Climate challenges for Nicaragua Legal and economic context (página 2)

With the return of the Sandinist government to power, it reinforced its popular base by the advance of the Councils of Citizen Power CPC[30]These are civilian councils, constituted by members of the FSLN, to tackle social issues. While these groups are heavily criticized by the opposition parties because of the government aid they receive, their direct action is a force to be reckoned with. Their presence in every town and community provides a communication channel that informs the government (and especially the Sandinist party) of the real needs of the people, and allows the government to take social action, in this case directed towards climate change. It is natural that there are discussions about the democratic levels of these organizations. At the one hand, they implement base democracy of a sort, but they form at the same time part of the party aparatchik. It might provide a way to empower the communities and organize them to take local action. It is however noteworthy that indigenous people are historically biased against participation in Sandinist schemes due to the events in the civil war in the 1980s, so involvement of CPC might be low in the rainforest area and does not necessarily reflect the interests of indigenous people.

The Sandinist government furthermore singles out the youngsters[31]to participate in environment action. With slogans like[32]La Juventud Presidente (Youth for President), the government of Reconciliation and National Unity (as the FSLN labels itself), identifies itself with the young people. For climate change, the Movement of Environmental youngsters Guardabarranco, as part of the Juventud Sandinista 19 de Julio, the youth branch of the Sandinist Party, takes action to sensitize citizens, organize community action (e.g. through ecology days for cleaning up parks and streets) and provide the necessary environmental skills to young people (e.g. through school visits).

Through the National Crusade of Reforestation, the more than 10,000 members of this group plant trees. In 2009, unofficial media[33]already announced the planting of over a million trees, and the same objective was set for the planting efforts in 2010. While it is difficult to check on the exact numbers which are likely to be exaggerated as they serve political propaganda purposes, the intentions are good and do something concrete for the country as a whole. Lacking effective state law enforcement and institutional capacity, it probably is the only option left for Nicaragua while they do not receive massive funding to do something for the forest on an institutional level. While the political nature of the organization undermines the democratic level of these groups, this political character ensures the undivided government support for the actions taken by unpaid "workers".

This involvement of citizens also allows to contribute to more efficient monitoring climate conditions. It is obvious that in most developing nations, the official institutions are not capable of measuring e.g. water levels. The fact that programs like POSAF can rely on the voluntary contribution of youngsters that are simultaneously sensitized about the impact of climat change provides for both numerical data and environmental education for the future.

Environmental plans Nicaragua 2000-2010

Environmental plan 2001-2005[34]

As a signatory to UNFCCC, Nicaragua needed to make an inventory of its natural resources for the international Conference of Parties of the treaties, and propose its plans to combat climate change. The main sources of emissions are discussed when we look at the reporting for Kyoto.

The environmental plan was certainly good intentioned, and it reflects the outcomes of a workshop on climate action needed for the various sectors[35]and the legal framework. In the spirit of UNFCCC representatives of these sectors were brought together to comment and recommend on climate change action. For all sectors concrete proposals are made for the period 2001- 2005, assigning responsibilities to the different ministries and institutions.

Its outcomes were however limited, as the goals set were too ambitious. It divides the national action plan in actions oriented at sectorial management, territorial management and institutional management. It gives a good overview of the existing issues regarding climate change, including forest fires, illegal wood cutting, overfishing, threatened water resources by the overuse of agrochemicals, disappointing incomes from tourism, etc. Proposals are correspondingly made to improve the monitoring and management of air quality, solid waste, urban development, pesticides, protected areas, coastal zones, soil and cultural heritage. Finally, on the institutional level, land reform, biodiversity, environmental education, legal framework, environmental information, adherence to conventions, decentralization, while not leaving out the social factors involved such as gender, social vulnerability, disaster management, etc. While suggestions were made for the different institutes and ministries to take action, no concrete timeline or budget was proposed, and this lack of operational guidelines led to little practical implementations.

Environmental plan 2003

While the 2001 plan spread its attention over various sectors, here the focus lies specifically on agriculture and hydraulic resources. It seeks to more concretely fight climate change by promoting new sinks (green energy, forest use) and reduce emissions. It is a clear reaction to prepare for Kyoto CDMs.

Most of the arable soil in Nicaragua is overused, raising the risk of floods, landslides and drought. The corresponding expansion of agriculture and pastureland leads to deforestation, both in forest and the protected areas. Timber extraction and disasters as forest fires and tropical storms are other negative factors. It is natural that the national plan seeks to detain agriculture from removing forest land (partly by eliminating agriculture incentives), and to reforest plantations.

The plan also focuses on the management of protected areas, which are often not especially protected both legally and physically. The implementation of CDM through carbon sequestration would provide carbon credits. Another possibility for sustainable use of the protected areas is ecotourism.

"Kyoto" Areas are identified in the plan as eligible for CDM activities.

Forest management is generally poor and should be reviewed to find solutions for the illegal and ruthless deforestation. Reforestation measures are implemented and monitored by INAFOR.

Likewise Nicaragua's protected areas are not protected in full, suffering from agricultural and pasture uses. Nicaragua needs to be updated on information technologies that promote and reduce greenhouse gas emissions, UN programs are undoubtedly very large, it is necessary to follow up studies of new technologies and apply them. Nicaraguan population should receive environmental education, requiring substantial investments of time and money. In order to show leadership, Nicaragua must provide strong measures as penalties for private and public companies to reduce the deforestation of precious wood which is sold for high prices. For Nicaragua to implement the national plan, it is necessary to restructure the protected areas:

• Forest Ecosystems: improve the legal framework, promote land reform, develop mechanism for the conversion of farms by technological and sustainable upgrades, and avoid wood fires

• Protected Areas: develop CDM activities, provide environmental services, consolidate the juridical framework of the protected areas

• Kyoto Areas: Promotion of hydraulic resources and biodiversity, reforestation in the Central Northern region, and an improvement of public relations

It is remarkable that Nicaragua came to these conclusions in the light of the CDMs that came later. While the need to protect the forest was correctly identified and highlighted 7 years ago, all CDM proposals were focused on energy efficiency. It seems that the international carbon market provided easier funding and investment for CDMs related to green energy and energy efficiency, which may have inspired Nicaragua to make proposals of this type.

