Agriculture drives deforestation around the world, but a Peruvian nonprofit is using carbon finance to help 1,100 farmers develop sustainable cocoa production in an effort to save an endangered wildlife area. It’s a marriage of avoided deforestation and sustainable commodity production that is projected to pay off in more ways than one.
By Allie Goldstein
This article has been adapted from a longer piece on Ecosystem Marketplace. Click here to read the article in its entirety.
1 May 2015 | Last November, a group of Dutch businessmen found themselves far from their desks, standing damp but happy in the Peruvian rainforest, where they’d come to visit the forest they were paying to save.
“What is so depressing is I came to Puerto Maldonado 31 years ago,” said Mark Meyrick, who heads the carbon desk for Dutch energy giant Eneco. “That town has not changed materially in terms of development in that time. It’s still pretty dusty, still pretty rundown, still doesn’t have much going for it, and yet there has been a huge amount of environmental damage done in that area and I ask myself, to what end? Who has got rich on this? And it’s very difficult to see anybody has.”
His company -- along with the FMO development bank, the Desso carpet company, and a competitor from the energy sector, Essent -- had all invested in a program that might not make people rich, but will at least help them make ends meet while taking pressure off the valuable forest: the Tambopata REDD project, which is nestled in a massive protected area spread across the Tambopata National Reserve and the Buhuaja-Sonene National Park in the Madre de Dios region.
Known as the “Biodiversity Capital” of Peru, the Reserve provides critical habitat to threatened species such as the black caiman, the harpy eagle, and the giant otter. But more and more people are coming, too: a recent government census puts the human population of Madre de Dios at just under 110,000 – more than 20 times what it was in the 1940s, when gold mining began to draw migrants from the South Andes. The construction of the South Interoceanic Highway, which started in 2006, has accelerated gold mining, wood extraction, and slash-and-burn agriculture.
REDD stands for "Reducing Emissions from Deforestation and Degradation" of forests, and the Tambopata REDD project began to germinate after the cash-strapped national protected areas authority, SERNANP, awarded a 20-year management contract to the Peruvian sustainable development NGO Asociación para la Investigación y Desarrollo Integral (AIDER). The project aims to save the forest by spurring economic activities that are based on the forest’s conservation rather than its destruction – activities such as cocoa production, chestnut harvesting, small-scale fish farming, and low-impact logging.
AIDER aims to work with 1,100 farmers in 19 villages around the buffer zone of the protected regions. These farmers practice migratory agriculture, moving from plot to plot over time and sometimes clearing sections of the Reserve. AIDER seeks to break this cycle by helping them intensify agricultural production on land outside of Tambopata and Bahuaja-Sonene, as well as by planting crops that are lucrative enough that farmers can earn a long-term livelihood from a finite land area.
Last year, the NGO helped to form a farmer’s cooperative called Tambopata Candamo, which is focused on harvesting, processing and commercializing cocoa, with a goal of maintaining 4,000 hectares of fine aromatic cocoa trees. With AIDER’s help, they’ve invested in infrastructure such as warehouses, dryers and fermentation facilities, and trucks that will transport the processed product to market. Between the chocolate trees, farmers will also plant other cash crops such as bananas and beans.
“Our goal is to avoid the deforestation of almost 12,000 hectares in both natural protected areas in the first 10 years of the project, and contribute to biodiversity conservation and socioeconomic development in the buffer zone,” said Paul Ramirez, the project manager.
For the project to work, AIDER will have to succeed in the market for REDD offsets, which is currently valued at around $100 million per year, according to Ecosystem Marketplace’s 2014 State of the Forest Carbon Markets report. Governments are currently negotiating how avoided deforestation might be including in an international climate change agreement, but until then the REDD market is entirely dependent on voluntary buyers. Though REDD offset sales are growing, prices are dropping, and last year project developers reported taking home less than 70% of the revenue they needed to keep projects afloat long-term.
The biggest challenge so far has been communicating the concept of payment for performance to local farmers, according to Ramirez.
“It’s [hard] to make them understand that this is not a donation project, because they are used to NGOs coming with projects as grants and they don’t have to give anything back,” he said. “I think that’s why many projects don’t have the impact that they should have: Because people have machines and they don’t take care of the thing because it didn’t cost them. So this is a different project. It’s not a grant project, it’s a business project.”