ENVIRONMENT TIPS

China Uses Market-Like Mechanisms To
Promote Reforestation Of Sloping Lands

                          
  China Uses Market-Like Mechanisms To
Promote Reforestation Of Sloping Lands
                                         
 

Rapid expansion of agriculture has led to the destruction of forested hills critical for regulating water flows. China’s expansion has been bigger and faster than most, and so are its problems. But the notoriously top-down government has responded with a centrally funded yet incredibly decentralized, flexible, and locally-administered solution.  

30 April 2013 |
Until the middle of the last century, Fuzhou, China enjoyed regular flows of clean water from the Min River. But that began to change with the advent of urbanization in upstream cities like Sanming and Nanping, and with deforestation in hills surrounding those cities. This brought irregular flows of dirty, unsanitary water to Fuzhou. Now the city is paying roughly $800 million annually to each of those cities. The money is used to administer regional water management programs that encourage farmers to reforest the denuded hills and implement sustainable land-use practices.

It’s all part of the Min River Watershed Water Resource Protection Eco-Compensation Program – one of several uniquely Chinese efforts to promote healthy watershed stewardship on a grand scale. Like dozens of Payments for watershed services (PWS)-also known as investments in watershed services (IWS)-programs underway across the world, China’s eco-compensation programs aim to tap the flexibility of markets to promote responsible and cost-effective watershed stewardship. Unlike those other efforts, however, this one has the heft of China’s powerful central government behind it. That’s made it possible for them to achieve unrivaled scale – to the point that China accounted for 91% of watershed investments in 2011, according to Ecosystem Marketplace's State of Watershed Payments 2012 report. This one country almost singlehandedly generated all of the $ 7.46 billion in watershed transactions that came out of Asia that year.

The term “eco-compensation” is an all encompassing term that covers government initiatives to improve environmental management with a focus on water resources and watershed management. While eco-compensation is a uniquely Chinese concept, it shares DNA with PWS, because it offers market-based – or at least market-like – solutions to environmental challenges. Eco-compensation is almost entirely driven by the government – primarily the national government, although local implementation varies place to place. Sometimes, compliance is mandatory. It has strong elements of wealth transfer from urban to rural and from richer to poorer members of society, and that means to those most environmentally impacted. It’s also happening at an unprecedented scale. Much of China's involvement and innovation in this sector is due to the nation's growing environmental problems. The rapid economic growth in China has put increased pressure on the nation's water supply and other resources.

China's biggest and most successful eco-compensation program so far has been the Conversion of Croplands to Forests and Grasslands, (CCFG) otherwise known as the Sloping Lands Conversion Program. The CCFG initially aimed to convert 14.67 million hectares of cropland to forests and afforest about the same amount of land that is currently wasteland, according to a study on the program called China's Sloping Land Conversion Program: Institutional Innovation or Business as Usual? The program has since been frozen at 9.2 million hectares.

The Genesis

The CCFG program was implemented after flooding across China in the 1990s displaced millions of people and killed thousands. According to the same study on CCFG, sloping cropland contributes 65% of the 2-4 billion tons of silt that is dumped into the Yangtze and Yellow-China's longest and most productive rivers- every year, and that’s the focus of this program.

In order for this program to work, farmers don't necessarily have to stop farming but they do have to alter their land-use practices. While many farmers find other sources of employment, the program uses several creative approaches like agroforestry that allows farmers to continue working on the land. As part of the program, the government provides compensation to farmers. At one time, farmers could be paid with grain or cash but now all payments are in cash.

By 2003, the program was being implemented in more than 2000 counties in 25 provinces. As of 2007, the program had retired and afforested over 9 million hectares of land-an area slightly smaller than the state of Maine-according to a report on CCFG.

In 2011, the CCFG program was the largest land reforestation program in the world and was responsible for 47% of China's Investments in Watershed Services, according to State of Watershed Payments 2012.

Eco-Compensation vs PES

The innovative approaches CCFG used – like contract rural landowners as direct stewards of ecological services- helped generate widespread momentum for eco-compensation in China.

Eco-compensation envelopes a variety of frameworks. This includes direct payments from government to individuals or community suppliers of watershed ecosystem services. It covers compensation to households or regional governments for taking regulatory action towards conservation or protecting a fragile ecosystem among other deeds. Eco-compensation can also include some sort of fee or tax to increase funding or incentives on restoration and environmental management.

