PROCEEDINGSOFTHE INTERNATIONAL FORUM ON ENHANCEMENT OF JAPAN'S
PRIVATE SECTOR'S OVERSEAS RE-AFFORESTATION COOPERATION- Beyond COP6 of the United Nations Framework Convention on Climate Change -Pt and 2m 1 February, 2001
At the International Conderence Room, National Olympics
Memorial Youth Center, Yoyogi, Tokyo, Japan

Japan International Forestry Promotion & Cooperation Center(JIFPRO)Table of Contents
1

p age
3

Agenda of the Forum
First Day,

1st February, 2001

2 Welcome Address by:Mr. Tomohide Akiyama, Board Chairman of JIFPRO

6

3 Welcome Address by:Mr. Tetsuo Kato, Deputy Director General,
Forestry Agency, Ministry of Agriculture,
Forestry and Fisheries, Japan8

4 Chairperson's Opening Remarks by:Dr. Fujio Kobayashi, Vice President,
The Japan Forestry Association

10

5 Key-Note Address by:Dr.Untung Iskandar, Director General,
Forestry Research and Development Agency,
Ministry of Forestry, Indonesia

11

6 Presentations-Mr.Mikihiro Inoue, Senior Officer,
19
Forestry Agency, Japan-Dr. Kyaw Tint, Director General,
25
Forest Department, Ministry of Forestry, Myanmar
36-Dr. Nguen Ngoc Binh, Director General,
Department for Forest Development,
Ministry of Agriculture and Rural Development, Vietnam
47-Dr. Plodprasop Suraswadi, Director General,
Royal Forest Department, Thailand-Dr. Mark Stevens, Assistant Manager,
59
International Greenhouse Partnerships Office, Department ofIndustry, Science and Resources, Australia

-Sr. Claudio Forner, Advisor,
Ministerio del Ambiente, Colombia
7 Discussions on the Key Note Address and the Presentations

2nd Day,88

113

2nd February, 2001

8 Panel Discussion
9 Floors' Responses to Panelists
10 Chairman's Closing Remarks by Dr. Fujio Kobayashi

120
134
142

Annex: List of Foreign Participants

144

1

Agenda of the International Forum on Enhancement of Japan's
Private Sector's Overseas Re-Afforestation Cooperation
Beyond COP6 of
the United Nations Framework Convention on Climate Change

1st Day,

Pt February, 2001(Thu)

9:30 AM

Opening of the Forum

9:35

Welcome Address by Mr.Tomohide Akiyama, Board Chairman ofJIFPRO
Welcome Address by Mr. Tetsuo Kato, Deputy Director General,
Forestry Agency, Ministry of Agriculture, Forestry and Fisheries,
the Government of Japan

10:00

Nomination of Chairperson of the Forum, Dr.Fujio Kobayashi, Vice
President, The Japan Forestry Association
Opening remarks by Dr. Kobayashi

10:15

Key-Note Address by Dr.Untung Iskandar, Director General,
Forestry Research and Development Agency, Ministry of Forestry,
Indonesia' Enhancement of Reforestation and Land Rehabilitation in thetropics'

11:00

Coffee Break

11:20

Introduction of discussions of COP6 at the Hague, with special
emphasis on carbon sink projects in relation to CDM
by Mr Mikihiro Inoue, Senior Advisor, Forestry Agency, Japan

11:50AM
Lunch Break
13:10

Presentation by Dr. Kyaw Tint, Director General, Forest
Department, Ministry of Forestry, Myanmar' Status of Forestry Activities in Myanmar with Some Reference to
GHGs Mitigation'

13:40Presentation by Dr. Nguyen Ngoc Binh, Director General, Department for
Forestry development, Ministry of Agriculture and Rural Development,
Vietnam
The National Five Million Hectares Reforestation Programme '14:10

Presentation by Dr. Plodprasop Suraswadi, Director General, Royal
Forest Department, Thailand
Thailand's Position on Enhancing Re-Afforestation in the country with
Some Reference to the Discussions at COPE

14:40

Coffee Break

15:00

Presentation by Dr. Mark Stevens, Assistant Manager, International
Greenhouse Partnerships Office, Department of industry, Science andResources, Australia' International Climate Change Partnerships'

15:30

Presentation by Sr. Claudio Forner, Advisor, Ministerio del Medio
Ambiente, Colombia
Special Considerations regarding the Expiring CERs Proposal

16:00

Questions from the floor

17:00- 19:00

Reception

2nd Day, 2nd February, 2001
9:00AM- 10:20 AM

Panel Discussions

Chairperson: Dr. Fujio Kobayashi
Panelists:

Sr. Claudio FornerDr. Ir. Ngaloken Gintings, Director,
Forest Products Research Center, Indonesia
Dr. San Win, Forest Research Institute, Myanmar
Dr. Pham Quang Minh, Head of Silviculture Division,
Department for Forestry Development, Vietnam
Mr. Pravit Chittachumunonk, Director of Silviculture
Research Division, Royal Forest Department, Thailand
Dr. Mark Stevens
Dr. Masahiro Amano, Forestry and Forest Products
Research Institute, Japan

10:30AM- 10:50AM

Coffee Break

10:50AM

Panel Discussion ( Continues )12:20

Comments and questions from the floor

12:50

Chairperson's concluding remarks by Dr. Fujio Kobayashi

13:10

Close of the two day session of the Forum5

2

Welcome Address by Mr. Tomohide Akiyama,
Board Chairman of JIFPROGood morning, distinguished guests, ladies and gentlemen!

I am Akiyama, Chairman of the Board of Directors of Japan International Forestry
Promotion & Cooperation Center, JIFPRO.
I am very happy today to have many participants in this Forum.
I would like to express my deepest gratitude to Dr. Untung Iskandar for accepting to
make the key-note address for this forum and I am very grateful for the participation by
the distinguished high officials from foreign countries.
On this occasion, I would like to introduce to you the major activities of JIFPRO.
We are a Japanese foundation, which specializes in promoting forestry international
cooperation.

More specifically, JIFPRO supports other Japanese NGOs forestry

related international activities, tries to nurture competent personnel, promotes
Japanese NGOs' and other private sector's overseas re-afforestation cooperation,
conducts various research activities, and conducts public awareness raisingactivities.
From the Japanese Government side, the Forestry Agency often gives us advice andprovide us with financial assistance whenever feasible.

This forum is one of theexamples of JIFPRO activities with such Government support.
Today, Mr. Tetsuo Kato, Deputy Director General of the Forestry Agency, is here with
us together with other officials and I am especially grateful for that.
As all the participants are well aware, global environment is worsening and global
warming is advancing.
I am convinced that the important task for us in the 21st century is to manage forests
properly in sustainable way.

For that, international cooperation is indispensable.

Let us work together and let us make further efforts to achieve sustainable
management of the world's forests.
The role of forests and re-afforestation has generally been recognized in the United
Nations Framework Convention on Climate Change and in the Kyoto Protocol to it.
However, COPE in the Hague in November 2000 was adjourned without taking any
decisions. Hence, no decision was taken for the Kyoto Mechanism of the Protocol,
including the matter of concern of the Clean Development Mechanism(CDM) should
include carbon sink projects like re-afforestation projects or not.

I believe that the inclusion of carbon sink projects in CDM would offer one of theeffective ways to combat global warming and would definitely enhance global forest
conservation.

I understand that there are several problems in inclusion of sinkprojects in CDM but I believe that they are solvable ones if we work hard.
I do hope that the wise decision would be taken at the second part of COP 6 to beheld sometime later this year.
We have the same goal of conserving the world forests

but we have of course

diversified views.
I think it is very important for us to express ourselves openly and cordially at thisForum. That would facilitate us to move on.
In conclusion, I sincerely hope for your kind cooperation for the success of the Forum.
Thank you very much.

7

3

Welcome Address by Mr. Tetsuo Kato, Deputy Director General,
Forestry Agency, Ministry of Agriculture, Forestry and Fisheries,
the Government of Japan
Good morning, distinguished guests, ladies and gentlemen!

I am Kato, Deputy Director General of the Forestry Agency , the Government ofJapan. It is my honour to have this opportunity to make my welcome speech on behalfof the Forestry Agency at this International Forum.
This Forum, as I understand, aims at sharing the results of the discussions of theHague Session of COPE of the United Nations Framework Convention on Climate
Change, express our views freely on what we have done and on what we should do forenhancing re -afforestation activities in each country and for enhancing private sector's
re-afforestation cooperation, with emphasis on Japan's role in it.
The Forestry Agency has been very active in international forestry cooperation;nearly 100 Forestry Agency officials are working as experts of Japan International
Cooperation Agency( JICA ) in foreign countries, especially in tropical countries; wehave been instrumental for Japanese Government to provide financial contribution to
ITTO and FAO; and we have been instrumental for the Japanese Government tocontribute financially and in terms of offering expertise to various international
activities, aiming at achieving sustainable forest management globally, like theInter-Governmental Forum on Forestry( WI,' ).
I firmly believe the importance of realizing integrated value of forest for national
land conservation, water resource enrichment, recreational use, and timber and otherforest products supply, would definitely become larger for our present and futuresociety.

Other factors of increasing importance are the forest role of C 0 2 sinkand effective utilization of timber, sustainable resource which can be recycled, tomitigate global warming. Under the circumstance, we have conducted thorough reviewof the forestry policy and has decided to reorient the forestry policy to make full play ofthe multilateral role of forests and make full exertion of recycle use of forest resource.
It is regrettable that COPE at the Hague had not brought about any decisions; I
understand that one of the reasons for this was that there were wide range ofdifference in the views of parties, concerning the treatment of carbon sink projects
in the Clean Development Mechanism(CDM) of the Kyoto Protocol.
Japanese Government's firm position is that we should fully appreciate the importantrole of forests in mitigating global warming, forest's carbon sink role should be fully

appreciated, carbon sink projects like re-afforestation projects should be included in
CDM and credits should be awarded for that so that re-afforestation cooperation
projects between Annex I countries and Non-Annex I countries would be further
promoted.
For this Forum, high officials in forestry administration and related fields from 6
countries could come over to Japan, and we have also wide range of participants fromall over Japan.
I believe that discussion at this Forum would be very useful one and I sincerely hopeevery participant would acquire some useful information from this Forum and the
Forum

would

eventuallyfacilitate

Japan's private

contribution to other countries.
Thank you very much.

9

sector's re- afoorestation

4

Chairperson's Opening Remarks by Dr_ Fujio Kobayashi,
Vice President, the Japan Forestry Association

I am Fujio Kobayashi who has just been nominated as Chairperson of this Forum.
I would like to make a brief speech as Chairperson.
It is my great honour to be nominated as Chairperson of this important Forum.
The Chairpersonship is a very heavy duty for me and I would make my best effort
for the success of the Forum, counting on full cooperation by those who would makepresentations ,and by the floor colleagues.
The Forum originally meant the Roman public open square, where Roman citizens
could express their views freely.

At this Forum too, it is essential that participants

express their views freely. I would like to point out that what would be expressed andwhat would be discussed here would not accompany any obligations with them.
The Forum's sub-theme refers to COPE of the United Nations Framework Convention
on Climate Change. More specifically, it relates to CDM and Joint Implementation(JI)of the Kyoto Mechanism of the Kyoto Protocol to the Convention. As the participants arewell aware, one of the major discussion points at COPE at the Hague in November, 2000
was whether CDM should include carbon sink projects like re-afforestation projects.
Although unfortunately COPE was adjourned without making any decisions, I do
hope wise decisions would eventually be taken at the second part of COPE to be held
this year. I do hope that Kyoto Mechanism, especially CDM and JI, would enhance
re-afforestation cooperation among countries and would enhance Japan's private
sector's re-afforestation projects abroad.
The important task of this Forum is to provide participants with the precise
information on the current situation and with the proper basis to move on further.
Again, I beg your full cooperation for the success of the Forum.
There will be a chance that floor participants to express themselves; whenever thefloor participants are given chance to speak, please identify yourself first, followed by
the comments.
Thank you very much.

5

Key-Note Address by Dr. Untung Iskandar, Director General,
Forestry Research and Development Agency, Ministry of Forestry,
Indonesia

Dr. Untung Iskandar commenced his presentation by thanking Mr. Tomohide
Akiyama,Board Chairman of JIFPRO, Mr.Tetsuo Kato, Deputy Director General of theForestry Agency,

Dr. Fujio Kobayashi, Vice President of the Japan Forestry

Association and the Chairperson of this Forum, and all the participants in this Forumfor having the opportunity to present his key-note address.
Dr. Untung Iskandar's key-note address was delivered along the line with theattached Forum Paper 1:
Firstly, such difficult condition of Indonesian forests and forestry, especially after
1997 Asian economic crisis ,as forest destruction by fires, illegal cutting, and turning
forests into oil palm plantations. Dr. Untung Iskandar touched upon theover-capacity of wood industry of Indonesia against the domestic timber supply
capability.
Secondly, the importance of re-afforestation and regreening for future timber supply
and for better environment, sustainable water supply, preventing soil erosion, and so
on was explained.
Thirdly, the address emphasized the importance of securing high quality tree seeds
and various efforts on it was introduced.
Fourthly, the natural forest conservation efforts, sometimes involving cross-borderjoint efforts with Malaysia, were introduced.
Fifthly, the effects of recently introduced decenralization in Indonesia on
re-afforestation projects were explained.
Sixthly, emphasis was laid on the essential element of community involvement in
re-afforestation projects was explained.
Dr. Untung Iskandar mentioned that it was unfortunate that no decision was taken at
COPE of UNFCCC in the Hague in November, 2000 and said that the carbon sink roleof re-afforestation would introduce new scheme in the relation between it and industry.
Dr. Iskandar hoped that the wise decision would be taken internationally soon on thismatter. Possible AIJ projects by JICA and Japan's private sector was introduced,too.
Dr. Untung Iskandar in conclusion said that although his address referred mainly tothe matters particular to Indonesia, there were various similarities in the tropicalregion and hoped that his address would give

useful starting point for the Fotrum.

FORUM PAPER

1

ENHANCEMENT OF REFORESTATION AND LAND REHABILITATION
IN THE TROPICSA KEYNOTE SPEECH BY DR. UNTUNG ISKANDAR1
AT THE INTERNATIONAL FORUM ON ENHANCEMENT OF
JAPAN'S PRIVATE SECTOR'S OVERSEAS RE-AFFORESTATION COOPERATION2FEBRUARY 1-2, 2001

Honorable Mr. Tomohide Akiyama, Chairman of the Board of Director, JIFPRO
Honorable Mr. Tetsuo Kato, Deputy Director General of Forestry Agency
Honorable Dr. Fujio Kobayashi, Vice President, the Japan Forestry Association
Distinguished Officers of JIFPRODistinguished Participants,
Ladies and Gentleman,
In the outset, allow me to express my appreciation and my great pleasure to be invited by
JIFPRO to attend this very respectable meeting and even to deliver a keynote address.
Of course, every country undergoes vicissitudes and eventually during the down era, theassistance from others is highly valued. My personal feeling is that despite the cold
winter, I always feel comfortably warm in Japan, as the people are very hospitable.
Personally, I am very happy to be here and to participate in the discussions to come.
Introduction
The economic crises that started in the middle of 1997 also have some impacts on the forestry
sector in Indonesia. The crises intensified efforts to convert natural forestland into palm oil
plantation. They did that by burning the remaining forest stands. The aftermath has been
overwhelming. World Bank3 reported that the total area burned was 9,7 million hectares, of which
4,8 hectares were montane forests (100.000 hectares), 3,2 million hectares lowland forests, 1,5
million hectares swamp and peat forest and 186.000 hectares timber plantation. Kalimantan
suffered about 6,5 million hectares burning, of which 2,4 million hectares were lowland forest
The crises also brought about unprecedented destruction of forest due to the efforts to satisfy theneed of raw materials for timber based industry. The industry has been accused for overcapacity,
as compared to the ability of the forest to provide for sustainable flow of raw materials. Simply put,the demand for logs was around 48,9 million cubic meters to be processed for export, while thesustainable supply was around 21,4 million cubic meters. These statistics disregards the demandfor domestic consumption for construction and fuel woods. Illegal logging has satisfied theimbalance between demand and supply, which is about 27,5 million cubic meters. The data fromthe World Bank indicated the annual rate of deforestation (namely the permanent loss of forest
cover) was between 630.000 hectares to 2,0 million hectares. The figure from FAO was about 1,3
million hectares, while World Bank put a somewhat conservative figure of 1,7 million hectares, forthe period between 1985 and 1998. The deforestation was in the form of over cutting, damaged
Director General of Forestry Research and Development Agency (FORDA) of the Republic of Indonesia.
Organized by Japan International Forestry Promotion And Cooperation Center (JIFPRO).
3 Forest Policy Dialog in Indonesia, 1998-2000: Results, Outlook and Lessons Learned.
12residual trees due to incorrect logging practice and, logging outside the approved logging blocks.
Illegal logging and encroachment of lands to be planted with cash crops, or for settlements,
aggravated the problem.
The result of such situation was reflected by the report of the Ministry. The data published by
Badan Planologi4 showed the destructed forest was 11,7 million hectares out of 41,2 million
hectares of production forest. The remaining primary production forest was 18,4 million hectares.
Kalimantan forest was damaged the most, registering 6,2 million hectares. Protection forest andconservation area were also illegally logged. This affected 3,6 million hectares of protection forestsand 2,9 million hectares of conservation areas. Those data are only provisional, since not all areas
are calculated. The Ministry of Forestry registered a forest cover of about 119,7 million hectares in1985 and 99 million hectares in 1997, which means that annual reduction was 1,7 million hectares.
The Challenge
From the data, it is apparent that the challenge of forest management in the new century would beto rehabilitate the degraded forests areas and to replant the deforested or, barren land areas.
Forest rehabilitation will take place as enrichment planting in the degraded forest areas and in the
poorly stocked seedlings and saplings. Establishing forest plantation may be the choice forrehabilitating deforested areas. The activity is called the reforestation if done on in the degraded
forest areas. Forest plantation could also be developed on formerly non-forest areas, including
former-mine areas. This is called afforestation. The main objective of establishing forest plantationis still economic, namely to provide for future timber supply, while the secondary objective would beto create services from the tree community, such as better environment, sustainability of watersupply and reduction of soil erosion. Gone were the days of exploiting abundant timber fromnatural tropical forest. The further action from reduced supply of cheap raw materials would be torestructure and downsize industry that could utilize smaller diameter timber from plantation forestsand mix them with that from the remaining natural forests, if any. The timber from natural forest will
only available if the government permits further extraction from the remaining natural forest. It that
does not happen, the industry simply will have to be satisfied by timber from plantation forests andfrom external sources. Even the industry may resort to timber import to satisfy the demand of theconsumers. In short, the industry has to transform itself to maintain its competitiveness in theworld market. Gone also were the days of market dominance of plywood from natural timber. It isan opportunity to create secondary processed wood industry, to satisfy different markets.
Therefore, land and forest rehabilitation and the establishment of forest plantation will determine
new era of resource management. First, the sector would need to procure for a continuing supplyof high quality seeds whether they are from internal or external sources. Early on, the forestry
sector will have to identify the remaining seed production areas and secure them from illegal
logging or fire. Such action should be led by the Ministry, or, the forestry agency at the provincial
level. When the areas have been identified and secured, next action would be to identify andsecure superior trees to produce seeds. Following that, the collection, selection, examination,
treatment and transport handling of seeds should take place in an efficient way to prevent further
destruction. The further action, if possible, would be to certify them based on their quality. To
4 Badan Planologi Kehutanan dan Perkebunan. 2000. Rekalkulasi Areal Hutan Produksi, Hutan Lindung dan Kawasan

Konservasi. Badan Planologi is the Macro Planning Unit of the Ministry of Forestry.

enable doing so, the management should determine the system to protect seed production areas,
to secure the areas, to select and to certify the seeds. The management should also produce
methods for seed collection, selection, treatment and handling.
In the absence of genetic improvement, high quality seed stands should be established based on
the existing superior seed trees. A continuous stand examination and seed collection to assure
the release of superior seeds should take place since the rehabilitation and establishment of forest
plantation will require such seeds. The consumers have to be assured that they receive only highquality seeds to produce high yield stands. In conjunction with the availability of high quality seeds,
better nursery practices and field planting of the seedlings also determined the success ofplantation forestry and forest rehabilitation. Therefore, the forestry public sector should develop
manuals for nursery and plantation operations. These manuals will assist those who are willing toinvest on these activities.
The above-mentioned actions are based on the physical appearance of the trees, which may begenetically deficient. Genetic improvement should be the second action that should take place, toimprove the seeds quality. In contrast to previous actions, genetic improvement works from theinside of the plant, namely the hereditary trait, which is determined by DNA and other molecularproperties. The genetic improvement could significantly improve the seed quality by eliminating theunwanted traits (such as crooked growth or low production of gums) and enhance the superior
quality. In the absence of adequate quantity of seeds, the required action is to produce highquantity seedlings by way of vegetative propagation. Since molecular genetics is relatively new andadvanced science, the developing country may resort to conventional tree breeding. However, as
many believe that tropical forests constitute the lung of the earth, and their very existence have to
be safeguarded, therefore cooperation in molecular genetics may be explored and possibly
expanded.
Aside from rehabilitation and establishing plantation forests, a third action should take place, i.e.
conservation, be it conservation of ecosystem by way of good management of national parks andprotected areas and conservation of species. Conservation on those characters will keep theexisting genetic resources available for the current as well as future activities. To be conserved
are the remaining production forests and the existing conservation areas and protection forests. To
do so, a complete ban on logging in the remaining production forests will effectively boost theconservation efforts. A complete logging ban would also prevent illegal logging from national parks
and protection areas. The ban will indicate that any logs that are being traded or processed, aslong as they come form natural forests, are illegal. Logs from plantation forest certainly havedifferent physical appearance from those from natural forests. In addition, logs from plantation
forest will have different scheme of management, such as the timber track requirements.

The Action
Currently, Indonesia is cooperating with international agencies and donors to carry out those
programs. Indonesia is working on ex-situ conservation of Shorea leprosula and Lophopetalum
multinervium, under funding by International Tropical Timber Organization (ITTO). Identifying
specific genetic resource areas is among the project's activities. Next, small-scale plantations areto be established, by planting seedling of those species. To keep the good traits of the parent trees,
the seedling were prepared by vegetative propagation. The second project worth mentioning is the
cross-border conservation management of Betung-Kerihun National Park (Indonesia) and Lanjak
Entimau Wildlife Sanctuary (Sarawak). Similar arrangement will be made for Kayan-Mentarang
National Park and its counterpart in Sabah. CIFOR is carrying out a project on the development of
a Forest Model in Bulungan. This project could also be viewed as management capacity
strengthening, including conservation and management by community involvement. This project isalso funded by ITTO. In the past JICA also financed rehabilitation of mangrove forest in Bali, andthe activity could be viewed as the model for mangrove rehabilitation. The project is currently
under evaluation for possible extension. It is expected that the project could expand its activity byinclusion of training for those who would like to rehabilitate mangrove in their areas. The activities
of CIRAD Foret on STREK, even though focusing on growth and yield, also contribute to the studyof ecosystem.
Prevention and detection of forest fire could also be viewed as the means to carry out ecosystemconservation. Aside form JICA, other donors have worked in this field. European Commission,
ITTO, GTZ and US-AID are among the donors assisting Indonesia on forest fire prevention anddetection. Within the country, several agencies assist the Ministry of Forestry as well.
Seed management is being funded by DANIDA, which has been operating in Indonesia forsometimes. There is cooperation between FORDA as the main partner and JICA on genetic
improvement of Acacia mangium and other species. This very cooperation addresses the issues ofmolecular genetics. The cooperation also deals with the need for human resource development,
and therefore it invites the participation of companies to contribute to the effort of expanding thegenetic based materials.
FORDA and KOMATSU Company work on development of apical vegetative propagation of
meranti (all types of Shorea, but mainly Shorea leprosula, the most commercial of all) and the next
effort is to produce in quantity (millions a year) to supply reforestation programs. SumitomoCompany also executes similar effort in cooperation with Kutai Timber Company in Indonesia.
Experts from the University of Mulawarman, East Kalimantan, also involved in such cooperation.
The most recent development is the development study on Forest Management and Carbon Fixing,
cooperation between FORDA and JICA. Similar cooperation is reported to happen between Gadjah
Mada University and one Company from Japan. The project funded by ITTO will establish 750
hectares of Shorea plantation, annually. Currently, EPSON Company also reforests somedegraded areas in South Kalimantan. The management is offered to JIFPRO, which selected
community forestry and intercropping system.
The outcomes of these cooperations make up a good start for expanding plantation forest inIndonesia. Currently, one state company namely PT INHUTANI I already planted about 15.000