Agriculture is threatened because of low technology use and its dependency on rainfall. Nicaragua has a great number of water resources, mostly surface water. The water resources are analyzed per region. As temperature increases and rainfall diminishes, water resources will be adversely affected, harvest will be reduced, and this while there are already net imports for rice, beans, cooking oil and milk, the main food for the Nicaraguan population. Maize production, the principal component of the national diet, is vulnerable to climate change through drought and hurricanes, and might no longer be profitable. The trend in bean production is a reduction in returns. The production of soya has increased considerable over the last years due to its nutritional and economic value.

The plan proposes to 1) Improve the monitoring of meteorological data, 2) Research the impact of climate change for the relevant crops 3) Diversify production in the most vulnerable zones 4) Develop more efficient techniques for the various crops 4) Promote the use of improved seeds 5) Use water resources in a sustainable fashion.

The energy sector is very inefficient, having the highest unit production cost of Central America[36]The energy use per capita is also the lowest in the region. Policies focus on the generation of electrical energy and efficient energy use.

Environmental plan 2010

A proposal was made for an environmental plan 2007-2011[37]

This plan is biased towards international cooperation. Support to Nicaragua is present but Nicaragua would have to provide more results to promote a stronger economic support. Countries like Denmar, Spain and Canada along with UNDP and the EU equally consider it very important to delegate responsibility to national institutions, nevertheless it should be noted that the government should take its responsibility as executive organ. The government and ministries have to come to a more efficient communication about matters concerning forests and dedicate funds to these in the national plan. For implementation of PES and forestry related activities, it will moreover be necessary to extend the legal framework with laws and economic incentives; this task lies in the hands of the National Assembly.

Integration with regional level

At Central American level SICA[38]is responsible for integration between the states. The Central American parliament (PARLACEN) and court of justice (CCJ) form part of it. CCAD is directly related to the SICA secretary general[39]

CCAD directs the Mesoamerican Environmental Information System SIAM, which gathers the data from its members. There are also a number of associated committees[40]that council CCAD, like the Climate Change Committee, the Committee for Institutional Communications on the Environment, the Technical committee to Environmental Impact Evaluation, the Central American Council for forestry and the Central American Council of Protected areas

Other specialized institutions linked with SICA are CEPREDENAC[41]CRRH[42]and BCIE[43]

Implementation of the Kyoto protocol

Kyoto Protocol implementation guidelines

Countries ratifying the Kyoto protocol both have to ensure that the necessary institutions, systems and procedures are in place, and that complete reports are submitted duly. This is not an easy process, as is underlined in the Message to parties to the Kyoto Protocol[44]of 2005[45]Similar reminders are being sent on a yearly basis, e.g. the one for 2010[46]

Non annex I parties have to provide at least 1 initial national communication. The country, according to IPCC guidelines, estimates, at least for one year, emissions of CO2, CH4 and N2[47]This is called the national GHG inventory; the resulting amount indicates if the country is a net source or sink of greenhouse gases, measured in terms of CO2 emissions tones equivalent[48]

The Mechanisms under the Kyoto Protocol[49]are Emissions Trading, the Clean Development Mechanism (CDM) and Joint Implementation (JI). These mechanisms help developing countries to reduce greenhouse gas emissions, apply technology to stimulate sustainable mechanisms for investment by Annex I countries, and stimulates all sectors to contribute to reduction efforts. Emission trading allows countries that have emission units to spare to sell this excess capacity to countries that are over their targets[50]

The principle of emission units effectively constitutes a new market commodity, by critics sometimes referred to as "Hot air". As each unit is defined as one tonne of carbon dioxide, the market is called Carbon trading market or simply Carbon market. Complex administrative rules[51]to prepare, process, evaluate and monitor the production and trade of emission units have been developed to set the rules for the commodity exchange.

Emission trading schemes are established as climate policies on a national level and regional level. It is here that governments set obligations for the participating entities. The European Union emissions trading scheme is the most active in operation.

Least Developed countries (LDCs) countries provide national adaptation programmes of action (NAPAs[52]concerning climate change to UNFCC. It is then decided which projects are given priority. Money comes from a special LDC fund.

CDM involves investment in sustainable development projects that reduce emissions in developing countries. CDM mainly deals with the reduction of energy related emissions (which constitute 80 % of all GHG emissions). It does not focus so much on the LULUCF sector; rather the REDD scheme seeks to reduce deforestation and degradation of tropical forest (17 % of GHG emissions").

Joint Implementation enables industrialized countries to carry out joint implementation projects with other developed countries.

This leads to additional types of emission units (other than the general emission units); there are also "a removal unit (RMU) on the basis of land use, land-use change and forestry (LULUCF) activities such as reforestation, an emission reduction unit (ERU) generated by a joint implementation project and a certified emission reduction (CER) generated from a clean development mechanism project activity. Transfers and acquisitions of these units are tracked and recorded through the registry systems under the Kyoto Protocol. An international transaction log ensures secure transfer of emission reduction units between countries"[53].

National Reporting for Kyoto Protocol

Nicaragua sent the first report on national communications[54]on 25 July 2001, for the base year 1994. This report[55]summarizes the baseline study of GHG emissions which is used under the Kyoto protocol. UNFCCC compiled the initial national communications[56]was made in 2005. It mentions the specific problems with the registration of greenhouse gas emissions, as their calculation following IPCC guidelines is not always straightforward. The data established for Nicaragua (in 1994) are the following:

GHG emissions without LUCF: 7,651.84 (Gg CO2 equivalent)

GHG emissions with LUCF: -5,404.82 (Gg CO2 equivalent)

Of the emissions, 35 % corresponded to Energy, less than 5 % to Industrial processes, 55.8 % to agriculture, and 4 % to Waste. Correspondingly, the gases generated were 2,728.38 Gg CO2, 196.66 Gg CH4 and 2.56 Gg N2O, which clearly shows the impact of agriculture on emissions, which is the biggest producer of methane.

While Nicaragua was indeed a net sink in 1994[57]with the ongoing deforestation[58]Nicaragua turned into a net source by the year 2000.

