Ariste - Agroforestry

1. Costs and benefits of
agroforestry in Haiti: a value
chain that includes environment
and health
By: Ruolz Ariste
Researcher: U. Laval and UQO
Haïti Priorise Conference
Pétion-Ville (Port-au-Prince)
April 29th - May 3rd 2017

2. Overview and Context
• Solid fuels (wood and charcoal) account for 70% to 95% of
the energy used for cooking in Haiti.
• Given that a systematic program for
the efficient use of this energy source is
limited, this situation is very detrimental
to the country's forests.
• The problem of deforestation has traditionally been dealt
with through repressive measures.
• It is also appropriate to use the power of convincing, as
conveyed by the new modes of governance.
2

3. Objectives
• Address the issue of deforestation
upstream and downstream in
order to improve the forest cover
of the country.
• Three interventions are identified
to stimulate reforestation and
contribute to strengthening the
value chain of agroforestry:
̶ Optimal agroforestry
̶ An infrastructure for the carbon
market (ICM)
̶ Intensification of biogas for
cooking.
3

4. OPTIMAL AGROFORESTRY (OAF)
First Analyzed Solution
4

5. Literature review - OAF
• Interest in Moringa (Benzoliv) in international development
organizations (FAO, UNICEF, WFP)
• Mechanisms put in place for the development of the sector
by international financial groups such as the Moringa Fund
– Final investment objective of € 100 million in Latin America and
Africa).
– 4 to 10 million € per year in cost-effective, large-scale agroforestry
projects
• Moringa is known in Haiti for more than a century, but
neglected until recently (MARNDR-BRH, 2016)
• Interest throughout the country with campaigns of
promotion of the National Commission to Fight Hunger and
Malnutrition (COLFAM) in coordination with MARNDR,
MSPP, MDE, MENFP.
5

6. Description of the solution - OAF
• Intervention on 252,000 has covering 257,000 farmers
• Direct benefits
– Leaves and seeds of moringa
– Wood: Harvested in the 20th year (400 trees / ha)
• Indirect benefits
– Health: Reduced child malnutrition (4.2%) and decreased growth
retardation due to moringa (marginal)
– Carbon: Social value = Social cost of 1 t of CO2 * Qty of CO2
stored in 1 ha of forest
– Regulation: 4.0% of Haiti's GDP (based on De Groot et al 2012,
ESVD)
– Biodiversity: 4.7% of Haiti's GDP (based on De Groot et al 2012,
TEEB, ESVD)
6

7. Annual costs – OAF
7
Cost type Year 1 Cost
(HTG/ha)
Cost of
subsequent years
in (HTG / ha)
Year 1 Total cost
(in million HTG)
Total cost in
subsequent years
(in million HTG)
Land rental (additional cost) 1 923 1923
484,93 484,93
Promotion and training 300 60 75,65 15,13
Workforce
Cleaning, plowing
Sowing - moringa
Sowing- arachides
Planting of moringa
Planting of arachides
Weed control (3 x / yr)
Harvesting Moringa
Harvesting of arachides
10,000
24,000
6,000
5,000
2,500
33,600
24,000
8,000
5,000
0
6,000
0
2,500
33,600
24,000
8,000
2,521.74
6,052.18
1,513.04
1,260.87
630,44
8,473.05
6,052.18
2,017.39
1,260.87
0
1,513.04
0
630,44
8,473.07
6,052.18
2,017.39
Moringa leaves Transport 4,800 4,800 1,210.44 1,210.44
Moringa pods Transport 7,200 7,200 1,815.65 1,815.65
Arachide Transport 1,862 1,862 469.55 469.55
Total 129,185 94,945 32,577 23,943