hectares of meranti. The company is also establishing Dipterocarp Center, concentrating its efforts
to research in various subject matters on meranti and practical education for plantation growing of
meranti. Adjacent to the facilities are the Wana Riset Samboja, which also does similar efforts.
This facility is the outcome of cooperation between FORDA and Tropenbos Foundation of theNetherlands. The Center and the Wana Riset will be available for researchers from all over theworld.
The establishment of plantation forest, however, should be the conclusion of continuing, open andtransparent consultation among the parties involved, namely, Badan Planologi of the Ministry ofForestry, the Provincial Government, the research organizations including FORDA, the executing
agency and the community. The Badan Planologi will determine the national or macro location of
the area, judging from its main role as the Planning Agency of the Ministry. The Provincial
Government will determine the priority areas to be planted, after examining the maps and plansfrom the Badan Planologi. The priority should also determine the species to be planted and thelikely use of products from those forests. This is the responsibility of the R&D organization. The
Provincial Government should have the maps and plans ready to invite investment from externalsources. It is expected that main activities of the rehabilitation and plantation will be Kalimantan
and Sumatra, two islands in which the incidents of deforestation and forest degradation occur the
most. The extent of rehabilitation and plantation should be around two to three million hectares perannum to cancel out the rate of deforestation and forest degradation of about 1,7 million hectares.
Since the promulgation of decentralization law and consequently the advent of regional autonomy,
the Provincial Government is taking more responsibility on resource management The decision on
who should be the executing agency is therefore, on the hands of the Provincial Government. It
may be cooperation between state-owned companies with external investors, or between theProvincial Government with the investor, or even direct investment. The Central Government,
however, is determined to connect reforestation and rehabilitation programs with the existing
companies and those to come. This plan is essentially enforcing the Forestry Agreement in which
the concession holders are responsible to regenerate the forests, as one of the responsibility uponreceiving the concession rights.
Therefore, if the Provincial Government is determined torehabilitate the area, it can easily assign the concession holders to do so. The community will
have to be involved from the planning phase to invite their cooperation and support. Their support
is mostly required to protect the investment. In addition, they could be persuaded to practise
agroforestry, which is believed as their traditional occupation. In this regard, the Provincial
Government practices the custom laws of the community. The agroforestry could take place for theland rehabilitation efforts. In brief, the involvement and participation of local community should
generate sustainable and meaningful benefits for them, which is reflected as improving theirprosperity.
In addition to the conventional plantation-industry relationship, new scheme could be developed.
The scheme will address the issue of the mitigation of global warming and carbon sequestration.
In this manner, plantation establishment and land rehabilitation will be considered as one means tosequester green house gases from the atmosphere. Such scheme will strengthen the cooperation
between developed and industrialized countries with the countries possessing large areas ofdegraded and critical lands, including agricultural lands of the developing countries. The developedand industrialized countries could finance the rehabilitation efforts of such lands in the developing
countries. The task of the developing countries would be to guard the areas under such programthat it would remain intact for the duration of the contract. The long period of the contract may bestated as an intergenerational one. To assure that the program would be successful, the developed
countries could plan for the transfer of knowledge and management skill to the personnel from thedeveloping countries that are engaged in the program.
The cooperation between countries or between a multilateral agency and one particular country
that covers the transfer of knowledge and skill including management skill for the betterment of theeconomic well being, has been demonstrated by ICRAF. They have success stories on the practiceof agroforestry. Such stories could attract for more serious adoption of such scheme. In the case ofIndonesia, the most recent cooperation between FORDA and JICA on the Development Study ofForest Management and Carbon Fixing opens the possibility of accomplishing carbon-offset by
way of Activities Implemented Jointly. In the arrangement, the Provincial Government will
determine the location to implement such scheme, since the activities are expected to benefit theprovince considerably. The future role of the Provincial Government would be even greater, namely
it has to look after the land for exceptionally long period of time, e.g. up to 100 years. Thus a very
succinct agreement, which should be respected by their successors, is very important. A lengthy
agreement may cause differing interpretation among parties; the result would be a disastrous
investment. Therefore, it is possible to establish intergenerational forest management, to honor theagreement. Furthermore, the Central Government will have to declare her political position on thisissue.
The issue of carbon fixing has been discussed extensively and during COP-6 of the FC35 in The
Hague, which sadly could not forge a decision. For us, the issue that has to be carefully consideredis the role of reforestation and afforestation in the carbon fixing endeavors. Therefore the next
meeting of the parties will re-visit the issues to resolve the differences which eventually to reach adecision. Being the country which extensive forest covers it is imperative that we should strive
towards decision that will benefit all parties. In the meantime, a bilateral agreement may overtakethe postponed multilateral one, to fill the gap on the need to rehabilitate the forests and tocontribute to the improvement of environmental quality. In implementing the bilateral cooperation,
it is necessary to examine the role of forestry in carbon sequestration. Nonetheless, such action
constitutes an uphill battle of the countries that have extensive forest cover. There are parties that
do not agree that forestry could participate to reduce green house gases. Therefore, such efforts
require strong political commitments from such countries. Without one, the investor may simply
refuse to come by. As in any other venture, any political commitment should be supported byscientific thought and practical experience. Therefore bilateral technical cooperation should direct
to the development of methodologies to calculate the significance of forestry efforts in carbon fixing.
We all know that the technical matters have been touched on the Kyoto Protocol among others,setting the base line, permanence, verification of additionally and also to assess the social,economic and environmental benefits from such attempt.
A three-way cooperation (Epson, JIFPRO, Director General of Land Rehabilitation and Social
Forestry of the Ministry of Forestry) is about to begin in Indonesia. Fourth party will take benefit,
however. This is the Provincial Government of South Kalimantan. The activities of the cooperation
are rehabilitation of the degraded areas and reforestation in the province. The cooperation will fallunder the Activities Implemented Jointly (AIJ) of the Kyoto Protocol. It is expected that many other5 Framework Convention for the Climatic Change

companies will follow, given that the conditions are attractive. The security of investment, thesimplicity of process and the assurance of lands for the duration of the projects are the main
attraction of such venture. Essential for the success of the efforts are the support and cooperationof the local community. Such support will be encouraged by the conviction that such efforts will
improve their economic welfare. Therefore, inclusion since the start of the efforts would constitutea useful step.
Expanding the Scope
While Indonesia is being taken as an example, it is understood that there are many similarities
among tropical countries. One similarity might be the prevalent practice of excessive logging andthe under care of land and soil. The result is the same, namely the presence of degraded lands
and forests. They have to be rehabilitated and reforested. Establishment of plantation forestry
and agroforestry are among the alternatives. As long as the parties involved could agree on ascheme, then a strenuous effort should follow to materialize the scheme. Many of those countries
also have been engaged in international cooperation and donor institutions have assisted many of
their development. Many of their able human resources also have been trained in the donor
countries, and therefore the effort could take place with no apparent difficulty.
I hope my elaboration could provide some insights and thank you very much for kind attention.

6
Presentationso Inoue,
6-1 Presentation by Mr.
Senior Officer, Forestry Agency, Japan
Mr. Inoue thanked all the participants for coming to this Forum and theircooperation in enhancing Japanese private sector's international forestry cooperation.
He specifically expressed his gratitude to foreign participants who traveled all the way
to Japan to participate in the Forum and expressed his high expectation for theForum.
Mr. Inoue said that he had participated in COP6 of UNFCCC held in the Hague inNovember,2000 as a member of the Japanese Government delegation and reminded theparticipants that carbon sink role of re-afforestation and forest conservation projects indeveloping countries, cooperated by Japanese private sector would have real positive
impact on the theme of this Forum, i.e., enhancement of Japan's private sector's
overseas re-afforestation cooperation.
Mr. Inoue's presentation consisted of the following parts., i.e., firstly, report of what
was discussed at COPE in the Hague;secondly, report of what was discussed

specifically on carbon sink role of re-afforestation and forest conservation projects inrelation to CDM( in other words, LULUCF in relation to CDM, which terminology Mr.
Inoeue prefers to use ) of the Kyoto Mechanism of the Kyoto Protocol; thirdly,
introduction of the Pronk Paper at COPE in the Hague; fourthly,
to include LULUCF in CDM;

why it is importantand fifthly explanation about

AIJ, Activity

Implemented Jointly.
Report of what was discussed at COPE in the Hague:
The main objective of COPE in the Hague in November, 2000 was to decide the rulesof implementation for the various matters stipulated in the Kyoto Protocol to theUnited Nations Framework Convention on Climate Change.
There were three different groups of countries at COP6: the Umbrella Group which
included such countries as Japan, USA, Australia, Canada, and so on: EU ; andthe developing countries group and China. The different views from these threegroups prevailed at the heated discussions at COP6.
At nearly the end of COPE in the Hague, heated discussions were conducted at the
Ministerial level, including all night sessions, and even the COP6 was extended

by one day, unfortunately however, no decision was taken and it was adjourned.
One of the most difficult parts to reach consensus at COPE was how the mattersrelated forests should be treated in the efforts to mitigate global warming; there were
two aspects on it. The one aspect is how to estimate the quantity of CO2 absorption
from atmosphere in developed countries , which must meet the GHGs reduction
obligation, and another aspect is whether developed and developing countries
cooperated carbon sink projects in the developing countries could be included in CDM.
Mr. Inoue said in his presentation at this Forum, he would focus on the above last
matter, i.e.,whether CDM should include carbon sink projects like re-afforestation
projects.
Report of what was discussed at COPE in the Hague specifically on carbon sink role ofre-afforestation and forest conservation projects in relation to CDM:
Mr. Inoue reminded the participants that the terminology of 'sink' is generally usedin describing carbon absorption from the atmosphere in current international
discussions.
Mr. Inoue further said that forest related sink projects include not only
re-afforestation and forest conservation projects but also include such ones as fossil
fuel substitution projects utlizing wood and forest biomass, Mr. Inoue informed theparticipants that he would use the terminology of LULUCF,
Change and Forestry,

Land Use, Land Use

instead of 'sink' throughout his presentation in this Forum.

Mr. Inoue pointed out that whether LULUCF should be included in CDM had been
continuously discussed in the course of formulation of the implementation rules of the
Kyoto Mechanism, which includes CDM, Carbon Trade, and Joint Implementation.
( Joint implementation refers to the joint projects among developed countries andKyoto Protocol stipulates the inclusion of sinks into JI, whereas no such stipulation
exists in the case of CDM.

Carbon Trade is stipulated to be done among developed

countries. )The Umbrella Group of developed countries has been demanding that CDM should
include LULUCF,

while EU has been opposing it. Among the developing countries,

most of Latin American countries support the inclusion of LULUCF in CDM andnumber of countries in Asia and Africa which have the same view are apparently
increasing.

However, still many developing countries are silent and there aresome countries which are against it.
The reasons of opposing LULUCF to be included in CDM are the permanence

problem, in other words the difficulty to maintain forests permanently: uncertainty
of securing relevant data through feasible surveys and so on.
Some delegates opposed to inclusion of LULUCF in CDM by saying that local
residents' right to live might he hampered or they might be pushed out from where they
live if re-afforestation and/or forest conservation projects expand.
The counter arguments of those who support LULUCF inclusion in CDM are suchkind of problems could be avoided by conducting careful feasibility study and adopting
detailed, sond project design, and through conducting careful monitoring of project
implementation;

In relation to the local communities and local residents related

concerns the problem should not exist as re-afforestation and/or forest conservation
projects would not be able to exist without local partners involvement and participation,from our past experience.
The problem of permanence is particular to forestry sector and it is a persisting
problem to be solved.

At the SBSTA meeting in Lyon, France in September,2000,

Colombia made a proposal of innovative way of calculating credit for such projects.
Mr. Inoue said that he was looking forward to hearing what Sr. Claudio Forner would
present at this Forum.
Introduction of the Pronk Paper at COPE in the Hague:
At nearly the end of COPE, on 23rd November, 2000, the President of COPE, Mr. Pronk
who is also Environment Minister of the Netherlands, issued a paper on his personal
capacity, summarizing the discussions at COPE. The Pronk Paper at COPE is therefore
his summary of what had been discussed and tried to give direction to settle conclusion
on matters of different views. The intention of issuing the Pronk Paper was to serve as abasis of further discussion to reach agreement. ( But, in reality, no agreement had beenreached.)The first page of Mr. Inoue's 2-page reference paper, Forum Paper2, depicts the way the
Pronk Paper dealt with the LULUCF and CDM.
Mr. Inoue explained the Pronk Paper proposed three major points for LULUCF and
CDM; firstly, afforestation and reforestation should be included in CDM; secondly,
other forestry related activities like prevention of forest decrease should not he includedin CDM; and thirdly, the way of calculating credits in relation of CDM LULUCF
projects should be decided later separately.
The reaction of parties on the Pronk paper was that EU opposed it as LULUCF was
included in CDM. The Umbrella Group also opposed it as CDM included only
afforestation and reforestation projects.

Mr. Inoue said that the Pronk Paper had at least one positive aspect of inclusion of
re-afforestation in CDM, but added whether it would continue to serve as a basis of
discussion at resumed COPE in 2001 was not certain.
Why it is important to include LULUCF in CDM:
Mr. Inoue explained about the reasons why it is important to include LULUCF in
CDM, from following aspects:•

Global forests are decreasing by 11.1 million ha annually. This fact iscausing various environmental problems, including global warming.
Re-afforestation in the developing countries, cooperated by developed
countries and enhanced by inclusion of LULUCF in CDM, would turn thesituation around.
Re-afforestation projects in developing countries give employment
opportunities to rural communities and give opportunity of sustainable
development there.
If re-afforestation projects could acquire credits for carbon absorption inearly stage of planting, investors could recover their investment earlier
than now and they could have chance to make another investment for
re-afforestation elsewhere, including ones at so far unattractive places forinvestment.
Re-afforestaion projects have possibility of becoming more attractive ifthey are combined with biomass energy projects.
In this regard, Mr. Inoue explained about the page 2 of the Forum Paper 2.
, which shows the merits of this kind of combination.
AIJ,

Activity Implemented Jointly:

Mr. Inoue said that he would expect that actual start of CDM would take some moretime and drew participants' attention to AIJ, Activity Implemented Jointly.
Mr. Inoue said that AIJ, established in 1995 at COP1, was a experimental activity withjoint cooperation between developing countries and developed countries, aiming at
facilitating to solve technical problems of inclusion of LULUCF in CDM.
Mr. Inoue asked the participants to think seriously in starting AIJ.
Mr. Inoue, in conclusion, reiterated that CDM was only one mechanism, inclusing
both developing countries and developed countries

and hoped that developing

countries active participation in the discussions for including LULUCF in CDM.

FOR

PAPER

2

Note by the President of COP6

23-11-00 7:04

NOTE BY THE PRESIDENT OF COP6
23 NOVEMBER 2000
23-11-00 7:04 PM

LULUCF under the Clean Development Mechanism❖ Parties agree that LULUCF activities can contribute to the two-fold purpose of the CDM.
Parties therefore decide to include afforestation and reforestation under the CDM. However
they also recognize the special concerns, which arise from implementing these projects.
+ Parties decide that activities, preventing-deforestationand land degradation,min not be
eligible as credit pnerating projects under the CDM. However, these activities will be labeled
as priority projects to-be funded under the adaptation ftuid in order to address drought,
desertification and watershed protection, forest conservation, restoration of native forest
ecosystems, restoration of salinised soils. .
•) Parties recognize that accounting modalities, and definitions for Article 33 may need to bemodified,. and-that the issues of non-permanence, social and environmental effects, leakage,
addidonality and uncertainty should be properly addressed. LULUCF projects-would alsoneed to be in conformity with the objectives of other multilateral environmental agreements.
+ Parties therefore decide to establish a process under the SBSTA.to develop rules andmodalities taking into account further methodological work by IPCC, where necessary, to deal
with these issues.

Credits of CDM by Sustainable Forest Management
and Fuel Biomass Use(Certified Emission Reduction : CER)

Forest Management
CER

CER

CER

CER

year

harvestharvestharvestreturnreturnreturn

of

of

of

CER

CER

CER

CER

Fuel Biomass Use

CER
CER
accumulation of
CER

CERs

year

fuel

fuel

fuel

biomass

biomass

biomass

use

use

use

6-2

Presentation by Dr. Kyaw Tint, Director General,
Forest Department, Ministry of Forestry, Myanmar

Dr. Kyaw Tint commenced his presentation by thanking the Japanese Government,
the Board Chairman of JIFPRO, and the Chairman of the Forum, Dr. Kobayashi for him
to have chance to come over to Japan for this Forum and having chance to make his
presentation.
Dr. Kyaw Tint's presentation was delivered along the line with the attached Forum
Paper 3 and consisted mainly of introduction of the natural forests management,
reforestation, and carbon absorption and emission situation in relation to forestry in
Myanmar.
Firstly, Dr.Kyaw Tint explained that the total area of forests in Myanmar and said
that they were divided into Reserved Forests, Protected Public Forests, andProtected Area systems.
These three categories of forests are designated as the Permanent Forest Estate( PFE ), which accounts for 20.85% of the national land.

The Forestry Policy

issued in 1995, according to Dr.Kyaw Tint, had decided that the percentage should
be increased to35 %.
Secondly, Dr. Kyaw Tint explained about the forest biomass in Myanmar, by forest
categories.

In doing this Dr.Kyaw Tint added that the forest area in Myanmar

decreased by 0.64% annually between 1975 and 1989.
Thirdly, Myanmar Selection System, MSS in natural forest management as the toolof sustainable forest management was explained.
Fourthly, reduced impact logging by Myanmar Timber Enterprise, MTE, sole
Government organization for harvesting, using elephants was explained.
Fifthly, Dr. Kyaw Tint explained about re-afforestation situation in Myanmar; theaccumulated planted areas as of the end of 2000 were 750,000 ha; and annual
target areas of planting were 44,516 ha of which 30,352 ha were to be planted by
the Forest Department and 14,164 ha by the, Dryzone Greening department, newly
founded in 1997 in the Ministry of Forestry.
Sixthly, carbon sink and carbon emission situation of Myanmar forestry sector was
explained.

The fact that Myanmar Participated in ALGAS, Asia Least Cost

Greenhouse Gas Abatement Strategy was explained and the fact that forestry
sector was a net sink of GHGs in 1990 and would be expected to be so in 2020 was
also explained

Dr. Kyaw Tint, in conclusion, emphasized the importantce of

global cooperation in enhancing re-afforestation for abating global warming.

FORUM PAPER

3

UNION

MYANMAROFMINISTRYFORESTOFFORESTRY

DEPARTMENTSTATUS OF
ITH SOMERERENTIOATI1

by
DR. KYAW TINT
DIRECTOR — GENERAL(Paper Presented at the International Forum on Enhancement of Japan's Private
Sector's Overseas Re-afforestation Cooperation held on 1-2 February, 2001 in Tokyo,
Japan)

January, 2001
- 26 -

Contents

No

Particulars

Page
1.

Introduction

12.

Conservation of Natural Forests1

2.1

Current Status of Landuse

1

2.2

Forest Cover2

2.3

Extent of Permanent Forest Estate2

2.4

Forest Biomass

3

2.5

Land Use Changes

3

2.6

Sustainable Forest Management

3

3.

2.6.1

Management System

3

2.6.2

Silvicultural Treatments

4

2.6.2.1

Improvement Fell ings

4

2.6.2.2

Gap and Enrichment Plantings

4

2.6.3

Protection

4

2.6.4

Protected Areas System

4

2.6.5

Least Impact Logging

4

Re-afforestation Activities

5

3.1

Re-afforestation Programme5

3.2

Voluntary Tree Planting Programme

6

3.3

Contribution to Carbon Sequestration

6

Status of Carbon Emission and Uptake in the

64.

Forestry Sector
4.1

Total CO2 Emissions and Uptake

6

4.2

Baseline Scenario Projection of Sectoral

7

GHGs Inventory to 2020
5.

Conclusion

8- 27 -STATUS OF FORESTRY ACTIVITIES IN MYANMAR
WITH SOME REFERENCES TO GHGs MITIGATION1.

INTRODUCTION

Most scientists agree that due to increasing accumulation of greenhouse gases (GHGs), ourworld is getting warmer.
Emission of greenhouse gases such as carbon dioxide (CO2) and methane (CH4) began toincrease gradually since the industrial revolution in the mid-18th century, and has been
increasing at a rapid rate since 19503.
CO2 emissions in the air have currently been estimated at about 3.2 GtC per year. If leftunchecked, atmospheric CO2 concentrations will result in an increase by 2
H to 6
the global mean temperature and thus in a rapid climate change in about 100 years.

HC inStudies show that emissions of CO2 from the biomass can be prevented by conserving forests,
and CO2 removed from the atmosphere by re-afforestation.
Myanmar has a wealth of natural forest resources and has been accelerating re-afforestation
programmes since 1960.
This paper describes conservation of natural forests, re-afforestation activities and status ofcarbon emission and uptake in the forestry sector from the perspective of mitigating GHGs
emissions.
2.

CONSERVATION OF NATURAL FORESTS
Current Status of Land Use

2.1

The current status of land use in Myanmar is provided in Table 1. Currently, the area ofreserved forests and protected public forests come up to about 19% (12.5 million hectares) of
the total land area of 676, 577 km2. Other forest lands with an area of 21.3 million hectares
constitute 32%, indicating the considerable potential area for reservation in the future. In
agriculture, the current net sown area in Myanmar amounts to about only 14% (9 million
hectares) and there still exists an equal extent of fallow and cultivable wasteland for agricultural
expansion.
Table 1. Status of Land Use in Myanmar

•":".

.. .

...'...•....

re(% of total

1

Reserved Forest

125,911

18.7

2

Other Forest

212,776

31.7

3

Fallow Land

11,165

1.8

4

Net Sown Area

90,261

13.5

5

Cultivable Wasteland

79,148

11.7

Other Lands

152,316

22.6

76,577.

......... ..........

6
..

•

..

..

.

••

...........................
. ............................................ •- 28 -

Source: Forestry in Myanmar

2.2

Forest Cover

Out of the total land area of 676,577 km2, 498,621 km2 are covered with different categories
of forests. Closed forests having an area of 293,269 km2 constitute 43.3% of the total area ofthe country, while degraded forests with an area of 50,963 km2 form 7.5% of the countryarea. Shifting cultivation is a major cause of forest degradation and it has affected 154,389
km2 of forests, constituting 22.8% of the total land area. The breakdown of forest land use isshown in Table 2.
Cover
...

'RNA

•••,m
rem.

, nn,

...A".!!1E!!!!!!i3i!

.......4` 'ff
1."- `11,11P1.

MPH! LIIIM11121.11'11• 1,nit
11,11t-1i.

-

....

W.;

1144

1

Closed Forest

293,269

43.3

2

Degraded Forest

50,963

7.5

Forest Affected by Shifting Cultivation

154,389

22.8

Total

498,62173.6

Source:2.3

Forest...

Table 2.

Forestry in Myanmar (2000)

Extent of Permanent Forest Estate

Three categories of forest lands, namely Reserved Forests, Protected Public Forests, andProtected Areas System legally constitute permanent forest estate(PFE).The extent of PFE at the
beginning of Year 2000 is presented in Table 3.
Permanent

ForestEstatein

MyanmarthAr:ter..

. .....

.....

Table 3.

1

Reserved forest

11,11216.40

2

Protected public forest

1,479

2.19

3

Protected areas system

1,527

2.26

Total

14,11820.85

Source:Forestry in Myanmar (2000)

PFE now covers

14.1 million hectares constituting

The new Myanmar Forest Policy promulgated inarea of the country under permanent forests.

20.85% of the total land area.
1995 stipulates to keep

35% of the total

2.4

ForestBiomass

To date, 1347 species of big trees, 741 species of small trees, 96 species of bamboos, 1696
species of shrubs, 36 species of rattans and 841 species of orchids have been recorded to be
existing in the Myanma natural forests.
Because Myanmar covers a very wide latitudinal and topographic range, vegetative types arediverse varying from mangroves through broad-leaved species to conifers.
The biomass of big trees alone has been estimated at overTable 4.
Biomass of big trees in the natural forests
..

.....

.............
.

.... 1 ......

.... . .. .....• ............

......

...
.

...

...........

..

...

.......

.......

...

Table 4.

2.2 billion cubic metres as shown in

....

1

Closed broad-leaved

1,859

90.0

357

30

2,216

2

Mangroves

12

30.6

4

10

16

3

Conifers

16

141:6

Total

1,887

16
361

2,248

Source: Kyaw Tint (1995)
2.5

Land Use Changes

Forest lands are affected to some extent by human interference or encroachment, shifting
cultivation, etc. The actual forest cover had decreased at an annual rate of 220,000 ha or 0.64%
of the actual forested area during the period of 14 years from 1975 through 1989, which was
mainly attributable to shifting cultivation and encroachment. However, the physical transfer offorest land into non-forest uses in the same period was only about 15,000 ha annually. There arestill large tracts of undisturbed forests in the northern hilly region of the country. In spite of aheavy loss of forests, there still remain over 50% of actual forested area in the country as shownin table 2. Therefore, Myanmar is still regarded as one of the countries with the highest forest
cover in the South-East Asian region.

2.6
2.6.1

Sustainable forest management
Management system

Myanma Selection System (MSS) has been being applied since 1856 to manage Myanma
natural forests, especially natural teak-bearing forests, on a sustainable basis. Under MSS only
mature trees are selected and harvested once in 30 years. Annual harvest of a tree species isregulated based on its annual growth.

2.6.2

Silvicultural treatments

2.6.2.1

Improvement fellings

Improvement felling is usually done in the natural forests in conjunction with girdling
operations in order to enhance natural regeneration, establishment and growth of commercially
important species. Cleaning, climber cutting and coppicing are also done to improve naturalregeneration.
2.6.2.2

Gap and enrichment plantings

Gaps created in the natural forests are planted with suitable tree species and valuable species
introduced in areas where forest density and the composition of the commercial tree species are
low with a view to enriching existing forests. This will also, of course, sequester more carbon
and hence contribute to reduction in GHGS emissions.
2.6.3

Protection

All forests in the country are state-owned. Up-dated forestry legal framework is in place and theForest Department within this legal framework regulates annual harvest on a sustainable basis.
Protection against illegal cuttings and encroachment is effectuated by the 15 thousand member
strong forest staff seeking people's participation and enforcing forest laws where and whennecessary.
Forest Law, 1992, has provisions for fire protection, prevention and suppression measures innatural forests. However, fire has never been a problem for the natural forests in Myanmar.
With regard to the outbreak of insect attacks and diseases, Myanmar has never experienced
serious damages. Although teak has occasionally suffered some attacks by bee-hole borers andleaf defoliators, they are usually localized in nature.
2.6.4

Protected Areas System (PAS)PAS now covers 1.53 million hectares and is being gradually increased to reach twice thisextent in the near future. Logging in PAS is completely banned.
2.6.5

Least impact logging

Use of elephants for skidding is a traditional and consistent practice in timber harvesting in
Myanmar. The elephant logging has proven to have the least adverse impact on the environmentand biodiversity.
Timber extraction is permitted to be done only by the Myanma Timber Enterprise (MTE), a
parastatal organization, which employs about 5,000 elephants for logging: about 3,000 of its
own and 2,000 hired from the private sector.

