Payments for Ecosystem Services in Africa Challenges and Opportunities for Legislators

1. Payments for Ecosystem Services in AfricaChallenges and Opportunities for Legislators Alice Ruhweza Forest Trends/The Katoomba Group: East & Southern Africa aruhweza@forest-trends.org e-Parliament Hearing; Costa Rica; 5th -7th June 2009

2. Africa – Quick Facts • Almost 50% of the population lives under $1 a day • Over 80% depend on Natural Resources for Food, Fuelwood, Medicine, GDP (Tourism, Mining, Exports etc) • High DeforestationRates: 4 times the world average; Among Top 10: Sudan, DR Congo, Zambia, Tanzania, Nigeria, Zimbabwe • Water Stress: 25% suffer from water stress ( expected to increase to 50% by 2025); 96% of agriculture is rain fed; 40 percent of the irrigated land is unsustainable; mostly due to lack of infrastructure ( e.g 2 dams in TZ compared to 589 in S.Africa!). Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

3. Africa Quick Facts - continued • Soil Nutrient Depletion: 40% of farmland with nutrient depletion rates greater than 60kg per hectare per year (2006). The highest rates of depletion are in Guinea, Congo, Angola, Rwanda, Burundi and Uganda • Energy: High dependence on fuel wood (firewood & charcoal) and small diesel generation with high operating costs (US$0.40 per kWh) -three times higher than in countries with large power systems; Low electricity generation (47 Sub-Saharan Africa countries, with 800 million people, generate the same power as Spain, with 45 million people). Power consumption at 124 kWh per capita per year and falling. Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

4. How can PES help? • Carbon Markets: payments for activities that reduce GHG emissions (carbon, methane, nitrogen) e.g Afforestation/Reforestation; Fuel switching; etc Rules to include credit for carbon sequestration in soils can improve productivity in the agricultural sector • Water Markets: Payments/Incentives to those who ensure water supply, water quality • Biodiversity Markets: Payments/Incentives for activities that conserve biodiversity Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

5. Payments for Carbon Sequestration • Uganda: Trees for Global Benefits Program: Afforestation by small holder farmers; (400 trees per seller-minimum) Staggered cash payments based on tCO2 sequestered per hectare; US$ 8 per tonne of CO2; Minimum of 20 years before harvest; Over US $300,000 worth of credits sold; 200 farmers connected to buyers, 200 applications being processed. • Senegal: Restoration of lands in the groundnut basin: to restore 15 000 ha affected by salinization. Plantation will be of halophile (adapted) species in the Senegal groundnut Basin. Approx: 52875 t CO2e through 2012 • Cameroon: Protection of over 20 000 ha of the Douala-Edea mangrove forest through use of 500 traditional smoke houses. This is expected to reduce wood consumption by 50% and Approx: 51,234 t CO2e through 2012 Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

6. Payments for CO2 seq-continued • Senegal Green Charcoal project: Use of biomass pyrolyzer to produce green charcoal from agricultural wastes or invasive weeds. Will replace traditional wood charcoal, reduce deforestation and reduce carbon emissions. The project estimates a reduction of 14539 tCO2 through 2011 • Gabon: Bambidie Wood Residual Cogeneration Project: This project will substitute three diesel generators the by producing electricity with a 1.5MW thermoelectric steam turbine using wood residues from wood processing of the sawmill. The project is estimated to sequester 18200 t CO2e through 2017 Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

7. Payments for CO2- continued • Uganda, Kenya, TZ: Sequestering CO2 through the use of efficient stoves –Reduced pressure on forests; less exposure to pollutants; employment, livelihoods. 1st certified Gold standard project in Uganda with credits sold on open market; Lots of potential in Tanzania and Kenya MANY MANY MORE—methane reduction from waste, biomass cogeneration from sugar, tea – credits bought by the World Bank PCF, BCF, CCF CDM: Uganda West Nile power project registered, TZ & Senegal in the pipeline Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

8. Payments for Watershed services • Tanzania EPWS project :Downstream corporate users compensating upstream- (Buyers: DAWASCO-US$ 100,000, Coca Cola & Sab Miller interested) • In the Pipeline: Kenya: Sasumuwa Dam, Green Water credits –lack of institutions/capacity, buyers? • South Africa: Working for Water- US$ 56 million (450 million SA Rand) paid by Govt annually to clear land of invasive alien species- 1.96 million hectares cleared & 30,000 employment opportunities per annum to date • Maybe a Cap & Trade?; Those who pollute more buy from those who pollute less -Lake Victoria, Nile Basin.? [need requisite policies & institutions] Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

9. Payments for Biodiversity Conservation • Trust funds to channel payments for biodiversity conservation : 13 in Africa; Eastern Arc (TZ), Bwindi Mgahinga (Uganda)Sangha Tri (Cameroon, Central African Republic and Republic of Congo) etc • Payments/Incentives for biodiversity conserving mgmt: cash payments or access to protected areas: e.g Kenya Kitengela Wildlife Lease Programme;US$8 per acre per annum paid to land owners who set aside land for wildlife corridors; Agreements with communities to manage sections of protected areas in return for access- many examples in Africa ( JFM, CBFM, WMA, Campfire in Namibia?; 20% of gate fees in Uganda) • Purchase of high value habitat for biodiversity conservation:Chimpanzee Sanctuary, Turtles, Cheetah, ..etc Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

10. Payments for Biodiversity Conservation-cont’d Payments for access to species of habitat:gate fees, research permits-(Tourism growth expected at 5.5% per year- Buyers: airlines, tourists, tour operators) Payments for biodiversity conserving business e.g Premiums for conservation friendly agriculture: fair trade, Organic products etc; Ecolodges and conservancies –up to 15% conservancy fees on top of hotel rates per night! Payments for offsetting biodiversity losses : Businesses voluntarily offsetting unforseen residual impacts from their projects: Oil & gas sector- Uganda, Mining- Ghana, Madagascar, South Africa—etc [BBOP] Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

11. In summary: Key features of PES in Africa • PES and PES-like initiatives growing / Some money exchanging hands/Considerable diversity of projects and different types of payments being made •  Long gestation period and lack of assurance on projects moving from design to implementation- high transaction costs, lack of buyers, • No ‘one size fits all’ approach throughout the region, as the focus and definition of PES projects and approaches varies from country to country. • Few legal and policy changes made to specifically accommodate PES (South Africa Water Pricing Policy, SA Biodiversity Policy: tax incentives for biodiversity friendly projects) Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

12. Key Issues/Challenges • Limited awareness: What is PES? How does it work? How should it be designed? • Lack of homegrown capacity/institutions: high dependence on external experts – very costly • Who should be paid? – Property rights not always clear • Lack of start up capital to cover the transaction costs • Benefits capture /Trade offs not well analysed • Equity Issues/Negative spin offs for non participants • Very few Government led efforts –though that is changing with REDD Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

13. Opportunities for Scaling up • Growing awareness and interest in PES—particularly carbon – but demand for clean water, and water supply likely to catalyse PWS. • Increasing demand for carbon credits from Africa: “charismatic carbon” but challenge is generating both amount and quality of credits to meet buyer requirements • Since carbon is an international product as well as being fungible, expertise developed can be transferred between countries • Funds for REDD readiness FCPF, UNREDD, Congo Basin Forest Fund, COMESA Africa BioCarbon Facility to target Agriculture & soil carbon (REDD plus); Biochar Fund Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

14. What legislators can do • Invest in institutions that can facilitate PES: e.g:, certification and verification bodies, registries, mechanisms to enforce contracts and settle ownership disputes, monitoring, aggregation of carbon credits amongst a large number of smallholders etc.. • Locally based institutions would reduce transaction costs Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

15. Institutions in a PES deal Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

16. What can legislators do? - continued • Set clear rules and guidelines for PES: what services are to be sold, at what price? Who should be paid? ( clarification of property rights), methods of measuring and valuation..etc. • Support promising projects to get to market – by giving start up funds- • Support capacity building of policy makers, local service providers/project developers PES will not solve all of Africa’s problems – it is only one tool in a toolbox – but it has great potential which has not been fully exploited Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org

17. About the Katoomba Group (1) Share intelligence & best practice related to PES; (2) identify gaps in PES theory and practice and (3) tackle key obstacles not being addressed by other players; Work closely with partners: Activities include: • Promoting dialogue and capacity building for PES through Meetings/Learning Events: (Ghana, Oct 6th - 10th, 2009) • Linking community projects to markets through the Katoomba Incubator: • Support to National REDD Readiness Strategies • Engaging the Private sector in PES • Sharing information, Newsletters, Ecosystem marketplace; Forest Carbon Portal etc. Visit us at www.katoombagroup.org Alice Ruhweza, East and Southern Africa Katoomba Group; aruhweza@forest-trends.org; www.katoombagroup.org