National Implementation of Kyoto Protocol

MARENA"s ONDL is the institute in charge of the preparation and execution of the CDM projects. In order to improve the process of CDM, ONDL should be separated into:

• an executive organism for administration and monitoring of CDM projects

• operation organisms responsible for the certification of carbon credits (now dependent on international cooperation)

• Independent organisms for verification and audits

Nicaragua has four approved CDM projects under the Kyoto protocol[59]

• Project 0198: San Jacinto Tizate geothermal project[60]

• Project 0675 : Vinasse Anaerobic Treatment Project – Compañía Licorera de Nicaragua, S. A. (CLNSA)[61]

• Project 0191 : Monte Rosa Bagasse Cogeneration Project (MRBCP)[62]

• Project 2315 : Amayo 40 MW Wind Power Project – Nicaragua[63]

One more CDM project is awaiting approval, Project 2999 : El Bote small hydroelectric plant[64]The main characteristics of these projects are summarized in the following tables. The first one shows which parties are involved, the second gives more technical information about the projects.

San Jacinto, Monte Rosa and Amayo are all involved with energy generation. The San Jacinto Tizate PDD[65]projected a generation of a 66 MWe geothermal plant, to be carried out in 2 phases. The first phase, including the installation of a 20MWe using combined cycle technology, should be fully operational by the beginning of 2006, while the second phase installation of a 46MWe expansion using condensing turbine generation, was foreseen for mid 2007.

However, the monitoring report[66]of 2009 indicated that at the time of monitoring the project only operates 2 units of 5 MW. A further extension with a 24 MW modular condensing turbine (MCT), supplied with steam from two new production wells, should bring output to 34 MWe by the end of 2010. Two further units of 24 MW, with additional drilling of production and injection wells, should be ready by the beginning of 2011.

This considerable delay in meeting the project objectives is worrying to say the least, and shows how Nicaragua can not live up to the implementation of CDM projects.

After years of struggling for survival, the San Jacinto Tizate project now seems to be looking at a brighter future. In December 2009, president Ortega formally announced the expansion works of the plant[67]At the time, the plant was still producing a mere 10 MW, after an investment of 57 million dollars. Ram Power, the Nevada based project owner, is already mentioned. In January 2010, a 77 million US$ credit facility is announced[68]By March 2010, the first 18 million US$ is turned over[69]Ram Power then negotiates with IDB for 40 million US$ in funding, a loan that is approved by August 2010[70]Finally, by November 2010, the credit structure for San Jacinto Tizate is laid out as a 190 million US$; the main creditor will be IFC, through which IDB channels its funding. This money is invested in Polaris Energy Nicaragua SA, a group of Canadian investors.

The hopes are now high for San Jacinto. While it is expected to require an investment of over 300 million US$, it would provide 20 % of Nicaragua"s energy needs[71]As it is the biggest geothermal project in Central America, its success will be critical as an example for future investments.

The Monte Rosa Bagasse Cogeneration Project by (MRBCP) consists of increasing efficiency in the bagasse cogeneration facility at Monte Rosa. Bagasse is a fibrous biomass residue from sugarcane processing (alcohol and sugar production). All the bagasse utilized is produced internally and used for steam and power generation. Therefore, no bagasse was purchased. No bagasse is stored for more than one year at the project site. Only a relatively small amount of biomass residue is stored from one crop season to another, to start up the boilers.

The bagasse internally produced by MRBCP is internally transported through electrical and/or mechanical conveyor belts which operate using electricity and/or steam generated in the biomass residue cogeneration facility of the own mill. Therefore, there is neither fossil fuel consumption within the project boundary nor any other fossil fuel consumption attributable to the project activity. Consequently, there is no need to monitor fossil fuel consumption of the project activity. With the implementation of this project, the mill is able to sell electricity to the grid, avoiding the dispatch of same amount of energy produced by fossil-fuelled thermal plants to that grid.

The 4th monitoring report[72](monitoring period 01/05/2008 to 28/02/2009) for Monte Rosa Bagassa Cogeneration project discusses the different phase of the project. Before the project (2001-2002 cane season), the Monte Rosa plant[73]had a total initial installed capacity of 7 MW. At the beginning of phase, only one turbo generator (3 MW) was left in operation. During 2001, the first phase of the cogeneration project began with the installation of one 15 MW extraction turbo generator and one pressure boiler to start operating during the 2001-2002 cane season (March 2002). At the end of 2002 the installation of two 4 MW backpressure turbo generator (TG) was finished[74]At this point the plant has an installed capacity of 26 MW, of which 18 MW were used and 8 MW were on standby. During the second phase (2004), one 3 MW turbo generator (TG) is put on standby and one condensing turbo generator with an average production of 15 MW. Two 20 MW extraction turbo generator (TG) and one more pressure boiler are also installed. During this phase one 15 MW backpressure turbo generator (TG) is disabled.

During the verification period, two 20 MW extraction turbo generator (TG) and one 16.5 MW condensing turbo generator were in operation, as well as the 2 main boilers. During the off-crop season no energy is produced neither sold to the grid. During the monitoring period, the MBRCP generated 41,607 tonnes CO2 equivalent. This project is functioning well.

The Amayo 40 MW Windpower project is the first wind-power plant in Nicaragua and is fully operational, consisting on nineteen 2.1 MW wind turbines, for a total installed capacity of 39.9 MW. Amayo wind farm was connected to the grid 9 February 2009 and started to produce electricity 12 February 2009, as the first days were required to energize the main transformer and test the electrical circuits. Since the Amayo 40 MW Wind Power Project uses a renewable, source, project emissions are zero. Therefore, emissions reductions equals baseline emissions.

In the monitoring report[75]it is mentioned that the emission reductions for the monitoring period are 42,871.20 tCO2e[76]

The Vinasse Anaerobic Treatment project treats the wastewater (vinasse) generated during the production of alcohol from sugar molasses by using the organic matter in the vinasse to produce clean, renewable energy. The project is made up of biodigesters where the vinasse is treated anaerobically. The methane generated from the anaerobic treatment is captured and combusted to produce energy. This energy substitutes the consumption of fuel oil and, in the future, will also substitute part of the electricity used during the alcohol production process. The project will substantially reduce use of fuel oil and gridsupplied electricity.

The monitoring report[77]showed a total emission reduction in the period 2003-2008 to total 286,848 tCO2eq. It contributes as such in a positive way to emission reductions.

CDM evaluation on the international level

CDM has known a number of problems. Many projects started with weak PDDs, having a low quality. Moreover, like MARENA, the UNFCCC secretariat is understaffed, with the consequence that projects take more time for registering and after that to become productive. With the growing number of applications (over 1000 yearly), approval is likely to take longer. As trade volumes should increase to provide for a more efficient carbon market, a more effective administration is thus necessary.

