On the subject of Joint Implementation, Mexico was one of the few developing countries that, during the early conferences on climate change, were willing to explore such concept. Moreover, in 1993 the ILUMEX project of the Federal Electricity Commission (CFE), the Global Environmental Facility, and the Government of Norway was developed. Under the sponsorship of the World Bank, it was part of the joint implementation program.

As from the Berlin Conference of the Parties held in 1995, Mexico expressed its interest in having joint implementation as a financial mechanism to assist the development of the country.

Among the issues addressed in these meetings are the certification and register of reductions and/or carbon sequestration, the distribution of “carbon credits” among participants in joint implementation projects, the monitoring and verification of such reductions, and the establishment of basic scenarios and additionality-related issues.

In December 1997, the Kyoto Protocol was instituted, which created two mechanisms to reduce emissions: Emission Trading among Annex I Countries and the Clean Development Mechanism. Through the latter, developing countries might benefit from activities resulting in emission reductions certified by the operational entities appointed by the COP acting as the Meeting of the Parties of this Protocol. Annex I countries will be able to use such reductions so as to achieve the objectives specified by the Protocol.

• Ilumex
• Scolel - Té
• Calakmul Climate Action Project
• Sustainable Forestry in the Northern Sierra of Oaxaca

Ilumex

The project replaced about 1.7 million fluorescent lamps (FLs) in the cities of Guadalajara and Monterrey. FLs require only 25% of energy required by incandescent lamps to produce the same level of lighting. Besides, their useful life is 134 times longer, reaching up to 10,000 hours.

The objectives of the project were the following:

1. To prove technical and financial feasibility of reducing greenhouse gas emissions and local environmental pollution through the general installation of high-efficiency lighting.

2. To build institutional capacity required to achieve a technological change and energy saving.

3. To provide a demand management model that may be multiplied in Mexico and in other developing countries.

4. To strengthen CFE capacity to exercise demand management in a sustainable way.

The total environmental benefits obtained throughout the project were estimated in:

- 726,675 metric tons of carbon dioxide;
- 18.57 metric tons of methane (455 tons of CO2 equivalents);
- 10,986 metric tons of sulphur oxide (SOx);
- 1,982 metric tons of nitrogen oxide (NOx);
- 5,363 metric tons of particles;
- 746 metric tons of hydrocarbons (HC) and
- 188 metric tons of carbon monoxide.

Scolel - Té

Background:

The title of the project ~ Scolel Té ~ means "growing trees” in Tzeltal and Tojolobal dialects, it was chosen by the participating farmers, from the State of Chiapas, during the feasibility study of the project.

Objectives:

Develop a carbon sequestration prototype scheme in sustainable forests and agricultural systems. The scheme should ensure that carbon is reliable sequestered for long term in social, environmental and economic viable systems.

To develop a carbon sequestration model that should be applicable on a larger scale in similar regions of Mexico and Latin America.

Location:

The project is located in Chiapas, in the southern part of Mexico, covers two distinct bio-climatic and cultural regions of the State of Chiapas: highland Mayan Tojolobal communities and lowland Mayan Tzeltal communities.

Participants:

El Colegio de la Frontera Sur (ECOSUR) and the University of Edinburgh's Institute of Ecology and Resource Management (IERM) are responsible for providing technical support to local technicians working with farmers' organizations and to the Fondo Bioclimático, and to monitor carbon sequestration and socio-economic impacts of the pilot phase of the project.

Lessons learned:

The pilot phase of the project ended in 2000. During this period, funds were accumulated in a project trust fund, Fondo Bioclimático, for financial and technical support and to monitor and evaluate several inputs. It is expected that if funds are available for the main implementation phase, the system could become financially self-sustaining, by 2018.

Substantial preparatory work has already been accomplished, local forestry promoters received training in forestry planning methods and tree propagation. Several rounds of consultation with various stakeholders, including women, took place between 1996 and 2000. Procedures for the planning, implementation and monitoring of agroforestry were developed.

Fondo Bioclimático could provide Mexican farmers with financial and technical assistance during 25 years to implement farm or community-scale forestry and agroforestry developments, on the basis of the carbon that will be sequestered. Plans have been assessed for technical feasibility, social and environmental impacts, and for carbon sequestration potential. Viable plans are registered within the Trust Fund and are eligible for assistance.

Carbon Sequestration Potential:

The potential impact of the pilot project, in terms of carbon sequestered, is estimated in 300 thousand tons, through the development of 1,200 hectares of agroforestry lands and 1,000 hectares of restoration and management of natural forest. The average cost of carbon sequestration within the project is currently estimated at around US $12/tC, of which US $8 are paid to farmers, US $ 2 for administration expenses, and US $ 2 for technical services. The Fédération Internationale de l'Automobile has an on-going agreement to purchase 5,000 tons of carbon credits per year in order to offset the CO2 emissions from Formula 1 Motor Sport.

