The BioCarbon Fund at the World Bank has been pivotal in developing the forest carbon market. It translated the Clean Development Mechanism (CDM) rules into on the ground projects with a value placed on the carbon sequestered. The BioCarbon Fund is developing some methodologies for CDM afforestation and reforestation activities and is active in developing agriculture, forestry and other land use (AFOLU) type of activities that are not Kyoto-compliant. Because of the important role of AFOLU in climate change mitigation and adaptation, the BioCarbon Fund will continue to pioneer work in this field.

Demonstrating positive impacts on biodiversity
Projects in the BioCarbon Fund portfolio are increasingly demonstrating that a well planned project can have multiple benefits. In addition to mitigating global climate change, as they remove carbon from the atmosphere or prevent the further release of greenhouse gases, AFOLU projects also create local benefits. For example, projects with components addressing socio-economic and environmental concerns of communities, help restore natural habitat for wildlife and protect soil against erosion; agroforestry increases the vegetative cover and helps diversify crop mixes, which reduces susceptibility to pests; watershed management enhances water infiltration; and reduced tillage improves agricultural yields by building up organic matter and retaining moisture, helping soils regenerate and limiting the need for chemical inputs.

The incentive of carbon financing to AFOLU projects means there is a great opportunity to develop projects with a positive impact on biodiversity, and which can play a substantial role in climate change mitigation and adaptation. Such projects will have a positive impact on biodiversity as long as appropriate planning and management is undertaken, and depending on the ecosystems these projects are replacing.

BioCarbon Fund examples
The Acacia Community Plantations Project, in the Republic of Niger, is a BioCarbon Fund project based on the exceptional capacities of an endemic species from the African Sahel, Acacia senegalensis. Its environmental benefits include a powerful rooting system, which makes it efficient for dune stabilization as well as wind and water erosion control, and a nitrogen-fixing ability which improves the fertility of extremely degraded soils. The project will produce gum Arabic, used primarily in the food industry as a stabilizer, and re-introduce agricultural activities through intercropping with groundnuts and cowpeas. The vast majority of the plantations will be developed by small local farmers on communal desert lands under partnership agreements with a private company that would also harvest the gum Arabic. The project implements the National Niger Strategy for the development of A. senegalensis plantations.

In Madagascar, a BioCarbon Fund project is rehabilitating forest corridors crucial for many threatened species among the Analamazaotra Reserve, Maromizaha Private Forest and Mantadia National Park. The sustainable forests and fruit gardens will provide significant alternative livelihoods to local communities and a buffer around the corridors. The project, supported by the Third Environment Programme of the Republic of Madagascar, also aims at protecting 80,000 hectares of forest north of the corridor, so as to maintain continuity up to Zahamena National Park. This last component will pilot avoided deforestation. The payment for carbon sequestration will be the only income generated in the short term but, in the long term, the restored area should also benefit from an increase in ecotourism revenue.

The BioCarbon Fund projects have shown that there may be trade-offs between carbon sequestration and biodiversity. Fast-growing trees are best for carbon sequestration, but do not necessarily improve local environmental and social conditions. In addition, the CDM rules do not take into account benefits such as biodiversity. Therefore, the BioCarbon Fund adopts a project design strategy that examines on a case-by-case basis, the proposed environmental and social impacts of a project and ensures the risk of non-permanence of carbon is minimized. In general, concerns over biodiversity or community benefits can be addressed by fostering quality standards that could widely be adopted to AFOLU projects. The cost of all these strategies must also be factored into the project design.

Benefiting local communities
Agriculture, forestry and other land use activities can create social benefits for local communities, including additional, more stable or less physically taxing employment. They can provide new sources of revenue, in cash or in kind, from the sale of greenhouse gas emission reductions from the project, and/or from the project’s activities — such as the acquisition of free or cheaper fuelwood and timber, sale of fruit or other agroforestry and non-timber forest products. AFOLU can promote the diversification of economic activities—the creation of long term savings and the acquisition of new knowledge or techniques, for example for tree planting or conservation agriculture.

The BioCarbon Fund examples highlighted above show the benefits to the local community, but also the potential wider benefits to the national economy. Both the environmental and social benefits also have significant value with their role in helping communities adapt to climate change by having more resilient ecosystems and economies. The great variety of agriculture, forestry and other land use projects makes them suitable for most types of ecosystems, which they can help conserve and enhance and to which they can add greater economic value. These activities are mostly implemented in rural areas and represent one, if not the only way, for the poorest populations to participate in the carbon market and reap some of its benefits.

Benoit Bosquet is Senior Natural Resource Management Specialist and Ellysar Baroudy is Technical Specialist, World Bank.

See also: The World Bank, Carbon Finance Unit