The provision of new criteria in the form of the VVM (Validation and Verification Manual) and new procedures for evaluation will allow for more efficient and effective PDD evaluation.

After a decline in trade volumes due to the global financial crisis, trade volumes stabilize now and provide hopeful trends. Nevertheless the total CERs produced have declined as the perception of risk in emission reduction investment discourages the private sector. In the absence of a long term international agreement, future investments in new projects remain risky; investors tend to take an interest in projects attaining financial closure. Sources of funding thus represent the major obstacle for the new development of CDM projects.

China was in 2009 the major seller of CDM certificates, as their projects are relatively stable; the whole of Latin America excluding Brazil accounts only accounting for 4 %.

Conclusion

Nicaragua has been a good student in the climate class after all. Despite the damage caused by the civil war, political turmoil and a general lack of monetary means, it has managed to come up with some decent projects for Kyoto, providing a long term improvement for the energy sector in Nicaragua. In order to accomplish this, the Environment ministry has set up a structure of commissions and committees, while collaborating with other relevant ministries.

Although Nicaragua now starts to make use of its renewable natural resources, it has been a slow process, and funding has often delayed project implementation. It is now expected that 20 % of the energy used in Nicaragua will be generated by renewable energy sources in the foreseeable future. This is a great accomplishment by itself.

CDM projects are almost entirely dedicated to energy efficiency, having a low impact on national climate change with the agricultural sector representing most of the national economy and the biggest source of GHG emissions, converting the country into a net source in a mere 6 years. In hindsight it is remarkable that Nicaragua"s forestry plans have received so little attention from the national institutions and international funding.

The realization of its environmental plans may have been a limited success, but plans have matured and current projects have learned from the previous experiences to provide a better management of the environment in the future. Comparing Nicaraguan performance with the average developing country, there are reasonably accurate measurements of indicators that will help to develop better policies and make better decisions regarding the health of the national territory. In the next chapter we will observe the efforts of Nicaragua regarding its extense forest reserves.

Chapter 3:

REDD or GHG Mitigation in the Forestry Sector

The importance of saving the forest

Trees play a quintessential factor in the survival of the Earth. A central factor is the process of carbon sequestration by trees. Trees take the carbon dioxide out of the air and convert it into fresh oxygen. As such, half the dry weight of wood constitutes stored carbon, which is released when the tree rots or is burned. They also regulate water run-off, mitigating risks of flood and drought. They host animal and plant species and more hundreds of millions of forest dwellers. Plant species in the forest are exploited for bioprospecting, and were in history the base point for the development of aspirin and the cancer drug taxol.

According to FAO, 4 billion hectares of forest remain, covering 31% of the earth"s surface, but only a third is primary, furthermore the definition of a forest takes in areas with as little as 10 % tree over. Half of the remaining forest is in the tropics, mostly as rainforest. Nearly a third of the rainforest is in Brazil, a fifth in Congo and Indonesia. The second area is the taiga of Russia, Scandinavia, Canada.

Deforestation accounts for 16 % of the total emissions, more than the share of the complete transport sector. 13m hectares of forest are lost each year, mostly tropical forest razed for agriculture. The negative impact of this deforestation is, according to TEEB studies, between 2 and 4 trillion US $ a year.

There are two huge threats to the forest. The first is climate change, which will cause the northern forests to become more important, but the melting permafrost will release billions of tones of methane, and an increase in forest dieback elsewhere, caused by rising aridity, drought, pests and fires. The second threat is human, over the next four decades population is expected to rise to 9 billion. Most deforestation is the result of expanding commercial ranching and agriculture.

Ecology itself proves its resilience to restore degraded soil and ecosystems. However, while nature performs exceptionally well, it is clear that human impact should be reverted towards positive effects. Mankind should help nature by designing and executing plans to enhance ecosystems that absorb waste waters. Territorial development should constitute interface zones between city and rural territories and provide urban woods[78]

Just as gene manipulation is used to design organism with specific characteristics, a thoughtful mix of appropriate species can help ecosystems to recover quicker. This could contribute to saving biodiversity on the planet and improve sustainability of human activity. The challenges that climate change confronts us with demands for a higher flexibility, and it will require an intellectual flexibility as well to meet this objective.

National framework for forest conservation

Legal and Institutional Framework of the forest sector[79]

The policies of forest management, as seen before, focused on the establishment of a Regional System for Protected Area, adopt forest management programs based on conservation, fortify the processes of international negotiation, establish legislative and administrative measures to protect biodiversity and finally the rehabilitation and restoration of ecosystems. MARENA in its "Legal and Institutional framework for the Forest Sector with Respect to Climate Change"[80] described topics like laws on forests and soils, electrical energy, public administration involved with forest and climate change, disasters, climate change, protected areas, private forest reserves and management plans. The roles of the relevant ministries (MAGFOR, MARENA and MIFIC) related to forest management were clearly defined.

The framework emphasizes the need for a correct implementation of CDM, regarding conformity, verification, accountability, transparency, communication and financial mechanisms. The public sector provides funds through the National Environmental Fund[81]while the private investment comes mainly from the banks.

Strategy for the Convention on Biodiversity

The national strategy for biodiversity[82]is based on legal framework and laws underlying biodiversity in the environment, protection and implementation of the law. This is how SINAP covers most of the arrangements to be made, based on a lot of modernized environmental planning for the sustainable management of resources and protected areas.

The first objective, "Promote the conservation of biodiversity of ecosystems and habitats"[83], sums up the situation of protected areas in Nicaragua; SINAP regulates 66 protected areas and 5 marine protected areas. In 2009 there were 56 Private Forest Reserves and 17 under municipal management.

Nicaragua started in 2007 to reforest sites under pressure from fuel wood and timber. The small reforestation of 50, 091.37 hectares can be considered as a step in the right direction.

The National Forestry Institute provides timber resource conservation in Nicaragua. Only a certificate is a legal means to confirm and certify that the wood originates from established forests that are dedicated to export. These forest conservation efforts were realized by the collaboration between Rain Forest Alliance, Future Forest, Forest ALBA.

The report provides us with an interesting look on the roles of the diverse ministries and institutes. The National Forestry Institute (INAFOR), the Institute of Tourism (INTUR), Ministry of Agriculture and Forestry (MAGFOR), as well as the Autonomous Regions of North and South Atlantic (Caribbean Nicaragua), are in close collaboration with the General Directorate of Natural Heritage, the National System of Protected Areas (SINAP), the Directorate of Biological Diversity and the National Environmental Information System (SINIA).