8. Yearly benefits - OAF
8
Benefits Type Price per
unit (HTG)
Price per units Benefits
(HTG/ha)
Total amount of
benefits (HTG
millions)
Private Sale of moringa leaves Sale of moringa pods
Sale of unshelled peanuts Sale of wood after 20 years,
d.r. 5% Increase in salaries due to reduced growth
retardation, 5% d.r
10
75
128.84
850
1.52
1,200 kg/ha
1,800 kg/ha
950 kg/ha
400 posts
1 ha
12,000
135,000
122,393
10,593
1.52
3026.1
34043.5
30864.3
2671.2
0.4
Social
Carbone, 3 % d.r.
Carbone,. 5 % d.r.
Carbon, 12 % d.r.
Biodiversity
Regulation
Health, 3 pc x GDP, 3 % d.r.
Health, 3 pc x GDP, 5 % d.r.
Health, 3 pc x GDP, 12 % d.r.
1,451.30
328.30
0
1,711
4,355
109,407
109,407
109,407
9 t CO2/ha
9 t CO2/ha
9 t CO2/ha
1 ha
1 ha
0.1107 DALY
0.0745 DALY
0.0324 DALY
13,062
2,955
0
1,711
4,355
12,111
8,151
3,545
3293.9
745.2
0
431.5
1098.3
3054.1
2055.5
894.0
Private Total 279,987 70,605
Social Total, 3 x GDP ph, d.r. 5 % 17,172 4,330
Overall Total 3 x GDP ph, d.r. 5 % 297,159 74,936

9. Benefit-Cost Ratio (BCR) - OAF
(DALY at 3x GDP pc)
9
Intervention Discount Benefits (
HTG
billions)
Cost ( HTG
billions)
BCR Quality of
evidence
Agro
forestry
3 % 1,190 375 3.17
Medium5 % 963 322 2.99
12 % 595 209 2,85
• Sensitivity analysis:
̶ 1x GDP pc : 3.08; 2.93 et 2.83 à 3; 5 and 12% respectively
̶ 8x GDP pc : 3.39; 3.13 and 2.91 à 3; 5 and 12% respectively.

10. INFRASTRUCTURE FOR THE
CARBON MARKET (ICM)
Second Analyzed Solution
10

11. Literature review - ICM
• About 40 national jurisdictions and more than 20 sub-
national jurisdictions have established a carbon price
(World Bank, 2014)
• Together, these carbon pricing instruments cover almost 6
Gt CO2
• World leaders are currently uniting, via the Carbon Pricing
Leadership Coalition (CPLC, 2015)
• Meanwhile, structures are in place to connect forestry
operators with the international carbon market; Example
of Verified Carbon Standard (VCS, 2016)
• Planned Contribution Determined at the National Scale
(CPDN) sent to the UNFCCC: Haiti is considering access
to carbon markets to finance some of the conditional
measures of its contribution (MDE, 2015).
11

12. Description of the solution - ICM
• Intervention on 251,000 has of bare or rocky soil
covering 256,000 farmers
• Direct benefits
– Leakage costs the first year
– Carbon: Market value = 1t CO2 price * Qty of CO2 stored in 1ha
of forest
– Wood: Harvested in the 20th year (400 trees/ha)
• Indirect benefits
– Carbon: Social value = Social cost of 1 t CO2 * Qty of CO2
stored in 1 ha of forest
– Regulation: 4.0% of the GDP of Haiti (estimate based on De
Groot et al 2012, ESVD)
– Biodiversity: 4.7% of the GDP of Haiti (estimate based on De
Groot et al 2012, TEEB, ESVD).
• Health benefits not considered.
12

13. Cost - ICM
• Private Cost related to:
– Planting of trees in the first year (109,000 HTG/ha)
– Then to land rental only (1,900 HTG / ha)
• Social cost of ICM, Examples:
– VCS registration fee: $ U.S 0.10 x estimated annual volume of
emission reductions, capped at USD 10,000 (HTG 633,800)
– Delivery fee (recurring): U.S. $ 0.10 per VCU for the first 1 million
VCU; Then regressive (13.6 millions HTG)
– Cost of developing the methodology (1st year): 125,000 USD
(7,9 million HTG), excluding local expertise
– Local expert (recurrent): 2 FTE (1.2 million HTG)
– Leakage cost in the first year alone: ​​1,580 HTG / ha (396 million)
– Recurrent payments to farmers for CO2 reduction (4.070 HTG /
ha / year or 1.02 billion HTG / year).
13

