Raising the Bar on Kyoto

By Adelheid Fischer

At first glance, it seemed like one of those win-win scenarios. To provide charcoal fuel for its pig iron works, Plantar S.A. Reflorestamentos, a private company in southeastern Brazil, sought to plant 23,000 ha of cloned eucalyptus trees. Using cultivated trees, the company argued, would sequester one metric ton of carbon for every ton of iron produced.

To finance its plans, Plantar turned to the World Bank’s new Prototype Carbon Fund. The fund, which currently provides US$105 million in support of emission reduction projects in developing countries, allows investing companies and governments to earn carbon credits toward meeting their Kyoto targets (see table). Instead of applause, however, the Plantar application drew the ire of 80 environmental and human-justice organizations. In a 2004 letter to the World Bank, they called for a halt to the project, charging that the plantation displaced people from their land and polluted area waters with agrochemicals.

Projects like the Plantar plantation are the Achilles’ heel of the Kyoto Protocol, says John O. Niles, manager of the Climate, Community & Biodiv-ersity Alliance (CCBA). Under Kyoto, investment in projects in developing countries is one of three main ways that developed nations can meet their emission-reduction targets. But in the rush to invest, governments often lack adequate safeguards to ensure that emission-reduction projects benefit the environment and local communities more broadly.

In 2003, forest advocates founded the CCBA to develop a gold standard of certification that could be used by governments, NGOs, or private investors seeking to invest in projects that delivered a bigger bang for their climate-change buck. And the potential size of that bang is what sets this project apart from other voluntary standards. Under Kyoto, most of the developed countries in the world will need to reduce their emissions by up to ten percent by 2012, and the value of global carbon trading could reach US$45 billion by 2010.

To harness that huge economic force for environmental good, CCBA organized a coalition of nonprofit groups including The Nature Conservancy, Conservation International, and the Hamburg Institute of International Economics as well as corporate heavy hitters including BP, Intel, Weyerhaeuser, and SC Johnson. In May 2005, the CCBA released the first multi-objective standards for land-use projects aimed at mitigating climate change.

To become certified under what is known as the Climate, Community & Biodiversity Project Design Standards, projects must undergo rigorous examination by an independent evaluator and substantively address three pressing global problems: poverty, loss of biodiv-ersity, and climate change. First and foremost, projects must demonstrate that they can make a dent in the levels of atmospheric concentrations of greenhouse gases by preventing or reducing emissions, sequestering carbon, or finding substitutes for fossil fuels.

But meeting these benchmarks is only the start. Under the standards’ biodiversity guidelines, for example, the project must avoid planting invasive species or genetically modified organisms. It must also demonstrate that operations will have no negative impacts on threatened species that appear either on the IUCN’s Red List or lists issued by the host country. The project also must contribute to the social and economic well-being of nearby communities, a criterion that gives local people a say in the project’s design in its early stages as well as a forum to express and redress grievances.

The alliance field-tested its certification protocol in places as disparate as Indonesia, Bolivia, Scotland, and Madagascar. In November 2005, Futuro Forestal S.A., a sustainable-forestry operation in Panama, became the first project to seek certification. Futuro Forestal S.A. reclaims tropical forests by planting abandoned cow pastures with native tree species. In its forest-maintenance, seed-growing, and sustainable-logging operations, the company trains and employs workers from local communities.

But the CCBA’s greatest influence may be felt in China. Since the 1990s, China has embarked on a nationwide push to reforest steep slopes after agricultural conversions caused massive flooding, soil erosion, and siltation in waterways such as the Yangtze and Yellow Rivers. In May 2005, China’s State Forestry Administration announced plans to use the CCBA standards to design several forestry projects in the country’s Yunnan and Sichuan provinces. If the pilot projects are successful, the agency may use the standards to guide the management of millions of additional hectares of forest land.


The eight largest emission-reduction projects funded by the World Bank’s Prototype Carbon Fund, listed by dollar value. Adapted from www.carbonfinance.org.

ProjectCountryDescriptionPCF Contracts (US$ millions)
Coal-bed MethaneChinaCapture of coal mine methane for 120 megawatt power generation17.00
Durban Solid WasteSouth Africa10 megawatt generator to produce electricity from landfill methane15.01
Indocement Sustainable CementIndonesiaReducing clinker contents in cement, alternative fuels, heat power generation10.80
Xiaogushan HydropowerChina98 megawatt run-of-river hydroelectric plant on the Heihe River9.22
El Canada Small HydroGuatemala43 megawatt run-of-river hydroelectric plant to displace thermal power plants7.50
Umbrella Waste ManagementMexico6 bundled waste-to-energy projects totalling 21 megawatt capacity6.30
Plantar ReflorestamentosBrazilCharcoal from sustainable plantation replacing coke for pig iron works5.30
Pannogreen Pécs Fuel ConversionHungaryConversion of coal-fired power plants to biomass5.01

About the Author

Adelheid Fischer is a freelance writer based in Phoenix, Arizona.