Forestry Key to Africa’s Carbon Permit Market, Envirotrade Says

Conserving forests as a means for countries to meet climate change targets is crucial to Africa’s participation in the world’s carbon markets, said Envirotrade Carbon Ltd.

The London-based company is investing about $2.8 million to develop a project in Mozambique’s Quirimbas National Park that will protect 125,000 hectares (480 square miles) of coastal forest and mangroves from deforestation.

By doing so, Envirotrade will sequester up to 10 million metric tons of CO2 over 20 years, said Chief Executive Charles Hall in a May 17 interview. Trees absorb carbon dioxide for growth and release it when they rot or burn.

Carbon credits linked to deforestation, rather than tree planting, were excluded from the 1997 Kyoto Protocol and aren’t covered in Europe’s emissions trading program.

About 200 nations will meet in Durban, South Africa, in December for the United Nation’s climate talks to look at ways of creating carbon forestry credits, which may be part of a new treaty.

“The inclusion of forestry and land-use activities in the compliance regime post-Kyoto is crucial to Africa,” said Hall on the phone from London. “So far, African participation in the Clean Development Mechanism has been tiny, less than 2 percent.”

CDM Projects

Currently only 25 CDM projects are registered in Africa, two-thirds of them in South Africa, the United Nations Development Program said.

“Unless and until the UN compliance carbon framework allows forestry and land-use to participate, Africa will never participate in those schemes anywhere near to the extent that it should,” Hall said.

Instead, the company will be restricted to selling its forestry credits on the global $186 million voluntary carbon market, which relies on purchases from companies and individuals for purposes other than meeting Kyoto or European Union regulatory targets.

Envirotrade plans to register the Quirimbas project with the Washington-based Verified Carbon Standard program, or VCS, toward the end of the year, Hall said.

“We’ve now got a method to produce REDD credits from VCS,” said Hall. Reducing emissions from deforestation and degradation, known as REDD, was only recognized by the voluntary market as a means of offsetting emissions in November, he said. Until then the only forestry credits one could generate were through reforestation projects.

Nature Reserve

The Quirimbas project is an expansion of a 10,000 hectare pilot initiative started in 2002 in Mozambique’s Gorongosa nature reserve. The Sofala Community Carbon Project, as it is known, received a 2 million euro grant from the EU and has generated 1.2 million tons of carbon credits, of which one fifth have been sold, Hall said.

The offsets have been bought by companies such as Max Hamburgerrestauranger AB, Sweden’s oldest hamburger chain, Arla Foods AB, the Danish food manufacturing company, and the Creative Artists Foundation, one of Hollywood’s top talent agencies.

Envirotrade signed contracts with about 3,000 farmers to change the way they used their land, paying them money from the sale of the carbon credits to get them to plant trees, including cashew and mango, alongside their fields to boost their crop yield.

‘Slash and Burn’

“In those kinds of environments you cannot succeed in protecting forests without engaging with the local communities to wean them away from slash and burn techniques that they’ve used for centuries,” said Hall.

By improving food security and introducing potential cash crops to the area, the project addresses a key driver of deforestation and reduces pressure on the forests, the company said in a statement.

Deforestation represents a major challenge to resolving climate change, contributing more to carbon emissions than fossil fuel consumption does, said Mark Heaton, Envirotrade’s country manager for South Africa. “It’s a significant motivating factor to get forestry included” in the EU carbon trading scheme, he said.

Global forests contain an estimated 638 gigatons of carbon, more than all the carbon in the earth’s atmosphere, the UN Framework Convention on Climate Change, said on its website. One gigaton is a billion tons.

To contact the reporter on this story: Lauren van der Westhuizen in Cape Town Nef at lvanderwesth@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net