3.

RE-AFFORESTATION

3.1

Re-afforestation

ACTIVITIES

programme

Re-afforestation got momentum in early 1960's. The objectives had been to rehabilitate
degraded forest lands, restore deforested areas and supplement various timber yields from thenatural forests.
Since then the annual plantation programme has been intensified gradually till it has reached thepresent target of about 44,516 hectares. This annual planting target includes 30,352 hectares
planted by the Forest Department and 14,164 hectares planted by the Dry Zone Greening
Department.
The Forest Department establishes four types of plantations, namely commercial plantation,village supply plantation, industrial plantation and watershed plantation.
The Dry Zone Greening Department (DZGD) which was formed in 1997 with special tasks torestore environment, prevent desertification and mitigate climate change in the Dry Zone ofCentral Myanmar establishes forest plantations in order to meet these objectives.
Foreign NGO's like JIFPRO, OISCA and Yomiuri Shimbun of Japan, and KOICA of the
Republic of Korea also contribute to the environmental restoration in the Dry Zone with forest
plantations.
Up till the end of Year 2000, a total of about 750,000 hectares of various forest plantations havebeen formed all over the country.
Distribution of forest plantations by age-classes is shown in the following figure.

Distribution of forest plantations by age-classes
700000 —
600000— 500000
400000coou 300000 —L
200000 —100000 —01ifttilefT111.

30-34
1965-69

25-29
1970-74

20-24
1975-79

15-19
1980-84

10-14.
1985-89

Age/Period
Area

Cumulative figure

5-9.
1990-94

0-4
1995-99

3.2

Voluntary tree planting programme

Myanmar people love trees and planting trees is considered to be a meritorious deed by tradition
and religion. In this context, the Forest Department distributes about 17 million seedlings
annually to the public including school children to plant in the school compounds, in the farms,in the backyards, on the roadsides and along canal banks, etc.
3.3

Contribution to carbon sequestration

The re-afforestation programme, apart from serving commercial and greening purposes, being
additional to the existing forest carbon, helps reduce GHGs emissions and mitigate global
warming.

4.

STATUS OF CARBON EMISSION AND UPTAKE IN THE FORESTRY SECTOR

Myanmar joined the Asia Least Cost Greenhouse Gas Abatement Strategy (ALGAS) regional
project in 1995 and launched the national ALGAS project in 1996, with the principle objective
to reduce the rate of growth in GHGs emissions and also to enhance the development of thesinks.
Under that project GHGs inventories were conducted for all related sectors in the country toestimate the status of emission and uptake of GHGs for the reference year 1990.
Presented here are the results of the national GHGs inventory for the Land Use Change andForestry Sector.
The Intergovernmental Panel on Climate Change (IPCC) methodology was applied for the said
inventory, and the following land use changes were considered:a. Changes in forest and other woody biomass stocks;
b. Forest and grassland conversion; andc. Abandonment of managed lands.
In addition, the method also addressed the immediate release of non-CO2 trace gases (CH4, CO,
N20 and NON) from the open burning of biomass from forest cleaning.
4.1

Total CO? emissions and uptake

The analysis of the results of the GHGs inventory had indicated that the net CO2 emissions fromthe forestry sector in 1990 was -2362 kt of C.
Detailed information is provided in Table 5.

Forestry and land use change sector, total CO2 emissions and uptake...... ...
.. ....

Table 5.

..
...

.

...

......

....
...

..

....

.

....

rs

...

1

C uptake from changes in forest and other woody biomass stocks- 127362

C emission from forest and grassland conversion+ 173423

C uptake in abandonment of managed lands- 71704

Non-CO2 gas emissions(trace gases) in terms of CO2 equivalence+ 204

Net CO2 emissions from forestry sector- 2,362+=

Emission,

Uptake=Baseline Scenario Projection of Sectoral GHGs Inventory to 2020

4.2

The National ALGAS Project also projected CO2 emission and uptake up to year 2020,
assuming that total area of actual forests in the country was 34.4 million hectares in 1990 withthe annual deforestation rate of 0.2 million hectares. CO2 data projection from 1990 to 2020 isshown in Table 6.
Projection of C emission/uptake from 1990 to 2020, forestry sector....

.1211,

.....

Efr'l

..........

Table 6.

.....

.....

...

........

9:ra#...........

...

LW"

1.

C uptake from changes in forest and otherwoody biomass stocks-12,736-12,480-12,077-11,6742.

C emission from forest and grassland+17,342conversion+17,342+17,342+17,3423.

C uptake4. in abandonment of managed
lands-7,170-7,115-7,086-7,0684.

non- CO2 traces gases in terms of C

+204

+204

+204

+204

5.

Total net C uptake-2,362-2,051-1,619-1,198

6.

Uptake in CO2 terms-8,659-7,519-5,935-4,392

Total C released (on and offside burning)

7,916.80 kt

C released from decay of above ground biomass

1,184.76 kt

C released from soil

8,240.10 kt

As evident from the table, there were no net GHGs emissions from the forestry sector either inthe reference year 1990 or up to year 2020. Thus, forests could serve well as a net carbon sink inMyanmar for many years to come. However, total carbon emission from the forests for the baseyear was 17.34 Mt. Thus, forest depletion and degradation rate is frightening, and unlessremedial measures are undertaken in time, will threaten the environmental and ecologicalstability of the country leading to a rapid climate change.
5.

CONCLUSION

Myanmar still possesses a considerable extent of forest cover thanks to the systematic andscientific management continuously practiced for nearly one and a half centuries. Pristinenatural forests still flourish in many parts of the country. According to the National GHGs
Inventory there were no net carbon emissions in 1990 and this situation would remain true forthe projected years till 2020.
Still, the Forest Department of Myanmar has been not only effectively conserving the existing
natural forests but also enriching them in terms of density and value. Added to this are theaccelerated re-afforestation activities being undertaken by both the State and the people. These
undertakings will doubtless enhance productivity of these invaluable natural resources for socioeconomic benefits of the nation, and promote carbon sequestration as well, thereby mitigating
global warming and climate change.
As a matter of fact, the threat of the climate change is a global concern, and thus, the global
community is urgently called for to effectively conserve existing forests and to re-afforest where
necessary before it is too late.

* * * * * * * * * *References:
1. Forest Department (2000):

Forestry in Myanmar

2. Myanmar NTE team and the AsianDevelopment Bank (1999):

ALGAS project, Myanmar national results vol. 1

3. JIFPRO (2000):

Activities of JIFPRO: Rich Forests forTomorrow's Earth

4. Asquith, N. (1999):

The Kyoto Protocol, ITTO and Tropical Forests

Presentation by Dr. Nguyen Ngoc Binh, Director General,
Department for Forest Development, Ministry of Agriculture
and Rural Development

6-3

Dr. Nguyen Ngoc Binh commenced his presentation by thanking the Japanese
Government and JIFPRO for inviting him to this Forum. He thanked Dr. Kobayashi
for his Chairmanship and thanked

all the participants in the Forum for their active

participation.
Dr. Binh's presentation was delivered along the line with the attached Forum
Paper 4 and focused on the National 5 Million Hectare Reforestation Programme.
Firstly, the recent history of reforestation was explained and Dr. Binh said that the
National 5 Million Reforestation Programme started officially in 1998 as aprogramme covering the period from 1998 to 2010 with the following three objectives:•

Through the Programme, together with conservation of existing 9 3 million
ha of natural forests, to increase forested area to 14.3 million ha, orincrease the percentage of forested area against the national land fromcurrent 28% to 43%.

•

To create 2 million jobs for the rural, mountainous area people, to raise
income level there, and to eradicate poverty and food shortage there.

•

To enable to produce 15 million m3 of timber, 20 million m3 of fuelwood, one
million tons of paper, and one million m3 of wood board,

Secondly, Dr. Binh explained about implications of the Programme on each category offorests; to establish 2 million ha of the protection forests and the special use forests;
and to establish 3 million ha of production forests.
Thirdly, the lessons learnt from the preceding Programme 327, covering the period
from 1990 to 1998, was explained and various international cooperation fromdeveloped countries,

international organizations,developed countries for the Programme 327 andprivateinvestment fromfor the current National 5 Million

Reforestation Programme was explained.
Fourthly, the mechanism and supportive policy mechanism including the land
allocation policy, was explained and again the expectation for foreign investment for
the Programme related to re-afforestation projects under the Programme wasemphasized.
Fifthly, problems associated with implementing the Programme was introduced.
Finally, Dr. Binh emphasized the importance of mitigating global warming , possible
important role of re-afforestation on it and the international cooperation on it.

FORUM

PAPER

4

MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT
Forestry Development Department

THE NATIONAL FIVE MILLION HECTARE
FO STATION PROGRAMME
By
Nguyen Ngoc Binh
Director general
Forestry Development Department
Ministry of Agriculture and Rural Development

List of Contents
1. INTRODUCTION TO THE PROGRAMME
2. LESSONS LEARNT
2.1. From Programme 327
2.2. From Foreign-supported Projects
3. CHARACTERISTICS OF THE PROGRAMME
3.1. Scope
3.2. Organization
3.3. Planning
3.4. Policies
4. PROBLEMS FORESEEN
5. PRIORITIES FOR SUPPORT FROM ABROAD
6. EFFECTIVENESS OF THE NATIONAL FIVE MILLION HECTAREREFORESTATION PROGRAMME TO ENVIRONMENT IN VIETNAMINTRODUCTION TO THE PROGRAMMEThe National Five Million Hectare Reforestation Programme was approved in 1998 by the tenthsession of the National Assembly of the Socialist Republic of Vietnam. Government decision
661/QD-TTg of 29/7/1998 specifies objectives, tasks, mechanism and organization of thisProject. After the Programme has been completed, the following is expected to have beenachieved in rural and mountainous areas of the country:a)Creation of an additional five million hectares of forests and successful protection ofexisting forests (9.3 million ha), thus increasing the national forest cover from 28% to43%, ensuring environmental security, reducing natural disasters, promoting aquatic
development, conserving genetic resources and bio-diversity.

b)

Effective use of previously bare land, providing gainful occupation for two million
persons, contributing to increased incomes for people living in or close to forests,
contributing to hunger elimination and poverty alleviation, providing conditions forsedentary living, ensuring political stability and national security, especially inmountainous and border areas.

c)Annual supply of 15 million m3 of timber and 10 million m3 of fuelwood, raw materials
for conversion into 1 million tons of paper and 1 million m3 of lumber, thus satisfying
domestic needs and leaving a surplus for export.

d)Forestry would have become an important sector in the economy, making a significant
contribution to socio-economic development in mountainous areas.

Specifically, the Programme is expected to achieve the following:a)Creation of 2 million ha of special-use and protection forests, throughRestoration of special-use forests and assisted natural regeneration of watershed
protection forests, together covering 1 million ha;
Plantation of forests, for watershed protection, as wind breaks, as protection
against sand, and for dike protection, as well as special-use forests in cases where
ecological restoration is urgently required;b)Creation of 3 million ha of production forests, with forest trees as well as with perennial
agricultural crops which have a canopy like that of forest trees, including:
2 million ha for production of pulpwood, mining timber, non-timber forest
products, and bamboo of various kinds.
1 million ha of long-rotation cash crops and fruit trees.
Some 50 million trees per year scattered around houses, in school yards, alongroads and canals, thereby meeting a part of the local demand for timber andfuelwood.

(c)Achievements over project periods
Reforesting 1,050,000 ha (350,000 ha per year), of which 700,000 by
1998-2000:
planting and 350,000 by natural regeneration
Reforesting 1,950,000 ha (390,000 ha per year), of which 1,300,000 by
2001-2005:
planting, and 650,000 by natural regeneration.
Reforesting 2,000,000 ha (400,000 ha per year).
2006-2010:- 38 -

2. LESSONS LEARNT
2.1. From Programme 327
Programme 327 operated from 1993 to 1998 and is estimated to have reached the following
results:
Arranging and paying for contracts to protect 1.6 million ha;
Natural regeneration of 0.7 million ha, some of this area now yields valuable products;
Planting 640,000 ha of forests;
Planting 88,730 ha of cash crops and fruit trees including 21,000 ha of rubber, 10,000 haof tea, 25,000 ha of fruit trees;
Establishment of 31,300 ha of home gardens together with the rearing of 53,100 cattle;
Creation of jobs for one million households.
The Government has reviewed the experience from six years of implementation of Programme
327. The main lessons are:Firstly: The households have been dynamic units in implementing the project, following upon
allocation of land and contracting for forest protection. Programme 327 has had organizedproduction as follows:
Participating households have received an allowance from the state for protection, naturalregeneration, planting and tending forests. People were supported in planting trees bothfor protective and productive purposes. The persons planting the trees will also beentitled to benefit from their yield.
Participating households who were granted Land Tenure Certificates (normally for 1.5-2
ha per household) for growing cash crops or for gardening and livestock rearing wereentitled to an interest-free loan of between VND 3 and 5 million that they needed to pay
back only when the crop was ready for harvest.
Participating households enjoyed indirect benefits, for example from physicalinfrastructure created in the project area (roads, small scale irrigation schemes, health andeducation services).
Secondly: Farm households have proved able to make sound production decisions. They were
free to choose tree species and establishment techniques, as long as they followed general
guidelines by the Government and technical advice provided by the project owners.
Implementation was not guided by commands. Project staff organized supply of seeds orseedlings, payments, technical advice, and also assisted in marketing the products obtained.
Thirdly: There is a need for consistent policies and regulations about investment and sharing of
benefits. Programme 327 would have been more successful if it had implemented all relevant
policies in a consistent way instead of changing them from year to year, thereby confusing thefarmers.
Fourthly: The State Farms and State Forest Enterprises were useful in their leading roles,
especially in remote and mountainous areas where infrastructure is poor and the educational
level is low. Those enterprises played an important role in assisting participating households toimplement the project.
- 39 -

2.2. From Foreign-supported Projects
International support to the forestry sector in Vietnam grew rapidly after the Forestry Sector
Review was carried out, i.e. after 1992. Even before that, however, a few internationalorganisations had been assisting the sector for more than a decade, notably the World Food
Programme and Swedish SIDA which both supported major reforestation projects. The most
relevant lessons from foreign-supported projects have however been learnt since 1992, when thegeneral transition to a market-oriented economy was well underway.
There are two kinds of lessons, one relating to the technical contents of the cooperation projects,
another to the fact that the projects are executed in cooperation between a Vietnamese and aforeign partner.
As seen from the perspective of the National Five Million Hectare Reforestation Programme, themain lessons to be drawn are the following:a) Technical issues
In order to be sustainable, activities in the forestry sector cannot be based on major
subsidies by the State;
There is good potential for farmer-based activities which yield interesting economic
returns to them;
A number of technical issues remain to be resolved, for example in selection of speciesof economic value to farmers, methods for assisting natural regeneration, and ways toorganise effective protection of forests.
b) Cooperation issues
International cooperation projects in the forestry sector have been supportive in thedesign and implementation of many of the key changes in the sector over the past decade,such as the transition from state forestry to people's forestry, the development of methods
for allocation of forest land and planning for the use of the land allocated;
Many cooperation projects have been heavily influenced by the availability of relatively
large funds. In many cases, this has led to the development of methods that are notsustainable in the Vietnamese environment when the external support has been
terminated;
Many of the projects have to a certain extent operated outside the Vietnamese system, so
that, even when suitable, the results achieved have not easily found their way into otherparts of the forestry sector.
3.

CHARACTERISTICS OF THE NATIONAL FIVE MILLION HECTAREREFORESTATION PROGRAMMEThe Five Million Hectare Reforestation Programme is a continuation of Programme 327. It willbuild on the strengths and learn from the mistakes of that programme as well as from otherprojects implemented in the past.
3.1. Scope
The Reforestation Programme covers the three kinds of forests: special-use, protection andproduction forests. Plantation, natural regeneration and protection of exiting forests are to be
combined. Forest protection and development are also seen as contributions to settling of- 40

population and to the programmes for hunger elimination and poverty alleviation.
New forests should be established all over the country, distributed among regions in accordancewith needs and capacities in each locality. Creation of concentrated plantations should be
combined with planting of scattered trees.
The strategy for project implementation should unify the various steps in the forest production
chain, from providing a vegetation cover for environmental reasons or commercial purposes
through harvesting of wood and other products to the processing and eventual sale in the market
of finished products. At the same time, those activities would create jobs and incomes for local
farmers, contribute to hunger elimination and poverty alleviation as well as to industrializationand modernization.
3.2. Organization
The Programme has a mechanism for implementation that reaches from the national to the local
level:a) National level
At the national level, a Government Programme Board has been established, headed by a Vice
Prime Minister. The Minister of Agriculture and Rural Development is the standing deputy.
Other members of the Board come from MARD, MPI, MoFi, CEMMA, Farmers Association,
Youth Union etc. The Government Programme Board is assisted by the National Steering
Committee headed by a Vice Minister of Agriculture and Rural Development. Relevant
departments of MARD and related Ministries are represented in the Committee. The Chairmanof the National Steering Committee is assisted by a Programme Office, headed by a Vice
Director of the Forestry Development Department and staffed by a full time team.
For field projects led by Ministries and other branches of the Government, ProgrammeManagement Boards are to be created to assist in implementation of the local projects.
b) Provincial level
The Provincial People's Committees are assisted by Provincial Steering Committees headed by avice chairman of the PPC. Provincial Project Management Boards are located in the provincial
Departments of Agriculture and Rural Development or the provincial Departments for Forestry
Development.
A structure for management of local projects is to be established as required. The capacity ofexisting Management Boards for special use forests, protection forests and production forests
should be utilized.
In the local implementation of the programme, provinces are to examine and re-arrange projects
as relevant so that they cover the three types of forests (special-use, protection, and production).
Provincial authorities are also to issue operational rules and regulations.
c) Project owners, implementers and participants
Any organization or individual meeting the following requirements is qualified to be project
owner:- 41 -

- be the manager of an investment project approved by the competent body,- have land allocated or rented from a competent body.
Past experience indicates that state enterprises should be selected as project owners in the casesof special-use and protection forests. For production forests, any social or economic organization
or individual fulfilling the demands above could be selected.
The local project owners are responsible for overall implementation of the project. For protection
and special-use forests, the project owners are to arrange for two-way services (i.e. provision of
production inputs and marketing of production outputs) to the local population and participatinghouseholds. For production forests, project owners are to make their own decisions and be
responsible for the activities as given for the corresponding investment categories in the law andrelated regulations.
Households are to implement project activities on land allocated or leased to them. They are toreceive payment and enjoy benefits from the forests as provided by government regulations.
3.3. Planning
The National Five Million Hectare Reforestation Programme is large, covering 57 of the 61
provinces in the country and is also closely followed by the Government. Its constituent projects
are located in rural and mountainous areas with an underdeveloped economy, difficult transport
situation, and low level of education among the local people. In this situation, planning has toensure two-way communication from the central to the local level so that the resulting project
follows the overall Government intentions and also meets local demands.
At the central level, the Government defines targets as well as policies and organisation for
implementation of the Programme. It also sets priorities between the three types of forest andbetween the provinces of the country. At the local level, the provincial authorities design theirprojects on the basis of the general guidelines from the Government and considering local
strategies for socio-economic development and local land use plans.
In summary, it can be said that the distribution of targets is made from the Government to theprovinces, while plans for implementation are compiled in the opposite direction, as follows:
Households + villages -> local project -> province -> the Government;
Appraisal and approval of projects starts at the local level. The analysis made at the local level isthen reviewed by the Government.
For disbursement, Circular 28/1999/TT-BTC dated 13/3/1999 provides guidelines on the use of state funds for theFive Million Hectare Reforestation Programme. The provision of credits for establishment of production forests
during 1999 is, in general, regulated by Decision 13/1999/QD.TTg dated 4/2/1999. Detailed rules are, however, still
under preparation.

3.4. Policies
SpeciesSpecies to use in reforesting an area is to be selected in such a way that the purpose of theplantation is met in an effective way. In special-use forests, natural regeneration is to be given
priority. If planting is needed, indigenous species are to be used. In protection forests, a— 42 —

combination of species of forest trees, fruit trees and cash crops should be found that bothprovide protection and yield valuable products. For production forests, finally, both natural
conditions such as soil and climate and the market situation must be considered, so that the wood
produced can be processed and the final products are attractive in the market.
Land
Availability of land for the Programme is a major issue. A review of the availability ofagricultural and forest land is to be carried out, starting at the commune level and thenproceeding to the district and the provincial levels. The outcome will serve as a basis for thedesign of local projects.
Land is to be allocated and Land Tenure Certificates are to be issued to organizations,households and individuals. Land allocation is considered a key tool to encourage theparticipants in the Programme to manage and utilize the land in an effective way. The allocationof land should be completed by 31/12/2000.
Funds
State grants are provided for establishment of special-use forests as well as critical (rat xung yeu)
and important (xung yeu) protection forests. The amounts to be paid are as follows:
50,000 dong/ha/year, for up to 5 years;- Protection contract:- Natural regeneration with enrichment planting: 1 million dong/ha, to be used over 6 years;
2.5 million dong/ha, including tending in the first 3 years;- Planting of protection forests:
2 million dong/ha- Planting of production forests:
The Five Million Hectare Reforestation Programme can use up to 5% of the budget for
infrastructural activities such as forest fire control, pest prevention, and establishment ofnurseries. Project owners are entitled to a management fee amounting to 8% of the total budget
allocated to the project.
Credits are to constitute the main kind of funds for production forests and for less important (itxung yeu) protection forests. Land Tenure Certificates can be used as collateral for the loans. The
investor has the right to borrow up to 70% of the total cost as estimated in the approved projectplan and will pay reduced interest rates as regulated by the law.
Grants from abroad will primarily be used for loans, either directly or re-lent through the banking
system. Interest rates, duration, and conditions for pay-back to be specified in each project
document.
As stated in the law, foreign direct investments is primarily to be used for forest plantations inassociation with processing. Different ways to split the investment between foreign and
Vietnamese partners can be envisaged, from 100% foreign investment to joint ventures and otherkinds of cooperation.
Rights ofparticipantsParticipating households have the right to enjoy the following benefits: In case of special-use andprotection forests, poor households residing near the forests shall be given priority in receiving
contracts for forest protection. Such contract holders are entitled to harvest fuelwood andnon-timber forests products under the canopy of the protection forest. Households holding
contracts for assisted natural regeneration have the right to pruned and thinned products and-43 -non-timber forest products. Households planting protection forests have the right to pruned andthinned products, non-timber forest products and, in addition, the entire production from fast
growing tree species inter-planted in the protection forest.
In arranging contracts for regeneration or protection of special-use and protection forests, priority
will be given to households engaged in fixed cultivation and sedentarisation projects, poor
households, households living near the forest, and households who previously have held suchcontracts.
Owners of production forests shall have the right to decide the time and harvesting method, but
he/she will have to regenerate the forest within one year after harvest.
All products from bamboo forests and non-timber forest products from natural forest can be
freely marketed.
In general, the Government favours the use of products from man-made forests. In particular it
encourages processing and exporting of processed products from such forests. The Government
will also provide incentives leading to a shift from natural forests to plantations for supply of raw
materials.
Taxes
Organizations, households, and individuals who plant forests and trees on bare land or process
agriculture and forest products have the right to reduced tax rates as provided by the law
encouraging domestic investment. Thus, products coming from restored natural production
forests are exempt from resources tax. Further, exemption of provisional commercial tax is
granted for all kinds of products legally harvested in plantation forests and for non-timber forest
products harvested in natural forests.
Science and technology
Priority is given to studies and research leading to the identification of locally adapted tree
species which have a high yield of valuable wood or other products. When suitable species,
varieties, or provenances are identified, efforts will be concentrated to provision of quality seeds,
possibly by import and to the establishment of nurseries operated by various local organisations.
A system for quality certification of seeds should be developed, ensuring that low quality seeds
are not used.
The problem of forest fires must also be studied and effective ways to limit them must be found.
Cooperation with foreign countries.
Foreign investors should be encouraged to cooperate with domestic investors in. investing inreforestation and processing of forest products. More pilot tests should be made with renting land
for forest plantations. Foreign investors are to be given favourable conditions as provided by the
Law of foreign investment and Decree 10/1998/ND-CP of the Vietnamese Government.
4. PROBLEMS FORESEENThe Five Million ha Reforestation Programme is likely to face major problems in the following
areas:- 44 -

Infrastructure, in particular regarding
land use planning, where the rules and principles are unclear;funds for forest plantations (less than USD 200 per ha);ow level of education and knowledge in remote areas;poor physical infrastructure;
limited market knowledge;
scattered and inefficient processing units.
Capacity of implementing agencies, in particular with respect tovarying quality of local staff in remote and mountainous areas;
low capacity in monitoring and evaluation of projects;
low capacity among staff and poor facilities for production of quality seeds and for forest
fire control;
poor physical facilities for project management boards.
5. PRIORITIES FOR SUPPORT FROM ABROAD
Given the size of the Five Million Hectare Reforestation Programme, it is obvious that external
support is needed in many, if not most fields. There is a need for both technical and financial
support. Technical support should, in particular, be considered for the following issues:
Formulation of suitable policies on a broad spectrum of issues, for example credits, rightsof the participants in the Programme, seeds, certification of sustainable forest
management, monitoring and evaluation;
Land use planning, in particular in finding a productive balance between the interests of
the Government in a certain use of the land and the benefits for the users of the land;
Development and application of suitable technologies in wood processing, not least sothat the products will easily find a market;
Human resources development, in particular in the following fields: project management,
forest management (for commune staff), production of seedlings, pest control, forest
fire control, and sustainable forest management in general;
Regarding financial support, there is in particular a need for the following:
Soft loans or joint venture funds for establishment of production forests and construction of processing
facilities;

Grants for protection and regeneration of special-use and protection forests;
Grants for infrastructure in remote and mountainous areas;
Grants for project management, especially at the village and commune levels.
Support can be channelled to the local projects in different ways. One alternative is to direct itto the central project organisation from where it would be forwarded to the local level throughthe National Steering Committee. As an alternative, support could be directed at specific local
projects.

