1. Dr Sean Weaver, Principal, Carbon Partnership sean.weaver@carbon-partnership.com www.carbon-partnership.com Pilot Project Case Study: Improved Forest Management Climate Protection Through Forest Conservation in the Pacific Islands Inception Workshop, 22-24 November 2010 Suva, Fiji

2. Voluntary Carbon Market And Maori Indigenous Forests Resource 64m ha NZ Total 2.4m ha Harvestable 614,000 ha Maori Owned

3. Resource 614,000 ha Maori Owned Pre-1990 Forest Ineligible for carbon trading under the NZ ETS Eligible for carbon trading under the Voluntary Carbon Market Voluntary Carbon Market And Maori Indigenous Forests

4. 614,000 ha Maori Owned Key Factors Determining Voluntary Carbon Trading Eligibility: 1.Outside compliance carbon accounting 2.Project type eligible under a voluntary standard 3.Legal sanction for BAU emissions or sink activity 4.Commercial viability of BAU activities Eligible for carbon trading under the Voluntary Carbon Market

5. 614,000 ha Maori Owned Case Study: SILNA Forest Land – Western Southland

6. Rowallan-Alton Incorporation Office of the Maori Trustee R IV/1 R IV/2 R IV/3 R IV/9 R IV/4 R IV 12 R IV 15 A VII 3,4 A V/2 R III/1R II/1 R II/7 R III/9 R VII/3

7. Unlogged

8. Logged

9. 1.Avoided or reduced emissions (stopping timber harvesting) 2.Enhanced carbon sequestration (carbon farming) Two main activity categories:

10. VCS CCB Particularly Suitable for Indigenous Forests

11. American Carbon Registry Standard Climate Action Reserve Protocols The CarbonFix Standard Clean Development Mechanism Chicago Climate Exchange Offsets Program Climate, Community, and Biodiversity Standard EPA Climate Leaders Offset Guidance Greenhouse Gas Services Standard Gold Standard Australian National Carbon Offset Standard ISO 14064-2 Standard Plan Vivo Social Carbon TUV NORD Climate Change Standard VER+ Standard Voluntary Carbon Standard Supplier specific standards

12. American Carbon Registry Standard Climate Action Reserve Protocols The CarbonFix Standard Clean Development Mechanism Chicago Climate Exchange Offsets Program Climate, Community, and Biodiversity Standard EPA Climate Leaders Offset Guidance Greenhouse Gas Services Standard Gold Standard Australian National Carbon Offset Standard ISO 14064-2 Standard Plan Vivo Social Carbon TUV NORD Climate Change Standard VER+ Standard Voluntary Carbon Standard Supplier specific standards

13. American Carbon Registry Standard Climate Action Reserve Protocols The CarbonFix Standard Clean Development Mechanism Chicago Climate Exchange Offsets Program Climate, Community, and Biodiversity Standard EPA Climate Leaders Offset Guidance Greenhouse Gas Services Standard Gold Standard Australian National Carbon Offset Standard ISO 14064-2 Standard Plan Vivo Social Carbon TUV NORD Climate Change Standard VER+ Standard Voluntary Carbon Standard Supplier specific standards

14. American Carbon Registry Standard Climate Action Reserve Protocols The CarbonFix Standard Clean Development Mechanism Chicago Climate Exchange Offsets Program Climate, Community, and Biodiversity Standard EPA Climate Leaders Offset Guidance Greenhouse Gas Services Standard Gold Standard Australian National Carbon Offset Standard ISO 14064-2 Standard Plan Vivo Social Carbon TUV NORD Climate Change Standard VER+ Standard Voluntary Carbon Standard Supplier specific standards

15. American Carbon Registry Standard Climate Action Reserve Protocols The CarbonFix Standard Clean Development Mechanism Chicago Climate Exchange Offsets Program Climate, Community, and Biodiversity Standard EPA Climate Leaders Offset Guidance Greenhouse Gas Services Standard Gold Standard Australian National Carbon Offset Standard ISO 14064-2 Standard Plan Vivo Social Carbon TUV NORD Climate Change Standard VER+ Standard Voluntary Carbon Standard Supplier specific standards Global Best Practice

16. Project Sequence: 1. Select Voluntary Standard 1. Select Voluntary Standard 2. Select or Develop Methodology 2. Select or Develop Methodology 3. Project Description Documents 3. Project Description Documents 4. Project Validation 4. Project Validation 5. Registration Issuance Monitoring 5. Registration Issuance Monitoring

17. Project Sequence: 1. Select Voluntary Standard 1. Select Voluntary Standard 2. Select or Develop Methodology 2. Select or Develop Methodology 3. Project Description Documents 3. Project Description Documents 4. Project Validation 4. Project Validation 5. Registration Issuance Monitoring 5. Registration Issuance Monitoring Eligible Project Types: 1.Afforestation, Reforestation, & Revegetation (ARR) 2.Improved Forest Management (IFM) 3.Reducing Emissions from Deforestation and Degradation (REDD)

18. Eligible Project Types: 1.Afforestation, Reforestation, & Revegetation (ARR) 2.Improved Forest Management (IFM) 3.Reducing Emissions from Deforestation and Degradation (REDD) IPCC category: ‘Forest remaining as forests’ a.Reduced Impact Logging (RIL) b.Converting Logged to Protected Forest (LtPF) c.Extending Rotation Age (ERA)

