As DRC Emerges from Civil War, Government Seeks $50 Million per Year to Protect Forests from Surging Development
By Gloria Gonzalez
The Democratic Republic of the Congo (DRC) has the second largest forested area in the world, and the usual threats to forests – logging and agricultural expansion – have historically been muted by the civil war that has plagued the country since the mid-1990s. However, the DRC’s increasing political stability could result in the forests falling under threat from development, so the government is launching a pay-for-performance avoided deforestation program seeking $50 million a year from the private sector.
29 September 2014 |The forests in the Democratic Republic of the Congo (DRC) do not get nearly as much attention as those in Brazil and Indonesia, even though the DRC’s forests rank right in the middle of those countries on the list of the top three forested areas in the world. The DRC holds 155 million hectares of forests, more than 50% of all of Africa’s forests, and the country’s iconic Congo Basin is second only to Brazil’s Amazon forest in size – roughly 540 million hectares – and is larger than the 90 million hectares of forests in Indonesia.
Brazil and Indonesia are both beneficiaries of pledges potentially valued at up to $1 billion from Norway to support their efforts to conserve their forests. But the DRC has yet to receive that level of commitment from either donors or the private sector, in large part because the civil war that led to the deaths of six million people in the country also perversely protected the DRC’s forests from widespread destruction. In late 2013, however, the main armed rebel group agreed to a peace treaty, which paves the way for increasing political stability in the country. With that political breakthrough comes much-needed development, and with development come increased risks to the DRC’s forests, which, if destroyed, could potentially release 140 billion tonnes of greenhouse gases.
Now, donors and investors have a unique opportunity to prevent widespread deforestation before it occurs. To counteract potential forest destruction, the DRC government is launching a new pilot program to safeguard nearly nine million hectares – 10% of the DRC’s forests in an area the size of England – in the districts of Mai Ndombe and Plateau using the UN REDD+ (reducing emissions from deforestation and forest degradation) mechanism.
Bonobos, our closest relative
The area to be protected from deforestation is home to more than 1.8 million people and endangered species – some living in Salonga National Park – such the bonobo, the great ape that is the closest relative to humans and lives only in the DRC. It is also the site of the largest wetlands on the Ramsar List of Wetlands of International Importance, which originates from the global convention governing the sustainable use of wetlands. The area is the closest forest area to Kinshasa, the capital city, meaning it is also under threat from the growing charcoal, timber and food needs of nearly 10 million people, in part because of transportation infrastructure improvements making the forests more accessible.
“Our country believes with good regulation we can participate fully in the solution to climate change,” Minister N'sa Mputu Elima, Minister of Environment, Conservation of Nature and Tourism for the Democratic Republic of the Congo, said during a Climate Week NYC 2014 event.
Where’s the money?
The DRC receives funding from Norway and the World Bank to support its REDD+ development efforts, including $3.6 million in REDD readiness funding from the World Bank’s Forest Carbon Partnership Facility (FCPF). In April, the DRC drafted an Emission Reduction Programme Idea Note (ER-PIN) in pursuit of emissions reduction payments of about $60 million up to 2020 under the FCPF’s Carbon Fund program, which helps pay selected forest nations for reducing emissions from deforestation. In June, the DRC was accepted into the fund’s pipeline, but a final decision on whether it receives funding has not been made.
The ER-PIN’s stated proposal is for FCPF’s Carbon Fund to enter into an Emissions Reductions Purchase Agreement (ERPA) for 10 million tonnes of carbon dioxide equivalent (MtCO2e) over five years. But the FCPF process is a competitive one, with several other countries in the mix, and there has not been a formal commitment made to the DRC’s program. And even if the DRC is selected, the country will need to find additional funding to fully scale its planned program, to generate the targeted emissions reductions of 29 MtCO2e emissions reductions from 2016-2020.
The DRC is now seeking $20 million in start-up financing, and the government is looking mainly to philanthropic donors. This is because it is too difficult to make the business case for commercial investment, said Mike Korchinsky, Founder and President of Wildlife Works, which is a partner in the DRC’s REDD+ effort. Starting in Year Two, however, the program would shift into a pay-for-performance model in which private sector companies would pay the DRC government about $50 million for verified emissions reductions, with a target reduction of 7-10 MtCO2e per year. These revenues would be generated if and only if the country is able to reduce deforestation below historical rates. Proving emissions reductions against a baseline will take a major effort, since the DRC does not have high historical deforestation rates to begin with, he said.
The price for the emissions reductions would be dictated by the voluntary carbon markets, but the partners have assumed a price of $6 per tonne although they understand that there is no proof that the markets will support a minimum price, Korchinsky said. “We welcome some stability as long as it’s a fair price,” he said.
The program is potentially of great interest to corporations that need to show a reduction in their net carbon footprints and have done all they can to reduce their carbon emissions internally, Korchinsky said. The partners have started having conversations with corporations operating in the DRC to urge them to take responsibility for their emissions.