Although the central government is driving the policy and footing much of the bill, the program enjoys flexibility in how the policy directive can be implemented locally. This has positives and negatives. On the plus side, it has fostered variety and experimentation on the ground, which in theory promotes models that work. But because of the low information sharing between government ministries, academic institutions and the private sector, several eco-compensation programs are undocumented. It’s created a system that’s difficult to evaluate and tough to track. Also, China as a whole is new to market-based instruments causing some market-like activities to remain under the radar.

Moving Forward

With solid financial backing from the Chinese government to implement these market based instruments that are improving efficiency, eco-compensation has the potential to bring real and much-needed reform to China's water resource management and also help China develop an economic model that is sustainable. In 2009, China's National Development and Reform Commission (NDRC) and other government agencies hosted the "International Conference on Payments for Ecological Services" in an attempt to share experiences and provide opportunities to invest and operationalize eco-compensation programs. The NDRC is also developing a national Eco-compensation Ordinance, and the national government has stressed promotion and improvement of eco-compensation as a key component of the environmental targets of its 12th Five-Year Plan. Chin's Five-Year Plans are a series of social and economic incentives laid out by the Chinese government. The current guideline, the 11th Five-Year Plan (2011-2015) focuses on tackling environmental challenges like carbon emissions and water pollution.

Eco-compensation will likely be integrated into China's zoning laws in the future as well. In a new zoning system, development rights and restrictions are distributed based on the ecological services of the land.

Kenyan Farmers Boost Yields With
Payments For Watershed Services

                          
                              
 
 
For two years now, flower growers along the shore of Kenya’s Lake Naivasha have been paying farmers in the hills 40 kilometers away to adopt sustainable agriculture practices. They’re doing it to save their lake, but it’s also helping farmers lift themselves out of poverty.

This is the fourth in a six-part series examining the interplay between economy and ecology in the Lake Naivasha Watershed. The earlier stories explore the more technical aspects of the PWS program
   

18 April 2013| NAIVASHA | Kenya |
Chege Mwangi looks out over his small patch of farmland on this steep incline high in Kenya's Abardares Hills and smiles. His cabbages are bursting, and his potatoes are ready to be harvested. Then he glances across the valley.

“Mine used to look like those,” he says, pointing to the dusty hills where farmers haven’t yet joined the Payments for Watershed Services (PWS) program that's reshaping the landscape around him. “But since the strips came in, my soil isn’t disappearing.”

The “strips” are rows of Napier grass spaced every ten meters. Embedded in each strip of Napier grass, Mwangi has three rosewood trees, which hold the soil and pull nitrogen from the air. They can even provide timber when he needs it.

“See that stump?” he asks. “That’s from the one tree I had before, but I harvested that for KSh 5000 ($60) to pay school fees for my children. Soon, I'll have plenty of trees.”

The grass and trees were provided by WWF and CARE as part of a massive PWS program that aims to help farmers reduce their runoff into Lake Naivasha. The tree roots reinforce the grass strips, which will capture soil washing downhill, causing the earth to gradually rise upward until it forms terraces. That process won’t be complete for another six years, but the change has already begun; the uphill side of each grass strips is already higher than the downhill side, albeit it just by a foot or so.

“All this would have become unwanted silt if it got to the river, but here, it's valuable soil” says Mwangi, adding that the cabbages began to grow faster just weeks after the Napier grass was planted. Down the middle of the cabbage patch, however, some of the heads are smaller than the others, and the leaves are yellow. “Before I got the grass, they all looked like that,” he says.

Peter Mungai says the smaller, yellow heads are coming in where the water ran the hardest before Mwangi joined the program.

“This is what happens when you have a depletion of nitrogen,” says Mungai, the WWF community outreach officer in charge of this region. “That means this was a waterway before PES. This was all rutted here, and the topsoil got washed away.” He suggests Mwangi plant peas next year – they fix nitrogen, he says.

The contrast between the farms on Mwangi’s side of the valley and those across from him is what convinced James Waweru to join the program as a buyer last year.

