the mesoamerican biological corridor and carbon program: investing in a sustainable future for...
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The Mesoamerican The Mesoamerican Biological Corridor and Biological Corridor and
Carbon Program: Carbon Program: Investing in a Investing in a Sustainable Future for Sustainable Future for
Central AmericaCentral America
Background
• Central American Bank for Economic Integration (CABEI)
• Central American Commission for Environment and Development (CCAD)
• Central American Integration System (SICA)• Alliance for sustainable Development
(ALIDES)
What’s at Stake?
Flooding Earthquake Forest Fire Hurricane TsunamiTornado Volcano Drought Excess rainfall
Putting Natural Disaster in Perspective
0
5
10
15
%
RATIO OF TOTAL LOSSES VERSUS GDP
Mitch in CentralAmerica
El Niño 1997-98 inAndean Region
Hurricane Andrew inthe USA
Hurricane Andrew 1992
United States of AmericaUS$ 29.5 billion
Hurricane Mitch 1998
Central AmericaUS$ 6 billion
• Mesoamerica contains less than 0.5% of the world’s land mass, yet it is home to 10% of the planet’s biological diversity.
• houses 24,000 plant species, and countless undiscovered or endangered animal species
Land Mass World’s Biodiversity
.5% 10%
What’s at Stake?
Ongoing Possibility: the MBC• The Mesoamerican Biological
Corridor seeks to provide a holistic means of addressing all the issues.
• By linking environmental efforts to social, economic and governmental agendas that involve women and men from different races, we can achieve measurable progress for the people of Mesoamerica.
MBC and Central American Carbon Program
• Connects Central America’s protected areas
• Unique regional collaboration allows for more effective CO2 mitigation efforts
• Bringing a united Central America into the international carbon trading arena through the CCP
Reserva de la Biosfera Maya
TrifinioSolidaridad
Cayos Misquitos
Golfo de Fonseca
Pila
Bahia de Salinas
RB Darien
Gandoca-Bocas
Siapaz
Golfo de Honduras
Land-Use Within the Corridor
crops
National park
Privateforest
communities
Private lands
Tree plantation Privateforest National
park
Private lands
Regional Benefits, Global Implications
• While the regional benefits of the Corridor are substantial, the ripple effects of the project to the global community are equally important.– Climate Change Convention
– Biodiversity Convention
– CITES
– RAMSAR
Climate Change Convention
• Technology Transfer• Vulnerability and Adaptation• Mitigation• Kyoto Protocol• CDM promt start
Why a Carbon Program?• Complements MBC Activities
– MBC not just about the environment, attracts direct foreign investment for development
– Carbon Program supports these same goals
EcotourismEnvironmental
Education
IndigenousInvolvement
Community Health
Initiatives Increased AgriculturalProduction
Social-Economic
Development
Evolution of Electric Generation with Thermal Sources inGuatemala, Honduras and Nicaragua
Source: Data from OLADE
• FACT: Emissions are increasing due to wrong pricing signals
Why a Carbon Program?
Why a Carbon Program?• Reduces emissions and vulnerability
Deforestation in Central America
8000 BC
1943
1987-1992
Reduces Deforestation
Combats Forest Fires Recovers Degraded Areas
Why a Carbon Program?• Promotes rural development
– Development of alternative sources of energy– Access to renewable energy at reasonable cost
for rural communities – Better forest management
Why a Carbon Program?• Reduces global compliance costs for
industrialized countries, promotes global trade
Source: Ricahrd Baron, “The Kyoto Mechanisms: How Much Flexibility do they Provide?”. Emissions Trading and the Clean Development Mechanisms: Resource Transfers, Project Costs and Investment Incentives. International Energy Agency, 1999.
