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Zenbaba Union / Agricord workshop in Support to Forest Producers’ Organization In Amhara

Potential Benefits from Carbon Trading to Smallholder Farms - comparison of Ethiopian and Finnish average forest farms Veli Pohjonen Tana-Beles WME project. Zenbaba Union / Agricord workshop in Support to Forest Producers’ Organization In Amhara Bahir Dar 19 January 2012. CO 2 in our air.

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Zenbaba Union / Agricord workshop in Support to Forest Producers’ Organization In Amhara

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  1. Potential Benefits from Carbon Trading to Smallholder Farms- comparison of Ethiopian and Finnish average forest farmsVeli PohjonenTana-Beles WME project Zenbaba Union / Agricord workshop in Support to Forest Producers’ Organization In Amhara Bahir Dar 19 January 2012

  2. CO2 in our air Despite climate conventions in Kyoto, Copenhagen and Durban (South Africa): CO2 concentration of the air is rising 11 per cent in Kyoto period 1990 – 2012 No effect from CO2 emission reductions

  3. Carbon dioxide in accelerating increase

  4. Two ways to combat • Through the sources: reduce CO2 emissions. Technological way. • Through the sinks: increase Carbon Offsets to trees and soils. Ecological way.

  5. Carbon Offsets via trees • Conserve and manage the existing natural forests • Establish (large) block plantations • Agroforests , forest farms

  6. Carbon Offsets in agroforests and forests farms • Plant trees • Count the trees in year 1 • Define carbon stock in year 1 (= A, tn C/farm) • Recount the trees in year 2 • Define carbon stock in year 2 (= B, tn C/farm) • Carbon Offset = B – A (tn C/farm/yr)

  7. Average Amhara smallholder farm: assume 1500 agroforestry trees (stems); how much carbon is Offsetted in a year, how many Birr is it worth of?

  8. Tana-Beles farms (8) Carbon Offset • Year 2010: 2077 trees (stems), Carbon stock 4.005 tn/farm • Year 2009 : 1055 trees, Carbon stock 3.333 tn/farm • Carbon Offset B–A=0.672 tn C/yr/farm • How much in Birr is B – A?

  9. Carbon trading pricing principle • Daily price of Carbon dioxide is found in http://www.pointcarbon.com • Price on 18.1.2012 = 6.85 Euro / tn CO2 • Price of C = 25.12 Euro / tn C (factor 44/12) • Price of C = 556 Birr / tn C (exchange rate 22.14) Value of Carbon changes daily at international market

  10. Tana-Beles average farms (8): Birr value of Offsetted Carbon • Carbon Offset in one year B-A = 0.672 tn C/farm/yr • Price of Carbon 556 Birr/tn C • Value of Offsetted Carbon: 373 Birr/yr/farm

  11. How potential Carbon trading 373 Birr/yr/farm compares to smallholder farm annual sales?

  12. How about average forest farm in Finland? Would Carbon Trading give added value? • Average size of Finnish forest farm: 31 ha • The per hectare tree stock has increased in Kyoto period from 83 to 100 m3/ha (national averages) • For 22 years the average Finnish forest farm has Offsetted Carbon • How many Euros per year?

  13. Ten per cent added value • The Carbon Offset 1990-2012 to average Finnish forest ha: 0.383 tn C/ha/yr • Carbon price 25.12 Euro/tn C • Carbon Trading value: 9.63 Euro/ha/yr (or 299 Euros/farm/yr) • Based on commercial tree growth and sales the average annual forestry income is about 100 Euros/ha • Carbon trading would give 10 per cent added value.

  14. Forest Producers Organization to take over the Carbon trading • Smallholder farm is the basic unit both in Ethiopia and Finland • Smallholder farmers get added value to their annual sales (up to 20 per cent in Ethiopia, 10 per cent in Finland) • FPO would be suitable basic unit for Carbon trading • FPO would get share of Carbon trading, to finance its administration & management

  15. How to organize Carbon trade? • Smallholder farmers group into Forest Producers Organization (FPO) • FPO buys once a year (or once in 3 years, or once in 5 years) the Carbon Offsets from member farmers • FPO sells the Carbon Offsets to International Carbon Trade markets • Carbon Offsets become a new export commodity (like atana – poles in Amhara) • This possibility and potential should be presented in the next Climate conference (December 2012)

  16. Carbon Tower gets greener

  17. Thank you • veli.pohjonen@gmail.com • http://veli.pohjonen.org

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