alternative, if implemented, could diminish the interference of the established forest land, but would not prevent it.

• the establishment of baseline monitoring permanent plots outside the project boundary. This

alternative would require the control of areas outside the project boundary, which may not be owned by the project proponents. It is unlikely that the permanent plots will be maintained under the control of the project proponents during the entire crediting period, and that the conditions to reproduce the natural regeneration process would be ensured.

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