6. EFFECTIVENESS OF THE NATIONAL FIVE MILLION HECTAREREFORESTATION PROGRAMME TO ENVIRONMENT IN VIETNAM
In the 1980's and 1990's international treaties on ozone layer protection and climate change
were adopted under United Nations umbrella.
The Socialist Republic of Vietnam has acceded to the Vienna Convention on the ozone layer
protection, and its protocol — the Montreal Protocol on substances that deplete the ozone layer;
and the United Nations Framework Convention on Climate Change, and its protocol — theKyoto protocol.
In Kyoto Protocol , a clean development mechanism ( CDM) was established and Modalities
and procedures for CDM were discussed in 6th conference of Parties of the United Nations'
Framework Convention on climate change (COP6 ), held in the Hague, the Netherlands inNovember, 2000.
At the COP6, various matters were discussed in heated and sincere manner so that the worldcommunity could take effective measures to combat global warming and so that developed
Countries could take effective measures to reduce the emission of the greenhouse effect gases .
The modalities and procedures as to how and which additional human induced activities
related to changes in greenhouse gas emissions by sources and removals by sinks in the
agriculture soils , the land-use change and forestry categories shall be added to.
At COP6 , international cooperation between developing countries and developed countries ,might relate some parts to reforestation activities in developing countries supported bydeveloped countries, which benefit both sides and may have potential to contribute to curbing
global warming .
It would have also good effect on cooperation between developed countries and Vietnam toenhancing reforestation programme on carbon absorption leading to mitigating global warming
In order to mitigate CO2 emission, restrict.the Ozone layer emission and climate changes. Oneof the importance actions is a forest cover rehabilitation. Therefore one of the three objectivelyof the Five Million Hectare Reforestation is enhancing the forest cover from 33.2% in 2001 to
43% in 2010 (From 10.9 million hectare to 14.5 million hectare of forest) including implement
the active relating to climate changes, watershed regulation, Bio-diversity conservation.
6.1 Bio-diversity conservation are conserve the Fauna and Flora systems at Nation Parks

and Conservation Natural areas based on building and implementing the research
projects, protect core areas as well as economic develop in buffer zone areas forcommunity people by the forestry community projects to sustainable development
achievement.
6.2 Building the sub-projects of plantation in the very crucial areas in the provinces

constantly was threatening by natural calamity in the all provinces in Vietnam to
reduce flood, improve water resource and climate.
6.3 Building the sub-projects of plantation in the areas was threatening by desertion toincrease forest cover, watershed conservation and climate changes.

6-4 Presentation by Dr. Plodprasop Suraswadi, Director General,
Royal Forest Department, Thailand
Dr. Plodprasop Suraswadi commenced his presentation by thanking the Forum
Chairperson , Board Chairman of JIFPRO , and organizing committee of JIFPRO for
inviting him and his colleague to this timely Forum.
Dr. Plodprasop's presentation was delivered along the lines with the attached
Forum Paper 5,Firstly, Dr. Plodprasop reminded the participants that the global warming andclimate change were the real problems to which the world community should pay
real attention.
Secondly, Dr. Plodprasop reminded the participants that Thailand had been
supporting faithfully and vigorously the international efforts to solve the problem ofglobal warming and climate change.

The Director General emphasized that theThai Government supported the notion of the common but differentiatedresponsibility of each country in soving global warming.
Thirdly, Dr. Plodprasop introduced Thailand's large scale re-afforestation
programme, core of which was the Forest Rehabilitation on the Occasion of the 50th
Anniversary of the King's Ascension to the Throne Project.

The Director Generalsaid that the results of the efforts, despite the late 1990s economic crisis, werepromising and one of the positive effects was the decreasing carbon emission from
LULUCF in Thailand.
Fourthly, the Director General expressed his disapointment that COPE in theHague had adjourned without taking any decisions. The Director General said
that it was sure that re-afforestation and sound forest management were effective
to mitigate global warming and the Royal Forest Department would continue tomake efforts in that regards.
With regard to the problem of inclusion of LULUCF in CDM, the Director General
expressed his wish that the matter should be solved through transparent, logical,
and scientific analysis and discussions without politicizing it too much.
In conclusion, Dr. Plodprasop Suraswadi reemphasized the Royal Forest Department
contribution to solve the problem through taking continuing efforts on re-afforestationand sustainable forest management.

FORUM PAPER

5

Thailand's Position on Enhancing Re-afforestation in the Country with
References to the Discussion at COPE of UNFCCC
byDr.Plodprasop Suraswadi
Director General, Royal Forest Department, Thailand

Preamble
1. During the 1980s, the world's scientific community voiced
their concern on climatic change based on evidence from various scientificobservations.

The major causes turned out to be coming from humanactivities that release additional greenhouse gases to the atmosphere. Theseonthropogenic sources of greenhouse gas especially carbon dioxide added tothe atmosphere since the beginning of industrial revolution have caused arise in average global temperature of 0.6°C. This increase in temperature
may seem miniscule but its significance is already evident.
2. In the 1990s, the decade was the hottest decade on record
with increasing severity and frequency of storms.

Unusually extreme

droughts and floods are causing casualty misery and hardship to people inmany countries. Asian monsoons are becoming less and less predictable
which results in damaged crops and less food production. All these events
are believed to be the result from the warming of the global atmospherewhich caused the change in the climate system. The most well known of thisphenomenon is El Nino/Southern Oscillation (ENSO) which shift the climate
system in the south pacific ocean and disrupt the annual pattern of weather
on both sides of the pacific ocean.

3. The link of increasing carbon dioxide and other greenhousegases with the increase in surface temperature of the earth are wellestablished. The habitability of the earth depends on carbon dioxide level in
the atmosphere which must not falling too low nor rising too high. Withoutcarbon dioxide and certain other gases, which help trapping the heat near theearth surface, the average surface temperature would drop below 00C. On
the other hand, too much carbon dioxides would elevate the average surface
temperature to the boiling point of water. At current levels, the earth's
surface temperature is at a comfortable average of 15°C.
4. Maintaining carbon dioxide levels in the atmosphere withinreasonable limit is an intricate balance of sources and sinks. This intricate
balance is the result of the interplay between atmosphere, hydrosphere,
biosphere, and lithosphere. Volcanoes add carbon dioxide to the atmosphere
while the weathering of rocks, aided by water and plants, removes it. Livingorganism, especially, plants extract carbon dioxide from the atmosphere
depositing the carbon in their cell and organs. Some of this carbon fromliving organism is released back to the atmosphere through decay and fire.
Carbonates accumulating on the sea flour through weathering and run-off
and detritus from marine creatures are eventually pushed under continental
plates and finding their way to the atmosphere again through volcanic
activities millions of years later. Furthermore, carbon from living organisms
is buried underground in the form of coal, oil, and gases.
5. Through out the past history, the balance of carbon dioxidein the atmosphere is regulated by natural forces through bio-geochemical
processed and volcanic activities. Some natural phenomena may have caused
some fluctuations in the level of carbon dioxide in the atmosphere causing
alternating warm and cold period of the earth. However, the earth's changing

climate in the past appeared on geological time scale. Thus living organisms
have time to adapt themselves to the changing environment. Types anddistribution of biomes are testament to the adaptation ability of livingorganisms to fit into the existing niche.
6. Since the industrial revolution, human has returned large
quantities of this formerly locked up carbon in the form of coal, oil, and gases
to the atmosphere.

Before the industrial revolution began there wereapproximately 580 giga tonnes of carbon in the atmosphere as carbon dioxide.
At present, there is more than 750 giga tonnes of carbon in the atmosphereand the number is still rising at about 7 giga tonnes annually. Most of the
exponential growth of carbon in the atmosphere is the result of industrial
activities originated from the industrialized countries mostly in the north.
7. Facing with serious environmental consequences, which isconsidered serious threats to the sustainability of the world's environment,
global economy as well as human health and survival, international community
responsed to the threats with the development of the United Nations
Framework Convention on Climate Change (UNFCCC). The convention,
adopted in 1992, set out a framework for action aiming to stabilize
atmospheric concentrations of greenhouse gases at a level that would prevent
interference and disruption of the climate system.

Since its existence,

there were six meetings of the Conference of the Party (COP). The last,
unfinished meeting was COP6 which was held in the Hague, the Netherlands,
from 13-25 November 2000.
8. The Kyoto Protocol under UNFCCC was agreed upon in COPS
in Kyoto, Japan in December 1997 after intense negotiations. The Protocol
is an agreement that commits developed countries and countries making thetransition to market economy to achieve quantified target for decreasing
their emissions of greenhouse gases. These countries, known under the
UNFCCC as Annex I Parties committed themselves to reduce their overall- 50 -

emissions of six greenhouse gases by at least 5% below 1990 levels overthe first commitment period between 2008 and 2012 with differentiatedtargets for most of these countries. The Protocol also provides the basis for threemechanisms to assist Annex I Parties in meeting their targets cost-effectively.
These mechanisms are an Emission Trading system, Joint Implementation(JI) of emission-reduction projects between Annex I Parties, and a Clean
Development Mechanism (CDM) to encourage joint projects between
Annex I and non-Annex I Parties.
Thailand's Position on Climate Change Convention
9. Thailand, as a member of the world community, realized the
profound importance of climatic change. We have signed the Conventionin June 1992 and subsequently ratified the Convention on December 28,1994.
As for the Kyoto Protocol, we have signed the Protocol on February 2,1999
but still not yet ratify. As all these actions indicated, Thailand is fully
supported the effort of the world community to mitigate global warming andclimatic change.
10. Since then, Thailand has taken steps to initiate national actions
on climate change problems. The National Climate Change Sub-committee
was established in 1993 under the National Committee on Environment.
National Focal Point Agency has been assigned to the Office of Environmental
Policy and Planning (OEPP), Ministry of Science, Technology and Environment.
Thailand has launched the national greenhouse gases inventory studies as well
as several other studies related to climate change in order to prepare National
Communication to be submitted to the UNFCCC Secretariat.
11. As for the role of Thailand in UNFCCC, we are actively
cooperating with the world community to help solving the problems inclimate change. By formulating policy on greenhouse gases reduction which
will not cause negative effect on the nation's social and economic

development. Thailand endorses the concept of "common but differentiatedresponsibilities" in dealing with problems on climate change and base its
policy alternatives on "no regret option" when dealing with measures toreduce greenhouse gases emission.
The Role of Forestry in Greenhouse Gas Mitigation
12. In 1994, Thailand's greenhouse gas emission was in theorder of 286 million tonnes of carbon dioxide. This figure is in term of"global warming potential"

which equate other greenhouse gases withcarbon dioxide. Out of this figure, the actual carbon dioxide emission ofThailand was 241 million tonnes which more than half of this amount was
produced by energy and transport sectors. However, during that same period,
the amount of carbon dioxide taken up by the country's forest was estimatedat 39 million tonnes, while carbon dioxide emission from land use, land usechange and forestry (LULUCF) was estimated at 59 million tonnes.
13. The good sign of forestry's role in carbon dioxide emission
was that the net amount of carbon dioxide emitted from LULUCF showed aclear declining trend.

From Thailand's country study, carbon dioxide

emission from LULUCF was projected to be 59 million tonnes in 1994,
51 million tonnes in 2010, and 46 million tonnes in 2020. This clear trend in
reduced carbon dioxide emission from LULUCF is a tangible result from ournational forest policy in forest conservation, restoration, and re-afforestation
as well as restrictions on forest land utilization and harvesting.
14. The Royal Forest Department (RFD) is the sole responsible
government agency in forest resources of the country. It's mandate covers
the whole range of forest resources conservation and management. The past
four decades of national economic and social development plans exploitedthe country's endowment in forest resources which resulted in rapid loss offorest area due to deforestation and conversion of forest land for other uses.

The scenario is now changing and improving. Great emphasis on protecting
the existing forest areas become the main priority of RFD. At the same time,
forest restoration as well as re-afforestation activities are encouraged andpromoted.
15. As a result of these efforts, the loss of forest area has been
stopped. Large scale rehabilitation of degraded forest area has been initiatedin 1993 through "Forest Rehabilitation on the Occasion of the 50th
Anniversary of the King's Ascension to the Throne Project". The Project isaiming to establish 5 million rais (800,000 ha.) of "permanent forest"
through reforestation of the degraded forest areas. Up to present time, RFD
in collaboration with private sectors has already established more than
2.5 million rais (400,000 ha.) of "permanent forest".

The rehabilitated"permanent forest" areas are mostly in the northern part of the country,
which is the most important watershed areas of the country.
16. In addition to the above project, RFD also undertakes its
own watershed rehabilitation activities in its annual work plans.

This

activity which is aiming to stabilize and rehabilitate critical watershed areasof the country is also a major sink in carbon dioxide mitigation. Furthermore,since 1992 the government through RFD have launched "Economic Tree
Plantation Promotion Project" with the aims to diversify crop land to forest
plantation by providing subsidy to participating farmers. Up to present time
this undertaking results in additional 2.35 million rais (376,000 ha.) of forest
plantation in Thailand. The increase in forested area is evident when theforest area was reassessed in the year 2000 by using GIS althoughconfirmation by ground truthing is not yet completed. (See Annex)

RFD's Position on Re-afforestation with Reference to the Discussion of
COP6 of UNFCCC
17. All of these forestry activities stated above are, undoubtedly,
the major contributor to Thailand's ability to mitigate carbon dioxide
emission even though the objectives of those projects are not intended todeal with greenhouse gas mitigation of the country. They are nevertheless,taken up carbon dioxide from the atmosphere in significant amount relative
to emission figure of the country. Therefore, forestry activities, especially,
re-afforestation activity is seen as the most cost-effective and feasible tocarry out in order to mitigate global warming by removing carbon dioxidefrom the atmosphere.
18. Even though there is no consensus in the meeting of COP6 —Part I on the inclusion of re-afforestation in the Clean Development
Mechanism (CDM), the Royal Forest Department will continue its policy
and implementation of the work plans in forest conservation and reafforestation as much as its own resources permit.

However, since theundertaking of re-afforestation to mitigate global warming costs a lot ofmoney to carry out the activities, so in order to be fair to all parties, this costs
should be borned by those who are the major contributor to the problem.
The problem of the inclusion or exclusion of re-afforestation in CDM is amatter of selfishness with no moral consideration to take responsibility in
reducing greenhouse gas emission and global warming mitigation.
19. Although Thailand is a non — Annex party to the UNFCCC
which is not required to take any action to reduce greenhouse gas emissionin order to meet the target set forth by the Kyoto Protocol, it has taken many
important actions to deal with the problem of climate change.

Severalmeasures are implemented in greenhouse gases reduction front to reducegreenhouse gases emission through improved energy efficiency in industrial
and transport sectors as well as curbing or switching the use of greenhousegases in industry.

On greenhouse gas removal front, forestry throughconservation and re-afforestation measures are the main thrust in the removalof greenhouse gas from the atmosphere. It is the activity that Thailand could
contribute effectively to the world community' s effort to mitigate global
warming.
20. The Royal Forest Department is, therefore, eager to promoteforest conservation and re-afforestation activities as a major activity ingreenhouse gas mitigation project for the world's benefit and better
environment for humankind.

The different viewpoints in inclusion or

exclusion of forest conservation and re-afforestation activity in any
mechanism seem to be irrelevant in view of urgent actions the worldcommunity need to take to avoid the impending environmental crisis which
threatens the survival of humankind.

ANNEX
Thailand's Forest Area Assessment 2000
The result of new assessment of forest area in Thailand using
GIS in year 2000 reveals that the country forested area has increased from153,952 km2 in 1995 to 171,825 km2 in 2000: The increase in forested
area occurred significantly in the northern part of the country.

Other

regions also gain slight increase in forested area (Tablel).
Analyses of factors contributing to this increase indicated thatseveral factors are all contributing to the result obtained. These contributing
factors are;1.

Re — afforestation and restoration of degraded forest

through various projects and work plan of the Royal Forest Department i.e.
Forest Rehabilitation on the Occasion of the 50th Anniversary of the King's
Ascension to the Throne Project, Economic Tree Plantation Promotion
Project, work plan on watershed area rehabilitation as well as work planson reforestation for conservation and community forest plantation.
2.

Natural regeneration and succession as a result of logging

ban measure in effect since 1989.
3.

Increase in the establishment of protected areas (nationalpark and wildlife sanctuary).
4.

Increase in people's participation in forest protection as aresult of awareness raising campaign.
5.

Increase in efficiency and effectiveness of forest five

prevention and suppression.

Table 1 : Forest Area Data in 1995 and 2000

1995

2000

Area
(Kin)

Forested Area
(Kin)

Forested Area
(Kin)

ChangeCentral21,165

721

1,584

+863

Eastern

36,561

7,689

8,250

+561

Northeastern

167,650

24,247

26,929+2,682

North

172,286

86,484

98,032+11,548

West

45,885

18,432

19,752+1,320South

70,14916,38017,278

+898

Total

513,698

153,952

171,825+17,873

Region(K n2)

120000
100000
o
cur

.F.
(c)

80000
NOY

60000
40000
20000
0

CentralEastern•ir
Northeastern

North

West

0 Forested Area in 1995
M Forested Area in 2000
: Comparison of existing forest area of Thailand in 1995 and 2000

South

6-5

Presentation by Dr. Mark Stevens, Assistant Manager,
International Greenhouse Partnerships Office, Department
of Industry, Science and Resources, Australia

Dr. Mark Stevens commenced his presentation by thanking JIFPRO for inviting
him to the Forum.
Dr. Stevens said his presentation would consist of two parts: one would be theoutline and explanation of present situation concerning CDM and Joint Implementation,
JI of the Kyoto Protocol ; the other part would be explanation about the activities of theInternational Greenhouse Partnerships Office. The material used and distributed to
the Forum participants for Dr. Mark Stevens' presentation was the attached Forum
Paper 6.
CDM of Kyoto Protocol to the United Nations Framework Convention on Climate
Change:Dr.. Mark Stevens drew the participants' attention to the fact that 39 countries listed in
the Annex 1 of the Protocol had the obligation to reduce GHGs between 2008 to 2012 by
5% in average against the 1990 level.
Dr. Stevens said that CDM of the Kyoto Protocol stipulated the relation between
developing countries and developed countries; CDM would assist non-Annex I countries
to achieve sustainable development in each country, while CDM would give Annex I
countries to acquire Certified Emission Reduction, CER, which would assists Annex I
countries to achieve GHGs reduction target.

CDM's possible decision making

mechanism, like Executive Board and Operational Entity. was also explained by Dr.
stevens.
Dr. Stevens said there had been no clearly written indication in the Protocol that sinkprojects could be included in CDM.
Joint Implementation, JI of Kyoto Protocol:
Dr. Stevens explained that JI stipulated things related to cooperation among Annex I
countries through conducting emissions reduction and/or sink projects.
As the result, CER acquired could be transferred from one developed country to anotherdeveloped country.

The decision making mechanism of JI would be more voluntary

than CDM.
The matters to be decided on CDM and JI:.
Dr. Stevens reiterated that implementation methodology, whether there should beceiling in using CDM and JI,

whether it should include sink projects in the case of

CDM,

in which way the proceeds of CDM would be spent, and so on had not been

decided yet.
Dr. Stevens touched on the potential of CDM and JI, too.
International Greenhouse Partnership Office:Dr. Mark Stevens explained about the International Greenhouse Partnership Office,which was an Australian Government Office and for which Dr.Stevens was working.
Dr. Stevens said that IGP was established for expediting CDM and JI, throughparticipating in international discussions and through the efforts to establish various
methodologies.
Dr. Stevens said that IGP had been conducting workshops on CDM in somedeveloping countries, had published 5 workbooks on such subject as project baseline,
which is an
essential factor to verify additionality of CDM( and JI) projects,

and monitoring

methodology.
Dr. Stevens said that IGP was in the final stage to publish 2 more workbooks, one ofwhich would be on LULUCF. Dr. Stevens further mentioned that IGP had been
participating in 13 AIJ projects in thedeveloping countries and ,through them, had been trying to identify the ways to copewith such difficult problems of leakage, permanency, and so on.
Dr. Mark Stevens, in many parts of his presentation, emphasized the importance of
involving developing countries in the process, especially in CDM.

FORUM PAPER

6.1111‘1 ilN
k
VI,

_13
International Greenhouse
Partnerships

INTERNATIONAL CLIMATE CHANGE PARTNERSHIPSMark Stevens & Noshir Bharucha, International Greenhouse Partnerships Office, GPO Box 9839,
Canberra ACT 2601, Australia Tel: (61-2) 6213 7891, Fax: (61-2) 6213 7903, E-mail:igp.office@isr.gov.au, Internet: http://www.isr.gov.au/resources/energy_greenhouse/igp
The Kyoto Protocol and the flexibility mechanisms
The Kyoto Protocol was adopted by the Third Conference of the Parties to the United Nations
Framework Convention on Climate Change in December 1997. Australia views the Protocol asa significant step forward in addressing climate change. When it enters into force, the Protocol
will bind thirty-nine Annex I countries (developed countries and economies in transition) to
individual emissions limitation and reduction targets with a view to reducing their overall
greenhouse gas emissions by at least five percent below the 1990 levels in the first commitment
period of 2008 to 2012.

Attainment of an equitable outcome was achieved, in large part, by setting differentiated targets
for countries that reflect their individual circumstances. In Australia's case, this meant agreeing
to a target, for the first commitment period, of 108% of our 1990 emissions. This represents a 30
per cent reduction in Australia's greenhouse gas emissions from a business as usual scenario. To
reach this target will be challenging. For this reason Australia and other countries strongly
argued in Kyoto for the inclusion of the so-called Kyoto flexibility mechanisms - International
Emissions Trading, the Clean Development Mechanism and Joint Implementation.
The flexibility mechanisms hold the prospect of substantially reducing the cost of implementing
the Kyoto Protocol compared to a situation where each country met its target by domestic
measures alone. Economic modelling by the Australian Bureau of Agriculture and Resource
Economics - known as ABARE - suggests that emissions trading alone would reduce the global
cost of meeting Kyoto targets by 80% and for Australia by 20%.
— 61 —

The Clean Development Mechanism (CDM) is significant because it assists non-Annex I (ordeveloping) countries in achieving sustainable development through project activities resulting
in certified emission reductions. In turn this gives developed countries access to low costabatement opportunities in developing countries, and thereby lowers the global cost of reaching
the Kyoto targets. Importantly, it will also lead to substantial flows of investment andtechnology to developing countries. A share of the proceeds from certified project activities will
be used to cover administrative expenses as well as to assist developing country Parties that are
particularly vulnerable to the adverse effects of climate change to meet the costs of adaptation,
thereby providing further benefits to non-Annex I countries. Importantly, the Kyoto Protocol
states that credits arising from CDM projects could accrue from as early as the year 2000.

The other project-based mechanism, Joint Implementation (JI), allows Annex I countries totransfer or acquire from any other Annex I country emission reduction units from projects aimed
at reducing anthropogenic emissions by sources or enhancing anthropogenic removals by sinksof greenhouse gases in any sector of the economy. The economies in transition in eastern
Europe are considered to be prime candidates for JI projects as there are considerable
opportunities to improve the efficiency of these economies.

The Kyoto Protocol covers six greenhouse gases; viz carbon dioxide, methane, nitrous oxide,hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. It also allows greenhouse gas
mitigation in a wide range of sectors, including energy, industrial processes, agriculture andwaste management. The Protocol has great potential to trigger, promote and facilitate innovative
greenhouse gas mitigation technologies as Annex I countries seek to meet their commitments ina cost-effective manner.
The CDM and JI represent potential avenues for countries hosting projects to become direct
beneficiaries from investment in these technological developments and know-how that will need
to be utilised by developed countries to meet their commitments under the Protocol. In so doing,
these mechanisms could help to set host countries on -a more sustainable path in relation togreenhouse gas emissions mitigation.

The Protocol makes it clear that any decision to participate in the CDM and JI must be voluntary.
It will be up to individual countries to determine whether proposed projects are consistent with
their development priorities.
- 62 -Given the voluntary nature of these mechanisms, projects must be mutually beneficial to theparticipating entities. From a host country perspective, projects will need to assist them to meettheir development goals. In addition, project hosts may also wish to examine the extent to which
projects enhance investment flows and facilitate other benefits, such as the transfer of technology
or know-how and human resource management.

From the perspective of investor parties, the costs associated with implementing CDM and JI
projects will inevitably be compared with the costs of domestic measures and internationalemissions trading between Annex I countries to reduce emissions.

Australia believes that it is important the rules for the CDM and JI are settled in a way that
ensures environmental integrity but does not weigh down CDM and JI projects with unnecessary
administrative costs. Such costs would only make the CDM and JI unattractive to investors,
thereby reducing the levels of potential investment and technology transfer. Furthermore, thelevel of adaptation funding available from the share of proceeds would be diminished.

The Kyoto Protocol also makes it clear that the CDM and JI may involve public and/or private
entities. The engagement of the private sector will be important if these mechanisms are to be
utilised to its full potential. From a technology transfer perspective, private sector involvement
is important as most intellectual property resides with the private sector. Furthermore, overrecent years, financial flows from industrialised to non-Annex I countries have been increasingly
driven by the private sector.

However, the Kyoto Protocol provides only a basic outline of the mechanisms. Much remains to
be done to agree the details governing the operation of the CDM and JI. It is hoped thatagreement will be reached on these details when the sixth Conference of the Parties resumes later
this year.