19. Eligible Project Types: 1.Afforestation, Reforestation, & Revegetation (ARR) 2.Improved Forest Management (IFM) 3.Reducing Emissions from Deforestation and Degradation (REDD) IPCC category: ‘Forest remaining as forests’ a.Reduced Impact Logging (RIL) b.Converting Logged to Protected Forest (LtPF) c.Extending Rotation Age (ERA)

20. Eligible Project Types: 1.Afforestation, Reforestation, & Revegetation (ARR) 2.Improved Forest Management (IFM) 3.Reducing Emissions from Deforestation and Degradation (REDD) IPCC category: ‘Forest remaining as forests’ a.Reduced Impact Logging (RIL) b.Converting Logged to Protected Forest (LtPF) c.Extending Rotation Age (ERA) Time Project management period Project Carbon Stocks Baseline Carbon Stocks SFM Timber harvesting Avoided Particularly relevant in NZ because forest degradation is illegal Case study helps to test commercial viability of carbon at low volumes Original forest = old growth

21. Time Eligible Project Types: 1.Afforestation, Reforestation, & Revegetation (ARR) 2.Improved Forest Management (IFM) 3.Reducing Emissions from Deforestation and Degradation (REDD) IPCC category: ‘Forest remaining as forests’ a.Reduced Impact Logging (RIL) b.Converting Logged to Protected Forest (LtPF) c.Extending Rotation Age (ERA) Project management period Project Carbon Stocks Baseline Carbon Stocks SFM Timber harvesting Avoided Particularly relevant in NZ because forest degradation is illegal Case study helps to test commercial viability of carbon at low volumes Original forest = regenerating

22. 1. Select Voluntary Standard 1. Select Voluntary Standard 2. Select or Develop Methodology 2. Select or Develop Methodology 3. Project Description Documents 3. Project Description Documents 4. Project Validation 4. Project Validation 5. Registration Issuance Monitoring 5. Registration Issuance Monitoring Eligible Project Types: 1.Afforestation, Reforestation, & Revegetation (ARR) 2.Improved Forest Management (IFM) 3.Reducing Emissions from Deforestation and Degradation (REDD)

23. 2. Select or Develop Methodology 2. Select or Develop Methodology 1.Follow VCS Guidance 2.Project Eligibility Criteria 3.Boundary Determination 4.Baseline Scenario 5.Project Scenario 6.Additionality 7.Leakage 8.Risk & Permanence 9.Ancillary Impacts 10.Monitoring Why all this detail? Because we are creating a new commodity that you cannot see 3. Project Description Documents 3. Project Description Documents

24. Case Study: SILNA Forest Land – Western Southland 3. Project Description Documents 3. Project Description Documents Populate methodology template with data from this case study

25. Case Study: SILNA Forest Land – Western Southland Rowallan-Alton Incorporation Office of the Maori Trustee R IV/1 R IV/2 R IV/3 R IV/9 R IV/4 R IV 12 R IV 15 A VII 3,4 A V/2 R III/1R II/1 R II/7 R III/9 R VII/3

30. Define Eligible Area Calculate baseline emissions Calculate Project GHG benefits Additionality, Leakage Non-Permanence Risk Monitoring

32. Define Eligible Area Calculate baseline emissions Calculate Project GHG benefits Additionality, Leakage Non-Permanence Risk Monitoring Preliminary Calculations For Carbon Benefits: 1,400 ha 7,000 tCO 2 per yr x 50 years = 350,000 tCO2 350,000 x US$6 = US$2.1 million (if forward sold) If the baseline activity is high intensity (unsustinable) logging:  the Baseline emissions are much higher and  the carbon revenues much higher

33. Define Eligible Area Calculate baseline emissions Calculate Project GHG benefits Additionality, Leakage Non-Permanence Risk Monitoring Two sale options:  Forward sale (futures market) ex ante  Standard (after carbon benefits are delivered) ex post 350,000 x US$6 = US$2.1 million (if forward sold) 1,400 ha 7,000 tCO 2 per yr x 50 years = 350,000 tCO2 Preliminary Calculations For Carbon Benefits:

34. 1. Select Voluntary Standard 1. Select Voluntary Standard 2. Select or Develop Methodology 2. Select or Develop Methodology 3. Project Description Documents 3. Project Description Documents 4. Project Validation 4. Project Validation 5. Registration Issuance Monitoring 5. Registration Issuance Monitoring US$0 – US$40k US$40 - US$60k US$20k (US$40k) (If new methodology) US$10k 5-yearly

35. 1. Select Voluntary Standard 1. Select Voluntary Standard 2. Select or Develop Methodology 2. Select or Develop Methodology 3. Project Description Documents 3. Project Description Documents 4. Project Validation 4. Project Validation 5. Registration Issuance Monitoring 5. Registration Issuance Monitoring Phased approach: Phase 1: Scoping Exercise (e.g. US10k) Phase 2: Draft PDD & Data Gap Analysis (e.g. US$40k) Phase 3: Complete Path To Market