“The difference between those who subscribed to PWS and those who didn’t was quite apparent,” says Waweru, who runs the Flower Business Park Management Ltd., which coordinates activities of several flower-growers along the lake’s shore. After that visit, he persuaded FBP members to become buyers as well.

The sellers were all small farmers like Mwangi, whose plots range in size from a quarter-acre to 15 acres. Most are too small for rotating, and instead rely on intense management to keep them going.

In addition to the grass and trees, each received a $17 voucher that they could use for their own inputs. Mwangi used his to buy medicine for his cow and anti-fungal spray for his potatoes.

Interestingly, it’s the potatoes – which lie below the last strip of Napier grass – that have benefitted the most.

“I used to get just four bags from this lot,” says Mwangi. “Now I get ten.”

For Muigai, that’s something he can use to pitch the program to other farmers.

“Even though the potatoes are down at the bottom, they benefits because the water doesn’t gush like it used to,” he says. “So, his neighbors are benefitting from his actions as well, and have become quite receptive to our message.”

Planning For The Future

Mwangi keeps a dairy cow on community land above the farm, and says he’s now thinking of getting a second one and maybe keeping it on his small farm.

“The potato patch is too small to make a go of it commercially,” he says, “but if I can get enough potatoes to feed the cows, then I can earn money off the milk, and the cabbage can be my subsistence crop.”

Alternately, he’s thinking of replacing the potatoes with Napier grass and building a shed and stall for the dry season. Then he’ll have a continuous supply of grasses for additional cows uphill.

But there’s a complication: climate-change has disrupted the long-reliable rain patterns. It’s normally dry now, for example, but the region has been experiencing unseasonable rains. That’s led to something of a bounty, but it’s also unpredictable for the rest of the year – with higher highs during the day and also more frequent frosts due to the lack of cloud cover at night. The amount of rain is about the same, but it’s coming in massive gushes followed by long dry spells.

“Last year’s draught was incredibly severe,” says Daniel Koros, who oversees the project for WWF. “It resulted in total crop losses, some trees dried up and we were told by some residences that bats and some small animals died during that period.”

This all makes farming even more uncertain than it was before, says Muigai.

“He’s got to plant with uncertainty and frost in mind,” he says. “That probably means more cabbages, which have the advantage of being frost-resistant because they have big, waxy cuticles – unlike potatoes, which are more susceptible to frost.”

Even though the tuber is underground, the leaves that support it freeze easily. When that happens, the tuber that’s growing below dies as well. The Napier grass is a frost-resistant type called Kakamega 1, but there is no equivalent for potatoes.

So far, the project is paying off financially for participating farmers, but the effects have not yet trickled down to Lake Naivasha itself – although water samples show dramatic reductions in sediment up in the catchment.

All buyers have already renewed for this year, and most have upped their payments, but Mwangi says the program has to scale up – and fast – if it’s to have the impact needed.

“We’re dealing with 785 farmers now, but there are 5,000 households up there,” he says.

The Farm

Chege
 
Chege Mwangi (right) and neighbor Muigai Mwathi stand between two rows of Napier grass.

The Contrast
Chege2
 

Mwangi’s lush farm (foreground) contrasts sharply with those across the valley – which are not participating in the program.
 

This Week In Forest Carbon: Lessons For Government Oversight

                                                        

The Darkwoods Forest Carbon Project controversy continues to unravel, revealing essential documents and highlighting the role of government oversight in future carbon offset project developments. Meanwhile, California Governor Jerry Brown’s approval of the proposal to tie California’s cap-and-trade scheme to Quebec’s builds capacity for prospective linkages between project-level activities like REDD+ and established emissions trading schemes.

This article was originally published in the Forest Carbon newsletter. Click here to read the original.


16 April 2013 | In Ecosystem Marketplace's last issue of Forest Carbon News, we fielded a few concerns surrounding the recent audit report released by British Columbia’s Auditor General that challenged the baseline and additionality of the Nature Conservancy of Canada’s (NCC) Darkwoods Forest Carbon Project.

Since then, we have released the next article in our series on the controversy, unearthing key documents and insights through interviews with individuals involved on the project, the lead auditor himself, timberland consultants, and a competing property bidder.    