Potential CDM and JI Projects

If the CDM and JI are to be used to their full potential to deliver economic and environmental
benefits for all participants, Australia believes they should include a wide range of activities. If
international negotiations result in the exclusion of certain types of activities from thesemechanisms, some countries and regions are likely to miss out on capturing project opportunities
relevant to their development goals. In addition, by allowing a broader range of projects to be- 63 -

implemented in a greater number of countries, more revenue would be generated for adaptation
funding to the most vulnerable countries.

In particular, Australia strongly believes that sinks should be included in these mechanisms.
Other areas that could be covered by the CDM and JI include:(i)enhanced efficiency of electricity generation, distribution, transmission and use;(ii)

the use of non-carbon energy resources, eg biomass, solar, wind, hydro, especially inremote or rural areas;(iii)

improvements in primary energy production and transportation, eg. capture andutilisation of coal mine gas, reduction in pipeline gas leakage;(iv)

the substitution of low-carbon intensive fuels, such as natural gas, for more carbon
intensive fuels, eg coal, oil.

Some countries are arguing for the exclusion from the CDM of certain project types including
sinks. By trying to limit the range of potential CDM projects, they would limit the number ofdeveloping countries which would,have the opportunity to engage in activities that areenvironmentally and economically beneficial and would reduce revenue generated for adaptation
funding. Australia, in contrast, believes it is up to developing countries to decide what is in theirbest interests for sustainable development. Sinks projects offer the potential to arrest major
environmental problems, such as desertification and salinity, and ensure that forestry activities
are managed on a more sustainable basis.

Some commentators have noted that, unlike energy projects, there is a risk that sinks projects
may not deliver a permanent abatement of emissions. However, global warming is reduced
when sinks remove greenhouse gases for a period of time. Clearly, permanence is an important
issue that will need to be addressed in the design of sinks projects. However, it is not a reason to
reject sinks projects, as measures exist which can ensure that the level of credits that investors
receive from sinks projects is commensurate with their climate change benefits.

International Greenhouse Partnerships Program

As part of Australia's commitment to ensuring a workable and cost effective CDM that would
contribute to developing countries' sustainable development, the Australian Government
established the International Greenhouse Partnerships (IGP) Program. The Program is working
closely with partner countries from most regions of the world and has focused on capacity
building and the establishment of commercial international collaborative projects to reducegreenhouse gas emissions.

A key element of the capacity building involves the staging of training and development courses
for developing countries and economies in transition. The courses seek to increase awareness ofthe technical issues associated with the establishment of CDM and JI projects. To date, twocourses have been held in Australia (June 1999, May 2000) which were attended byrepresentatives from 17 developing countries and economies in transition. A third course is to beheld in May this year.
In preparation for the training courses, the IGP Program has commissioned the production of aseries of workbooks which are providing practical guidance on the establishment, design andmonitoring of various types of project, including potential methodologies for determining
whether projects meet additionality requirements under the CDM and JI. To date, five
workbooks for the energy sector have been completed and two workbooks relating to land usechange and forestry (LUCF), and transportation, are under development.
To gain experience in the lead up to the establishment of the CDM and JI, Australia has reachedagreement with seven countries from around the world - namely Mauritius, Chile, Malaysia, Fiji,
Indonesia, Viet Nam and Solomon Islands - to establish thirteen projects under the Activities
Implemented Jointly (AU) pilot phase. The projects cover a diverse range of activities including
forest plantations using improved planting stock, energy efficiency improvements, renewableenergy in rural villages and better industrial production technology.

The IGP Office is currently in the process of expanding the range of project opportunities. To
facilitate the establishment of new projects outside Australia, funding is being provided toAustralian-based organisations on a competitive basis for projects, where the host country
government is willing to accord the project official status under the UNFCCC.
- 65 -

As emission reduction credits are not available from the AB pilot phase, there are few incentives
for business to participate at this stage. Nevertheless, the existing projects are providing someinsight into the potential benefits which could flow in the form of technology transfer, capacity
building and investment when the CDM and 11 become operational and credits become available.

Concluding Remarks

The Kyoto Protocol provides us with a way to reduce global greenhouse gas emissions. As partof the global response Australia, along with other developed countries, has agreed to take onemissions targets. This represents a significant challenge. The best way to ensure that theenvironmental goals of the Protocol are reached is to reduce their economic cost.

For this reason Australia has been arguing strongly that the Kyoto flexibility mechanisms need tobe cost effective, without quantitative restrictions on their use, and attractive to the private sector.
From our perspective, the best way to achieve this is by making the mechanisms market-based
and minimising the bureaucratic hurdles that need to be overcome at both the international anddomestic levels.

Doing so will ensure that the goals of CDM and T1 - including increased investment andtechnology transfers between countries - will be realised. At the same time, the likelihood that
the Protocol's environmental goals being reached will increase.
At the same time Australia has put in place a domestic program for reducing greenhouseemissions that will see almost $1 billion spent over the next four years. This represents thelargest per-capita expenditure on greenhouse gas reduction in the world.

As this level of expenditure indicates, the Australian government attaches a high level ofimportance to reducing greenhouse gas emissions, and it wants to see the Kyoto Protocol work.

Thank you.

International Greenhouse
Partnerships•—

International Climate Change
Partnerships
grs,

HMI

Mark Stevens•

national Greenhouse Partnerships Office...

• .....

.. . : .

•

.,‘

6
I
Inter national Greenhouse
Partnerships

Content of Paper-20-t 2.
..

.

oto Protocoln Development Mechanism (CDM)..... . ... .. .
.

• • ' "i.• '' ''ose & Authority

mplementation (JI)
47E
rurpose & Authority

CDM & JI - Status
International Greenhouse Partnerships• policy capacity building & projects

Conclusions

tiS'‘4?1%‘1,
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International Greenhouse
Partnerships

Kyoto Protocol•.410

Inds 39 Annex B countries (developed
countries & EITs) to reduce their overall
greenhouse gas emissions by at least 5%
below 1990 levels in 2008-2012
IncludA provision for collaboration between
Annex I and non-Annex I countries (newly
industrialising & developing countries)
through the Clean Development Mechanism
CDM)

im4

International
Greenhouse
Partnerships

CDM -Purposeo assist non-Annex I Parties in achieving sustainable
ment and in contributing to the ultimate°ec we of the Convention.
o.
Assi Annex I Parties in achieving compliance with
their uantified emission limitation and reduction
ramitme ts.
Under the CDM:
L non-Annex I countries will benefit from project activities
resulting in certified emission reductions (CERs)
2. Annex I Parties may use the CERs from such project activities
to contribute to compliance3 a share of proceeds will cover administrative expenses andassist with adaptation costs for the most vulnerable Parties

4

Internat ional Greenhouse
Partnerships

CDM -Authority`D I shall be subject to the authority and guidance
the COP/moP
The CDM shall be supervised by an Executive BoardB), which reports to the COP/moP
Each project activity shall be certified by operational
entities (0Es)

cf.

0

International
Greenhouse
Partnerships

JI - Purpose
Any Party included in Annex I may transfer to, or
acquire from, any other such Party emission reduction
units resulting from projects aimed at reducing
emissions by sources or enhancing removals by sinks ofgreenhouse gases in any sector of the economy

international

Greenhouse

Partnerships...

JI - Authority• A pro ect must have the approval of the Parties involved
Legal entities may be authorised to participate, under an
Annex I Party's responsibility, in actions leading to thegeneration, transfer or acquisition of emission reduction
units (ERUs)

International Greenhouse
Partnerships

Potential CDM/JI Projects
use of non-carbon energy (renewable) sources as anernative to fossil fuels
Improvement in the efficiency with which energy isrecovered and used
he enhancement of sinks
T e capture and utilisation of fugitive emissions
TA e substitution of low-carbon fuels for high carbon
elsInternational

Greenhouse

Partnerships

CDM & JI -Status
rotocol provides framework for the CDM and JI
r Iii

zany .of. design and operational aspects remain to bereed`:
m to resolve outstanding issues by COP6
art I November 2000

International Greenhouse
Partnerships

CDM & JI -Status
6

r7.7"..Ati-

ssues Requiring Resolution
ementarity

should there be a limit on use of CDM and JI?

:pct Coverage
at types of projects should be eligible?
significant opposition to sinks projects

Institutional arrangementso CDM what should be role and composition of Executive Board?
• JI - what institutional arrangements are necessary?

aree Proceeds• CDM - what level?
JI - should there be a levy?

70;
.14

A1.1

International Greenhouse
Partnerships

International Greenhouse Partnerships(IGP) Officestablished by Australian Government to help progress
the Kyoto project-based mechanisms, including the
CDM by:• contributing to international negotiations• undertaking methodological work to ensure projects are
conducive to business engagement and deliver real emission
mitigation benefits• establishing AIJ/CDM-type projects overseas to gain experience
adopting portfolio approach (range of countries, range of projecttypes)• undertaking capacity building activities with newly
industrialising and developing countries

Greenhouse
International
Partnerships

IGP Office
Policy Development
4' f is lead agency in Australian Government on JI
DM including for international JI and CDM
negotiations-Norkin w- ith Umbrella Group to promote market-based, costeffective JI and CDM
Sp cific Australian submissions to progress negotiations,
including AIJ and CDM
Bilateral agreements with potential host countries; eg.
Indonesia and Republic of Korea
Participation in international fora to promote Australianm rests in ell and CDM

4

IGP OfficeInternational
Greenhouse
Partnerships

y Building

flops
HD

-ease awareness of CDM and project opportunities

LL Idonesia (July 1997), Mauritius (July 1998), South
Pacific (July 1999), Viet Nam (September 1999)
T aiming and Development Courses
increase awareness of methodological issues (eg.
asehnes
e 1999, May 2000 - 17 non-Annex II countries
course - May 2001

401111)
r-`

rga

e

IGP Officeinternational
Greenhouse
Partnerships

acity Building (cont.)
tidological Workbooks,age

ical guidance on project baselines and monitoring
red by consultant experts
books prepared for energy sector projects
wable-based electricity
'111

ggi

dsed electricity

qr energy efficiency in industry
energy efficiency in commercial buildings
fugitive emissions• two workbooks in preparation
ca- LULUCF
transportation

41111111‘tN
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r

International Greenhouse
Partnershipsy.•Activities Implemented Jointly (AIJ) pilot phase
Opportunity to gain experience in advance of CDM
Over 140 AIJ projects established worldwide
Over 48 countries involved, including 37 countries
hosting projects
15 AIJ projects involve forest preservation,
reforestation or restoration

4
ti

ad

International
Greenhouse
Partnerships

IGP Programro ec Assistance

P Office provides financial assistance for AIJ/CDM
projects for Australian based organisations on ac,:ompetitivebasis„„ii„.,,,,,,,,,.„,,,,,„„i.,„„„„„i.

roJec need to be endorsed as AIJ/CDM by the relevantof country

...

...

Approved Program funding can be used forcovering additional transaction costs
capacity building exercised with host countriesc00.,

2International
Greenhouse
Partnerships

IGP Program1„

projects endorsed in 7 countriesy Indonesia, Viet Nam, Fiji, Solomon Islands,
Mauritioo, Chile•

her projects under negotiation

AgoInternational
Greenhouse
Partnerships

IGP Programeats
iettian• in6reed carbon sequestration in improved planting

stock
bio

village households

Indonesia•

hydro/Wind/solar power supply to provide electricity to aremote village in Irian Jaya
hybrid solar/diesel power for 14 villages
landfill gas capture and utilisation

International
Greenhouse
Partnerships

IGP Program
roj ects
Malaysia• landfill gas capture and combustion
Solomon Islands• micro hydro power for two villages• air conditioner efficiency project with particularemphasis on government buildings■ Fiji• photovoltaic power supply system• energy efficiency in cement industry

International
Greenhouse
Partnerships

IGP Program
rojects
auritius
photovoltaic power supply• fuel efficiency improvement in oil-fired power station

Chile• reduce leakage from gas pipelines, fuel oil conversion tonatural gas, energy efficiency improvements

,International
Greenhouse
Partnerships

Conclusions-ender the Kyoto Protocol, developed countries have agreed to takeon emission targets at significant economic cost
Kyoto flexibility mechanisms (incl. CDM, JI) need to be costeffective and attractive to the private sector
sinks piArects are to be included in the CDM and JI, it will be,3sential to ensure they deliver real emission mitigation benefits
Jf

To facilita e he implementation of the CDM and JI, the IGP Officeis:• undertaking methodological work to ensure projects deliver realemission mitigation benefits
undertaking capacity building activities, particularly for non-Annex II
countries•

establishing collaborative projects to gain experience

6-6

Presentation by Sr_ Claudio Forner, Advisor,
Ministeiio del Ambiente, Colombia

Sr. Claudio Forner commenced his presentation by thanking Dr. Kobayashi,
Chairman of the Forum, and Board Chairman of JIFPRO, Mr. Akiyama.
Sr. Claudio Forner said that Colombia, despite various domestic problems, had actively
participated in the UNFCCC and Ministerio del Ambiente was the focal ministry,
having developed the national strategy, and had been making contributions to theinternational community through especially economic and financial analysis of CDM.

Sr. Forner's presentation was done based on the attached Forum Paper 7; he outlined
the contents of the paper which had been focused on the permanence problem and theway to cope with it,
Firstly, Sr. Forner reiterated that the Kyoto Protocol had set GHGs reduction target
for Annex I countries and provided for three flexible mechanisms, one of which was
CDM,
It was also explained that CDM had two objectives: one was to assist Annex I
countries to meet the GHGs reduction target; and another was to facilitate
developing countries to achieve sustainable development.
Secondly, Sr. Forner said that forest, which was source as well as sink of CO2, wasan important factor in the global carbon cycle and this factor had been duly written
in the Kyoto Protocol.
Thirdly, Sr. Forner said that absorbing CO2 through re-afforestation would be acost-effective way to reduce emissions and it had other additional benefits, like
contribution to sound watershed manegement.
He said, however, there were several technical problems to solve in including
LULUCF,especially re-afforestation projects in CDM.

Fourthly, Sr. Forner said that at this Forum he would concentrate on talking on a
proposal to solve the permanence problem associated with inclusion of LULUCF in
CDM. The permanence problem, according to Sr. Forner, is the problem that forests ,which store carbon, always had possibility to release it due to insect/ deseasedamage, forest fire,and so on. The aspect of the permanence problem was also
associated with forest harvesting, he said.

Fifthly, Sr. Claudio Forner explained about the Expiring CERs, which was theColombian proposal to solve the permanence problem.
This proposal, in other words, concerned issuing CERs with time limit.

The

effective period of CERs, in this case, is the period during which carbon is stored.
This proposal was, according to Sr. Forner, in yet other words, the provisional`license' in emissions reduction and had a role to buy time till more effective way
to reduce emissions would be found.
Sr. Forner said the details of the proposal were explained in the Forum Paper 7
and said that any questions were welcome.
Finally, Sr. Claudio Forner said that this proposal would facilitate inclusion of
LULUCF in CDM and as such would provide incentive to enhance re-afforestation
globally.

FORUM

PAPER

7Special considerations regarding the 'expiring CERs' proposal

Javier Blanco"
Claudio Fomer®
The Ministry of the Environment, Colombia

The present paper was written to be presented in the International Forum on Enhancement of Japan's
Private Sector's Overseas Re-afforesttion Cooperation'. The findings, interpretations and conclusions
expressed in this paper are entirely those of the authors. They do not necessarily represent the view ofthe Ministry of the Environment or the Government of Colombia.

1. Introduction
The Climate Change Convention
The United Nations Framework Convention on Climate Change (UNFCC) was adopted
on the Rio earth Summit in 1992 with the objective of stabilizing Greenhouse Gas(GHG) emissions to a level that would, to some extent, mitigate adverse effects ofclimate change. The Kyoto protocol establishes quantified emission reduction
commitments for industrialized countries (referred as Annex I countries). The agreed
target is to reduce aggregate emissions of Annex I countries to a level below 5% of that
one occurring in 1990, during a commitment period, which will run from 2008 to 2013.
In addition, the Kyoto protocol also established three flexibility mechanisms which
Annex I countries might use to comply with their commitments. The Clean
Development Mechanism (CDM) is one of such mechanisms and it refers to projects
that are implemented in non-Annex I parties with two main objectives:a) 'To assist parties not included in the Annex I in achieving sustainable development;
andb) to assist parties included in the Annex I in achieving compliance' (UNFCCC
Secretariat 1998).
The CDM allows Annex I countries to implement projects that result in certified
emissions reductions (CERs) in a Non Annex I country, and use these CERs to meet its
commitments acquired under the Kyoto Protocol. CDM projects must be implemented
on the basis of real, measurable and long-term benefits related to the mitigation of

Economic and Financial Analysis Group, The Ministry of the Environment, Colombia. Email:jblanco@minambiente.gov.co
Economic and Financial Analysis Group, The Ministry of the Environment, Colombia. Email:clafor@excite.corn— 90 —

climate change. Moreover, the accrued reductions must be additional to any that would
have occurred in the absence of the project activity (See Kyoto Protocol, article 12).

Forests and Climate Change
Given that the climate change problem arises from the accumulation of Greenhouse
Gases (GHG) in the atmosphere, and that CO2 can be thought of as the most relevant ofthese gases, the problem can be studied on the basis of the global carbon cycle. The
carbon cycle represents a model of stocks and flows between emitting agents (forexample the industry, respiration of biological communities, etc.), sequestrating agents(primary production of forests, the ocean, etc) and the pools. The interaction between
pools, in other words, the change in stock of a given pool represents a flow. The main
carbon pools on earth are the atmosphere, the ocean and the biosphere as they
accumulate the highest amount of carbon (see Table 1).
The fluxes of carbon between the pools are caused both by natural and anthropogenic
forces. Anthropogenic forces that increase the flux of carbon from the biosphere to theatmosphere include the burning of fossil fuels, some industrial activities such as cement
production and activities related to land use (deforestation and agriculture). On theother hand, activities that increase the flux of carbon from the atmosphere into thebiosphere include afforestation and reforestation, among others.
Sequestration by primary productivity and the amount of carbon in the biosphere's
biomass do represent both in flow and in stock an important input to the global carbon
balance, as can be seen on Table 1. According to the IPCC1 special report on Land Use,land Use Change and Forestry (LULUCF), the flow of carbon sequestration fromprimary productivity is approximately 0.7 GtC/year. As well, the stock stored in boththe soil and the organic structure of the organisms is 2477 GtC. It is important toemphasize that the potential may increase as areas are devoted to reforestation,afforestation and sustainable wood production. On the other hand, the actual scenario
shows a world with high deforestation rates (see Sizer 1999); deforestation itself has
proven to be the most important source of anthropogenic GHG emissions in thedeveloping world (see Watson et al. 2000; Sizer 1999).

As shown in Table 1, anthropogenic sources, especially those ones coming fromindustrial, energetic and land use activities represent an important input to the increaseof atmospheric GHG concentrations. On the other hand, capturing activities including
both anthropogenic land use change activities and biosphere primary production
counteract to the previous activities by reducing the concentration of GHG in theatmosphere. According to the IPCC report on LULUCF, gross primary production of
the biosphere is estimated to be 120 Gt C per year (Watson et al. 2000:34). Some
scientists suggest that, given the actual and future expected trends of forest growth,these systems could serve as a sink for about half the expected carbon dioxide emissions
from fossil fuel combustion (see DeLucia and Schlesinger 1999).

This report was formally requested by the VIII session of the Subsidiary Body for Scientific andTechnological Advice (SBSTA) to the Intergovernmental Panel of Climate Change in 1998 and waspresented in the XII session of the SBSTA in Bonn.
— 91 —

Table 1. The Global carbon Cycle Numbers
Stocks
1. Atmosphere
2. Soil
3. Vegetation
4. Ocean
Total

GtC
760
466
2011
39000
42237

GtCO2
198,26
121,57
524,6110173,91
11018,35

Emission flows
5. Respiration of ecosystems
6. Fuel and Cement production
7. Land use emissions
Total

GtC/y
60
6,3
1,6
67,9

GtCO2
15,65
1,64
0,42
17,71

Sequestration flows
8. Vegetation
9. Soil Uptake
10. Ocean flows
Total

GtC/y
61,4
0,5
2,3
64,2

GtCO2
16,02
0,13
0,60
16,75

Source: calculated based on Watson et al. 2000
The role of forests in the global carbon cycle is important as they represent both sinks,(primary production) and sources of emissions (deforestation), or as Brown et al. (1998:
164) suggest, forests play a double role in the carbon cycle. They conclude
that 'protecting, restoring and improving the management of forests can help slow
climate change'. Furthermore, Olander (2000:9) identifies three main roles of forests ininfluencing the Global Carbon Cycle. First, prevention of deforestation projects might
reduce emissions by sources, given the high emissions in third world countries fromland conversion and land degradation; second, enhancing the capturing capacity offorests through management and reforestation can certainly reduce on a temporary basis
the amount of carbon in the atmosphere; and third, fossil substitution using tree biomass
as burning fuel. Acknowledging this fact, the LULUCF sector has been included in the
Kyoto Protocol explicitly in articles 3.3 (reforestation, afforestation and deforestation),
3.4 (additional activities) and 3.7 (assigned amounts) related with the accountability andemissions reduction of industrialized countries.
On the other hand, it is important to take into account the many benefits derived fromthe implementation of LULUCF projects in developing countries. Apart from the clear
benefits regarding the atmosphere, these type of projects bring social, environmental
and economic benefits to local communities, such as protecting watersheds, enhancing
biodiversity, providing economic alternatives and preventing land degradation, among
others. It is important to highlight that the resulting social, environmental and economic

benefits are without a doubt, part of the objectives of the CDM itself, as they represent
inputs to the path to achieving sustainable development.
Notwithstanding the above, there has been a wide and long discussion regarding theeligibility of projects that would be included under the CDM (which as well is the only
mechanism that allows the participation of developing countries in the Kyoto Protocol).
The discussion has been mainly centered on the difference between reducing emission
projects (such as fossil fuel substitution) and sequestering GHG projects (forestry andother land use type projects). Arguments against the inclusion of sequestering types ofprojects range from legal, scientific, social and technical ones. Brown et al. summarize
these concerns in: a) unintended negative consequences (such as impacts on social
development, permanence and others); b) project eligibility and measurement (technicalaspects and uncertainties); and c) tracking and certification (monitoring and risk)(1998:
165)
The present paper will only be focused on a specific issue, which is considered to be
one of the main obstacles for the inclusion of LULUCF projects under the CDM: thepermanence problem. To do so, section two presents an in depth discussion of thepermanence problem in the context of climate change negotiations. The discussion will
be followed by the proposal2 of expiring CERs on section three, which was formallypresented during the XIII SBSTA in Lyon by the Colombian delegation (The Ministryof the Environment, Colombia 2000). Under the context of expiring CERs, section four
will analyze the market and price implications of non-permanent CERs. Based on someinternational market models, this section will discuss which are the implications of a
new CER market and how equilibrium prices for expiring CERs can be forecasted.
Finally, section five discusses some of the implications of the proposal at the projectlevel including establishing optimal project lifetimes and land use options for the
project proponent once the project lifetime has expired.

2. The permanence problem
Forestry and generally all LULUCF CDM projects have been questioned on the grounds
that it is very unlikely that they can generate long term benefits as climate change
mitigation options. This obeys to the fact that natural ecosystems, and in this case,forest ecosystems, are inherently dynamic systems (see Brown et al. 1998: 171); for thisreason, the carbon storage on forest is vulnerable to be re-emitted into the atmosphere in
the future. Furthermore, carbon stored is under continuous risk during the lifetime ofthe project, given the possibility of pests, fire and other natural or anthropogenic causes.
On the other hand, when a forestry project finishes, there is no guarantee that the carbon
will remain stored as biomass for perpetuity. In other words, projects which have afinite lifetime will not assure that the stock of carbon will remain in the trees, as bothrisks of re-emission and the need for land use change, will represent potential emissions.
Both sources of permanence, that is, risk during the lifetime of the project and reemission of capture after it, do in fact contravene the ultimate objective of the Climate
Change Convention. Conversely, this fact brings up a key question, which has been
considered as an important issue when the inclusion of forestry projects in the CDM is

2 A variant of the proposal was presented by Chornitz 2000.

— 93 —

studied: For how long should projects be kept in place in order to yield real benefits?
(see Mulongov 1998:19). This question will be addressed in section five.
In contrast, when an energy project reduces a ton of CO2 emissions below a validated
baseline, that ton of CO2 is permanently prevented from ever being emitted into theatmosphere. Even if the project stops at a certain point in time, the emission reductions
have already occurred and therefore, there is no risk of the re-emission of the amount ofcarbon that has already been reduced.
In the context of the Kyoto Protocol, an energy CDM project works as follows:
An Annex I country develops a CDM project in a Non-Annex I country.
The project results in a certified emissions reduction.
The atmosphere is indifferent on where the reduction took place.
The Annex I country uses the resulting CERs to comply and hence, it is allowed toemit the same amount of carbon.
5. If the project stops, then the reductions have already taken place and no CERs will
be certified from that point in time and on.

1.
2.
3.
4.

In the case of a LULUCF CDM project, the case is as follows:
1. An Annex I country develops a forestry project in a Non-Annex I country.
2. The project results in a certified carbon capture.
3. The atmosphere is indifferent on an emission reduction or a capture as they bothwill result in the same carbon concentration change on it.
4. The Annex I country uses the resulting CERs to comply and hence, it is allowed toemit the same amount of carbon.
5. However, in the case of a LULUCF project, the carbon captured could be released in
the future and consequently increase the carbon concentration in the atmosphere,
while the Annex I emission that was allowed will still remains in the atmosphere.

Some solutions have been proposed to address this concern. Approaches include
permanent enforcing, credit discounting, specific liability rules, minimum period for
project lifetime, CERs buffers for risk management and others. Solutions such aspermanently enforcing a carbon capture project have been severely criticized because
they could threaten the sovereignty of the host country (as there is a need for continuous
monitoring), or even its food security (given that no land use change will be allowed).
Solutions that propose a minimum project lifetime still do not resolve completely thefact that the stored carbon may eventually be emitted in the future and the problem ofpermanence still remains.

