Last month I rang my ethical isa broker. ‘I want to invest in forests in Africa,’ I said. We talked for an hour. I put the phone down knowing that there was little or nothing ethical about my ISA, and I certainly couldn’t dictate that they invest in the biodiverse tropical forest that I overlook as I write here in Arusha, Tanzania.
The conversation was emblematic of the situation faced by an Africa trying to adjust to a brave new world in which the west once again has eyes for the continent’s resources – this time it’s carbon.
At present, there are (politically) two ways to reduce the amount of greenhouse gases in the atmosphere: emit less, or create more carbon sequestration initiatives. The second approach, under the auspices of the UN’s ‘Clean Development Mechanism,’ involves high carbon emitters buying carbon credits from low carbon emitters – usually the less industrialised global south.
A key emerging mechanism for carbon sequestration is known as ‘REDD’ – Reducing Emissions from Deforestation and Degradation – designed to tackle the 17 per cent of annual carbon emissions that result from the destruction of forests.
Tanzania, along with several other less industrialised countries, argues that with a per person annual carbon emission of 1.2 tonnes per year (compared to the UK’s 10.7 tonnes per person per year, and America’s 23.5) has plenty of ‘surplus’ carbon to sell to the industrialised world. Much of this remains locked up in its extensive forests, which some believe could be worth up to $500m a year to the country.
But selling this carbon isn’t a straightforward business. The ability to ‘compete’ (or offer economically ‘efficient’ carbon) is key. As Fred Nelson, from Maliasili Inititatives in Tanzania says: ‘Land tenure security is a key factor in enabling local communities to capture revenues from the carbon market which will provide incentives for conservation measures.’
Secure land tenure ensures that the carbon owners – often villagers - are committed to the outcomes, and can’t be sidelined in (often slow and cumbersome) decision-making.
This is important, because Tanzania is the proud owner of a great deal of what is becoming known as ‘charismatic carbon’: a term coined by Scientific American in 2006. It actually refers to carbon in a certain type of soil, but has morphed into meaning accessing carbon from grassroots projects , or carbon that is stored in trees that are rare and valuable. Tanzania has 37 million hectares of indigenous forest – 40 per cent of the landmass. In fact it is recognised globally as one of the 25 most biodiverse environments in the world.
Sharing the benefits?
There are already many existing schemes to encourage villagers to manage and cultivate wooded environments: from managed charcoal schemes, to medicinal plant collecting and bee-keeping. The country is replete with unusual rare hardwood: from African Blackwood (Dalbergia melanoxylon, called locally mpingo) which is used for clarinets and oboes to valuable timbers like Mninga (Pterocarpus spp. - like cedar and mahogany), and Milicia excelsa (similar to mahogany) which can only be cut under licence.
But the route forward is not clear cut. Local NGOs such as African Wildlife Group are concerned that the ‘benefit sharing formula’ around carbon offsetting and REDD between community and government is not yet sufficiently hammered out.
It is a fair question to ask: will the Tanzanian government try to capture and retain all the revenue for itself?
Or, as in the case of the Congo basin, will communities be too weak to retain control and benefit, leaving the forests open either to illegal logging or exploitation by competing groups still immersed in brutal fighting?
Says Jessie Davies of the Tanzania National Resources Forum: ‘REDD looks like a “silver-bullet” solution to sustainable development. However, if implemented wrongly, REDD could do just the opposite. Payments must be fair, fast, transparent, and must reflect the “transaction costs”, which are the costs of forest management, and the "opportunity costs", which are the benefits lost by not engaging in other land use activities. Tanzania’s track record of equitable benefit sharing between national, district and local levels has not been exemplary, despite legislation being in place which allows for benefit sharing from revenues generated from natural resources, such as from forests and wildlife. This experience is one reason why the current centralised funding approach outlined in the National REDD Framework causes great concern amongst key stakeholders.’
Fred Nelson is more positive: ‘Tanzania has some of the most forward thinking forestry policies in the world. After years of “Ujamaa” (family hood) and the partially successful villagisation policies of Mwalimu Nyerere, Tanzania is combining pro-forest policies with pragmatism.’
