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Exploring the Forestry Carbon Finance Potential for an Indigenous Cultural Community in the Philippines

Listed author(s):
  • Margaret M Calderon


    (College of Forestry and Natural Resources, University of The Philippines, Los Banos)

  • Nathaniel T. Bantayan


    (College of Forestry and Natural Resources, University of The Philippines, Los Banos
    College of Forestry and Natural Resources, University of The Philippines, Los Banos
    College of Forestry and Natural Resources, University of The Philippines, Los Banos)

Registered author(s):

    The project explored the potentials of a forestry carbon project for an indigenous cultural community in the Philippines. Specifically, it assessed the global potential of forestry carbon finance; reviewed the legal and policy environments of forestry carbon projects in the Philippines; and evaluated the feasibility of a forestry carbon project in an Ayta community. The literature indicates the great potential of forestry carbon projects in both the global and local markets. In the Philippines, two such projects have passed the voluntary carbon market standard, and there are efforts to develop projects under the National REDD+ Strategy. The Philippines is committed to addressing climate change, as evidenced by its signing the ratification of the United Nations Framework Convention on Climate Change and the Kyoto Protocol, and the enactment of Republic Act 9729, otherwise known as the Climate Change Act of 2009. The results of the feasibility analysis reveal that developing a forestry carbon project for the Magbukún Ayta of Kanawan, Morong, Bataan is technically and financially feasible. The projected carbon loss in the ancestral domain due to possible deforestation in the old growth forest is a lot higher than expanding second growth forests and brushlands, thus creating an excellent opportunity for the community to be engaged in a forestry carbon project. The net present value (NPV) and internal rate of return (IRR) at the most conservative conditions (i.e., high scenario, price of USD 5/ton CO2, and 20% discount rate) are PhP 170.271 million and 40 %, respectively, which show that the forestry carbon project is financially viable. The Magbukún Ayta have also expressed in a resolution that they are amenable to the possibility of being involved in a payment for ecosystem services (PES) project, specifically on the carbon sequestration potential of their forests, making the forestry carbon project socially acceptable. It is therefore recommended that the potential of developing a forestry carbon project for the Magbukún Ayta be pursued.

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    File Function: First version, 2013
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    Paper provided by Economy and Environment Program for Southeast Asia (EEPSEA) in its series EEPSEA Research Report with number rr2013011.

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    Date of creation: Jan 2013
    Date of revision: Jan 2013
    Handle: RePEc:eep:report:rr2013011
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