How do Carbon Credits Work in Moçambique?

To make a cookstove into a carbon credit is one serious abstraction, isn’t it?

Take a region where charcoal is the cooking fuel of choice, switch it out for a cleaner burning fuel that doesn’t contribute to global warming quite so dramatically, then, somehow, track the whole thing accurately enough that it’s possible to measure the tons of emissions the switch represents.

Finally, sell the avoided tons on a carbon market to companies that are looking to offset their own over-indulgence or maybe organizations that want to be carbon negative, doing their part to reduce global warming. The calculations had better be accurate or else those credits will not be worth very much in the long run.

At their best, cookstove carbon credit projects like these are lauded for their co-benefits – not only do the cleaner stoves reduce the global warming potential of the cooking method, but they also reduce soot which means lower asthma rates (and cleaner homes – of great benefit to the women who have to clean up after dinner). Done right, a project like this can even jumpstart a new local sustainable business like CleanStar Mozambique.

However, the reputation of these types of projects has suffered in recent years due to allegations of double-counting by both the organizations that buy the stoves and the organizations that deliver them. Market participants have been subject to tough questions about how many of the delivered stoves are actually in use, how many actually replaced a dirty charcoal stove instead of another cooking implement, and how long the stoves actually stay in use. Are the credits still being counted long after the stove has been abandoned? These questions mostly plague the voluntary market, where there are many standards, but little overall regulation.

Offsets destined for the compliance markets – like the European Union’s Emissions Trading Scheme, or the market that’s being set up in South Korea now that they’ve passed a cap-and-trade law, are heavily regulated by the UN’s Clean Development Mechanism, which certifies the credits that are traded on the state-run markets. Says Abyd Karmali, Global Head of Carbon Markets for Bank of America Merrill Lynch, “The CDM compliance is what makes these credits reliable because they have such a thorough review process.”

Karmali represented Bank of America Merrill Lynch in the deal that brought them to the CleanStar Mozambique team. BofA’s seven-figure investment gives the bank the option to buy a guaranteed volume of credits created by CleanStar Mozambique’s stove program at a reduced cost. “Of course, we take a risk with this investment like any other – the CDM certification may not come through, or the stoves may not sell at the projected rate. The risk/reward calculation is the same for us in the carbon market as it is in any other business unit.”

Despite that modesty on Karmali’s part, BofA’s investment made a huge difference in the overall profitability of CleanStar Mozamibque’s business plan. A project in subSaharan Africa which spans the length of a country, engaging hundreds of farmers in growing cassava, building an ethanol plant, and selling stoves to thousands of urban customers is going to be a bit precarious. BoA’s investment means that Cleanstar Mozambique can sell their ethanol stoves at a reduced rate – $30 dollars instead of their $80 at cost – which brings them within spitting distance of the cost of the charcoal stoves which are currently being used by 95 percent of the market.

Now for the million dollar question: How do they actually calculate how many stoves equal a carbon credit?

Charcoal stoves contribute to global warming in two ways – first, when trees are clearcut to create charcoal (it takes 10 kilos of wood to make 1 kilo of charcoal), carbon that was once embedded in the trees drifts into the atmosphere. Second, there are the emissions from the stoves when they’re lit to cook a meal. CleanStar Mozambique’s methodology addresses both.

The man at the center of CleanStar Mozambique’s methodology is Boris Atanassov, a soft-spoken Bulgarian who was raised in Mozambique, who patiently walked me through his calculations, results, and the cross-checks in place to make sure his figures are accurate.

The deforestation component of the calculation relies on figures from external sources. First CDM requires the applicant to confirm that the forests in question are not being harvested renewably (if they were, they wouldn’t represent a carbon discharge). The government of Mozambique and numerous NGOs have documented those numbers and there are currently no significant efforts in place to reforest.

The second portion of the calculation focuses on the ethanol stoves being sold in the city center, presumably to women who were otherwise using charcoal. That’s where Atanassov’s methodology comes into play. His team set up a comprehensive series of tests and crosschecks to measure their assumptions about stove and charcoal usage.

First, they measured charcoal use in 421 households in Maputo and determined that the daily use was around 2.8 kilograms per day – almost twice their initial estimates.

The team also tested the efficiency of the charcoal stoves with a water-boiling test to determine the average efficiency of a Maputo charcoal stove. This is helpful information in cross-checking the amount of charcoal needed to cook the average meal.

When CleanStar Mozambique sells a stove, it educates the customer on the fact that these stoves are being used for carbon credits. The purchase price includes a warranty and CleanStar requires the buyer to sign an agreement that they’ll return the stove for repair or replacement if it breaks within five years. Customers are informed that they are receiving the stoves at a discount because of their agreement. This gives the team extra assurance that stoves will remain in use – even if they do break.

Once the stoves are in use, the team conducts surveys and in-house studies of the ethanol stove users to see if they are using the stoves exclusively or as only one of several cooking implements at their disposal. Just as we might use a frying pan on a gas grill for one sort of food preparation and a microwave for another, some families are using the ethanol stoves as only one cooking implement among many. The rate of actual usage gets incorporated into the methodology.

All the elements of the methodology use conservative numbers, and they’ll all be sent to CDM for carbon credit approval, which can take six months to a year or more. Approval looks promising, though, since the methodology is so comprehensive.

For more information about the CleanStar Mozambique project, click here.

Travel and accommodations provided by Novozymes
Image credit: Jen Boynton

New Licensing Deal with EU Fisheries emphasizes ustainability and reduced effort and tonnage

A new deal with Mozambique, which licenses fishing opportunities to 75 EU vessels from Spain, France, Portugal, Italy and the UK, puts more emphasis on sustainable fishing and controls and obliges EU vessel owners to employ local seamen, was backed by Parliament in a vote on Wednesday.

