ZIMBABWE does not operate any public REDD+ project. The country is only getting ready for that after joining the UN’s Programme late last year.However, its biggest private-funded scheme on reducing emissions from deforestation and degradation (REDD+) is facing challenges – not the most comfortable prospect for a REDD+ start-up nation.
The Carbon Green Africa (CGA) project running on 750,000 hectares of land across the rural councils of Mbire, Nyaminyami, Hurungwe and Karoi is struggling to secure markets for its 3 million carbon credits, its first issue from last September.
“We are still sourcing long term buyers to secure income from credit sales,” Carbon Green Africa chief executive, Mr Charles Ndondo said by telephone on Thursday.
“We remain hopeful some of the prospective buyers that we have been talking to will come through.”
Under REDD+, monetary compensation is paid for projects that limit emissions growth in tropical forests.
The carbon savings are bought mostly by Western companies or countries to compensate for pollution in their home economies in the form credits, also known as offsets or units.
The credits are equal to a tonne of carbon dioxide, the biggest catalyst for global warming and climate change.
Mr Ndondo runs a project that has directly and indirectly delivered hope to 200,000 people, although it is yet to roll out in all wards within the programme area.
It is a project that could potentially stabilise hunger, malnutrition, improve incomes and bring down dangerous emissions of carbon dioxide.
Over 30 years, the Kariba scheme is expected to remove from the atmosphere 52 million metric tonnes of CO2 emissions equivalent, if it can get buyers for its credits.
Since 2009, the project has distributed US$750,000 to the four rural councils to fund a range of community ventures based not only on forestry (such as bee keeping and conservation farming), but also includes repairs to public infrastructure development.
Bridges, irrigations have been rehabilitated, Ndondo explained, while schooling and hospital essentials were delivered.
An ambulance at Siyakobvu Clinic in Nyaminyami, which has not run for the past year was repaired last month; 47 boreholes have been sunk in Mbire as part of efforts to improve health systems and deliver clean and safe drinking water.
The money is disbursed in proportion to each council’s shareholding in the project or based on the amount of forested land in contribution.
Mbire holds 34 percent, Nyaminyami 29 percent, Binga 20 percent and Hurungwe 17 percent. Draw downs from any future credit sales will be distributed accordingly.
Carbon Green are the project developers, facilitating credits generation and providing technical support.
“The Kariba REDD+ project supports conservation farming through training and providing of inputs to farmers. (This includes) training of bee keepers, providing of hives and sourcing a market for the produce. Establishment of nutrition gardens in all areas,” he said.
Market Uncertainity Mr Ndondo’s optimism on securing buyers may be coming too early. The carbon credits market is currently flooded, sending prices crashing to as low as less than US$1 per tonne of carbon dioxide equivalent (tCO2e).
Some investors are becoming averse to forests-based offsets, even.
“Tree credits are losing style,” opined carbon markets expert, Canicious Mushavi.
“New focus is on issues like alternative energy, cookstoves, etc. Why should one buy credits from Zimbabwe when they can buy European credits on ice?
“The challenge is that a company like Econet would rather send money to its foundations and plant trees on their own than buy credits from someone. New rule of carbon markets is don’t start a project expecting it to be funded to profitability from carbon credits.”
That can’t come too soon for the financiers of the Kariba REDD+ project. After pumping US$750,000 into the scheme since operations began in 2009, how much longer will the project funders – Carbon Africa Investments, a UK firm – be willing to continue funding a project not turning in profit?
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Although the issued credits are only a year in holding, how much longer can the credits remain unsold before they expire, usually after five years?
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It is clear the private funders of CGA at some point in the nearest future will want the project to self-fund.
The high costs of setting up a forest offsetting project make sales critical for sustainability and continuity.
Councils are desperate for buyers and may push the credits be sold, even for a song, just to keep the project running. There is no quick-win solution in sight unless prices recover and markets are secured.
Yet, carbon prices are not expected to rise for the next three years due to an over supply of credits.
The State of the Carbon Markets 2014 report released earlier this year by the US firm, Ecosystem Marketpace, estimated that a pile of 277 million metric tonnes of carbon dioxide emissions equivalent (MtCO2e) will remain unsold until 2018 worldwide, putting a damper on prices.
In 2013, governments and companies from industrialised world spent US$94 million purchasing 22.6 MtCO2e of REDD offsets, more than double the volume bought in 2012.
But they paid just US$4.2 per tonne of CO2 equivalent, on the average, down from US$7.4/tCO2e prior year comparative.
At the end of 2013, the report said, 31.8 MtCO2e remained unsold “including 12.6 MtCO2e reported by 36 suppliers that tried to but simply did not find a buyer by year’s end.”
These statistics will not calm shaky nerves. Markets are uncertain. Prices are volatile. REDD schemes may struggle. The Carbon Green Africa project hangs in the balance if markets are not secured soon. Or, does it?”The project has been built around community and biodiversity enrichment, and therefore is not only selling a tonne of carbon,” said Mr Ndondo.”We market and sell far more than a tonne of carbon.
Therefore, we attract a wider buyer range, through clients who have corporate social responsibility objectives as well.”
The other problem is that CGA’s offsets are from Zimbabwe.The country’s risk profile is presently worrisome.
ts reputation with overseas buyers has been battered unreasonably since the fall-out with Britain and the US 15 years ago over land reforms.This may be keeping potential buyers at bay.
But that is little worry. Zimbabwe can still deliver greater community benefits from REDD+ projects.
“The most obvious opportunity for the country to benefit from REDD projects would be to incorporate them with other projects such as Campfire or conservation projects and involve National Parks,” said Mr Ndondo.
This will ensure “that communities can benefit from multiple revenue streams rather than the reliance on one or the other.”
The plus (+) in front of the REDD means that Zimbabwe is looking beyond carbon benefits to those that yield tangible socio-econmic transformation for communities, which depend on forests.
REDD+ non-carbon benefits include among other things employment creation and opportunities for activities such as bee keeping and production of timber related products, activities that help mitigate rural poverty.
“Zimbabwe has nothing to worry about,” from the carbon price volatility, Mr Abbie Jiri, a REDD expert with Bio-Hub Trust, the lead consultants in Zimbabwe’s REDD+ drive, said in a previous interview.
God is faithful.