3. The expiring CERs proposal
3.1 Expiring CERs
The problem of permanence arises as CERs generated from LULUCF CDM projects
were thought to give a permanent license of emission to the acquiring party. Given that
LULUCF activities are non-permanent, the expiring CERs proposal solves the problem
by establishing a non-permanent license to emit (or a temporary license to emit) to theparty that acquires the associated CERs.
In other words, the expiring CERs proposal establishes a temporary license to emit byplacing an expiration time to the associated CERs generated by a LULUCF project.
Once the CERs have expired, the acquiring party will have to replace the equivalentamount of CO2 with permanent CERs, new expiring ones or an extra emission
reduction (see figure 1).
It is important to state that if the carbon is released within the project lifetime, theproject proponent is fully liable for the CERs that have been used for compliance.
Therefore the project should include a risk mitigation strategy in order to replace
unexpected emissions with equivalent CERs3. The proposal gives the flexibility to theproject proponent to establish the period of time in which the carbon will remained
stored and consequently, the time in which the land will be under periodical monitoring.
Figure 1
The permanence proposal

A forestry project
sequesters a certain
amount of carbon

At the end of the project, theamount of carbon may beemitted back into theatmosphere

CER expiry
dateForestry Project4

Therefore, an accquiring party
is allowed to emit that sameamount into the atmosphere

Therefore, the acquiring party should
replace that emission with a reductionor the acquisition of a new CER

Annex I party

3 Several mechanisms are available for dealing with the risk of emissions, such as CERs buffers andinsurances.

— 95 —

The new process would be as follows: (see Graph 1)

1. An Annex I country develops a forestry project in a Non-Annex I country.
2. The project results in a certified carbon capture for a specific period of time.
3. The atmosphere is indifferent on an emission reduction or a temporary capture as
they both result in the same carbon balance.
4. The Annex I country uses the resulting CERs to comply and hence, it is allowed toemit the same amount of carbon which was stored by the project for a period equal
to the one in which the capture remained stored in the biomass.
5. Once the lifetime of the project has finished, the land is free from any liability andthe carbon may be released.
6. From the standing point of the acquiring party, once the licensed period has expired(that is, the validity period of the generated CERs), the acquiring party should
replace the same amount of CO2 with an equivalent emission reduction or byacquiring a new CER.
In addition, the proposal does not establish a strict relation between the date in which
the CERs are certified and the date when they are use for compliance (or retired to acancellation account). In this respect, CERs are fully bankable and can be retired
whenever the acquiring party decides to do so.
This scheme guarantees that the potential future release of the captured carbon will be
secured as the acquiring party will still be liable for the reduction when the CERs expire.
Moreover, as the CERs are certified ex — post and the monitoring of the carbon is madeduring the lifetime of the project, it is assured that the validity period of each CER
corresponds to the real time in which the carbon remained sequestered as biomass. The
proposal ensures a permanent reduction in the long run given that in the future, parties
will not only have to comply with new commitments, but also replace the nonpermanent CERs with equivalent emission reductions.

3.2 An example
The above section has identified some terms that would be useful to define before
setting up example:
Lifetime of the project (N): Total amount of years of the project.
CER generation date (t): Year of the project in which the CER was produced (certified)
Validity period (VP): Amount of years that the CER will be valid for
CER retire date: Date in which an acquiring party used the CER to comply.
Expiring date: Date in which the CERs will have to be replaced. This date is calculated
by adding the validity period to the date in which the CER was retired.
The example will be based on the following assumptions:
A reforestation project is set up for 25 years
Each year, the forest will sequester an amount of 100 tons of carbon, from year 1 (atthe end) to year 25 (also at the end).

- 96 -

-

Unless the international reglamentation of the Kyoto Protocol establishes something
different, for the purpose of this exercise, the certification will occur annually andtherefore, the project will yield a total amount of 100 certified CERs of 1 ton ofcarbon each at the end of each year.

Graph 1. The proposal process
Lifetime of the
project isdetermined
beforeA projectforestry project
startsThe project yields acertain amount of CERs
annualy0.

The emission ofa CER includes
the calculated
validity period

V
Land is released
from Liability

An acquring
party buys a 1
ton CER valid
for 10 years

The party
decides to bankthe CER and use
it later

The party retires
the CER on a
specific date

Establishment of
the CER expiry
date

The party isallowed to emit
1 ton of CO2 for
10 years

The projectfinishes

After 10 years,
the CER expires

Party should replace
the expired CER withan extra 1 ton
reduction

The validity period of each CER will depend on the period of time in which the carbon
will remain as standing biomass within the lifetime of the project. This is the same assaying that the validity period depends on the time that the project proponent assuresthat the capture of CO2 will not be released. For the purpose of this example weassume that the validity period will be based on the difference between the date ofcertification and the end of the project according to the following formula:

Validity period (VP)= N-t
Where:
N = lifetime of the project in years
t = the year of the project in which the CERs are certified.
For example a CER, which was generated on year nine will be valid for sixteen years(25 — 9 = 16). The flow of CERs for the selected project is stated on Table 2.

Table 2. CER Budget for the ProjectYear

Amount of CERs
(Ton of CO2)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100.
100
100
100
100
100
100
100
100
100
100

Validity
period (years)
VP=N-t
24
23
22
21
20
19
18
17
_,
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0

As a result, the project produces a total amount of 2400 CERs of 1 ton each. Because
the validity period of each CER is different, the market price for each will be different
as well. The market price implications will be discussed in the next section. Please donote that the last vintage of CERs, which is produced at the end of year 25, will have avalidity period of 0 years. The validity period is 0 because after year 25, the projectends and this last capture has not remained as biomass before the project lifetime
finishes. As will be stated later, this represents an incentive for the project proponent toextend the lifetime of the project.
Having stated above that there is no strict relation between the date in which CERs werecertified and the date in which they are used for compliance, the next step is todetermine the expiration date of each expiring CER. This process will depend on whenwill the CER be retired. The acquirer of the CER may choose when to retire the CER,
according to its needs, and recognizing that he/she will have to replace that CER when
it expires. The expiring date will be determined by the date in which the CERs isretired (e.g. added to its assigned amount) and the validity period.

Following this rationale if a CER that has a validity period of 5 years`, was retired on
the 5th of may 2008, then, the expiring date will be the 5th of may 2013 (the date ofretirement plus the validity period). Consequently, in this date, the party shall replace
the expired CER either with a permanent option (a permanent CER or an equivalentinternal emission reduction) or a new expiring CER.

4. Valuing time and forecasting the value of expiring CERs: A market approach

The Kyoto Protocol and its flexibility mechanisms can be seen as the establishment of a
tradable emission permits (TEP) market. This market appears with the creation of asingle commodity, based on the carbon units referred in articles 17 (part of assigned
amounts), 6 (emissions reduction units) and 12 (certified emissions reductions) of the
Kyoto Protocol. All these units are fully fungible, tradable and can be used by Annex I
parties to comply with their reduction commitments (see Petsonk et al. 1998). For the
purpose of this paper they will be named "carbon permits" in general.
With the appearance of the commitments of the Kyoto Protocol, the demand for carbon
permits is created. Each country will have two options for compliance: make theemissions reduction internally or buy carbon permits in the international market. On theother hand, all the countries, Annex I and Non Annex I, that have low cost emissions
reduction options can offer in the international market carbon permits. This constitutes
the supply of carbon permits in the market. The equilibrium price is determined by theinteraction of the demand and the supply curves, which as well are determined by the
specific marginal costs of reduction in each country (Annex I countries providing bothsupply and demand, and Non-annex I providing only the supply).
Given the opportunity for carbon markets with the future ratification of the Kyoto
protocol, there has been a wide range of efforts for modeling prices of carbon permits ingeneral. Many of the developed models include switches for accounting regulatory
aspects such as supplementarity, the inclusion of forests and others. It is worth tomention some of the most important studies that have ended in a market model using
the above structure: see Bernstein et al 1999, Brown et al. 1999, Edmonds J., M. Scott.
1999. , Ellerrnan et al. 1998, Holtsmark 1998, Manne and Richels 1999, Sands et al.
1999, Van der Mensbrugghe 1998.
With the inclusion of the expiring CERs in the Climate Change scenario, a new type ofcarbon permit appears. The new carbon permits have the characteristic of being nonpermanent and therefore will have a different price. It has already been stated that thepresent proposal represents a temporary license to emit, and in consequence, parties
interested in acquiring expiring CERs would be in reality buying time or, in other words,
postponing real reductions to a time in which technology will be developed enough tomake permanent reductions more cost effective.
Parties, as rational economic agents, would only be interested in buying expiring CERs
if it would be cheaper (or more efficient) to do the reductions in the future. The
willingness to pay for expiring CERs could be calculated by the difference between the

4This means that, as calculated in table 2, the CER was generated on the year 20 of the project.
— 99 —

cost of compliance today and the expectations of the cost of compliance in the future.
Acquiring parties will take a decision according to the following decision rule:
The buyer will be indifferent of buying permanent or temporary CERs if the cost ofcompliance today is equal or less to the expected cost of compliance in the future plus
the cost of delaying the compliance (e.g. buying the expiring CERs), or:
PPC = PEC + NPV (EPPC)Where
PPC is the price for a permanent CER
PEC is the price for an expiring CER
NPV (EPPC) is the net present value of the expected price of a permanent CER in the
futureTherefore, the acquiring party will be willing to pay for an expiring CER no more than:WTP (EC) = PPC — NPV (EPPC)Where
WTP (EC) = is to the willingness to pay for an expiring CER
Assuming that the price for compliance will remain constant in time, the new price canbe calculated by subtracting the discounted price for permanent CERs to the actual pricefor permanent ones. This can be considered as the worst case scenario, in which
expectations about the future cost for compliance remain constant. Providing that in the
future technology development will make options at a lower cost, expectations about
future cost can rise the price for expiring CERs. The estimation is as follows:
WTP (EC) = PPC — NPV (PPC), or
WTP(EC,) = PPC

PPC(1+ 6'

Where,WTP (ECi) = the willingness to pay for an expiring CER valid for i years
This formula shows that, as costs are delayed into the future, then the net present valueof the expected cost for compliance will decrease, increasing the willingness to pay forthe expiring CER, and consequently raising its price. In other words, as the validity
period increases the willingness to pay for expiring CERs rise. Intuitively it can be said
that for a long enough validity period, the willingness to pay expiring CER will be thesame as for a permanent one (which is not the same as saying that the price will be thesame, as marginal cost curves will surely differ).
The interaction of willingness to pay and the marginal cost of delivering an expiring
CER with a specific validity period will determine its final market price. The above- 100 -

context can be used to reformulate the market models, which have already beendeveloped.

5. Implications at the project level
Now lets analyze the proposal from the standing point of a project proponent. Given
the new context in which forestry projects yield non-temporary CERs, and consequently,
the differential price of the new expiring CERs, the impact on prices will have as wellan impact on the total revenue from single projects. Noting as well that the project
proponent may choose the length in which the project compromises to keep a certain
amount of carbon stored, the act of choosing a specific lifetime for the project is a
critical stage in the project design.
As was seen on the previous section, the longer the period of validity of a given
expiring CER, the higher its market price. On the other hand, extending the lifetime ofthe project increases the costs, as there is a need for periodic monitoring, longer
insurance premium, opportunity costs of land and other factors. On the other hand,
longer lifetime of a project will increase the price that is given to the generated CERs.
Under these circumstances, there is a need to establish an optimal length for the project.
The project proponent might choose to study the establishment of the optimal period byapplying optimal control theory, given a production a cost functions and the respective
restrictions.
Assuming that revenue from the project will only accrue to the selling of expiring CERs,
the project proponent can find the optimal lifetime of the project based on the revenue
from selling CERs with different prices and on the costs of producing them. In
mathematical terms, the following formula describes the net revenue function, which
will be maximized to increase profits:
max NR =s.t.

CERi* PiE,=, (1+ r)i

CERi

C f

Cma
1=0 (1+ r)`

cv *E CERi,•=0 (1 + r);

F(t) * K

Where
NR = Net revenue from the project
CERi = The amount of CERs certified at time i
Pi = The price for the CERs certified at time i, according to the given validity period(N-t). Pi is a price function Pi = G(N-i)
r = the interest rate
Cf= Fixed cost incurred at time 0
Cmi = Cost of monitoring, insurance etc, incurred annually
Cv = variable cost of maintenance of the projectF(.) = biomass production function of the selected species for all the project area.
K = The amount of carbon per unit of biomass
G(j) = Market price of expiring CERs of validity period j.

- 101 -

The left part of the equation refers to the revenues from selling the CERs, noting thateach one will have a different price according to its validity period. The right side ofthe equation includes the cost function, considering both fixed and variable costs andwhich are determined by the lifetime of the project. These costs can be seen as
abatement costs or, in this case, sequestration costs (see Holtsmark 1998). The
maximizing function will lead the project proponent to choose the optimal lifetime ofthe project as well as the optimal amount of CERs to be certified. The analysis will
result in the maximum net revenue (see Halsnaes et al. 1999:18).
Intuitively the expiring CERs proposal creates an incentive for extending the typicallifetime of the project (e.g. before the forest reaches maturity) because the project
proponent will be interested in increasing the price of the vintage of CERs that is
produced when the biomass production function reaches a maximums.
The conditions for maximizing the net revenue function will be specific for each type of
project. The CER production function will be based on the specific growth function ofa given type of forest or forest plantation and will also depend on the sowing conditions
and inputs to the process (nutrients, soil, water availability, etc.). On the other hand, thecost function will also depend on the prices of the mentioned inputs, the opportunity
cost of land, labor and technology, etc.
Before finishing the present paper, it is worth mentioning what happens to a specificproject after the lifetime has finished. There are two primary options for the project
proponent to decide what to do with the land; the first one is to extend the lifetime ofthe project and the second one is to stop the project.
The decision of extending the lifetime of the project has only sense if the project
proponent wants to extend the validity period of the CERs that are generated in the lastyears, now that only those ones who will be generated after the extension, will bebenefited. In this case, the analysis of extension will be very similar to the analysis offinding an optimal time for the project. The project proponent will focus on theopportunity cost of land, on the amount of carbon that will be captured each year6, thecosts of extending the project and the benefits derived from the extra price (premium)that the owner will get for each CER that extends its validity period.
If the owner decides to stop the project, then, the land will be released from liability,
and any emission caused by deforestation is compensated, as the responsibility of thepermanent reduction lies on the acquiring party. As the land is free from liability, theowner of the land might choose to change its use or leave the land as it is. The last
option is important to be considered, as there are many projects which, apart fromgenerating economic benefits in terms of CERs, they also generate social andenvironmental benefits. In fact, there might be the case that a great amount of
5 Typically, the biomass production function is of a logistic type where in the first years the amount ofbiomass stored is small. The function reaches a maximum at the middle point between the initial date andthe time in which the forest reaches maturity. From this point and on, the forest will grow at a decreasingrate until it stabilizes.
6 It is important to remember again the logistic growth curve of forests. At the end of the project, thesequestration might have became zero and therefore there might be no CER generation. The project
proponent might also choose to account for new pools, providing reglamentation of the Kyoto Protocol
allows him/her to do so.

— 102 —

restoration and sustainable wood production projects that became viable due to the CER
benefits. In this case, planted forests will remain, as they will generate a continuous
flow of environmental, social and even economic benefits into the population.
Another important option with the land is that, providing regulation of the CDM allows
it, the project proponent might choose to formulate a new forestry project in the land. It
is important to note that a single area of land could be used through time to implement a
continuous set of CDM projects that can assure a long-term reduction alternative. The
CERs generated from the different project on the same land will still be temporary andwill have to be replaced on the calculated expiring date. From the standing point of theatmosphere, this creates extra benefits as a great amount of carbon has the potential toremain for a longer period of time out from the atmosphere as wood products. Thesebenefits will not be accounted for.
6. Conclusions
In this paper we have analyzed in some detail the expiring CER proposal that deals withthe concerns of permanence of the LULUCF projects in the Clean Development
Mechanism. The proposal is based on a liability scheme that transfers the nonpermanence characteristic of a forestry project to the permits or allowances it generates.
The result is a temporary license that offset the future releases from non-permanent
projects. The proposal includes a rigorous liability scheme in which both the project
proponent and the acquiring party have a shared but differentiated responsibility of thestored carbon. The project proponent will be responsible and liable for the capture
and/or emissions of the capture during the lifetime of the project, assuring a net
environmental benefit. The acquiring party will be responsible for a permanent benefit,
as it is represented by the replacement of an expiring CER.
In the short run, the proposal facilitates compliance as it makes cost-effective options
available in the market. Furthermore, the many benefits derived from LULUCF
projects in developing countries are also important to be taken into account, as
LULUCF represent an alternative for ecosystem restoration, watershed protection, laborand others. In the long run, the proposal is compatible with the idea of real reductions
as it clearly states the liability of these reductions to the acquiring parties. In the longrun it also gives some time for technology to develop at a level in which new options
become cost-effective. As a result, the proposal of the expiring CERs deals with theconcern of permanence while at the same it might help to achieve article 12 objectives
and ease the path to the ultimate objective of the Climate Change Convention.
Secondly, we analyzed the effects of the proposal in the carbon permit market.
Understanding the proposal as a temporary license to emit, a new carbon market
commodity appears, concluding that this non-permanent carbon permits will have a
differentiated price that will depend mainly in the difference between the present costfor compliance and the expected cost of compliance in the future. Because a temporary
license to emit implies a postponement of compliance cost, the price of the expiring
CERs will increase according to the validity period. Economic agents will definitively
be interested in postponing costs due both to opportunity cost of money and expected
future costs of compliance to be lower.

The third analysis was centered on the implications of the expiring CERs proposal at the
project level. Given that there is a differentiated price of the CERs according to thevalidity period, the impact on the net revenue of the project is clear. Noting that thevalidity period depends on the length of the project, there is an incentive for project
proponents to extend the lifetime of single projects. This reveals an important questionon which is the best length of time for the project. The paper analyzed the generalcontext and opened a new path to understand the ways to maximize profits. Optimal
control theory can be understood as an important tool for answering this question.
Finally, the paper identified some of the incentives for extending the lifetime of the
project and the resulting collateral benefits from this extension. In the context of the
Climate Change Convention, long-term benefits are a priority of the projects. Forestry
projects offer a wide range of options and incentives for extending lifetime of projects
or keeping forests standing or implementing a subsequent series of CDM projects on asingle area of land.
The expiring CER proposal can make viable the use of forests for climate change
mitigation, as it represents a neutral alternative from the standing point of theatmosphere. It is also important to take into account that value, which is added toforests as the GHG capturing service, is acknowledged. Furthermore, making viable
forests under the CDM brings economic alternatives to communities throughout thedeveloping world.
The paper has identified and opened new directions and needs for research, that can beaddressed in the future. The authors expect that the proposal will be further developedin order to be fully compatible and be part of the reglamentation of the Kyoto Protocol.

References
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(1999), "Effects of Restrictions on International Permit Trading: The MS-MRT Model",in: Weyant, J. P. (ed.), The Costs of the Kyoto Protocol: a Multi-Model Evaluation.
Special Issue of the Energy Journal, International Association for Energy Economics,
pp. 221-256.
Brown S., D. Kennedy, C .Polidano, K Woffenden , G. Jakeman, B. Graham, F.
Jotzo, B. Fisher (1999); "Economic impacts of the Kyoto Protocol: Accounting for thethree major greenhouse gases" . ABARE, Mayo 1999.
Brown, S., N. Kete, And R. Livernash (1998). " Forests and Land Use Projects". In
Goldemberg, J. (e) (1998). The Clean Developm,ent Mechanism: issues and options.
United Nations Publications, New York. 163-173 pp.
Chomitz X. 2000, "Evaluating Carbon Offsets From Forestry And Energy Projects:
How Do They Compare?" World Bank Policy Research Working Paper No 2357.
DeLucia, E and A. Schlesinger (1999). "Quantifying Carbon Dioxide-Inspired
Growth Spurts". The forestry Source, June 1999. http://www.safnet.orgiarchive/co2699.htm
Edmonds J., M. Scott. (1999). , "International Emissions Trading & Global Climate
Change", Pew Center on Climate Change, December 1999.
Ellerman, A.D., H.D. Jacoby and A. Decaux (1998a), "Analysis of Post-Kyoto CO2Emissions Trading Using Marginal Abatement Curves " Oct 1998.
Halsnaes, J., P. Painuly, H.J. Turkson, A. Meyer and A. Markyanda (1999),"Economics of Greenhouse Gas Limitations": Main report summary guidelines"UNEP,
Denmark.
Holtsmark B. J (1998). "From the Kyoto Protocol to the Fossil Fuel Markets" Center
for International Climate and Environmental Research in Oslo (CICERO), 1998.
Manne, A.S. and R.G. Richels (1999), „The Kyoto Protocol: a Cost-Effective Strategy
for Meeting Envrionmental Objectives", in: Weyant, J. P. (ed.), The Costs of the Kyoto
Protocol: a Multi-Model Evaluation. Special Issue of the Energy Journal, International
Association for Energy Economics, pp. 1-24.
Mulognov, K. (1998). "Introducing Forestry Sector Concerns In The Development Of
Joint Implementation And The Clean Development". In Climate Change in the Global
Economy: npolicy dialogues of the iInternational Academy of the Environment 1998.
International Academy of the Environment, Geneva.
Olander, J. (2000). "Las Opciones Forestaies en el Mecanismo de Desarrollo Limpio:
Un resumen de los principales temas para los paises andinos". EcodecisiOn, Quito.

Petsonk, A., D. Dudek and J. Goffman (1998). "Market Mechanisms & Global
Climate Change: an analysis of policy intruments", Pew Center on Global Climate
Change, Arlington.
Sands R., J. Edmonds, S. Kim, C. MacCracken and M. Wise (1999), "The Cost of
Mitigating United States Carbon Emissions in the Post-2000 Period", Pacific Northwest
National Laboratory.
Sizer, N. (1999). Opportunities To Save And Sustainably Use The World's Forests
Through International Cooperation. http://www.iisd.ca/linkages/forestry/sizer.htrn1
The Ministry of The Environment, Colombia (2000). "Expiring CERs: A proposal
to addressing the permanence issue". Methodological issues, land Use, Land Use
Change and Forestry: Note by the Secretariat". FCCC/SBSTA/2000/MISC.8
UNFCCC Secretariat (Climate Convention Secretariat), 1998. The Kyoto Protocol to
the Convention on Climate Change, Climate Change Secretariat, Bonn.
Van der Mensbrugghe D. (1998), A (Preliminary) Analysis of the Kyoto Protocol:
Using the OECD GREEN Model. OECD Development Centre. March 1 1998.

'hP Ministry of thevi onment, Colombia
Spe

El

MI

iding-t`Expiring CERs' proposal

Presented by: Claudio Forner

Contents• int• duction: UNFCCC and forests• Thy problem of permanence• Ex firing CERs
• Ma ket implications• Pro ect level implications• Co clusion

UNFCCC and forests• UN CCC throught the Kyoto protocol
establishes emission reduction
co itments.
• inn -x I parties can reduce internally or
use hree flexibility mechanisms.
• CD is one of such mechanisms:- H 1p pantie: in achieving; reduction targets- C ntribute to sustainable development of thed veloping world

T e rolS enario• For sts are an important component of
the arbon Global Cycle, as they are botha si k and a source.
• CD objectives:
H Iping parties to reach targets (cost effective
al ernative)— G neration of a wide range of collateralb nefits to non-Annex I parties (in terms ofg• ods and services), such as protection of
w tersheds, biodiversity

orests and the Carbon ycle
Carbon Sink
primary productivity
1.4 Gt C/ year/

Carbon source:
Deforestation anddegradation: 1.1 Gt C/year

a 1. ,
r

Production of
biofuel for fossil
fuel substitution

The Problem of permanenceJ• An Annex I Party develops a project on a nonannex I party• The project results in a certified carbon capture• Annex I party uses the CER to comply and isallowed to emit the same amount of carbon into
the atmosphere.
• When the project finishes, the carbon capture isin risk of release, or there is no assurance of theperpetuity of it.

7.

Discussions on the Key Note Address and the Presentations

Comment/Question by Mr. Yamanaka, Environment Office, Kansai Electric Power
Company:
Mr. Yamanaka said he would support what Dr. Plodprasop Suraswadi, DG of RFD,
Thailand ,had said, i.e., re-afforestation itself has its own real value and whether it
would be included in CDM or not had in a way secondary importance.
He, however, said nevertheless for the private sector to expand forestry related
cooperation, LULUCF to be included in CDM would play an important role as anincentive.
Mr. Yamanaka's first question was directed to Mr.Mikihiro Inoue and the question
was whether very precise data would be necessary to facilitate inclusion of LULUCF
in CDM or not..
Mr. Yamanaka's second question was directed to Dr. Untung Iskandar about the way
to prevent illegal cutting. This question was raised in relation topermanence'

problem.
Mr. Inoue's response:
Mr. Inoue, before answering the question, said that it was very important that
LULUCF be included in CDM as ,otherwise, investment would be entirely
diverted to other sectors which were included in CDM.
Mr. Inoue said that it was true that survey and measuring would be comparatively
difficult in LULUCF, and as the results, viable data were lacking.
He said that COP had not decided about such matters as how to set baseline, theway of measurement/culculation, but the global consensus was to accumulate
real experiences/ examples and to discuss further based on these.
Mr. Inoue said that if a lot of money was spent, we would be able to collect accurate
data but he believed that we had to keep in mind the cost-effectiveness of
surveying/measuring.
Dr. Untung Iskandar's response:
Dr. untung Iskandar, before answering thequestion, thanked the Kansai

Electric Power Company for its cooperation with Gadja Madah University ofIndonesia.
Dr. iskandar said the important factors to prevent illegal cutting were upgrading
the community quality, government's firm stance against illegal cutting,downsizing domestic wood industry to balance demand and supply, and possibly
applying timber tracking method.

