The Forest, The Farms and the Finance: Why the Tolo River People Turned to Carbon Finance

05/18/2015 11:17 am ET | Updated May 18, 2016
About This Series 

Colombia's Tolo River People collectively own 32,000 acres of rainforest, and that forest feeds the river on which they depend. But ownership means nothing if you can't protect it. Four years ago, they began harnessing carbon finance to save the forest and preserve their way of life. This series takes us into their thinking and their strategy. It has been adapted from "Modern day forest conservation: A Colombian community protecting its rainforest one carbon credit at a time," by Tanya Dimitrova.

Part One: How The Tolo River People Of Colombia Harnessed Carbon Finance To Save Their Rainforest provides an overview of the project.

Part Two: The Forest, The Farms, And The Finance: Why The Tolo River People Turned To Carbon Finance examines the drivers of deforestation in and around the Tolo River Community.

Part Three: The Tolo River Community Project: The Importance of Inclusion follows the development of the project itself - its conception, its implementation, and its challenges.

Part Four: Getting Down To Business: The Tolo River People Shift From Building Their Carbon Project To Selling The Offsets tells the surprisingly challenging story of finding and cultivating offset buyers.

You can also find the REDD Desk Project summary of this project here.

The Tolo River People of Colombia were in a bind: dependent on nearby cattle ranches to make a living, they were helping destroy the forest that sustained them and their way of life. Here’s a look at the economics that drove them to embrace carbon finance.

This story is the second in a four-part series to initially run on Ecosystem Marketplace, and has been edited for a mainstream audience. Click here to view the full, unedited version.

18 May 2015 | Every morning, Jorge Vergara drives his motorcycle from the village of Acandí to the Builes Ranch, where he tends the nearly 400 cows and cattle. The ranch is just a ten-minute walk from Tolo River village of Peñaloza and one of many bordering their forest. On this day, two boys from the Tolo River community have tagged along to help him with the chores. Their payment will come in the form of a bottle of fresh milk.

The night before, Vergara had separated the two dozen or so milk cows from their calves so their udders would be full of milk by the morning. The hungry calves are now mooing by the fence, pushing to get close to their mothers.

Vergara lets one calf in, and it anxiously runs to its mom and starts suckling, only to be pulled away by Vergara’s young assistants once the milk-flow has “spiked”. Then he takes over to squeeze the warm milk into a bucket. “Boy!” he shouts. “Let another one in!”

Vergara is at the forefront of deforestation in this region, in part because land is so cheap here, and cattle ranching is so lucrative. That disparity left the forest at a disadvantage: living trees delivered no income, while cleared land did, and the desire that the Tolo River people had to save the forest was outweighed by their need to feed their families.

To balance that disparity, they turned to REDD (Reducing Emissions from Deforestation and Forest Degradation), which would make it possible for them to earn money by saving trees. The amount of money would depend in part on the amount of carbon stored in the trees they saved and in part on demand for carbon offsets.

The advantages of REDD are clear: it conserves tropical forests and unique natural biodiversity; it reduces our global impact on climate; and it fosters sustainable rural community development. Yet to realize and sustain the initiative’s success, many potential pitfalls need to be avoided as such projects scale up around the world.

The Economics of Deforestation

In countries where land is expensive, ranchers keep cows in relatively small spaces and feed them silage – fermented fodder produced from grass and maize plants. It’s an efficient, albeit perhaps not humane, way to manage land, and a farmer can raise up to three animals per hectare, greatly reducing the size of the farm, according to the Food and Agriculture Organization.

In many tropical countries, however, land is cheap, or even free if no farmer has claimed it yet. Ranchers here exhibit a classic open-frontier mentality: when they see a forest, they feel the land is wasted because it would make a great pasture. “The farm needs to grow,” says Vergara. “Silage is too much hassle.” They opt for less land-efficient cattle operations because it is easy and cheap to expand the ranch by clearing some of the bordering rainforest. On average, they place only one cow per hectare of land. This ensures that the herd always has fresh pastures with waist-high grass to graze.

It’s easy for cattle ranches in Chocó to illegally grab the forest: they just clear the vegetation on a 60-by-80 foot plot near the edge of the forest, put a fence around it, a salt lick in the middle and let cattle in. Most of the flat lands in the region have already been converted to pasture, so cattle ranchers encroach on the hills of the forest. Some of these cleared plots have an almost 45-degree slope – the cows look like mountain goats perched on the hillside.

 Jorge Vergara milking a cow with the help of a local boy. (Photograph: Tanya Dimitrova)

Jorge Vergara milking a cow with the help of a local boy. (Photograph: Tanya Dimitrova).

With land so easy to grab, there’s little incentive to farm more efficiently. REDD, however, can change that equation by providing the Tolo River people with a way to earn a living by protecting and managing their forest.

“Cattle ranching and illegal gold mines are the top two reasons for deforestation here,” says Rubén Guerrero from Colombia’s Ministry of Environment and Development. He explains that if the current rate of forest loss was to continue, half of Colombia’s rainforest would be gone by the end of the century.

Research from US NGO Forest Trends backs that up, and shows that almost half of all deforestation happens illegally.

Measuring The Carbon

Doctor Álvaro Cogollo is a legendary conservation scientist in Colombia. He began working for forest protection more than 30 years ago when most people in the country hadn’t yet realized the importance of this natural system. “People have this idea that Amazonia has the most spectacular forest in the world,” he says. “But the biggest trees are actually here, in Chocó.”