 

 

Regarding the audit report's conclusion that carbon credits were not a critical part of NCC’s decision to purchase the Darkwoods property, there are documents (here and here) showing that NCC had not only considered carbon credits but actively sought partners to buy them – written more than a year before the purchase. The auditor's team never asked to see them.


 

 

 

Christian Schadendorf – who advised the former Darkwoods owner on his sale of the property – stated that they had "had calls from several timberland buyers who would qualify as 'liquidation loggers,' but NCC got there first." This is in sharp contrast to the Auditor General’s report finding that no companies interested in a “liquidation logging scenario” had bid on the property prior to sale.

 

 

The overall episode offers lessons for cases down the line where government oversight is necessary in vetting carbon offset projects. Darkwoods' experience may be a relatively isolated occurrence for now, but government oversight is becoming an increasingly relevant issue in the forest carbon arena – particularly as we see momentum building for jurisdictional linkages and jurisdictional REDD+ approaches that wed broad-based government targets with project-level activities.

 

Read our coverage here, and stay tuned for the next piece in the series as we delve deeper into the Darkwoods rabbit hole and look at how the Darkwoods deal came to be, what the neighbors actually do, and what the baseline models say. 

 


 

Keep reading below for more forest carbon market news items, hot off the presses. Here in Washington, DC, we are busy aggregating data for this year’s State of the Forest Carbon Markets Report. Don’t forget to check the Forest Carbon Portal on a regular basis for featured survey respondents and their project profiles. If you have not already responded to this year’s survey, please contact Daphne Yin ASAP!


 

A big thank you to the following organizations that have most recently contributed data to this year’s State of the Forest Carbon Markets Report, including: Bosques Amazónicos, Conservation Fund, Finite Carbon, Future Camp, Green Energy Corporation, and Offsetters.

 


 

 

Tapping into the REDD-X Files

In an effort to provide information that will help governments and other REDD+ stakeholders better assess where REDD+ finance is flowing (and where it isn't), Forest Trends has just launched its new REDDX website (reddx.forest-trends.org)! "REDDX" is short for Forest Trends’ REDD+ Expenditures Tracking Initiative, which provides analysis of financial flows targeted at REDD+ activities in participating countries. The website will initially cover REDD+ finance data from Ecuador, Brazil, Ghana, and Vietnam, and is slated to expand its coverage to additional countries including the Democratic Republic of Congo, Liberia, Tanzania, and Colombia. 

 

The birth of a new REDDcommunity

With the launch of REDDcommunity.org, REDD+ practitioners around the world can now access a free and open online community and learning platform. WWF’s Forest and Climate Initiative developed the website as a capacity building tool for REDD+ practitioners – including representatives of governments, non-profits, community organizations, multi-national organizations, development organizations and businesses. This innovative platform allows REDD+ stakeholders to connect with one another, access technical information, learn about upcoming REDD+ related events, sign up for free REDD+ related webinars, and share their experiences – enabling them to advance REDD+ and harness its benefits to people and nature. 

 

International Policy

The golden link

Case studies conducted by the UN-REDD Programme, the Forest Policy Team of the Food and Agriculture Organization of the United States (FAO), and the EU-FAO Forest Law Enforcement, Governance and Trade Programme (FLEGT) reveal key linkages between REDD+ and FLEGT initiatives in countries like Cameroon and the Central African Republic. The studies indicate that synergies between REDD+ implementation and FLEGT bilateral trade agreements known as Voluntary Partnership Agreements (VPAs) may help streamline common work areas as parts of national forest policy planning processes. There is much work left to be done on opening up lines of communication between relevant sub-national and national level actors, and integrating REDD+ and VPA processes into national forest policies and laws. The UN-REDD Programme and partners are slated to host a meeting and workshop later this year. Case studies on Ghana and Liberia will be available soon.

 

Fora on Flora

Through April 19, high-level officials and ministers from 197 member and observer states are gathering in Istanbul for the UN Forum on Forests to discuss and establish appropriate policies to improve sustainable forest management. The conference meets every two years and highlights the importance of forests and their relation to deforestation, poverty, and global warming. The forum is slated to discuss appropriate financing mechanisms related to sustainable forest management, with side events covering issues ranging from social and economic considerations on REDD+ to forest conservation alternatives to REDD+. You can follow the forum live and access archived footage here.


 

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