Community Forestry Management, Indigenous Peoples, and REDD

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I recently visited the community of Ixtpal de Juarez, an indigenous community in the Sierra Norte of Oaxaca, Mexico. The 19,000 hectares of forest that the community manages generates almost $2 million/year in revenue and more employment than the community can fill.

The heart of this operation is a forestry management unit that uses sustainable practices on the 3600 hectares. This timberland supplies their saw mill enough logs to produce 25,000 cubic meters of sawn lumber per year. While the lumber could be sold on the market for ~$1/ board foot, it is instead transformed into furniture that sells for the equivalent of $3/board foot.

The project started almost 25 years ago when the community took control of the timber concession previously managed by a private timber company.

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Failure of Climate Bill - How does it affect Forestry and REDD?

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I think we would all agree that it is a disappointment that the US Senate didn't take up a climate bill that included a cap and trade system to finally put a price on carbon and begin reducing emissions.

The failure of the bill affects REDD not only in Panama, but throughout the world. Primarily, it hamstrings any meaningful encapsulating agreement coming out of Cancun in December, and probably even South Africa in 2011. More and more it looks like the best thing that can come out of Cancun for REDD is a "REDD+ Readiness" package that the new REDD+ Partnership can build off of. More on that Partnership later...

Most importantly for REDD, it doesn't look like we will have a significant market for any credits generated in the next 5-6 years; not a great signal to the private sector and investors.

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Nuts n' Bolts of the Business

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Our Snapshot 2015 series provides a rough sketch of Planting Empowerment five years down the road - from operations to products to impacts. In this part, we describe how the Planting Empowerment business structure looks.

Planting Empowerment in 2015 will be a self sustaining, fast-growing business with approximately 1000 hectares under cultivation, and approaching $6,000,000 of investment raised for the plantations. The business will restructure to become either an L3C or a B-corporation.

An L3C is a new type of corporation whose principal activity is social or environmental improvement, is limited-profitability, and is more "tax-attractive" to institutional investors such as endowments and trusts. With an eye on attaining scale, we are considering this option in order to tap into the social/environmental carve-outs of some of these investors.

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REDD in Panama

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How should REDD work in Panama? The basics are that it should:

  • Be a national system (potentially nested with a definite end for projects);
  • Ensure the majority of the benefits reach those living in the forests.
  • Not count enhanced forest carbon sequestration that comes from plantations (monoculture Teak, Oil Palm).

Why a national system? Independent projects are great, but they will just push the deforestation around the country - leakage, in other words. If these projects are to be included, it should be within a "nested" approach. This means that projects have a set amount of time (between 5-7 years) to merge their project into the national system, or "nest" it.

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