Dr Steve Kiriswa of African Wildlife Group agrees: ‘The Tanzanian government actually has a very good and enabling forest policy and frameworks… [which] give the local communities a stake in managing and utilising sustainable forest resources in both government and community forests.’
Carbon Tanzania, a global pioneer in channelling carbon market money to communities, is leading the way with the Mpingo Conservation & Development Initiative: by 2013 it is hoped that forests in Kilwa district in Southern Tanzania will supply an estimated 50,000 of ‘gold-rated’ accredited carbon credits – some real ‘charismatic carbon’. Assuming a conservative yield of $5 per tonne of CO2 after deducting costs, this will bring a net benefit of $250,000. At the end of the project, predicted profits of this charismatic carbon will be spread amongst approximately 10,000 people in six villages.
As Mark Baker, CEO of Carbon Tanzania, says: ‘There’s an overall change in the country; we want to profit from what we have already. There’s much to gain if we can sell carbon: we add value and create employment. We’ll never meet the demand for carbon credits: globally we emit 6 billion tonnes a year, and sequester only 1 billion a year. It’s an obvious economic and conservation winner, and vital for Tanzania, which has to find ways to capitalise on its excellent pro-poor and pro-conservation policies: I have already sold the carbon output of Kilwa, demand far outstrips supply”.
Communities in Kilwa have already started to benefit. ‘Previously we just used blackwood without thought, but we have learnt that it is a valuable resource,’ says Mwinyimkuu Awadhi, Chairman of Kikole village. ‘Now we see that we can utilise our stocks to benefit us all as villagers.’
Another farmer says: ‘We people own this land, we own the trees, they are a tangible thing. This is easy for us in terms of conservation; and trees don’t destroy anything or bring diseases like lions or wildebeest. From our experience with wildlife we understand the concept of communal management, and we see, trees bring communities benefits! Our people always list trees as highly advantageous, and if we can be paid to keep them standing rather than chopping them down, that’s a good thing.’
Green light for polluting?
Opponents of carbon trading, including NGO Carbon Trade Watch, say the whole carbon market just gives major polluters a green light to carry on polluting. Other critics, such as Larry Lohmann argue that it is an easy way for big polluters in the industrialised world to buy their way out of problems, up their carbon credentials, and get lots of marketing kudos in the process. He believes that carbon trading glosses over the central problem: that we are extracting too much carbon that should remain underground.
But the business case for carbon offsetting, especially in the less industrialised world, is becoming clearer by the day. ‘In the long run I am a conservationist, not a tree hugger,’ says Marc Baker. ‘Preserving Tanzanian woodland has to make economic sense. If this project encourages local people to look after our forests because they produce a valuable commodity, good! If the profits from carbon trading go poorer sections of community, even better.’
And the impact that steady, predictable flows of money from carbon trading could have on the lives of ordinary Tanzanians is greater still. Margareth Chacha, Executive Director of the Tanzanian’s Women’s Bank is reviewing how carbon credits are valued. Whilst you cannot currently borrow against the value of stored carbon, the bank views land that is registered as privately owned as equity. So, potentially, the actual trees on it will in turn be recognised as a valuable asset, with a relatively stable valuation, and can then be used as equity for a loan.
As long as potential projects are UN-recognised as offering carbon credits, the bank is looking at ways to value it: ‘73 per cent of our population works in a rural context: the majority of these are women,’ says Chacha. ‘By increasing the incomes of these rural poor, and their ability to access capital, we fundamentally change the shape of the Tanzanian economy. The important thing is the source of repayment, so if it’s trees on registered land, then in theory this is fine.’
Thembi Mutch is a freelance journalist based in Tanzania. She wishes to thank Jo Anderson, Marc Baker, Fred Nelson, Margareth Chacha, Bella Chacha, Dr. Steve Kiriswa, Charles Meshack, Carol Sorensen, Cassian Sianga, Jesse Adams for their help in producing this article
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