During the pilot phase, a Plan Vivo System was designed for planning, managing and monitoring the supply of carbon offsets from small farmers in ways that enhance rural livelihoods, and that will safeguard the investments of buyers of carbon services. It aims to ensure that these activities are environmentally sound and that agreements between providers and buyers of these services are fair and transparent.

Associated research activities were carried out along the pilot project, to answer some key questions related to the feasibility of large scale carbon sequestration programs; these included: studies of carbon fluxes associated with land use change, involving direct measurement of biomass in different types of vegetation (funded by the US EPA and the Mexican Government); research and development of appropriate protocols for community forestry planning and administration of carbon sequestration schemes (funded by the UK Government’s Forestry Research Programme); research of the cost and potential for large-scale carbon sequestration in southern Mexico, using economic models and geographic information such as satellite imgs (funded by the International Energy Agency - Greenhouse Gas R&D Programme).

Assistance for other research and training activities related to the project has been received from the Mexican Ministry of Environment (SEMARNAT), NAFTA’s Commission for Environmental Cooperation, the UK’s Darwin Initiative and the European Union.

The estimated amount of carbon that could be sequestered in these systems varies from 46.7 to 236.7 tC/ha. Net present benefits from replacing low productivity maize or fallow with farm forestry are expected to range from $500-1000/ha, depending on the value assigned to sequestered carbon, local agro-ecological conditions and the discount rate applied.

The principal barrier to community forest management appears to be socio-political rather than economic. Since forest management involves long-term investments, good planning and good local organization are vital. Further applied research linked to forest monitoring will also be required.

Looking into the future:

The Edinburgh Centre for Carbon Management commissioned the international company Société Genérale de Surveillance, SGS, to assess the performance of the Scolel Té/Fondo Bioclimático Project in Mexico against the Fondo Bioclimático Systems and Procedures; and an assessment of the functionality of the Plan Vivo in relation to the expected requirements of the Clean Development mechanism: and the verifiability of the Plan Vivo System. The work was carried out in December 2001.

Main findings of the verification: the Plan Vivo System has great potential for use in developing CDM compliant projects since they are highly likely to be additional, suffer from little leakage and, if certain conditions are met, they have a good chance of being permanent. The Fondo Bioclimático has been successful in establishing a range of forestry and agroforestry systems by working with farmers and rural communities. Its systems and procedures cover most of the requirements of the Plan vivo systems, but further work is required to define the essential procedures in a way that will make them cost effective to independently verify.

The carbon offsets from this project may currently be purchased at the Fondo Bioclimático and also from Econergy International Corporation, in the United States, and Future Forests in the United Kingdom.

April 2002

Calakmul Climate Action Project

The Nature Conservancy and its Mexican partner organizations have undertaken a feasibility study to assess the potential for carbon sequestration investment in the Calakmul Biosphere Reserve and surrounding areas, in the state of Campeche, Mexico, in the Yucatan Peninsula.

Objectives:

• Demonstrate verifiable greenhouse gas benefits; the benefits of greenhouse gas mitigation
• Provide habitat protection important to flora and fauna of the Reserve;
• Provide social and economic benefits to local communities.

The Nature Conservancy believes that the proposed Calakmul Climate Action Project is feasible and warrants advancing to full project development.

Location:

Located on the Mexican border with Guatemala, the 1.8 million acre (723 000 hectares) Calakmul Biosphere reserve is one of the largest protected areas in Mexico and forms part of the 2.2 million hectare, tri-national complex of protected areas known as the Maya Forest. Only 15% of Mexico´s original moist forest cover remains today and calakmul is the best opportunity to preserve Mexico´s rapidly disappearing tropical evergreen and diverse tropical semi-deciduous forests. These are critical ecosystems that offer invaluable services as carbon sinks, and as homes to a myriad of endangered, endemic and migratory species. The most serious threats to the ecosystems of Calakmul are deforestation and habitat fragmentation, fueled by alarming population growth rates that have been recorded in communities along a burgeoning development corridor.

Conservation value:

Visitors to the forest find howler monkeys, the multicolored ocellated turkeys, verdant parrots, and the king vulture among other wild life species. Five of the six species of cat found in Mexico need these forests for their survival, including the jaguar. Over 100 species of Neotropical migratory birds winter in Calakmul and approximately 40% of all North American migratory birds stop in its forests and wetlands during their annual flights. An estimated 3-5 billion birds depend on Calakmul´s forests for their migration.