14. Benefits - ICM
14
a) Annual private benefits
Benefits Type Price per unit
(HTG)
Price per units Benfits
(HTG/ha)
Total amount of
benefits (HTG
millions)
Benefits related to leakage
In-progress payment of reduction of carbon
Sale of wood, after 20 years, 5%, d.r (Posts)
197.5
452,54
425
8 trees/ha
9 t. CO2/ha
400
79 (1580/20)
4,073
5,296.4
19.81
1,021.47
1,328.33
Total for private 9,448 2,370
b)Annual social benefits
Carbon, 3 %, d.r. (Tonne of CO2 equivalent)
Carbon, 5%, d.r. (Tonne of CO2 equivalent)
Carbon, 12%, d.r. (Tonnes of CO2 equivalent)
Biodiversity (ha)
Regulation (ha)
1451.29
328.28
0
1710.77
4268.25
2, 257,164
2,257,164
2,257,164
250,796
250,796
13,062
2,955
0
1,711
4,268
3275.8
741.0
0
429.1
1070.4
Social Total, d.r. of 5 % 8,934 2,240
Overall Total (private + social) 18,382 4,610

15. BCR - ICM
15
Intervention Discount Benefits
( HTG
billions)
Cost
( HTG
billions)
BCR Quality of
evidence
Carbon Market
Infrastructure
3 % 108.03 43.37 2.49
Limited
5 % 51.47 39.96 1.29
12 %
23.44 32.78
0.72
• Sensitivity analysis:
̶ Biodiversity and regulatory services excluded: 2.00; 0.77 and 0.15 to
3; 5 and 12% respectively
̶ Regulatory services excluded: 2.14; 0.90 et 0.25 à 3; 5 et 12% resp.
̶ Strictly private aspect (with payment for carbon): 1.36; 1.17 and 0.70
to 3; 5 and 12% respectively
̶ Strictly private aspect (without payment for carbon): 0.93; 0.79 and
0.44 to 3; 5 and 12% respectively

16. INTENSIFICATION OF BIOGAS
FOR COOKING
Third Analyzed Solution
16

17. Literature review
• Biogas has grown internationally: $ 17.3 billion in
revenue in 2011 (Pike Research 2012).
• Existence of several studies or pilot initiatives on biogas
(DINEPA 2010, Lacour 2012, Ariste 2015)
– For DINEPA, technical support from large organizations such as
USAID, UNEP, UNICEF, Viva Rio
– But, non-materialized financing
• No studies have quantitatively considered indirect
environmental and health benefits
• None have proposed synergistic interventions to address
the issue of deforestation.
17

18. Description of the solution - Biogas
• With 11 millions t. of organic waste, possibility to cover
16% of energy requirements in cooking (Lacour 2012)
– 397,000 housholds
– 700 million m3 of biogas (350 million m3 of methane)
• Required biodigester volume: 467 million m3
– Ratio biogas output: digestive volume = 1.5 : 1
• Local solution, economically more efficient
– Cost / fam / day: 42 HTG; Which is about 38% cheaper than
charcoal and 20% cheaper than propane
• Capital-intensive, but very high multiplier effect and
positive impact on the balance of payments.
18