Cogollo and his 20 assistants spent three months in the Tolo River community forest studying the biodiversity and carbon contained in it. He calculated that one acre of the communal rainforest could contain up to 300 tons of carbon – seven times more than the average carbon content in one acre of an Amazonian forest.

Colombian REDD

The Tolo River people have one weapon that people in other parts of the world don’t, says Natalia Arango, climate change coordinator in a Colombian non-government organization Fondo Acción. Specifically, she says, they have Colombia’s willingness to recognize the rights of indigenous and Afro-Colombian forest communities, which offers fertile grounds for the REDD initiative. The progressive 1991 Constitution allowed them to claim their ancestral lands and provided them communal private ownership to the lands they manage.

In the past couple of years, the country has received $7.7 million from the World Bank and the United Nation’s REDD program to prepare it for large-scale REDD-financed conservation. The United States Agency for International Development (USAID) also invested $17 million in setting up local forest conservation projects in Colombia. This money is being used to estimate the amount of carbon stored in the nation’s forests, document the major drivers for deforestation in each region, and identify the deforestation rate in unprotected forests, which tends to hover between 1.5% and 2% across Colombia. Additionally, organizations such as Fondo Acción work with the indigenous land owners to design community development plans and economic alternatives to deforestation.

Arango says that Colombia, despite its progressive legislation, tends to be very slow in practical matters. Implementing change takes a long time because it has a complex society with lots of indigenous peoples and Afro-Colombians. For good reason, the government tends to be very cautious in making big institutional changes. “But it is being too cautious,” says Arango. “It has now spent years in the pre-pre-preparation phase of the strategy. And now we have some sort of public acceptance and agreement. We in the civil society think we need to go a bit faster because the forest is going very fast.”

Brodie Ferguson, an anthropologist from Stanford University, remembers first visiting Colombia nearly a decade ago. He was studying how the years of the Violence (a conflict between the Colombian Army and paramilitary and rebel groups) have affected indigenous and Afro-Colombian communities. After working in Chocó for many months, he eventually developed a close and trusting relationship with the Tolo River community and helped them design their forest conservation project. When thinking about the principle behind REDD, however, his most vivid memory comes from an interaction with another indigenous group: the Arhuacos from Sierra Nevada de Santa Marta.

Men from a nearby town transporting locally logged timber for construction. (Photograph: Tanya Dimitrova)

Men from a nearby town transporting locally logged timber for construction. (Photograph: Tanya Dimitrova).

Ferguson remembers talking with Danilo, one of the chiefs of the Arhuacos. The indigenous leader, dressed in his traditional white robes, was skeptical about REDD. “Do I want to be paying the youth of our community to conserve the forest?” he asked. “Shouldn’t they be doing this anyway out of appreciation for the forest and the community traditions… just because it’s the right thing to do?”

Ferguson concedes the point, but says that REDD isn’t about getting paid to conserve. Rather, when done right, it’s about jump starting new activities that can take the pressure off the forest for the long term. That, he says, means we must look at how REDD income is being spent.

“It should be spent on things like education, creating environmental awareness, improving healthcare, empowering women,” he says. Such programs have long-term positive effects. “Even if 100% of the profits go to the community – the best- case scenario – if they are not spent the right way, we are not achieving what we should be.”

Although new research from the World Resources Institute and the Rights and Resources Initiative indicates that REDD programs tend to strengthen the rights of forest people, that is not a foregone conclusion, and many forest peoples lack the legal protection that the Tolo River community enjoys.

On top of this is the cost of quantifying the carbon in all 6 million square miles of rainforest around the world. No two forests contain the same tree species and soils so carbon content can vary from 10 to 300 tons per acre. The threats to the standing forests also differ between regions as does the speed with which the forest would be lost had there not been REDD projects.

“We don’t want the money to get rich,” says community leader Córdoba. “We want to develop organizationally. That way we can protect our territory, maintain peace, improve our lives.”

Even if they wanted, though, they could never get rich off a REDD project. Income from selling carbon offsets currently cannot compare to any of the alternative ways to use their land: cattle ranching, cocoa plantations, gold mines, not-to-mention coca growing. A recent study estimated that only a price above around $30 USD per ton of carbon dioxide could make a forest more valuable standing than cleared.

Although plantations, if well designed and managed, could harbor lots of animals and plants, REDD proponents do not envision this kind of carbon emissions reductions. In fact, to issue forest offsets for tree planting, the Verified Carbon Standard – an organization which certifies and maintains an inventory of carbon credits worldwide – requires a proof that native forest clearing took place more than two decades ago.

What’s more, rich natural life and high carbon content need not be at odds with each other. A recent study found that combined carbon-biodiversity forest conservation strategy could simultaneously protect 90% of carbon stocks and wildlife (relative to a strategy focusing on either alone).

So ultimately what is an unsuccessful, poorly-designed REDD project?

“It is one where you have a London financier go down to Zambia, buy a bunch of land, hire some locals to protect the forest and then sell the credits on the market,” says Ferguson. That is not community-based conservation, though, there are a lot of such REDD projects out there – just not in the Tolo River community’s lands.

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Tanya Dimitrova just graduated from University of California, Berkeley, with a masters degree in energy and resources. She lives in Texas and works as a freelance science and environmental journalist.

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