Why a Carbon Program?• Global trade brings local environmental benefits and
sustainable development to the region
– Substantial at market price of US$28/ton
Source: Harvard/INCAE, 1999
Political Rationale for CCP• Complements World Bank PCF and private sector initiatives
(i.e BP, Shell) with a regional focus & supports implementation of CDM mechanisms
• Requested by the Ministers of the Environment at the Norwegian/CABEI workshop in November 1999
• Consistent with the CABEI, UNDP and CCAD missions to fight poverty and promote integration
• Places priority on mitigation projects consistent with the Alliance for Sustainable Development signed in 1994
• The CCP has two key ingredientsHow the Carbon Program Works
CER Projects
Complementary financing to generate CERs
Regional programs such as off-grid electrification
Identifies projects with carbon reduction potential in forestry, transportation and energy
CER Projects
Complementary financing to generate CERs
Regional programs such as off-grid electrification
Identifies projects with carbon reduction potential in forestry, transportation and energy
Central American Carbon Program (CCP)
Central American Carbon Program (CCP)
The Fund (FOCECA)
Trust for financing carbon estimates and projects
Certification program Capacity building and training Marketing of CERs
The Fund (FOCECA)
Trust for financing carbon estimates and projects
Certification program Capacity building and training Marketing of CERs
Overview of Carbon Fund• Target to raise US$25 million between
2000-2001• Set up as trust fund at CABEI• All stakeholders will have representation on
the trust’s executive committee• Coordination with CABEI and partners’
traditional programs (i.e. potential CABEI-IDB partnership for off-grid electrification for rural communities)
Overview of Regional CER Projects• Implementation of Land Conservation and Sustainable Forestry Projects • Expansion of Carbon Sequestration Projects• Development of renewable energy alternatives• Examples:
– Belize: Rio Bravo Carbon Sequestration Project– Costa Rica: Tierra Morenas Windfarm– Expand energy efficient projects
Offering Tangible Solutions• The Carbon Program will have a number of
key results:– Increase access to renewable energy sources by
the poor– Neutralize emissions, encourage fuel switching– Make wind power competitive alternative– Encourage “forest friendly” agriculture– Expand the reach of the Corridor
Projected Results of CCP• Increased access to renewable energy
sources by the poor
9%
10%13%
20%35%
90%
9%
50%
0
2
4
6
8
10
12
% off-grid Population
Mo
nth
ly p
aym
en
ts
Ability to Pay and Financing of Solar Solution in El Salvador
Projected Results of CCP• Increased access to renewable energy sources by
the poor (con’t)– On-grid average cost is 9 cents/kWh– Solar energy costs are around 13 cents/kWh, other sources
range between 7 and 20 cents/kWh– Trading Certified CO2 between US$5-US$35/ton could finance
the difference – Rural communities will pay a similar cost to the communities
on-grid, but will be using renewables increasingly– A flagship project to attend 5% of the more than 2 million
families without electricity in Central America will cost US$100 million
Projected Results of CCP• Make wind power a competitive alternative
– Successful case studies:• Costs of Plantas Eolicas (20 MW) project in Costa Rica was
7.4 cents per kWh in 1995• Costs of Tejona (20 MW) project was 3.4 cents per kWh at
same site in 2000– Four main reasons:
• Cost reduction due to technology improvement• Carbon reductions sold at US$10/ton• Successful learning process in Costa Rica• Central American Banks playing a pioneering role financing
projects
Expected Results• Expand protected areas in the MBC by more than
5 million hectares• Recover and convert degraded land to more
“forest friendly” activities (3.2 million hectares)• Promote the use of energy renewables
incentivating low CO2 intensity in energy• Promote the use of renewables by spreading new
technologies• Incorporate social-economic development to rural
and isolated communities with environmental development projects
Change in focus
• Traditional donor—recipient relationship – Traditionally Central America has been recipient
of donations from NORDIC countries in the following areas: biodiversity, forestry, agroforestry, technology transfer, environmental education, capacity and institutional building
• Move toward a cooperative relationship– Central American Carbon Program
Next Steps• Implement a cooperative approach
– Develop institutional arrangement for CDM, ie monitoring, certification, audit
– Promote, invest, and design CCP jointly– Join rural electrification program
• Exchanges– Promote workshops, encounters between business
communities or stakeholders, one in Central America and one in Nordic countries during the year
– Continue official visits of key public officials– Continue education exchanges
• Region to region as complementary to country to country
• First Climate Change & Biodiversity study
For Further ContactGracia Barahona
BCIEHonduras
Tel (504) 228-2243Fax (504) [email protected]
Cynthia GreenUNDP
Costa RicaTel (506) 296-1544
Rebeca MarínSICACCADEl Salvador
Tel (503) 289-6131Fax (503) 289-6127
The Mesoamerican The Mesoamerican Biological Corridor and Biological Corridor and
Carbon Program: Carbon Program: Investing in a Investing in a Sustainable Future for Sustainable Future for
Central AmericaCentral America