Additionally, Calkmul is home to over 11000 vascular plant species, which represent approximately 50% of the plant species on the Yucatan Peninsula. The heavy seasonal rains and rich variety of arboreal vegetation present favorable conditions for numerous species of epiphytic ferns, cacti, bromeliads and orchids.

Participants:

• Winrock International
• Consejo Civil Mexicano para la Silvicultura Sostenible
• Instituto de Ecología at UNAM
• El Colegio de la Frontera Sur

Project feasibility:

The following elements have been considered during the feasibility study:

• Additionality of carbon credits
• Potential leakage and prevention strategies
• Ease of monitoring and evaluation
• Legal land management agreement options
• Risk assessment
• Long term social and economic benefits (i.e. sustainable development)
• Important long term conservation financing benefits

Project Cobenefits:

• Social and economic benefits: the Calakmul Climate Action Project could last for 30 years; however the project must be designed to provide long-term benefits for the participating communities. The Calakmul Biosphere Reserve will continue to benefit from the project after its completion.

• Biodiversity Conservation. The Calakmul Biosphere reserve is the largest area of legally protected tropical forest in Mexico. However, due to the complex socio-economic dynamics of Calakmul, this area is still under threat. These endangered forests are the cornerstone of the regional forest complex that includes Guatemala, Belize and coastal Yucatan. If Calakmul forests are lost, the remaining forest will become fragmented into increasingly isolated islands.

In addition to provide critical protection for Calakmul, and generating a truly community base forest conservation model, the tools and mechanisms that the project proposes could be applicable throughout Mexico. Private land conservation mechanism, long-term financing structures and carbon monitoring and evaluation protocols are among the necessary management instruments that must be leveraged.

Looking into the future:

Carbon sequestration estimation:

The current estimate is that the project will result in a conservatively-estimated carbon benefit of between 1.1 and 1.9 million tons on 260,000 hectares of land. It was estimated that the budget necessary for the full scale implementation of the project could be between USD 8.5 million and 10,5 million. The approximately carbon sequestration cost per ton for the Calakmul project is estimated between US$ 4.5 and 9.5.

If implemented, the project will be a model for future conservation and carbon investment in this critical frontier region and throughout Mexico.

Winrock International is developing a baseline for carbon sequestration in this project, with funds from the United States Agency for International Development. The results will be available in approximately 5 months.

April, 2002

SUSTAINABLE FORESTRY IN THE NORTHERN SIERRA OF OAXACA

Objectives

The pre-feasibility study was aimed at planning the consolidation of forestry systems for the communities of Uzachi and Ixeto so that they may face their growing economic needs without reducing their forest areas. The project is intended to raise the volume of biomass in protected areas, forest areas , and those currently used in agriculture and livestock husbandry by means of: Forest Protection : Maintaining and increasing biomass in 31,847 ha through the enhanced efficiency in combating and preventing forest fires, pests, and diseases.

•  Forest Management : To keep and improve forest management standards, generating greater increases in biomass and reducing the impact of forest product extracting activities.

•  Forest Area Recovery : To take forest populating actions in grasslands and agricultural spots in forest areas complementing natural regeneration and recovering impaired areas.

•  Forest Logging Reduction : To increase agricultural productivity by developing irrigated areas and agro-forest systems. To generate employment in activities other than agriculture in order to reduce pressure on forest areas.

•  Efficiency Increase in the use of wood through the use of exploitation residues for edible mushroom cultivation , and of enhanced equipment for wood transformation.

•  Project Broadening so as to include other communities.

Project Location

The Project was performed in: Capulalpam de Méndez, Santiago Xiacuí, Santiago Comaltepec, Nuevo Zooquiapam, and San Miguel Aloapam, in the state of Oaxaca.

Area

In its first phase, the project will cover an area of 49,027 ha, of which 31,847 correspond to closed forests.

Project Operators

Fideicomiso de Recursos Naturales de la Sierra Norte de Oaxaca

Unión de Comunidades Zapoteco- Chinantecas(UZACHI),

Unión de Comunidades Ixtlán-Etla, Oaxaca (IXETO),

Technical Support and Follow-Up

Estudios Rurales y Asesoría Campesina, A.C., (ERA)

Monitoring and Assessment

Consejo Civil Mexicano para la Silvicultura Sostenible, A. C. (CCMSS).

World Resources Institute (WRI)

General Supervision

Secretariat of Environment and Natural Resources (SEMARNAT)

Carbon Captured

Project Term

The project is foreseen to have an approximate term of 30 years.

Investment Rates for Carbon Capture are the following:

Requested Investment: