Presentation from the World Teak Conference 2013 in Bangkok: Forest Carbon: Obstacles & possible Solutions: An introduction/overview of the market and situations prompting discussion from a project developers perspective on the difficulties faced on the ground in setting up a Carbon project based on experiences of the groups work in the sector.

1. Symposium II:
Environment & Carbon Trade
Forest carbon trading: ANDREW G . STEEL
Obstacles and possible solutions Chief Executive Officer
The TREEDOM Group
andrew.steel@treedom.com

2. The Treedom Group
Investment Advisor to the Asia Renewable Resources Fund
Forestry Consultancy & Project Management
Plantation Management & Luxury Aromatic Oil Producer
Charitable Objectives; Reforestation & Environmental
Education

3. Introduction
• Forest Carbon: Milestones
• Project Experience
• Survey Results
• Where are we now?
• The way forward?
– Into discussions
– Obstacles
– Measurement/Reporting/Verification (MRV)
– Market
– Solutions

4. Forest Carbon: Milestones
 2003 – 2010 CCX Operational
 2007 – The Bali Road Map (REDD+)
 2008 – Carbon Fix launched
 2010 – First Forestry VCS Credits issued
 2012 – The Gold Standard acquires The Carbon Fix Standard & ‘MOU’ with FSC

5. *Forest Carbon:
Top Ten - 2010 Milestones
i. The US Cap-and-Trade Meltdown
ii. REDD+'s Time to Shine at the UN
iii. California Stays in Front of the Pack
iv. Standards Set the Mark
v. An Explosion in Project Development
vi. Emerging National Conservation Strategies
vii. Public Pledges Outpace Private Purse for REDD+
viii. Beyond Project Scale Intervention
ix. Growing Pains for the REDD+ Partnership
x. Growing the Money for US Forest Conservation
*Ecosystem Marketplace Forest Carbon Portal

6. Project Experience 2009-12:
Soneva/PATT Reforestation Project
 Carbon Offset Project – create
VER’s to fund additional projects
 300,000 Seedlings per year
 Community Nurseries
 3 Hill tribe groups
 10 year project Project Partners:
 Framework species restoration
Donor: Soneva Resorts & Spa
Project Developer: PATT Foundation
Government Agency: DNP
Technical Support: FORRU

7. PROBLEMATIC ……
EDUCATION  Educating the client DOCUMENTATION
 Long lead time  Translation (500 pages)
 Educating Govt departments on  Removal of key sentences from
carbon offsetting our documentation
 Procedures
 Pioneering - No Govt policy
 Story changing
 Speaking Swahili
 Equipment
LOGISTICS
 Storage
 Seedlings
 10,000 a day from nursery
 Villagers
 Door to Door service!
 Walk 700m up the hill……..
 No Bathrooms

8. WEATHER …. FLOODING
21st Sept 2011 Water level started to rise …………….
28th Sept 2011 - Only 7 Days later
 Adverse climate conditions (persistent rainfall)
 Access to Areas
 Flooding of roads restricted area access (Mae
Wa)
 Bridge taken out (Doi Pa Ma)

9. VILLAGERS…. ISSUES &CONFLICTS
 Payments
 No ATM – Cash!
 Working with hill tribe
groups
 Lack of lead time to
conduct Participatory
Resource Assessments
(PRA)
 Knife threats
 Threats to take out the
bridge
 Threats to burn down the
site

10. COMMUNITY…. positives
Supportive
Employment Opportunity
Educational
Helping the Environment
Harmony

11. CONCLUSION
Not for the faint hearted or people with high blood pressure!

12. Survey & Results
1. What is your industry profession?
2. Did you attempt to create an afforestation/reforestation project with the sole aim
of trading carbon? If not, what was the project scope?
3. Was the price of carbon a major decision in putting the project together?
4. Was the project put together under a voluntary market system or UNFCCC CDM A/R?
5. If the project was aimed at the Voluntary Market – which standard did you follow?
6. What were the major obstacles that you faced?
7. What improvements would you like to see?
8. Have you sold or are you still attempting to sell carbon from your project?
9. How do you see the future market for forestry with regards to the sale of carbon
credits?

13. Where are we now?
• In 2011, forest carbon project developers reported the highest overall
value ever attributed to the global marketplace for forestry off-sets –
totaling $237 million.
Put it into context: 237/215 projects surveyed = $1.1M per project
• In 2011, projects managed to obtain prices that were double the 2010
average, seeing a market-wide average price of $9.2/tCO2e.
Overall, this price is the aggregation of hundreds of diverse prices that vary greatly by project
standard, location and other environmental and social co-benefits
– ranging from less than $1/tCO2e to over $100/tCO2e in 2011
*State of the Forest Carbon Markets 2012

14. The way forward?
– Obstacles
– Monitoring/Reporting/Verification (MRV)
– Market
– Solutions

15. OBSTACLES
OVERALL COSTS
EDUCATION
BUREAUCRACY
LACK OF EXPERTS
TRANSPARENCY
EXPERIENCE
FINANCE
CORRUPTION

16. M - measurement
R - reporting
V - verification
OVERALL COSTS
EDUCATION
BUREAUCRACY
LACK OF EXPERTS
TRANSPARENCY
• NEED TO ENSURE TRANSPARENCY AND
EXPERIENCE
ENSURE THAT OFFSET IS ACTUALLY
DELIVERED
• TRANSPARENCY
CORRUPTION
• COSTS ……………MONOPOLY
• REMOTE SENSING

17. Market Share - Motivation

18. Historical Transacted Volumes

19. Market Share (Price & Type)

20. Market Share for Standards

21. Project developer - Predications

22. POSSIBLE SOLUTIONS
OVERALL COSTS
• Support early stage project development EDUCATION
BUREAUCRACY
• Lower cost of accreditation & verification
LACK OF EXPERTS
TRANSPARENCY
• Education – increase market expertise
EXPERIENCE
• Simpler system or simpler legislation
• Capacity building - PINS & PDD
CORRUPTION
http://www.conservationfinance.org/

23. THANK YOU
ANDREW G . STEEL
Chief Executive Officer
The TREEDOM Group
andrew.steel@treedom.com