The implementation of the plan is however not so smooth. Illegal cutting has contributed greatly to the reduction of the Nicaraguan forest. There are little means to enforce the policies as described. Assignment of human resources and capital is not enough to gain an effective control of the extensive forest reserves.

REDD related activities in Nicaragua

History of REDD

The many benefits of forests as outlined above, make it logical to conserve them, and budget for their protection. This is the underlying idea of PES (Payment for ecosystem services). As the benevolent effects of forest are not directly perceived, however, putting a price on forests is quite difficult, and the opportunity costs are often deemed to be higher than estimates of conserving the forest. Bioprospecting activities to research new drugs are time consuming and patent including processes, in which the value of a specific piece of forest can hardly be defined.

In 1993 the Forest Stewardship Council (FSC) started a global certification scheme to combat illegal logging, soon after resulting in the International Tropic Timber agreement. The scheme wanted to determine the source of wood and the legality of its logging activities to provide a climate friendly purchase option for quality wood exported to the developed nations. However, the certification process was rather expensive, and the success of the undertaking limited as even consumers preoccupied with climate change don"t way too pay much more for ethical products. As such, only 15 % of timber globally was registered by FSC, and less than 2 % of tropical timber is covered by FSC.

The FSC laid bare some problems that remain main issues in the present days. The reliability of the certification may provoke corruption in weak institutions. Likewise statistics may be manipulated to improve appearances. While the UNFCCC provides a general recognition of the negative effect of human activity on climate change, there is a lot of scientific discussion on figures and factors. Technical discussions regarding operations and prices can drag on. Finally, forest timber is often used locally, so that an export based action will not be very efficient.

Typical weaknesses are land use planning, law enforcement and weak governments. Land use is often unregulated. The agricultural frontier should be confined by improving agriculture and make use of the land already in use by the sector. To enforce this and to protect forest from further degradation, inspection services don"t have the means to supervise forest reserves. Military satellite surveillance technology should be able to provide a global solution for forest management. All the same, there still are enormous challenges ahead for effective law enforcement, as "ground troops" need to combat illegal deforestation. This would help to get a grip on the problem. Finally, governments often take centralized actions for forest management that are limited in their effectiveness. Nicaragua might be able to avoid this by using the Sandinist movement discussed earlier, and although there might be discussion on the validity of the data, a huge amount of information could be collected this way.

REDD(+) is definitely the hottest topic in international climate change negotiations, and has been gathering support since 2007 when the Forest Carbon Partnership Facility (FCPF) was launched to assist developing countries to Reduce Emissions from Deforestation and forest Degradation (REDD).

Evaluation of R-PIN Nicaragua

70 developing forest countries are eligible to the REDD scheme because of their significant forest reserves. The general aim of REDD is to halve deforestation by 2020. In 2008, 25 parties (Nicaragua amongst them) provided their Project Idea Note, commonly known as R-PIN, as an initial draft for forest conservation action. These R-PINs were approved in February 2009. The 25 accepted countries are eligible to receive funding to develop a Readiness Plan (R-Plan), which will elaborate on the R-PIN and present a more detailed strategy for realizing REDD at the national level.

The World Resources Institute reviewed the approved R-PINS[84]and highlighted for Nicaragua that "More information is needed on the particular challenges and obstacles to improving the tenure situation." There is no discussion of independent forest monitoring or transparency. Nor is law enforcement discussed, although illegal logging is described as a major driver of deforestation. The R-PIN admits a lack of information on forest dependent people and their livelihoods.[85]

Nicaragua only confirms the rule, as it was considered that "none of the countries" submissions can be considered comprehensive". General problems with R-PINs include:

• Law enforcement challenges require greater attention

• Unclear tenure is a major challenge in most countries, and responding to this challenge will require much more effort

• Measures to increase policy coherence between sectors, particularly with regards to land use planning, need more attention

• The adequacy of existing revenue distribution and benefit-sharing mechanisms should inform the development of a payment system under REDD

• Transparency and accountability in forest monitoring systems for REDD need to be emphasized

Reforestation efforts up to now seem to have been limited to planting actions, and while these should be praised, there is certainly room for improvement. Official reporting on the progress of the realization of the action plan is weak overall, and seems to be used for political propaganda rather than by demonstrating results, possibly because results have been weak in the absence of funding. Campaigns only focus on the short term, and may resolve some critical issues, but in the long run a more stable plan is required.

Applying REDD to Nicaragua is complex, as it depends on international finance; Nicaragua is an extremely poor country, and its institutions are badly organized. The general poverty of the people imposes a severe limit to subsistence options for most, and it is natural that the most marginalized take the easy way without taking into account conservation of forests and climate in general. Solutions should be holistic and take into account:

Specifically, the following recommendations should be taken into account:

• Serious law enforcement measures should be taken to strengthen forest management

• Forest management should be improved with a rigid validation and verification mechanism

• Clear cost effective strategies are necessary to attract investments

• Land ownership should be resolved

• The rights of the traditional forest communities should be safeguarded, including land ownership, access to natural resources like water and assistance with climate change adaptation.

• Environmental education should be strengthened to generate a social change towards conservation

• Poverty reduction

Nitlapan[86]considers that the institutions in Nicaragua are too weak to enforce any real climate action, and seeks the origins of this malfunctioning in the lack of institutional guidelines, the non compliance of developed nations with international treaties and the general disinterest in the matter of the Nicaraguan population.

The legal framework is moreover not prepared to accommodate measures as PES or REDD because there is no definition for environmental services in the first place. Nevertheless, in Law 217, the primary law on environment and natural resources, there are some economic tools that could function as incentives, such as tax benefits for environmental conservation and tax exoneration for reforesting, soil conservation and biodiversity programs, including a duty exemption for imports of clean technology.

Other forestry projects

There are other forestry projects that might be incorporated into REDD efforts. Cemex (the cement factory of Nicaragua) wants to use biomass to cover its energy needs. Macesa want to use biodigesters to avoid methane emissions. Atlantis is a project funded by Finland with a generating power of 2.5 MW by using coffee and rice waste to generate electricity. The Swiss based Precious Woods investigated forestation efforts. Other plans focus on agricultural use of the forest (Plywood SA), reforestation of national reserves (Café y Bosque), and the MARENA led POSAF project used IDB funds to support small agricultural producers.