“But in the end, the vast majority of industrial emissions are created in the Northern hemisphere so it’s corporations in the Northern hemisphere that should carry responsibility for financing these activities in the long run,” he said. “The scale of this program is within the means of individual corporations whose emissions are far larger than this program is trying to reduce.”
A better alternative
Brazil and Indonesia receive a lot of attention for their forests mainly because of the very high historical deforestation rates they experience because they – like many developed countries – use their forests to increase the wealth of their countries, Korchinsky said. Brazil has per capita income of about $12,000 per year while Indonesia’s per capita income is about $3,500 per year. In comparison, the DRC’s per capita income is roughly $300-400 per year because the country has not had the opportunity to destroy its forests for growth, but the country must now make a decision about future development, he said.
“Can it learn from the lessons of Indonesia and Brazil and find a different way to protect its forests and still grow its economy?” Korchinsky asked.
The DRC’s forests are already facing intense new pressures from agricultural commodities such as palm oil. In 2009, Congo Oil & Derivatives SARL was awarded a 10,000-hectare concession to develop a new palm plantation in Muanda territory – despite the fact that the concession falls within two forest reserves. As of November 2013, the plantation was still in its early stages of development.
DRC’s forest dependant communities are vulnerable
One way to make sure that standing forests are valuable in the DRC’s economy is to ensure the REDD+ program creates as many jobs as possible. In the short term, REDD+ will not be able to employ as many people as activities leading to deforestation such as logging, Korchinsky admitted. However, the program intends to train community residents to perform much of the measuring and reporting work needed to verify that the promised emissions reductions are actually being generated. And it will invest in local education to give residents more options for employment in the future.
More than 70% of the start-up financing will be invested in programs in communities to convince them to participate in the program, with the balance going toward technical support, policy framework and legislation and changes in land tenure.
“In the end, this program will succeed because communities see the value,” he said.
What does the future hold?
The DRC government will soon hold a public national workshop to officially launch the design phase, with input coming from all stakeholders, including civil society organizations and the private sector. The design document will be presented in June 2015 to the World Bank, with the intention that the DRC and the World Bank would sign the ERPA by the end of the year.
The government has committed to copying this program in other parts of the country if the pilot works.
“It really is a pilot for the future of the Congo Basin,” Korchinsky said.
There are eight other countries in the Congo Basin facing the same challenges in stopping deforestation without having an adverse impact on their communities, said Victor Kabengele wa Kadilu, national REDD coordinator. “If it works in the DRC, it’s going to work in the other Congo Basin countries,” he said.
By Gloria Gonzalez
The Democratic Republic of the Congo (DRC) has the second largest forested area in the world, and the usual threats to forests – logging and agricultural expansion – have historically been muted by the civil war that has plagued the country since the mid-1990s. However, the DRC’s increasing political stability could result in the forests falling under threat from development, so the government is launching a pay-for-performance avoided deforestation program seeking $50 million a year from the private sector.
29 September 2014 |The forests in the Democratic Republic of the Congo (DRC) do not get nearly as much attention as those in Brazil and Indonesia, even though the DRC’s forests rank right in the middle of those countries on the list of the top three forested areas in the world. The DRC holds 155 million hectares of forests, more than 50% of all of Africa’s forests, and the country’s iconic Congo Basin is second only to Brazil’s Amazon forest in size – roughly 540 million hectares – and is larger than the 90 million hectares of forests in Indonesia.
Brazil and Indonesia are both beneficiaries of pledges potentially valued at up to $1 billion from Norway to support their efforts to conserve their forests. But the DRC has yet to receive that level of commitment from either donors or the private sector, in large part because the civil war that led to the deaths of six million people in the country also perversely protected the DRC’s forests from widespread destruction. In late 2013, however, the main armed rebel group agreed to a peace treaty, which paves the way for increasing political stability in the country. With that political breakthrough comes much-needed development, and with development come increased risks to the DRC’s forests, which, if destroyed, could potentially release 140 billion tonnes of greenhouse gases.
Now, donors and investors have a unique opportunity to prevent widespread deforestation before it occurs. To counteract potential forest destruction, the DRC government is launching a new pilot program to safeguard nearly nine million hectares – 10% of the DRC’s forests in an area the size of England – in the districts of Mai Ndombe and Plateau using the UN REDD+ (reducing emissions from deforestation and forest degradation) mechanism.
Bonobos, our closest relative
The area to be protected from deforestation is home to more than 1.8 million people and endangered species – some living in Salonga National Park – such the bonobo, the great ape that is the closest relative to humans and lives only in the DRC. It is also the site of the largest wetlands on the Ramsar List of Wetlands of International Importance, which originates from the global convention governing the sustainable use of wetlands. The area is the closest forest area to Kinshasa, the capital city, meaning it is also under threat from the growing charcoal, timber and food needs of nearly 10 million people, in part because of transportation infrastructure improvements making the forests more accessible.