Dr. Iskandar added that in Indonesia such

international organizations/ initiatives as SGS, Smart Wood, and WWWF werealso working to conserve forests.
Comment/ Question by Dr. Kobayashi of Sumitomo Forestry Company;
Dr. Kobayashi said that majority of more than 20 industrial plantation projects by
Japanese pulp/paper industry had been carried out in such countries as Australia, New
Zealand and Chile and that the fact, he thought, related to risk matters.
Dr. Kobayashi said that he had been engaged in various types of forestry relatedcompany activities and for the past 10 years had been responsible for a tropical rain
forest rehabilitation project in Indonesia.
Under the above background and with his belief that CDM should include LULUCF,
Dr.Kobayashi asked whether there were effective ways to protect projects from land andcommunity related disputes.
The question was responded by Dr. Untung Iskandar and by Sr. Claudio Forner.
Dr. Untung Iskandar's response:
Dr.Iskandar said that it was true that there had not been much investment inIndonesia by Japanese pulp/paper industry.
Dr. Iskandar said further that it was true there were community and people
related problem and in the case of Indonesia transition to decentralized forest
administration had added certain confusion.
He said that simple solution would not exist as people/land matters were very
complicated ones.
Dr. Iskandar emphasized that local communities should be involved from theinitial stage of project.
Sr. Claudio Forner's response:
Sr. Claudio Forner said that also in Colombia people related problems wereabundant. Sr. Forner, nevertheless, said the roblems might offer an opportunityof setting up a

project, involving local people, community, NGOs, andgovernment, and offer an opportunity to improve living conditions of people.
Sr. Forner said that a rule to regulate the relation between community andinvestor had to be clearly established at early stage of a project.
He said that there were two types of models: One type is the host induced
projects, in which main initiator of the project is community and they sell CERs;
Another type is bilateral project between community and investor.
With regard to land problem, Sr.Forner said that the problem might be solved
through Colombian proposal in relation to the ' Permanence' issue.

Question by Mr. Sakasegawa of Tokyo University:
Mr. Sakasegawa said that there had not been much reference to fast growing tree
species in the presentation.
He said in some cases fast growing trees might be useful, like Melaleuca, which wasre sitant to forest fire.
Mr. Sakasegawa wished to hear what foreign participants thought about fast growing
For Mr. Sakasegawa's question, Dr, Pham Quang Minh of Vietnam

species.
responded.

Dr. Pham Quang Minh's response:
Dr. Pham Quang Minh said that in Vietnam both indigenous and fast
growing tree species had been used for re-afforestation.

Dr. Minh said

fast growing tree species were planted in the production forest; until a few
years ago Eucalyptus species were mainly planted but recently, more acacia
species had begun to be planted.
Dr. Minh said that farmers in many cases did not like pure stand of fast
growing tree species and often fruit trees were mixed.
He added that Eucalyptus species had advantage of growing very fast andcould be rotated several times through coppicing but had problem of
hampering other vegetations' growth.
With regard to Melaleuca, Dr.Minh said that it had some problems, like theone associated with grazing.
Comment by Dr. Baba of the International Society for Mangrove Ecosystems(ISME):
Dr. Baba said that he would comment as a NGO( or NPO) member.
Dr. Baba said that forest is a complicated ecosystem and fast growing tree planting
might be cost effective in short term but it means the duration of carbon stock would
be short duration.
Dr. Baba said he believed that the way to acquire CER was important and the mostimportant matter would be how effectively involve local people in re-afforestation andhow effectively benefit the lives of local people. By taking this factor into full account ,Dr. Baba said, global environment would be conserved better in the long run.
Comment by Mr. Yamanaka of Kansai Electric Power Company:
Mr. Yamanaka commented in relation to Dr. Baba's comment; He said that privatecompanies also should involve local communities in their re-afforestation projects.
He said that his company's plantation in Indonesia included agro-forestry and one inThailand included silvo-fishery.
Dr. Plodprasop Suraswadi's Comment on the relation between re-afforestation projects
and local communities:
In Thailand and other South East Asian countries, local people's life linked very
closely with forests; they get various material from forest, including sometimes food andherb.
Dr. Plodprasop said that 1 million to 2 million people were living illegally in the forest,
half of which were foreign nationals. It was added that eviction of these people wasdifficult by various reasons.
Dr. Plodprasop said that under the circumstance the Government policy was to permit
them to stay there in harmony with forest by limiting the area and number of people in
one area, introducing agroforestry, planting fruit trees, and so on.
Dr. Plodprasop touched on a Movement called SMP, which asserted that people weremost important, they could cut trees freely, got land freely, and when land became
infertile move to another place;

Dr. Prodopraso added that this movement werereceiving some financial support from outside, including from Japanese NGO. Dr.
Plodprasop said that proper judgment should be applied on this kind of movement.
Question by Ms. Fujimori of Pacific Consultant company:
Ms. Fujimori said that she read the workbooks by IGP, Australia on energy sector withgreat interest.
Ms. Fujimori asked Dr.Mark Stevens when the workbooks on LULUCF andtransportation would be made available.

She also raised question to Dr. Stevens

whether the LULUCF workbook would cover the way to monitor leakage.
Dr. Mark Stevens' response:

Dr.Mark Stevens said that there had been

five workbooks issued on energy sector and they could be down loaded fromthe internet site, details of which would be made known during the Forum.
(Internet:http://www.isr.gov.au/resources/energy.greenhouse/igp)
Dr. Stevens said that the work book on LULUCF was in final stage ofpreparation and would be available within one month, although the exact date
was not known yet.
Comment and question by Mr. Kanda of Oji Paper Company:
Mr. Kanda commented partly in relation to the earlier comment by Dr. Baba of ISME.
Mr. Kanda said that there might exist some misunderstandings on industrial

plantation; Mr. Kanda said although industrial plantation by pulp/paper industry wasusually done on abandoned grazing land or bare land, still the good relation with thelocal community and local people was indispensable.
Mr. Kanda said that commercial companies to invest in tree planting meant theconsiderably large amount of funds had to be continuously invested without receiving
any returns,for long time.

Mr. Kanda said that hence some kind of social forestry

component was essential also in industrial plantation for pulp/paper and getting
incentive by CDM sink projects was very important.
Mr. Kanda's question was about the timing of awarding credit and he asked whether it
was possible to issue credit at the very beginning of a project and also asked about the
replacement of CER, whether there would be possibility of getting another credit after
certain period, say 10 years, after the initial credit was rewarded.
Sr. Claudio Forner responded to Mr. Kanda's questions.
Sr. Claudio Forner's response:
Sr. Claudio Forner said that private companies to pursue profits is rationaland still such activities could bring about social benefits, too.
In terms of getting credit in CDM, Sr. Forner said, the essential matter waswhether the activity contributed to achieving sustainable development or not..
Sr. Forner said that for private companies to set project period too long would
not be feasible in terms of cost performance; and the merit of the proposal of' Expiring CER' is, in a way, solved this problem.
Sr. Forner said there were several options for replacement of CER; if the
project aimed at rehabilitate degraded bare land, the important factor would
be how much carbon existed in the biomass there.
Comment and question by Mr. Nakagiri of the Greening Center of Yamanashi
Prefecture:
Mr. Nakagiri said that he understood that forest was neither sink nor source of GHGs in
the long term and that forest had its own merit .
Mr. Nakagiri had the impression that COPE had not reached consensus as the UmbrellaGroup including Japan and Australia had insisted too much that LULUCF should be
included in CDM and he wanted to hear why Japan would not make more effort in
reducing emission of GHGs originated from fossil fuels and why insisted in including
LULUCF in CDM.
Mr.Nakagiri understood that Australia had the national economic structure which
made emissions reduction difficult;

Mr. Nakagiri wanted to hear whether hisunderstaning was correct or not.
Mr. Mikihiro Inoue and Dr. Mark Stevens responded to Mr. Nakagiri's questions.
Mr. Mikihiro Inoue's response:
Mr. Inoue said that Japanese Government had formulated the generalpolicies to achieve the reduction target of 6 % and each sector was
making efforts to achieve the country's obligation.
Mr. Inoue said that he was not in a position to talk officially but he said
that he doubted that domestic LULUCF would account for large portionof 6 %.
Mr. Inoue said he, as a member of the Japanese Government delegation to
COP6 in the Hague, attended the session for CDM.
Mr. Inoue said that he was convinced if LULUCF excluded from CDM, thesector would have disadvantage, compared with other sectors included in
CDM.

Mr. Inoue said that he believed that re-afforestation had its

own merits independent from CDM matters but by the above reason hethought that Japan's position had been justified.
Mr. Inoue added that in case LULUCF included in C D M, further effort
would be necessary in identifying and conducting appropriate survey and/measurement. In this regard, Mr. Inoue introduced JICA's cooperation
with Indonesia to verify and measure CO2 absorption in the field.
Dr. Mark Stevens' response:
Dr. Stevens thanked Mr. Katagiri for his interesting question.
Dr. Stevens said that Australia were making effort in every possible
ways, in energy sector, through sink projects, and so on.
With regard to Mr. Nakagiri's question on the structure of Industry,
Dr. Stevens said that the characteristics of Australian industry was that
it was heavy processing type and raw materials depending type.
Dr. Stevens said that Australia were supplying materials to othercountries for further processing; he added that alminium sector was stilldeveloping; LNG supply was still expanding; and steel industry was stll
expanding, for instance, resulting in increasing emission of GHGs.
Unlike other developed countries in which service sector were gaining
more importance, Australia was different as the global supplier ofmaterials.

Dr. Stevens said that it was not justifiable to be penalized so long as
Australia tried hard to make the economic activity as efficient as
possible.

8

Panel

Discussions on 2nd February, 2001

Chairperson:
Panelists:

Dr. Fujio Kobayashi
Sr. Claudio FornerDr. Ir. Ngaloken Gintings, Director, Forest
Products Research Center, Indonesia
Dr. San Win, Forest Research Institute,
MyanmarDr. Pham Quang Minh, Head of Silviculture
Division, Department for Forestry
Development, Vietnam
Mr. Pravit Chittachumunonc, Director of
Silviculture Research Division, Royal
Forest Department, Thailand
Dr. Mark Stevens
Dr. Masahiro Amano, Forestry and Forest
Products Research institute, Japan

Chairperson's Guidance on the Panel Discussion:
Dr. Kobayashi said the panel discussion would be conducted basically as eachpanelist's response to the key note address, presentations and comments/questions
from the floor of the first clay session of the Forum.
Dr. Kobayashi said further that he would like to divide the panel discussion into threeparts; in the first part he would like to ask each panelist to express what he thought
about the first clay session and ask those who had not done so yet, to introduce
himself briefly;

in the second part he would like to ask each panelist to express hisview on prospect and task of forestry sector in each country; and in the third parthe would like to ask each panelist to express his view on LULUCF and CDM matter.

First Part of the Panel Discussion: Panelists' response on the first day
session. ( Some panelists actually covered wider subjects)
Sr. Claudio Forner's comment:
Sr. Claudio Forner said that he was convinced by the first day session that weshould think globally and act locally.
Sr. Forner said that in this respect this Forum was very important to share
information and to understand what the other parties were thinking.on thematter.
He said also that recognition of the importance of land use, the relation between
the government and community/people, and recognition of the importance of
permanence problem in relation to LULUCF had been deepened during the firstday session.
Sr. Forner concluded his comments by saying that if this kind of Forum could becontinued, we might be able to contribute to the matter further.

Dr. Ir. Ngaloken Gintings' Comment:
Dr.Gintings expressed his gratitude to Japanese Government and JIFPRO for
the invitation to this Forum.
Dr. Gintings said that he served currently Director of the Forest Products
Research Center of Indonesia.
Dr. Gintings said that by hearing the first day session he was reimpressed by thefact that forests had multiple roles and one of the roles was carbon sink role.
He said, however, that he had impression that enough data/information was stilllacking. The relation with local community/people, species selection, and theeffectiveness of short rotation plantation in carbon sink were the other matters
impressed Dr. Gintings.
Dr. Gintings went further to make explanation on the present situation ofrecovering forest in Indonesia.( Dr. Gintings showed several slides to theparticipants)
Dr. Gintings said that there were 56.9 million ha of degraded land in Indonesia,
15 million ha of which were degraded forest land.
With regard to the rehabilitation efforts, by July, 1999, 2.4 million ha were
rehabilitated by planting,

2.1 million ha of which were reforestation, and 1.2

million ha were rehabilitated by regreening.
Dr. Gintings said that 10 million ha were still to be rehabilitated by tree planting,and the plan for industrial plantation was to increse it annually by 0.3 million ha,with the expected costs per ha 5 million Rupiah. Dr. Gintings added that 1
trillion Rupiah were budgeted for community planting.

With regard to timber supply/demand situation in Indonesia, Dr. Gintings said
the supply capacity from natural production forests was 25.5 million m3 andannual timber demand was 63 million m3 and the gap was 37.5 million m3.
Dr. Gintings, in concluding, touched on the matter of LULUCF and CDM.
Dr. Gintings said that the Ministry of Forestry of Indonesia in collaboration withother Agencies concerned, had set up the position on Indonesia for COPE in theHague.
Dr. Gintings said that the Indonesian Government supported LULUCF to be
included in CDM.
He said that forests could be source as well as sink of CO2 and said that it
would be essential to get proper data on carbon sink by setting appropriate baseline.

Dr. Gintings said that Indonesia were trying to start AIJ projects likerecently started JICA cooperating project.
Dr. Gintings, in conclusion said, that the measures should be sought that local
communities and local farmers would benefit from carbon sink projects.

Dr. San Win's Comment:
Dr. San Win expressed his gratitude to JIFPRO for inviting him to the Forum.
Dr. San Win said that he was working for the Forest Research Institute of
Myanmar Government.
Dr. San Win said that he, by hearing the first day's session of the Forum, had
the impression that many countries supported LULUCF to be included in
CDM, added that he too personally supported the inclusion of LULUCF in
CDM as it would lead to reducing GHGs and at the same time benefit
developing countries. He said, at the same time, that he had noted that there
were various technical problems to be solved. .
Dr. San Win also explained about the Myanmar forestry sector. He said the
National Commission for Environmental Affairs was established in 1990 toachieve the balance among culture, national heritage, and resource development
for the Myanmar forests.
Dr. San Win said that the Forest Law was enacted in 1881, revised in 1902 andfinally revised in 1992. He added that the Community Forest Instruction was
issued in 1995 and by that local people could lease the use of degraded land for
30 years for farming and tree planting.

Dr. Pharr Quang Minh's Comment:
Dr. Pham Quang Minh expressed his gratitude to having been invited to theForum.
Dr. Minh said that he was a forester and was serving as Head of Silviculture
Division of the Department for Forestry Development, Ministry of Agriculture
and Rural Development.
Dr. Minh said that he had heard with great interest the first day session andhad got the impression that promoting re-afforestation would be beneficial interms of preventing global warming.

He added that he had also understoodthat cooperation between developing countries and developed countries wasimportant to promote re-afforestation in developing countries.
Dr. Minh said that in reality there would be various diffucult problems to solve.
For instance, he said, that local farmers in mountainous areas were generally
poor and did not afford to care about environment conservation or CDM.
Dr. Minh said that conflict involving land did exist in Vietnam, especiallymountainous areas, and said that Government's to keep good relation withrural communities was essential for successful re-afforestation projects.
Dr. Minh said that he noted in the first day session the choice of planting
species between indigenous tree species and fast growing tree species was
discussed and said that we needed to pay attention to conserving biodiversity.
In concluding his remarks,

Dr. Pham Quang Minh said that developing

countries were receiving assistance from developed countries and internationalorganizations and appreciated the cooperation, but nevertheless, it would begood to know what kind of cooperation was effective and what kind ofcooperation was not successful.

Mr. Pravit Chittachumunonk's Comment:
Mr. Pravit Chittachumunonk expressed his gratitude for having been invited to
the Forum.
Mr. Pravit said that he was Director of Silviculture research Division of Royal
Forest Department of Thailand.
He said that by hearing the first day session he had got the impression that
all the participants had understood well about various matters like theproblem of global warming, the Framework Convention, the Kyoto Protocol,and so on.
Mr. Pravit added that aspects beyond forest and forestry related field should befully taken into account.
Mr. Pravit, in conclusion ,said that he wanted to hear more from Japnese
private sector, including their views on why they wanted to implement
re-afforestation cooperation projects, what they thought on the effects of it, andwhat they thought the effects of plantation on global warming.

Dr. Mark Stevens' Comment:
Dr. Mark Stevens expressed his gratitude to JIFPRO again for his
participation in the Forum.
Dr. Mark Stevens said that this Forum was valuable activity and the papers
presented were well balanced and had high quality.
Dr. Stevens said the papers which dealt with potentials of CDM for developing
countries and the papers which dealt with technical problems of LULUCF
CDM were balanced.
Dr. Stevens said that the technical discussions on CDM had been done mainly
among developed countries but this Forum was different and of high value,
participated by very high ranking officials from developing countries, and withpresentation of valuable initiatives in developing countries.

Dr. Masahiro Amano's Comment:
Dr. Amano said that he was with the Forestry and Forest Products ResearchInstitute of the Japanese Government.
Dr. Amano said that he had been looking forward to receiving indications tosolve various problems like uncertainty, permanence, and leakage at thisForum. Dr. Amano said that the first day's session was very useful for him
as all the presentations were really to these points.
Dr. Amano said further that Dr. Mark Stevens' presentation on IGP programme
was useful by showing ways of capacity building and technology transfer fromAnnex 1 countries to Non Annex 1 countries.

Second Part of the Panel Discussion: Panelists' comments on the prospects
and tasks of forestry sector in each country.
The chairperson, Dr. Kobayashi, expressed his gratitude to the panelists for theircomments and expressed his pleasure of hearing various valuable comments.
Dr. Kobayashi now asked the panelists to offer their comments on the prospects andtasks of forestry sector in each country. Dr. Kobayashi said those panelists who
thought that they had offered comments of same effect in their comments at the First
Part could skip their comments for this sub-theme.
Dr. Kobayashi asked Sr. Claudio Forner to offer his comments first.

Sr. Claudio Forner's Comment:
Sr. Forner commented that he undersood global economy had been changing frommaterials production to providing service, adding that forestry sector would bein the same situation.
Sr. Forner said that Colombia had various problems like poverty and drugs andsaid that the Government of Colombia, fully recognizing these problems, thoughtthat forestry would provide a chance to change the national situation into thebetter way, although currently the forestry sector accounts for only less than 1%of GDP.

Mr. Forner said that he himself also was convinced that thepotential of forestry is large and forestry was the sector which would develop
from now on.
Sr. Forner said that the Colombian Government regarded re-afforestation as atool to terminate illegal logging and cultivation of illegal plants.
Sr. Forner reported that social awareness of the service from forest as important
ecosystem was rising, those who owned forest land had started reforestation andthe country had been receiving international cooperation to forestry sector past
10 years especially in watershed conservation. Sr. Forner expressed his hopethat projects beneficial both to donors and to Colombia could be further developedby CDM.
Sr. Forner, in concluding his comment, said the Ministerio del Ambiente had beentackling CDM for the past 3 years but so far there was no operating project andsaid that the risk of investment was diminishing and hoped Japan's private
sector's interest in investment in Colombian forestry sector.

Dr. Ir. Ngaloken Gintings' Comment:
Dr. Gintings said that a project, cooperated by Norway, had started three years
ago to measure the biomass of cinamomum, and started the same for Acacia
mangium.
Dr. Gintings said that a project cooperated JICA had started recently and it
would do the similar measurement for pines, Shorea, Dipterocarpus, and Acacia
mangium and hoped the better information on carbon sink function for thesespecies would be got, although there were about 4.000 tree species in Indonesia.

Dr. San Win's Comment:
Dr. San Win said that one thing that he would like to emphasize was that forestry
sector played a very important role in Myanmar; for instance forest products
export accounted for 1/3 of the total export in amount, had number 1 export item
surpassing rice export which had been dominant from 1940s to around 1985.
He said that forest had to be well managed for environmental reason as well as
economical reason.
The matter of concern, said Dr. San Win, was the excessive shifting cultivation
practice in the country; he said 22.8% of the national land, or 150,000 km2 inabsolute terms were affected by shifting cultivation which meant annually 10,000
ha were under shifting cultivation, supposing the fallow period as 15 years.
Dr. San Win said that 5 million people, or 1 million households were engaging in
shifting cultivation and as the national population was 50 million, 10 % of thepeople in the country were doing shifting cultivation.
Dr. San Win made concluding remarks that the potentially available land forplanting was very large and in one estimate as large as 300,000 km2.

Dr_ Pham Quang Minh:
Dr. Minh focused on the importance of biodiversity factor in promoting the
National 5 Million Reforestation Programme, citing the fact that during theProgramme 327 from 1993 to 1998 650,000 ha were planted and 700,000 ha
were rehabilitated through natural regeneration.
Dr. Minh said natural regeneration was very effective in conserving biodiversity,
adding that good combination of natural regeneration and planting wasessential.
Dr. Minh showed following slides:
A rehabilitated forest by natural regeneration, especially at upper part ofa hill, mixed with tea and crop growing in the lower part.
A forest of indigenous species; these indigenous species were growing mixed
with 7 year old eucalyptus plantation.
Farmers, utilizing and conserving a forest through coppicing in Paksan
Province, grow cassava and litchi at the mountain foot.
Another example of natural regeneration with farming at the foot of a hill.

Farmers coexisting with a forest; planting species to be decided by themand natural regeneration introduced in the upper part of a hill.
A Center to research natural regeneration and cheaper way of forest
rehabilitation; research on bamboo also conducted here.
•

A farmer rehabilitated a forest in 35 years by leaving behind one mother
tree.

This farmer told Dr. Minh that he wanted to leave this forest to his

family, to his seven sons.

Pravit Chittachumunonk's Comment:
Mr. Pravit said that in Thailand forests were categorized into three categories:
conservation forests, economic forests, and the forests to be converted to farm land.
Mr. Pravit said if re-afforestation was intended to establish consevation forests, itwould clearly lead to carbon sink.
Mr. Pravit said that the Forest Rehabilitation Project on the Occasion of the 50th
Anniversary of the King's Ascention to the Throne aimed at rehabilitate 5 million
Rai, or 800,000 ha of degraded land, all for conservation purpose.
Mr. Pravit said reforestation was done mainly for economic forests.
Mr. Pravit said that ,like Colombia , forestry in Thailand accounted for less than 1%of GDP and one of the difficulty for RFD was to secure funds for the forest
rehabilitation effort.
Mr. Pravit said that under the circumstance the Thai Government had started theeconomic tree planting project, which was afforestation on degraded farmlands tomake them private forests, with the Government support to participaticipating
farmers through providing seedlings and funds for labor.

This project had to bescaled down, according to Mr. Pravit, due to the economic crisis a few years before.
Mr. Pravit expressed his concern in case re-afforestation would be included in CDM
whether the established forests would have to be maintained as forest for long termor what would happen when the forest would eventually be harvested. Mr. Pravit
said that he understood no clear answer existed on these questions and thoughtthese points would be the subject of keen discussion.

Dr. Mark Stevens' Comment:.
Dr. Mark Stevens said there were currently 1 million ha of commercial plantationin Australia and the plan was to increase the area to 3 million ha in 2010.
Dr. Stevens said that the Government were giving incentives for this.
Another matter Dr. Stevens raised was 10 to 15 million ha of farm land degraded bysalt effect..

Dr. Stevens said that Australia should tackle with this problem forthe next 20 years through large scale vegetation recovery activity.
Dr. Stevens said that he was not a specialist in this field but he had dared to
explain why the salt related damage, accumulation of salt on land occurred.
Dr. Stevens said that the danger had not been recognized when the tree cover was
removed to make the land into farm land.
He said that there had been a great inland lake in Australia, which eventually had
been dried up, accumulated salt in soil.
land

When the vegetation cover of this died up

was removed, Dr. Stevens added, the underground water level rose andresolved the salt.

Dr. Stevens said that the salted soil problem had not been aclassical case salt related problem associated with irrigation in dry climate but very
unique phenomenon.

Dr. Amano's Comment:
Dr. Amano said that he would comment on Japan's stance on CDM rather thantalk on the tasks/problems of Japanese forests and forestry.
Dr. Amano said that there had been a concern that there existed uncertainty ofgetting data and difficulty to grasp the exact situation on leakage in forestry
sector in relation to CDM.
Dr. Amano said that this problem had been thought as particular to forestry sector;
however, Dr. Amano added that the recent understanding emerging, after hearing
the situation of emission source , was there would be not much difference between
the source and the sink in the field of measurement and data collection.
The general understanding now,

said Dr. Amano, that if the problem would be

solved in the source, most probably that would lead to solving the problem in thesink like forestry, as well.
Dr. Amano said that he could get some supporting facts by hearing the first day
session of this Forum.

One promising fact Dr. Amano introduced was theattempt by field projects to seek a parameter in calculating carbon volume based onforest biomass, and another attempt applicable was to calculate forest biomass
based on forest inventory.
Dr. Amano said that in case Japanese firms and NGOs/ NPOs tried to tackle withthe task of setting the base line or assess the leakage, they would be able to getquite a lot of information/data from past case studies.
Mr. Amano, in conclusion, said that he had been impressed by the presentations

which emphasized the participation by local communities and people inre-afforestation projects to be successful and he understood this in a way was
proposal for projects with no leakage and if we would continue to take this stance,
the leakage problem would be solved.

Third Part of the Panel Discussion: Panelists' comments on the inclusion of
LULUCF in CDM
The Chairperson, Dr. Kobayashi, asked the panelists to comment on the inclusion of
LULUCF in CDM.