As Nicaragua holds a great area of the Central American rain forest, its planning is incorporated with regional level strategies such as the Regional Strategic Programme for the management of forest ecosystems, PERFOR[87]This program, developed in 2008, is meant as an update and operationalisation of the Central American Forestry Strategy, (EFCA, 2006). The plan covers the 5 year period 2008 – 2012, but pursues a strategic perspective of 15 years or more. PERFOR member countries are all Central American countries and the Dominican Republic.

Conclusion

Nicaragua has been slow in conserving its extensive range of forests. A big part of the Central American forest corridor has been protected, but state mechanisms are inefficient, and little concrete action has taken place due to the lack of (international) funding. Even strategies are incomplete and do not take into account some of the critical success factors for a REDD scheme, such as a well developed R-PIN, attention for indigenous community rights and effective project management.

The lack of true involvement by the community and affected people is a worrying situation, because it might lead to increased poverty and displacement of traditional inhabitants, especially as the UN Declaration on the rights of indigenous people is not legally binding. This might well lead to land ownerships changing hands under corrupt governments, further worsening the situation. REDD schemes should fully consider all aspects related.

Other dangers related to the REDD(+) scheme include[88]the easy manipulation of data methods used, possible diversity loss across the defined REDD areas, the broad definition of forestry (allowing for mono-cropping) and the need to centralize forest governance which contradicts traditional forest management.

One of the main discussion points is the financial management of forest value. Forest conservation certificates were not allowed under the EU ETS, but New Zealand experimented with some. The establishment of an international carbon taxes system would be a very valid option, and one that would suit the interests of GHG emission combat as well. The incorporation of REDD into a trading scheme might undermine its long term commitment to forest conservation. One maybe ironic advantage of the REDD scheme[89]is the low cost estimations – as low as 3$ per tonne of avoided emissions- which convert it into an attractive commodity. While this price might be undervalued, as it is indeed, even the opportunity cost[90]is still lower than the about 90 $ of capturing emissions from power stations.

Another problem exists with regard to the accountability; REDD countries are obviously motivated by the possibility of protecting their forests for cash, but the first loopholes also start to emerge in a false interpretation of statistics as is the case in Indonesia. A certification framework comparable with the inventory of the EU ETS is required, which will be hard to bring about in developing countries. The introduction of the validation mechanisms of the Voluntary Carbon Standard[91]which provides an internationally recognized standard will greatly contribute to the success of REDD schemes.

The launch of REDD at Copenhagen was a relatively successful but overshadowed by the disappointment about not reaching a climate protocol to follow up Kyoto. In May 2010 in Oslo, 4.5 billion was provided until 2012. Gathering further impulse at the Nagoya CBD COP 10 convention, at UNFCCC COP 16 in Cancun, the international community pledged to raise 100 billion US$ per year by 2020.

If these investments materialize, REDD may prove to be an effective mechanism to fight climate change. Its success will depend on the criteria imposed and the management of the forest stock. It is likely that REDD will acquire a convention of its own to protect the carbon in the world"s forests.

Chapter 4:

Current challenges for climate protection

Nicaragua at the UNFCCC COP 15 Copenhagen

The speech of the Nicaraguan Foreign Minister at Copenhagen[92]was unambiguous. Nicaragua considers that climate change and global warming are a direct (historical) consequence of the capitalist system of production, based on the premises of everlasting growth of production and consumption. It highlighted the unwillingness of developed countries to take the necessary action to combat climate change because it may hurt national interests. Nicaragua demanded that the developed nations take their responsibilities to obtain the following objectives:

• Limit the global average temperature increase to 1.5 ºC

• Use the 1990 level of 350 ppm CO2 equivalent to establish reduction objectives

• Reduce the emission levels in industrialized nations to at least 40 % under the 1990 level by 2020

These three objectives translate into a global per capita emission level of 4 tonnes CO2 equivalent per year, which if applied globally in a differentiated manner would reduce the absolute levels for USA to 8 tonnes per capita as compared with the current[93]19.8 tonnes per capita.

Nicaragua pointed out that the nation suffers the consequences of climate change directly. State institutions (due to limited human and financial resources) are recognized to be weak. Therefore Nicaragua focuses its attention on social action involving the whole of the population. This translates into action taken by the CPC (Councils of citizen power) and "Solidary promotors of the environment" which take voluntary action to combat climate change, as discussed in Chapter 2.

The Nicaraguan delegation also underlined that national action is voluntary; they do not have any obligation to implement climate change action, as opposed to the developed nations which are bound by the Kyoto protocol framework. While this is true, they do realize that local action is needed, and declare that Nicaragua will take the needed actions in its power.

The speech referred to the report by the UN Department of Economic and Social affairs of September 2009, that established the need for a financial injection of 1% of the global GNP (roughly 500 billion US$ per year) until 2050 in order to establish a decent green economy.

Nicaragua wanted these funds to come from a global carbon tax system, as well as from taxes on pollution and financial transactions. They suggested that the UN & WTO might levy licenses, taxes and fines for the public domain, such as space, cyberspace and the seas (regulated by UNCLOS). Nicaragua also took advantage of the occasion to bring to mind the remaining historical debt of USA towards Nicaragua in the repayment of damage caused by the illegal support for the civil war in the 1980s.

Furthermore, the need for a global administration within the UN to take care of these funds was identified. Nicaragua thus implicitly favours general taxation above the introduction of a new cap-and-trade system and the creation of new environmental commodities (as forest carbon based certificates represent). This is consistent with its condemnation of neoliberal growth, which would lead to an automatic higher demand on climate.

A list of 25 concrete action points[94]was outlined to make the discussions more concrete. This followed the general line of thought as established in the speech. It criticized explicitly the use of carbon commodities as a means to generate funds to combat climate change, as these consistenly focus on the profitibality for the private sector. The right to pollute by paying off climate debts through acquisition of certificates is condemned. Nevertheless, and somewhat contradictory, the legal framework of Kyoto and the principle of common but different responsabilities were approved of because they provide obligations to make financial contributions.

In the action points, the amount of contributions needed was also more detailed; it mentions the Brasilian cost estimate of 350 billion US$ per year as a minimum to provide the means for ecological development on a global scale.

While they have a clear concept of their preferences, Nicaragua recognized their vision is utopical thinking. They answered this obvious critique by underlining the apocalyptical consequences of not taking action or taking meek action as an excuse to keep the global economy running as it is now.

