BioCarbon Fund StatusBioCarbon Fund Status

BioCF Workshop, World BankFebruary 5-8, 2008

Harnessing the carbon market to sustain ecosystems and alleviate poverty

World Bank Carbon Funds & World Bank Carbon Funds & FacilitiesFacilities

Prototype Carbon Fund. $180 million (closed). Multi-shareholder. Multi-purpose.

Netherlands Clean Development Mechanism Facility. (closed). Netherlands Ministry of Environment. CDM energy, infrastructure and industry projects.

Community Development Carbon Fund. $128.6 million (closed). Multi-shareholder. Small-scale CDM energy projects.

BioCarbon Fund. $89.9 million (Tranche 1 closed @ $53.8 million; Tranche 2 open). Multi-shareholder. CDM and JI LULUCF projects.

Italian Carbon Fund. $155.6 million (closed). Multi-shareholder (from Italy only). Multipurpose.

Netherlands European Carbon Facility. (closed). Netherlands Ministry of Economic affairs. JI projects.

Spanish Carbon Fund. $282.4 million (closed). Multi-shareholder (from Spain only). Multipurpose.

Danish Carbon Fund. $69.4 million (closed). Multi-shareholder (from Denmark only). Multipurpose.

Umbrella Carbon Facility. $737.6 million (Tranche 1 closed – 2 HFC-23 destruction projects in China).

Carbon Fund for Europe. $65 million. Multi-shareholder. Multi-purpose. Managed with EIB.

Total funds pledged = US$ 2.1 billion (16 governments, 67 firms)

BioCarbon Fund GoalsBioCarbon Fund Goals

Improve Improve livelihoodslivelihoods

Restore Restore ecosystemsecosystems

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Adapt to climate Adapt to climate changechange

Provide access Provide access to carbon marketto carbon market

Remove CORemove CO22 from atmospherefrom atmosphere

Co-benefitsCo-benefits BioCF wants to buy “green carbon with human face” Social: Improve livelihoods

People receive carbon payments New job creation Additional income from alternative activities Know-how

Environmental Conserve biodiversity Expand natural habitat Reconnect forest fragments Protect soil against erosion Protect savannah against fires Fight against desertification Moisture retention Stabilize radionuclides in biomass

Two WindowsTwo Windows

Second WindowSecond Window

• No Kyoto creditsNo Kyoto credits

• Exploration & Exploration & demonstration. Rules demonstration. Rules may change after 2012may change after 2012

• CDM: Revegetation, CDM: Revegetation, Forest management, Soil Forest management, Soil managementmanagement

First WindowFirst Window

• Meet Kyoto obligationsMeet Kyoto obligations

• “ “Kyoto-grade” credits Kyoto-grade” credits (tCERs, lCERs, ERUs)(tCERs, lCERs, ERUs)

• CDM: Afforestation & CDM: Afforestation & Reforestation Reforestation

• JI: All LULUCFJI: All LULUCF

Portfolio – First WindowPortfolio – First Window

Forest restoration

Community forestry

Agroforestry

Bioenergy plantations

Timber plantations

Portfolio – Second Portfolio – Second WindowWindow

Forest restoration & conservation

Reduced tillage

Revegetation

Tranche 1 Leading ProjectsTranche 1 Leading Projects

Albania Assisted Natural Regeneration China Pearl River Watershed Management Colombia San Nicolas Agroforestry Colombia Silvopastoral Rehabilitation Costa Rica Coopeagri Ethiopia Humbo Assisted Regeneration Honduras Pico Bonito India Improving Rural Livelihoods Kenya Green Belt Movement Madagascar Biodiversity Corridor Mali Acacia Plantations Moldova Soil Conservation Nicaragua Precious Woods Niger Acacia Community Plantations Philippines Watershed Rehabilitation Uganda Nile Basin Reforestation

How the Fund WorksHow the Fund Works

Industrialized Governments

and Companies

EITs and Developing Countries

$$TechnologyTechnology

FinanceFinance $$TechnologyTechnology

FinanceFinance

CO EquivalentCO Equivalent22

Emission Reductions

CO EquivalentCO Equivalent22

Emission Reductions

Several TranchesSeveral Tranches

Tranche 1Tranche 1 (operational since May 2004, closed to new Participants)

Tranche 2Tranche 2 (open to new Participants, operational March 13, 2007)

Tranche 3Tranche 3(may be opened

in the future)

Tranche-Window CombinationTranche-Window Combination

Tranche 1Tranche 1 (operational since May 2004, closed to new Participants)

Tranche 2Tranche 2 (open to new Participants, operational March 13, 2007)

Tranche 3Tranche 3(may be opened

in the future)

T1 W1T1 W1 T1 W2T1 W2

T2 W1T2 W1 T2 W2T2 W2

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ParticipantsParticipants Tranche 1 ($53.8 million)

Operational since May 2004

Okinawa Electric, Government of Canada, Government of Italy, Tokyo Electric, Eco-Carbone, Agence Française de Développement, Government of Spain, Government of Luxembourg, Idemitsu Kosan, Sumitomo Joint Electric Power Co., Sumitomo Chemicals, Japan Petroleum Exploration, Japan Iron and Steel Federation, Suntory

Tranche 2 ($36.1 million) Operational since March 2007

Consensus Business Group, Government of Ireland, Government of Spain, Natsource, Syngenta Foundation, ZeroEmissions Carbon Trust

Open for contributions

Tranche 1 Achievements (1/2)Tranche 1 Achievements (1/2) Contracts signed

16 ERPAs signed 4 more under negotiation

Methodologies 10 A/R methodologies approved Tool for Afforestation and Reforestation Approved

Methodologies Public domain 1 REDD methodology (in draft form)

Project registration First ever CDM A/R project registered (China)

Capacity building 22+ project entities have been trained Countries have adopted forest definitions

Tranche 1 Achievements (2/2)Tranche 1 Achievements (2/2)

Building up base of experience Show that CDM rules can work in practice

On-the-ground experience beyond theoretical debate Suggest improvements in rules

Testing ground for post-2012, including on “avoided deforestation”

Inclusion Rural world can participate in the CDM

Africa > 1/3 of portfolio

Expand beyond Afforestation/Reforestation Agriculture Renewable biomass Avoided deforestation

Allow Afforestation/Reforestation to supply more than 1% of Annex I 1990 emissions

Allow A/R on land deforested after December 31, 1989, with “reverse additionality rule”

Continue temporary crediting beyond 60 years

Inclusion of AFOLU in EU ETS?

Improvements in a Future Improvements in a Future RegimeRegime

Beyond A/RBeyond A/R

BioCarbon Fund Window 2 Tranche 1: Project-level “avoided deforestation”

Tranche 2: Soil carbon management

“Avoided deforestation” (REDD) Working with the Forest Carbon Partnership Facility

Requests by developing and industrialized countries

Capacity building + pilot purchases

In line with UNFCCC process

Launch at CoP13

www.carbonfinance.org

www.biocarbonfund.org