“Our country believes with good regulation we can participate fully in the solution to climate change,” Minister N'sa Mputu Elima, Minister of Environment, Conservation of Nature and Tourism for the Democratic Republic of the Congo, said during a Climate Week NYC 2014 event.
Where’s the money?
The DRC receives funding from Norway and the World Bank to support its REDD+ development efforts, including $3.6 million in REDD readiness funding from the World Bank’s Forest Carbon Partnership Facility (FCPF). In April, the DRC drafted an Emission Reduction Programme Idea Note (ER-PIN) in pursuit of emissions reduction payments of about $60 million up to 2020 under the FCPF’s Carbon Fund program, which helps pay selected forest nations for reducing emissions from deforestation. In June, the DRC was accepted into the fund’s pipeline, but a final decision on whether it receives funding has not been made.
The ER-PIN’s stated proposal is for FCPF’s Carbon Fund to enter into an Emissions Reductions Purchase Agreement (ERPA) for 10 million tonnes of carbon dioxide equivalent (MtCO2e) over five years. But the FCPF process is a competitive one, with several other countries in the mix, and there has not been a formal commitment made to the DRC’s program. And even if the DRC is selected, the country will need to find additional funding to fully scale its planned program, to generate the targeted emissions reductions of 29 MtCO2e emissions reductions from 2016-2020.
The DRC is now seeking $20 million in start-up financing, and the government is looking mainly to philanthropic donors. This is because it is too difficult to make the business case for commercial investment, said Mike Korchinsky, Founder and President of Wildlife Works, which is a partner in the DRC’s REDD+ effort. Starting in Year Two, however, the program would shift into a pay-for-performance model in which private sector companies would pay the DRC government about $50 million for verified emissions reductions, with a target reduction of 7-10 MtCO2e per year. These revenues would be generated if and only if the country is able to reduce deforestation below historical rates. Proving emissions reductions against a baseline will take a major effort, since the DRC does not have high historical deforestation rates to begin with, he said.
The price for the emissions reductions would be dictated by the voluntary carbon markets, but the partners have assumed a price of $6 per tonne although they understand that there is no proof that the markets will support a minimum price, Korchinsky said. “We welcome some stability as long as it’s a fair price,” he said.
The program is potentially of great interest to corporations that need to show a reduction in their net carbon footprints and have done all they can to reduce their carbon emissions internally, Korchinsky said. The partners have started having conversations with corporations operating in the DRC to urge them to take responsibility for their emissions.
“But in the end, the vast majority of industrial emissions are created in the Northern hemisphere so it’s corporations in the Northern hemisphere that should carry responsibility for financing these activities in the long run,” he said. “The scale of this program is within the means of individual corporations whose emissions are far larger than this program is trying to reduce.”
A better alternative
Brazil and Indonesia receive a lot of attention for their forests mainly because of the very high historical deforestation rates they experience because they – like many developed countries – use their forests to increase the wealth of their countries, Korchinsky said. Brazil has per capita income of about $12,000 per year while Indonesia’s per capita income is about $3,500 per year. In comparison, the DRC’s per capita income is roughly $300-400 per year because the country has not had the opportunity to destroy its forests for growth, but the country must now make a decision about future development, he said.
“Can it learn from the lessons of Indonesia and Brazil and find a different way to protect its forests and still grow its economy?” Korchinsky asked.
The DRC’s forests are already facing intense new pressures from agricultural commodities such as palm oil. In 2009, Congo Oil & Derivatives SARL was awarded a 10,000-hectare concession to develop a new palm plantation in Muanda territory – despite the fact that the concession falls within two forest reserves. As of November 2013, the plantation was still in its early stages of development.
DRC’s forest dependant communities are vulnerable
One way to make sure that standing forests are valuable in the DRC’s economy is to ensure the REDD+ program creates as many jobs as possible. In the short term, REDD+ will not be able to employ as many people as activities leading to deforestation such as logging, Korchinsky admitted. However, the program intends to train community residents to perform much of the measuring and reporting work needed to verify that the promised emissions reductions are actually being generated. And it will invest in local education to give residents more options for employment in the future.
More than 70% of the start-up financing will be invested in programs in communities to convince them to participate in the program, with the balance going toward technical support, policy framework and legislation and changes in land tenure.
“In the end, this program will succeed because communities see the value,” he said.
What does the future hold?
The DRC government will soon hold a public national workshop to officially launch the design phase, with input coming from all stakeholders, including civil society organizations and the private sector. The design document will be presented in June 2015 to the World Bank, with the intention that the DRC and the World Bank would sign the ERPA by the end of the year.
The government has committed to copying this program in other parts of the country if the pilot works.
“It really is a pilot for the future of the Congo Basin,” Korchinsky said.
There are eight other countries in the Congo Basin facing the same challenges in stopping deforestation without having an adverse impact on their communities, said Victor Kabengele wa Kadilu, national REDD coordinator. “If it works in the DRC, it’s going to work in the other Congo Basin countries,” he said.
Just a few more years until i can do that