Copenhagen was not the brightest moment in Climate Change negotiations, lacking a creative response to the need forinternational funding. In the light of the recent COP 16, however, it proved to be the closure of the Kyoto era to make way for new developments.

CBD COP 10 Nagoya outcomes

The CBD COP 10 of Nagoya took place under the somber shadow of the failed negotiations of Copenhagen of 2009. Building on the only ray of hope that was left from Copenhagen, the protection of forests through REDD, it called on the promises made in Johannesburg to substantially reduce the loss of biodiversity by 2010, recognizing that very little concrete results have been attained in the last decade.

In order to prove the international goodwill towards climate protection to the global public, the ratification of the Aichi protocol was widely hoped for. The two other goals of the COP, the establishment of a new ten year Strategic plan to meet the original CBD objectives ("the Aichi target") and the definition of new protected area targets and their corresponding resources. It may be called a miracle that the protocol was eventually really signed and the plans agreed upon at the end of the COP.

As the protocol provides ground rules for equitable sharing of genetic resources, it should improve the rights of local communities to share the benefits of their genetic resources and protect the animal and plant kingdoms that are overall endangered or at least threatened, just as human existence on this planet is.

The strategic plan outlines ambitions to at least halve and at best stop the loss of natural habitats, define a fixed percentage for protected areas (17 % of terrestrial and inland water areas, 10 % of marine areas), conserve and restore at least 15 % of degraded areas. A framework is defined as such with some clear goals for the coming years, which gives a new impetus to the development of concrete action plans.

Of course these are indeed laudable steps in the right direction. It is natural that similar outcomes are welcomed by environmental NGOs as Greenpeace[95]It is a moral victory to show that some agreement can be reached on an international level to do something for our natural resources. Nevertheless, it does not justify the almost ecstatic declarations made by the CBD authorities at the end of the convention[96]Certainly the results may well have been far greater than could realistically be expected, but this is rather an illustration of the exceptionally low expectations before the COP. The absence of real binding obligations seriously downplays the historical importance of the summit.

A glimmer of hope of the future might be in the identification of targets and mechanisms through which these financial resources can be channeled, the topic for discussion of CBD COP 11 in 2012. Whether this will bring the world closer to a general UN led environmental financing administration, and more importantly, if the amounts dedicated to it will be of any significance remains a big uncertainty.

These are indeed the issues that are being focused on in Cancun. As a follow-up of Nagoya in Cancun, a number of side events will be presented in Cancun[97]including discussions on REDD and biodiversity (organized by UN-REDD, CBD and the EC), carbon value (organized by conservation international) and the search for an effective financial mechanism (led by UNEP finance initiative). When looking at the governments which directly contribute to the organization of these events, it can be noticed that amongst the 9 contributors, the city state of Grenada, Papua New Guinea and the regional government of Flanders are the proud forerunners of climate change. While Japan, Mexico, Norway and the UK may put some real weight in the scale, the conspicuous absence of France, Germany, or the US, not to mention the BRIC countries, is a sign that shows the relatively low political barometer towards international climate action.

UNFCCC COP 16 Cancun

COP 16 results

With the Cancun top ended, there is reason for hope.

Technical discussions seem to simmer out with a consensus to limit the average temperature increase to 1.5 º C by 2100, thereby meeting the expectations of Nicaragua.

Also, international agreement has been reached on the principle of a global fund to manage the financial contributions to climate change action. The pledge to provide a 100 billion US$ per year to developing countries and least developed countries by 2020 was made. This money would be managed initially by the World Bank, which was frowned upon by many nations suspicious because of the bad track record of the US concerning climate change. This distrust may be overcome by the pending increase in the number of seats of China and India on the board of the World Bank at the expense of the EU. This would create a new balance in the composition of the World Bank and provide a new policy more adapated to globalization.

A final hurdle that may be overcome is the solitude of the European Union that took a first step towards binding obligations by ratifying Kyoto. China has already made considerable efforts towards climate change by monitoring the efficiency of its petroleum use and the introduction of hydroelectric plants; there are hopeful signs that India and China may join in further legal commitments. This would influence the international agenda on climate change in a very positive way by providing concrete steps towards climate change actions both in developed and developing countries. The outcomes are positive and may provide a framework for future action.

Climate Change finances: carbon markets and taxes

Interesting data on the value of Nicaragua"s reserves at present can be found in "States and trends of the Carbon Market 2010" [98]produced by Carbon Finance at World Bank. The implementation of carbon markets from the beginning of the new millennium onwards has been a great experiment in checking market mechanisms to cover for combating climate change. Results are now coming to ripeness.

The most influential and large scale example of the carbon market is without doubt the cap and trade scheme of the European Union, commonly known as the ETS (Emission Trading Scheme). With the obligation to reduce emission brought forth by Kyoto entering into force, true emission reductions have been brought about. The developments low-carbon technologies would certainly not have taken place without Kyoto, a significant support was raised for the development of low-carbon projects worldwide; finally ETS established an effective and scalable registration system. All these are assets to explore carbon market opportunities in the future within the framework of the current world economy.

The holes in the system have led to some VAT fraud and double registration of CERs, but as a whole this has helped to advance maturing the scheme. Another disappointing finding is the total of 400 million tons of CERs that have been issued up to the beginning of 2010, just over half the prospected quantity in 2007. The future of ETS remains unclear in the absence of a new binding protocol to follow up Kyoto, and Cancun will determine up to a certain extend the success of ETS. It will be very hard for EU to continue efforts without corresponding climate change action in the rest of the world.

Other schemes have been set up, e.g. in New Zealand where a trading scheme was set up, although there is no cap on emissions for the industry. As opposed to other schemes, forestry was taken into account, which may provide some lessons for the new tree hugging REDD proposals.

Post Kyoto reflections

Up to now, the EU ETS has been a moderate success. Although after 2012 Kyoto is no longer in vigor, the ETS scheme is already extended up to 2020. The financial crisis has had its repercussions on carbon trading scheme internationally, with the unit price of certificates lowering and a decrease in trade volumes.

For the carbon market to grow, a decent increase in scale is needed, combined with a long term guarantee that carbon trading makes sense. Also, any new starting product should have some guarantee that its projects will not turn out to be useless in the absence of a buyer.