19. Description of the solution - Biogas (2)
• Direct benefits
– Sale of methane: 0,81 m3 / fam / day (estimate based on daily
energy requirement in ESMAP 2007 and other parameters) and
price of 1 m3 of methane of 52 HTG (based on price for equivalent
daily propane consumption )
– Organic fertilizer: 3 million t. MS (Rate of 27%) at 2.378 HTG / t.
Estimation based on SOIL 2011 and Lacour 2012.
• Indirect benefits
– Health: Reduction of Household Air Pollution (HAP) by 6.4%
– Carbon (social): About 380,000 t. of charcoal can be saved every
year;
– Time saving: 40 mn compared to a traditional stove (Larsen 2014 for
propane)
– Energy saving: Charcoal cost - Cost in biogas
• Benefits to biodiversity, regulation, local production,
sanitation not considered. 19

20. Biogas - Cost
• Installation Costs
– Based on case studies from China (Hojnacki et al. 2011) and
Montreal (AQPER 2014).
– Adjusted for inflation between 2011 and 2015
– Estimated on average at 61,537 HTG / m3 or 79 billion HTG.
20
Cost Type (HTG millions) Year 1 Cost Cost in subsequent
years
Land rental 0.3 0.3
Factory installation 78, 739.7 0
Annual cost of operation and maintenance of factories 0 2,362.2
LNG cooker kit (every 7 years) 2,357.5 2,357.5
Maintenance of the LNG cooker 0 3.4
Promotion of the programme and training 317.4 0
Monitoring of the programme and training 0 63.5
Insurance 0 952.0
Capital 0 787.4
Coal Stove (every 3 years) - Base Scenario 67.1 67.1
Total Incremental Costs 81,348 6,459

21. Yearly benefits – Biogas
21
Benefits Type Price per unit
(HTG)
Price per units Total amount
(HTG millions)
Private Sales of NG (tonnes) Sales of organic fertilizer (tonnes)
Refund of NG cookers Value of cooking time earned (households)
Energy saved by opting for NG (households) Sales of charcoal
before intervention (households)
72,222.22
2,376.563
865.75
4,900
9,156
(22,902)
252,000,000
2,960,000
396,793
396,793
396,793
396,793
18,200
7,034.6
343.5
1,944.3
3,633.0
(9,087.4)
Social
Carbon, 3 %, d.r. (Tonne CO2 equivalent)
Carbon, 5%, d.r. (Tonne CO2 equivalent)
Carbon, 12%, d.r. (tonne CO2equivalent)
Health, 3 x PIB pc, 3 %, d.r. (DALY)
Health, 3 x GDP pc, d.r. 5 % (DALY)
Health, 3 x GDP pc, d.r. 12 % (DALY)
1451.29
328.28
0
109,407
109,407
109,407
1,893,181
1,893,181
1,893,181
10,088
8,009
4,292
2,747.5
621.5
0
1,103.7
876.2
469.6
Incremental Private Total 22,068
Social Total, of 5 % d.r. 1,498
Overall Total 23,566

22. Biogas - BCR
(DALY at 3x GDP pc if applicable)
22
Intervention Discount Benefits
( HTG
billions)
Cost
( HTG
billions)
BCR Quality of
evidence
Intensification
of biogaz
3 % 385.89 142.90 2.70
Medium
5 % 290.20 132.97 2.18
12 % 166.27 112.02 1.48
• Sensitivity analysis:
̶ 1x GDP pc: 2.62; 2.12 and 1.46 at 3; 5 and 12% respectively
̶ 8x GDP pc: 2.91; 2.33 and 1.54 at 3; 5 and 12% respectively
̶ Strictly private aspect: 2.10; 1.86 and 1.26 at 3; 5 and 12%
respectively.

23. Public Policy Recommendations
• Investing in good governance to attract private capital for
investment in these key activities, in particular biogas
– Potential to use diaspora bonds under certain conditions
• Integration of different economic sectors and actors from
the design of these interventions or programs
• Inclusion of biogas technology as part of the urban waste
collection program
• Subsidizing (tax) activities that help keep (free) the
carbon locked.
• Subsidizing (taxing) transactions that contribute to
improving (deteriorating) the trade balance
Contact: valservices.ra@gmail.com
23