Sr. Claudio Forner's Comment:
Sr. Claudio Forner said that Colombia supported LULUCF to be included in CDM
and had been participating in international discussions with that standpoint.
He said that LULUCF was an important factor in global carbon cycle and how wellits sink role be accommodated in CDM in order to achieve the objective of
UNFCCC was very important task; but he added that LULUCF's inclusion in
CDM should be regarded as a transitional way to cope with the global warming as
Colombia's belief was that the ultimate measure was to reduce GHGs emissions
and to sift the energy source to renewable ones.
Sr. Forner further said that there were three tasks for LULUCF to be included in
CDM:
Firstly political consensus has to be achieved internationally and at thenational level the decision on desirable activities which provide for the way
the projects are operated.
Secondly, although they are not insurmountable, such problems as
development of accounting method and identifying appropriate baselines
have to be solved.
Thirdly, each country has to set up system to promote CDM and has to
identify the way to approve appropriate projects.
Fourthly, promoting international cooperation in every aspect is essential.

Dr. Amano's Comment and Question to Sr. Forner:
Dr. Amano said that one of the hindrances for inclusion of LULUCF in CDM
was that if forest conservation projects should be applicable as the USA asserting,the carbon credits acquired would be enormous in amount and would be cheap incosts, making the ideal of the Kyoto Protocol meaningless. ( Dr. Amano added thatcarbon credits got from re-afforestation would be smaller in amount and costlier toacquire.)Dr. Amano said about the community involvement in re-afforestation projects that
it would be difficult to expand unless the additional benefits from CDM would beawarded.. He said the permanence problem would be partly solved if additional
economic benefits would be got from CDM as they would provide incentive to keep
forests longer terms.
Under the above thinking, Dr. Amano's question to Sr. Forner was about thecategory of LULUCF to be included in CDM and how high the credit level for
LULUCF should be.

Sr. Claudio Fomer's response to Dr. Amano's question:
Sr. Forner said that he put importance on the fact that environmental regulations
should not aggravate the local economy and that the Kyoto Protocol should not
aggravate the Global economy.
He said that the important matter was to reach the target through economical way.
He agreed with Dr. Amano by saying that the USA would be able to meet nearly all
her obligation if forest conservation projects became applicable to CDM. ( Sr. Forner
said that he was talking in relation to the Article 3 and 4 of the Kyoto Protocol,
which was different from CDM.)
Sr. Forner said currently the majority of GHGs emitted in developing countries
were the ones from degradation and decrease of their forests and if we could turnaround the situation, it would serve enormously for mitigating global warming.
Sr. Forner reiterated if the LULUCF based activities could result in the decrease of
GHGs, why not do that.
Sr. Forner said that the viable activities would be forest conservation,
re-afforestation, and agroforestry as they serve for achieving sustainable
development as well as mitigating global warming.

Dr. Amano's additional comments:
Dr. Amano raised question to either participant from Myanmar or from Vietnam.
He said that he heard the participants from these countries earlier commented that
local communities and local people's participation were essential for the success ofre-afforestation projects and he said that he would like to hear what kind of
benefits for the local communities/people were expected and what kind of policy
they were taking for that.

Dr. Kyaw Tint's respose (Dr. Kyaw Tint was in the floor for the second day):Dr Kyaw Tint said that in Myanmar community forestry had been in practice since1995 when the Communuity Forest Instruction was issued.

He explained that

the Instruction had permitted communities to use forest land for 30 years for tree
planting and cash crop cultivation, with possibility of further extension if the land
was managed well.
Dr. Kyaw Tint added that the Government had been promoting participatory
forestry, from planning to utilization.

Sr. Claudio Forner's response:
Sr. Forner introduced the host generated projects which the Colombian
Government was promoting and through which communities implement theirprojects on their own lands.
He said that there had been difficulty in promoting community projects as they
thought the government were selling forests to other countries but eventually
they came to understand that the government were doing good thing for thecountry.
Sr. Forner explained that there were other projects of different kind and for theseprojects contracts with communities offer basis to shre the profits.

Dr. Mark Stevens' comment:
Dr. Mark Stevens said that he had been hearing very valuable comments onsustainable development and community participation.

He said that thesematters were more important for host countries and another matter of importancewas what was truly voluntary mechanism.
Dr. Stevens said that he would like to come back to the question of whether COP
would be able to get decision.

He said there were two types of opposing voices:

one was technical and another was political opposition.
Dr. Stevens said that he was convinced that we would be able to solve technicalproblems but at the same time he would presume that reaching consensus would be
difficult before the second part of COP6; he said it would be good that COP6 PartII

would decide to include LULUCF in CDM with the condition that the technicalproblems would be solved later;This scenario, according to Dr.Stevens, wassimilar one with the Pronk Note issued just prior to the end of the part I of COP6.
Dr. Stevens said that political opposition was based mainly on the concern thatlarge scale sink projects would form the major component of Annex I countrie's
actions to cope with global warming.
Dr. Stevens said that if the technical problems were solved and the costs ofmonitoring sink projects were taken into account, the costs of reducing GHGs bysink projects would be the same level with low-cost energy projects and he wasconvinced that sink projects would not be the major component of emissions
reduction.

Dr. Stevens said, therefore, political opposition would be eventually

solved.

Dr. Gintings' comment:
Dr. Gintings commented on three topics:
Firstly, Dr. Gintings said that at the high political level clear image was lacking;
Newspapers still reported about CDM, and sometimes those who had invested
in re-afforestation projects thought that CDM would bring monetary return andasked us where the money was.

Dr. Gintings said that this was a problem.

Secondly, Dr. Gintings said that setting baselines for each tree species and for eachregion would be needed and measurement of biomass at the time of planting andthereafter pediorically was necessary but should be done in economical way.
Thirdly, Dr. Gintings said that in his country people often said that their major
concern was not the global environment but their living condition and thissometimes resulting in cutting of trees in even protected forests.

Dr. Gintings

said that it would be important to let the people know the mechanism and meritof CDM sink projects.

Dr. Amano's additional comment:
Dr. Amano said CDM related to the Article 12 of the Kyoto Protocol but Japanese
private sector had been investing in Australia besides in Non Annex I countries.
Dr. Amano asked Dr. Stevens what would be the difference of credits got in
Annex I countries and those got in Non-Annex I countries; Dr. Amano's second
question was whether carbon sink activities under the Item 3 and 4 of the Article 3of the Kyoto Protocol could be treated in the same way with those under the Article
12.

Dr. Mark Stevens' response to Dr. Amano:
Dr. Stevens said that he was not sure whether he could talk on the matters related
to the Items 3 and 4 of the Article 3 and said that he preferred to comment in moregeneral terms on cooperation among countries.
Dr. Stevens said that the Joint Implementation( JI ) of the Article 6 of the Kyoto
Protocol and the International Emission Trading of the Article 17 were themechanisms concern only Annex I countries;

Although details of thesemechanisms had not been finalized yet but clearly they related to sink activities
and would be affected by the decision on the Item 3 and 4 of the Article 3.
Dr. Stevens said also the decisions on the Article 6 and 12 would have to becarefully followed up.

Dr. Amano's follow-up question to Dr. Stevens:
Dr. Amano asked Dr. Stevens' comment on difference of generation of credits and of
accounting system for each mechanism.

Dr. Mark Stevens' response to Dr. Amano's follow-up question:
Dr. Stevens said there was clear difference between JI of the Article 6 and CDM of
the Article 12.

.

Dr. Stevens said further that there were difference between matters related to the
Article 6 & 17 and the matters related to domestic activities of the Article 3,
especially in terms of additionality.
Dr. Stevens mentioned that if the International Emission Trade of the Article 17
was tied up to domestic emission trade regime and became interchangeable, theproblem would become simpler.

8

Floor's Responses to Panelists

The Chairperson, Dr. Kobayashi, opened the discussion to the floor.

Dr. Baba's comment and question to Dr. Mark Stevens:
Dr. Baba said that he was from the International Society for Mangrove
Ecosystems(ISME).
Dr. Baba said that he had understood from Dr. Mark Stevens' comment that there had
been two types of problems which should have been solved at COPE in the Hague; onewas technical problem and the other political problem.
Dr. Baba said that he understood that Dr. Stevens had commented that the technicalproblems would be solved through prior negations before the second part of COPE.
Dr, Baba said that he thought the political problem would be more difficult to solve
and would like to hear from Dr. Stevens on the possible clue to the political solution.

Dr. Mark Stevens' response to Dr. Baba:
Dr. Stevens firstly clarified what he had commented earlier by saying that he had not
said the technical problems would be easy to solve but he had said that if the enoughtime was devoted, the solution would be found.
Dr. Stevens said further that he thought there would be linkage between politicalproblems and technical problems and by utilizing this linkage the political problems
would also be solved.

Mr. Urata's comment and question:
Mr. Urata said that he belonged to the International Charcoal Cooperative
Association( ICCA) and currently his group were conducting cooperation in thePhilippines in the field of charcoal making.
Mr. Urata raised the problem of forest fire and illegal cutting which would annul
several years' effort of tree planting.
Mr. Urata wondered what would happen to CDM credit in case the planted forest
burnt down.

Sr. Claudio Forner's response to Mr. Urata:
Sr. Forner said the risk management should be treated as first priority.
He said that every project had risks and the risk management would be essential.

Sr. Forner said after the risk management, precaution measures had to be taken;
Insurance should be applied to cover the lost CERs and the buffer should be set up;
He said there were two types of buffers: One was a buffer set in the CER accountand another was physical buffer to set aside, for instance, half of the forest so thateven in case of forest fires or insect/disease damage some carbon stock would remains.
Sr. Forner said that he believed that projects would be profitable even after every
precaution was taken.
In conclusion Sr. Forner commented that in Colombia community operated projects
were being promoted and in such a case the will to protect forest would be stronger
and the case of illegal cutting would be decreased.

Dr. San Win's comment on illegal cutting:
Dr. San Win said that the extension activity at the grass root level was essential as
unlike in developed countries awareness raising campaign through mass media was
not possible.
Dr. San Win said also the welfare of local communities should come as first priority
in re-afforestation projects, which would result in reduced illegal cutting.

Dr. Gintings' comment on illegal cutting:
Dr. Gintings supported the idea that local communities should be given more
responsibility in order to prevent illegal cutting.
Dr. Gintings introduced one good example in West kalimantan; there one
community manage a community forest of 100 ha and they had their own rule tomanage forest and even in case of shifting cultivation was practiced, all the members
would be notified and every community member observe the rule to protect the forest.
Dr. Gintings said in Indonesia the amount of fines for forest fire was 5 billion rupiah,
which amount one man could not earn in his life; Dr. Gintings said that in such acase no one would observe the rule; Dr. Gintings reemphasized the importance ofcommunity rule to protect forest.

Dr Baba's comment on illegal cutting:
Dr. Baba of 1SME commented again that there would be two kinds of illegal cutting:one type was poverty induced one and another type related to making profits. Dr.
Baba said the two types should be dealt with separately.

Dr. Baba concluded by saying that extension would be essential but at the sametime it would also be essential that CER credit would be given to communities as
well.

Dr. Gintings' associated comment:
Dr. Gintings said there had been no experience in which way CER would go tocommunity..
Dr. Gintings said that if communities got CER credit, forests would be managed
in better way.

Dr. Fatoni's comment:
Dr. Fatoni said that he was living in Tokyo and was a forestry attaché at theIndonesian embassy in Tokyo.
Dr. fatoni said he had participated in COPE in the Hague and had experienced
the heated discussions on whether CDM should include sink projects or not;EU was opposing it and the Umbrella Group including USA was supporting it.
Dr. fatoni said that he personally felt that the core of the opposing views lied in theeconomic consideration.
Dr. Fatoni introduced one experience in Lampung, South Sumatera, where morethan 100,000 m3 of Acacia trees were growing but they could not sell the wood as
there were no buyers; the people there even made contact with Dr. Fatoni to seekbuyers in Japan.
Dr. Fatoni said in case of CDM sink projects too, we should think of what kindof benefits would be provided to people.
Dr. Fatoni raised a question to Japanese participant(s) in case 10 year duration
planting CDM project existed and in case people could sell the wood to industry
and got money, whether local communities/people also could gain money from
CDM credit.

Mr. Yasuhisa Tanaka's comment:
Mr.Tanaka said that he was working for the Ministry of Agriculture, Forestry and
Fisheries, and was currently dealing with matters related to COP.
Mr. Tanaka said that he would like to comment in relation particularly Dr. Baba's
comment/question and Dr. Gintings' response, the subject of which was whether CER
belonged to communities or not.
Mr. Tanaka said, to be precise, that this kind of question could not happen.

Mr. Tanaka explained that in the Kyoto Protocol only 39 countries listed in Annex B
had the GHGs reduction obligation and Non-Annex B countries had no obligation in
GHGs reduction; he further explained CDM, Clean Development Mechanism of the
Article 12 of Kyoto Protocol provided Annex B countries with the opportunity toacquire CER, Certified Emission Reduction, which these countries would utilize toaccomplish their obligations, through implementing projects in Non-Annex B
countries.
Mr. Tanaka said that CER, therefore, belonged in principle, to Annex B countries.
Mr. Tanaka added that it was a fact, notwithstanding the above, in the negotiationsof COP there had been arguments on whether only Annex B countries got all CER
acquired by CDM and whether Non Annex B countries would be able to get certain
portion of CER; there had been still another argument that if non Annex B countries
got some CER, that might lead to reduction obligation of non Annex B countries.
Mr. Tanaka explained that Non Annex B countries' benefited in acquiring CER would
use it in Emission Trading of the Article 17 of the Protocol and so far there had beenno discussion on whether CER also belong to communities or not.
Mr. Tanaka reiterated that CDM had been intended to be a tool of Annex B countries toaccomplish their reduction target through implementing projects in non Annex B
countries and Non Annex B coutries would benefit by technical and financial
assistance associated with the project to achieve sustainable development.
Mr. Tanaka further explained that there had been idea of flowing back of a share ofproceeds of CER to some developing countries to be used for their sustainable
development but the matter was still in discussion stage.
Mr. Tanaka also touched upon the Adaptation Fund, which the Pronk Paper ataround the end of the COPE in the Hague mentioned. The idea of the Adaptation
Fund, said Mr. Tanaka, was to utilize a part of proceeds of CDM and to use it fordesertification prevention, watershed management, and etc. in developing countries,
but the discussions about it had just started.

Mr Mikihiro Inoue's additional comment to Mr Tanaka's comment:
Mr. Inoue said that as far as the Kyoto Protocol provided,

CDM should benefit bothdeveloped as well as developing countries.
Mr. Inoue said that there was another argument that projects in developing countries,
funded by developing countries should be approved as CDM projects; Japansupported this idea but there were some countries opposing and nothing had been
decided yet.
Mr. Inoue concluded his comment by saying that there was general consensus in
COP that CDM should not issue credit too easily; credit or in other words CER
should be approved after examined carefully.

Mr. Sasaki's comment and question:
Mr. Sasaki said that he was working at the Environment Division of Tokyo ElectricPower Company.
Mr. Sasaki said that the company had started a large scale afforestation project,aiming at carbon sink, in Australia in February, 2000.
Mr. Sasaki said that Tokyo Electric Power Company understood that afforestation
would be valuable not only for carbon sink but also played important roles incontributing indirectly to conservation of natural forests and to enhance woodbased local economy, through growing woody biomass.

Mr. Sasaki said that

his company, therefore, would further promote this kind of afforestation project.
He said that the company had no experience in forestry and when such a company
did implement re-afforestation projects there were various problems, which
included illegal cutting and forest fires which had been already discussed andinstitutional problems like uncertainty related the status of sink projects in CDM
and lack of information ,and so called country risk of host countries.
Mr. Sasaki said that already several countries had invited the company to invest in
re-afforestation projects but so far the company had decided to have a project inAustralia as the New South Wales State Law there had provided for a carbon rightand besides there was high possibility of JI of the Kyoto Protocol.
Mr. Sasaki asked whether there were any other countries which would offer suchsupport as providing information and reliable partners.

Sr. Claudio Forner's response to Mr. Sasaki:
Sr. Forner said that the points raised Mr. Sasaki were very pertinent ones.
He said that in general terms host coutries should arrange appropriate institutions
like setting up a central government organization specialized in bridging investors
and local communities.

Sr. Forner said that in case of Colombia the CDM office

was established in the Miniterio del Ambiente, which promote investment bylinking investors and local communities, and covered investors' risks.

Mr. Nakagiri's comment:
Mr. Nakagiri from the Greening Center of Yamanashi Prefecture Government, said
that in case planted forests were preserved long term like protected forests and incase there were no forest fires or illegal cutting, the stock of carbon would last longtime while in case the wood would be used as fuelwood, construction material, andpulpwood, the carbon stock would be transitional.
Mr. Nakagiri said that in that regard except fossil fuel substitution by wood energy, carbon sink by forests seemed transitional.
Mr. Nakagiri said that he thought Sr. Forner's presentation on setting limited termon effectiveness of carbon sink for re-afforestation projects was reasonably
understandable.
Mr. Nakagiri said he would like to receive further comments from other panelists.

Dr. Amano's response to Mr.Nakagiri:
Dr. Amano said that the matter related to so called accounting' of sink.
He said there had been several proposals; firstly to treat carbon sink by forest as
zero; secondly to treat the average forest inventory as the carbon fixed by forests.
The second proposal was popular at the earlier stage but there were suchdifficulties as when should be the start of awarding credit; at the beginningplanting or after certain period and etc.
Dr. Amano said that the third proposal was the ton-year-carbon accounting method,which proposed to give carbon sink credit little by little yearly, maximized at the
average inventory of the forest.
The latest proposal, according to Dr. Amano, was the proposal explained at thisForum by Sr. Claudio Forner, and which proposed the fixed term for carbon sink byforest.
Dr. Amano said that most of these proposals were attempts to give carbon sinkcredit to re-afforestation

which would eventually would be harvested.

Whether COP would decide to include re-afforestation in CDM was still undernegotiation, Dr. Amano said, and if which accounting method would be adopted was
uncertain,too.

Mr. Hisashi Watanabe's comment:
Mr. Watanabe said that he was from the Japan Federation of Paper Manufacturing
Industry.
Mr. Watanabe reported that Japanese paper industry had been established about

250,000 ha of plantation through 25 projects in 10 countries to secure raw material
supply.

Mr. Watanabe said these plantations had been established mainly overbare lands, which meant large amount of carbon had been fixed.
Mr. Watanabe said that he was convinced that Japanese paper industry had been
contributing much to mitigate global warming.
Mr. Watanabe one thing that he would like to emphasize was that there was JI in
the Kyoto Mechanism besides CDM and for 31 sink project had been included in the
Protocol itself.

He said that therefore re-afforestation could be included in 31.

Mr. Watanabe expressed his concern that if CDM excluded sink projects, Japanese
paper industry's investment would be concentrated in Annex I countries and very
biased situation would occur, depleting Japanese paper industry's possible
contribution in improving environment and economy of non-Annex I countries.
Mr. Watanabe ,in concluding, said that for CDM it was not feasible to decide only
among Annex I countries but the voices of non-Annex I countries were essential.

Sr Claudio Forner's response to Mr. Watanabe:
Sr. Claudio Forner said that Mr. Watanabe had expressed very important points ofthe situation.
With regard to non-Annex I countries' position, Sr. Forner said that even now there
were quite a number of countries which supported CDM's inclusion of sink.
He said that he himself supported sink's inclusion in CDM because besides thereason that Mr. Watanabe had pointed out, non-Annex I countries would lose thebenefits to facilitate sustainable development in the country. He added that it wastrue through such kind of projects of energy projects, there would be benefits too ofcourse, but the benefits from forestry sector projects would flow into communities
and people directly.
Sr. Forner, in conclusion, said that Colombia was making efforts to solve thetechnical problems not only for the sink's inclusion in CDM but also to achieve theideal of the Kyoto Protocol of the United Nations Framework Convention on
Climate Change.

Mr. Juan Pablo Campos' comment:
Mr. Juan Pablo Campos said that he lived in Tokyo and was consul at the
Colombian Embassy in Japan.
Mr. Campos said that he had been encouraged by the earlier comment by Mr.
Sasaki of Tokyo Electric Power Company.

Mr. Campos also said that the comment of Mr. Watanabe of the Japan Federation ofPaper Industry was wonderful.
He said that the Colombian Embassy in Japan had been making efforts to provide
various information including the one on security to Japanese private sector as
Colombia was far from Japan but needed investment. He said the Colombian
Embassy would assist Japanese private sector through diplomatic channel too ifthey wished to invest in Colombia..

Mr. Francis Otigil's comment:
Mr. Francis Otigil said that he was from Malaysia,

was working at Sabah

Forestyry Development Authority( SAFODA ), and was currently visiting Japan.
Mr. Francis Otigil said that he was not representing Government and would like topresent comment on personal basis.
Mr. Francis said that he was not opposing to sink projects to be included in CDM.
He said that he hoped that thorough discussions should be done from thestandpoint of the developed countries which wished to do sink projects and get
credits and from the host countries viewpoint which receive investment.
He added CDM sink projects would not be justified in contributing to emissions
reduction but should be sustainable and economically feasible.
Mr. Francis Otigil said that the mechanism should not be unbalanced one and we
had to make it ' Win-Win' situation.

The Chairperson, Dr. Kobayashi thanked the panelists and the floorand. closed the Panel Discussion.

10

The Chairperson's Closing Remarks by Dr. Fujio Kobayashi
Dr. Kobayashi delivered the following closing remarks:
I have tried to direct the 2 day Forum in a way that discussions would bevigorous and every partipant could express their views freely. To my satisfaction,
the Forum has been very successful on that score and I should like to express mysincere gratitude to all the participants for their cooperation.
My concluding remarks consist of the following 9 items and are different in naturefrom adopted conclusions of official meetings due to the nature of this Forum; theyarerather my personal observations/conclusions.

I, however,hope these would serve the basis for further actions by the Forumorganizer, JIFPRO and the participants.
1. The two day forum consisted of the key-note speech, presentations, and panel
discussions,and has provided us with diversified and useful information andview points.
The participation by the floor was very active too and I suppose that the Forumwas very useful to the general participants, too.
I should like to express again my sincere gratitude to all the participants forthe success of the Forum.
2

I am much impressed by the efforts being carried out by each country toachieve sustainable forest management through rehabilitation andconservation activities.

3. The sub- theme of the Forum refers to COP of the United Nations Framework
Convention on Climate Change, which aims to reduce GHGs emission.
I feel that generally speaking too much expectation has been given to carbon
sink role of forests.
4. Forests are precious ecosystems with biological diversity.
It is essential that we manage forests sustainably so that the resources andenvironment, indispensable for the survival of humanbeings, would bepreserved.
At the same time, it is clear that forests are effective GHGs sink.
Under the circumstance of deterioration and reduction of world forests, L U L
U C F , including re -afforestation projects to be included in CDM, would be very
important in giving incentive to these activities.
5. I believe the ideal of CDM, i.e., to facilitate sustainable development ofdeveloping countries and to assist developed countries to fulfil GHGs reduction

obligation, should be always firmly kept in mind.
6. Throughout the Forum, need of international cooperation to promotesustainable forest management in developing countries has been repeatedlyemphasized.
Importance of enhancement of Japan's private sector's overseas re-afforestationcooperation, the Forum's theme, has been recognized fully through the Forum.
It has been recognized fully that it is important, while at the same time theGovernment to Government cooperation is no doubt important.
7. During the Forum such technical problems related to LULUCF in CDM as
matters related to baseline, leakage, and permanence were discussed.
Besides, matters related to land tenure, community/people participation, forest
fires and illegal cutting were pointed out as matters to be dealt with; several
examples of ways to deal with these problems were introduced.
8. Even in case the decision to include LULUCF in CDM is taken, the efforts topursue a more feasible methodology should be continued. This would give more
incentive for investment in more scientifically sound projects. This should becontinued up until the First Target Period of the Kyoto Protocol.
During the Forum, some useful proposals for this were introduced.
9. I hope the organizer of the Forum, JIFPRO completes and distributes theproceedings of the Forum as soon as possible.
I hope also JIFPRO would try their best to hold another Forum of this kind, as I
think this Forum has provided an important opportunity to enhance Japan's
private sector's re-afforestation cooperation with special emphasis put on therole of CDM, participated in by important partners of foreign countries.
Thank you very much.

The Forum was closed by the above closing remarks by Dr. Fujio Kobayashi,
Chairperson.

Annex: List of Foreign Participants
Dr. Untung Iskandar, Director General, Forestry Research and Development Agency,
Ministry of Forestry, Indonesia
Dr. Kyaw Tint, Director General, Forest Department, Ministry of Forestry, Myanmar
Dr. Nguyen Ngoc Binh, Director General, Department for Forestry Development,
Ministry of Agriculture and Rural Development, Vietnam
Dr. Plodprasop Suraswadi, Director General, Royal Forest Department, Thailand
Dr. Mark Stevens, Assistant Manager, Internationalo Greenhouse Partnerships
Office, Department of Industry, Science and Resources, Australia
Sr. Claudio Forner, Advisor, Ministerio del Ambiente, Colombia
Dr. Ir. Ngaloken Gintings, Director, Forest Products Research Center, Indonesia
Dr. San Win,

Forest Research Institute, Forest Department, Myanmar

Dr. Pham Quang Minh, Head of Silviculture Division, Department for Forestry
Development, Ministry of Agriculture and Rural Development, Vietnam
Mr. Pravit Chittachumnonk, Director of Silviculture Research Division, Royal Forest
Department, Thailand
Dr. Achara Wongsanchan, Secretary to the Director General, Royal Forest
Department, Thailand
Dr. Tachrir Fatoni, Head of Forestry Division/ Forestry Attache,
Embassy of Indonesia to Japan
Mr. Francis G. Otigil, Deputy General Manager, Sabah Forestry Development
Authority, Sabah, Malaysia
Mr. Juan Pablo Campos, Consul, Embassy of Colombia to JapanThe number of Japanese participants was some 180; they include NGO members,
forest related industry personnel, academics, students, and government officials.