The whole discussion about value and measurability is moreover plagued by irrational points of view. Some things are not directly measurable by cost-benefit analysis. As climate change will present increasing costs to countries suffering its effects (estimated on a 1% of GDP for Latin America in the future[99]market economics will push the price of climate change related stock exchange up.

Nicaragua is becoming more isolated in its rejection of private investment schemes, calling for a global carbon tax schemes instead, which would require and oblige the deposit of a defined amount of money on a yearly basis. This discourse is obviously the result of the reigning Sandinist government, in which they are solely supported by Venezuela and Bolivia. While a similar scheme might be juster and desirable, it nevertheless encounters considerable practical difficulties, and there is little demand in the outside world to meet this ideologically inspired demand, rejecting capitalism by principle.

Conclusion

The processes to which we are subjected now and in the coming 100 years are variable and have an aggressive effect on the climate in many cases. Hurricanes, floods and a countless number of diseases are consequences of heightened temperature and the population growth on both a global and a national level.

It needs to be pointed out that by thinking about the future we can create realistic scenarios to resolve the climate problems that we are facing. However, climate change is happening at this moment, and solutions or mitigations should be realized as quickly as possible. In the presence of extreme events as earthquakes, hurricanes, storms, landslides, we have to stand up and deal with them or get used to the consequences. Overall it is of extreme importance to mitigate climate change and to combat deforestation, while promoting reforestation.

Nicaragua should have clearer goals in its vision for the future environment, when funds will come in to pay for environmental services, this is not just job creation, but instead has an important character to contribute to development projects in Nicaragua in general. It should be noted however that any funding of related projects should include long term commitments, if not there will be no sustainability.

After the civil war in Nicaragua in the 1980s, Nicaragua should fortify its democratic processes and take leadership in the implementation of national plans. The government should be more than an outward representation of the nation, it is also the representative of the Nicaraguan people and its future generations; Nicaragua should be converted back into the tropical paradise that its nature and wildlife constitutes.

Annex

Annex I: Relation between Ozone layer depletion and climate change

This annex starts with a description of the Montreal protocol and its objectives. It then summarizes Nicaragua"s involvement with the protocol, concluding with a short discussion of the relation between climate change and ozone layer protection efforts.

Significance of the ozone layer

The Earth"s stratosphere protects the surface from UV radiation by absorbing part of these rays in its atmosphere. It is ozone (O3) that is responsible for this.

Since the 1970"s, it became clear that the ozone concentrations in the stratosphere were declining. Also, polar regions experienced an "ozone hole", although seasonally. The proliferation of UV rays that reaches the earth has its effects on life on earth. It causes skin cancer and other diseases, and has a negative impact on plant growth.[100]

Montreal Protocol on Substances that Deplete the Ozone Layer[101]

Nicaragua ratification date: 5 March 1993[102]

Within the framework of the Vienna Convention for the Protection of the Ozone Layer[103]the Montreal Protocol was agreed upon to reduce the depletion of the ozone layer.

In order to prevent the further deterioration of the ozone layer, its main objectives are to regulate industrial chemicals such as Hydrochlorofluorocarbons (HCFCs), by reducing/removing the production and use of substances damaging the stratosphere. 

The aim is to improve the quality of life and avoid lethal diseases (e.g. skin cancer).

With help of the Multilateral Fund of Montreal developing countries are supported to eliminate the substance that affects ozone.  Likewise, it regulates the industrialized countries to follow the principles and foundations of the Montreal protocol. We can read in the structure of the treaty that there are many groups of halogenated hydrocarbons that play a role in Ozone depletion.  The Montreal protocol has been focused on gradually phasing out the use of the substances that lead to the depletion of the ozone layer, and has possibly been the most successful protocol in meeting its targets.

Implementation of Montreal Protocol

In the Executive Order 91-2000[104](September 2002), MARENA provides the "Regulations to control substances that deplete the ozone layer", which establishes a register for the importers and exporters of Ozone Depleting Substances (ODS), using the National Register for Pesticides, Toxic and Dangerous Substances as managed by MAGFOR. It also establishes an obligatory authorization mechanism for the ODS, the prohibition of equipment and vehicles that use or contain CFC11 or CFC12, import quotas of CFCs and an identification system for ODS. This effectively regulates CFCs for Nicaragua.

Relation between climate change and ozone layer

While the elimination of CFCs has been largely successful, they have been replaced by HCFCs. As these chemical components do not contain chlorine or bromine, the substances involved in the destruction of the ozone layer, they are nevertheless strong greenhouse gases. The solution for the ozone layer depletion problem therefore exacerbates the climate change problem.

Also, climate changes itself worsens the ozone layer depletion. The increased GHG concentration and the accompanying greenhouse effect causes the stratosphere to further cool down, resulting in a further polar ozone layer depletion.

Finally, as the ozone layer is depleted and the stratosphere cools down, the troposphere is further warmed by the actions taken to combat the effects of higher ozone concentration, such as the increased energy consumption related to use of air conditioning.

Policies towards these atmospheric conditions should look for a balanced solution that does not have a negative impact on either of the problems.

References

Author:

María José Centeno Fonseca

Date: January 16, 2011

CERIS 2009-2010

Master in Development Studies

[1] Signed 9 May 1992, it entered into force on 21 March 1994; see http://unfccc.int/essential_background/convention/status_of_ratification/items/2631.php

[2] ibid

[3] President from April 1990 until January 1997

[4] http://unfccc.int/essential_background/convention/background/items/2853.php, conveng.pdf

[5] Signed on 11 December 1997, and the protocol finally entered into force on 16 February 2005; there are now 192 parties to the protocol; see http://unfccc.int/kyoto_protocol/status_of_ratification/items/2613.php

[6] http://unfccc.int/resource/docs/convkp/kpeng.pdf

[7] Carbon Dioxide (CO2), Methane (CH4), Nitrous oxide (N2O), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6)

[8] The Subsidiary Body for Scientific and Technological Advice established the data that are used for the commitment levels. For countries in transition to a market economy (i.e. most of the old communities countries that do appear in Annex I but not in Annex II of the convention), a different base year can be used.

[9] Comisión Centroamericana de Ambiente y Desarrollo

[10] Signatories Costa Rica, Nicaragua, El Salvador, Honduras and Guatemala but not Panama

[11] Estrategica Regional de Cambio Climatico (ERCC), September 2010, published by CCAD.

[12] Convenio Regional Sobre Cambios Climáticos