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Michael Packer Developing a Carbon Credit Project Developer Perspective 1st Policy and Governance Roundtable Meeting Accra, 27-28 November 2008 Operationalising.

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Presentation on theme: "Michael Packer Developing a Carbon Credit Project Developer Perspective 1st Policy and Governance Roundtable Meeting Accra, 27-28 November 2008 Operationalising."— Presentation transcript:

1 Michael Packer Developing a Carbon Credit Project Developer Perspective 1st Policy and Governance Roundtable Meeting Accra, November 2008 Operationalising Carbon Finance for Sustainable and Tree Crops in Ghana

2 Project case study Project case study reforestation of severely degraded forest lands using rich mix of indigenous tree species

3 Stages in the project cycle 1 Project purpose develop multiple asset/multiple revenue forestry project that delivers sustainable value Project assessment property rights tree and carbon rights suitability of land risk assessment (including additionality & leakage) financial assessment

4 Stages in the project cycle 2 PIN PDD Securing investment (equity/debt) Implementation (delivery ‘partners’) Validation against Voluntary Carbon Standard (VCS) and Climate, Community, Biodiversity (CCB) standards Verification Issuance Periodic verification and issuance (carbon units and proportion of buffer units, assuming no increase in risk)

5 Risks Country Policy Financial Implementation Market/Price Climate change Direct threats (illegal logging/encroachment)

6 Financial issues high upfront payments high implementation costs time to realise carbon revenues equity/debt finance multiple revenue options carbon timber NTFPs ecosystem services demand-side voluntary carbon price discretionary spend

7 Transaction costs – large project Desk top analysis/ scoping study – $20-30K Demarcation fees – $10K Feasibility study – $40-50K Carbon stock analysis – $50K Project Design Document (PDD) development – $75-150K Possible new methodology – $50-150K Validation – $20-35K Registration – $10K? Internal monitoring – $20K (every 2 years?) Verification initial verification – $30-45K periodic verification – $20-35K Total upfront costs – $ K

8 Financial issues high upfront payments high implementation costs time to realise carbon revenues equity/debt finance multiple revenue options carbon timber NTFPs ecosystem services demand-side voluntary carbon price discretionary spend

9 Implementation costs Project established at 1000ha in year 1, 4000ha in year 2, 7000ha in year 3, and 8000ha in year 4

10 Financial issues high upfront payments high implementation costs time to realise carbon revenues equity/debt finance multiple revenue options carbon timber NTFPs ecosystem services demand-side voluntary carbon price discretionary spend

11 Carbon pools

12 Carbon and timber revenues 15% discount rate

13 Financial issues high upfront payments high implementation costs time to realise carbon revenues equity/debt finance multiple revenue options carbon timber NTFPs ecosystem services demand-side voluntary carbon price discretionary spend

14 Contractual issues legal entities expectations – landowners, national interests, project developers, investors benefit sharing policy compliance equipment, labour and management carbon transactions

15 carbon markets are an important opportunity for forestry projects are very complex and risky need to be realistic about what carbon finance can and cannot do high quality multiple forest assets/multiple revenues project and market stimulation – public funding – subsidise early costs, pilot development of generic methodologies, pump priming – policy and regulation – framework/boundaries within which the market can freely operate Key notes

16 Contacts Michael Packer PhD Managing Director Arborcarb Ltd Prama House, 267 Banbury Road, Oxford, OX2 7HT, UK UK cell Ghana cell UK tel


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