The resolution, drafted by Dolores García-Hierro Caraballo (S&D, ES) and approved with 566 votes in favour, 89 against and 17 abstentions, gave a green light to the deal, while reiterating Parliament’s call to be more extensively involved in its monitoring and enforcement.

The deal, which has applied provisionally since 1 February 2012, will remain in force until 31 January 2015.

Fewer vessels

Since overall catches by EU vessels in Mozambique’s waters in recent years have been below the levels assigned to them, the deal reduces the reference tonnage from 10,000 to 8,000 tonnes per year, but allows the ceiling to be raised if necessary. Accordingly, the number of EU vessels allowed to fish in these waters will be reduced from 89 to 75: 43 tuna seiners and 32 surface long-liners.

Under the deal the EU will pay Mozambique €980,000 per year: €520,000 for access to its waters and €460,000 to develop its fisheries policy.

More inspections

One third of all EU vessels authorised to fish in Mozambican waters will have to undergo an annual inspection in a Mozambican port before starting to fish. From 1 July 2012, an electronic logbook system will be introduced to record and transmit catch reports and a Mozambican scientific institute will help to verify catch data.

Mozambican seamen on board

The deal also requires EU vessel owners to hire at least two Mozambican seamen per seiner and one per long-liner, or pay a fine of €30 per day if they fail to do so.

(2012-05-23) Gorongosa National Park in the central Mozambican province of Sofala is reported to be showing signs of recovery. The park is widely regarded as the jewel in Mozambique’s conservation crown, but was severely hit during the war of destabilisation.

Since 2005 a restoration programme has been underway at the park, and a team of scientists led by E.O Wilson has reported that there are positive signs.

A secretary bird has recently been spotted in the park for the first time in many years. These birds were relatively easy for hungry soldiers to catch during the war of destabilisation, which devastated the park until the war’s end in 1992.

According to a report by E.O Wilson’s team, “we have seen plenty of snakes, lizards and grasshoppers that should be supplying food for this specimen and relatives who may be on the way. This is an excellent sign that life is returning to Gorongosa”.

The report also said that one of the three cheetahs reintroduced into the park in July last year was spotted on Saturday and is “clearly healthy and presently well fed”.

It also pointed out that on Sunday there was a census in the “sanctuary”, an area protected from predators and poachers. The census found 372 Blue wildebeest, 193 Cape buffalo, 68 Sable antelope, 364 Common reedbuck, 112 Impala, 38 Waterbuck, 9 Lichtenstein’s hartebeest, 140 Kudu, 482 Warthog, 116 Oribi, 8 Nyala, 58 Bushbuck, 11 Grey duiker and 4 Red duiker.

Gorongosa National Park is located at the southern end of the Great African Rift Valley, and specialists claim that it has 54 separate ecosystems. It is planned that by 2015 the park will receive half a million visitors per year.

Mozambican President Armando Guebuza on Friday declared that foreign investors are welcome provided that they are willing to abide by the country’s labour legislation.

(2012-05-19) Mozambican President Armando Guebuza on Friday declared that foreign investors are welcome provided that they are willing to abide by the country’s labour legislation.

Addressing a rally in the southernmost tourist town of Ponta do Ouro, as part of his “open and inclusive presidency”, President Guebuza criticised foreign investors who were accused by local residents of ignoring the country’s labour law, while also barring trade unions in the workplace.

In Ponta do Ouro some foreign investors have been accused of abusing Mozambicans and firing workers without just cause. According to residents, this often ends up degenerating into poorly handled labour disputes due to the lack of regular labour inspections.

“Investments in Mozambique are governed by the country’s legislation; therefore, it is unacceptable to break those laws. All investors, irrespective of their origin and identity, are welcome provided they abide by Mozambican legislation and respect people as human beings”, warned President Guebuza.

According to the President, this is the only way “we are going to build the society of tolerance and harmony that we all want”.

The President pointed out that workers have rights, duties and responsibilities which are dictated by the country’s rules and laws which must be respected by all.

He stressed that the war Mozambicans waged against colonialism was precisely to restore human dignity. “Anything that is against this principle is reprehensible”, said the President.

During the rally, residents also complained that some foreign investors have privatised access roads to the beach by erecting fences. As a result, they are forced to walk several kilometres even when the beach is not more than 500 metres away.

Answering this particular concern, the President stressed that the land is owned by all Mozambicans, hence people must not be held hostage in their own space.

the tourist resort will require investment of US$800 million and will include a casino, golf courses, gyms, business centres and hotels, amongst other facilities.

May 15th, 2012   News

Mozambique’s National Tourism Institute (Inatur) has launched an international public tender for construction and exploration of a tourist resort in the Inhassoro Area of Tourist Interest in Inhambane province, a source from the Institute told Macauhub in Maputo.

The area where the project will be located covers 1,750 hectares and has 5 kilometres of beach and is next to the Bazaruto archipelago national park, which is one of the world’s biggest diving centres, and just 30 kilometres from Inhassoro and 25 kilometres from Vilanculos, where the international airport is located.

The location is appropriate for beach tourism, water sports, big game fishing, and diving, for watching dugongs, dolphins, rays, sharks, sea turtles, and other marine species.

The source from Inatur told Macauhub that the tender is intended to find an investor with significant technical and financial capacity as the tourist resort will require investment of US$800 million and will include a casino, golf courses, gyms, business centres and hotels, amongst other facilities.

The resort will also have around 3,000 rooms and interested companies are required to put forward proposals by the second week of August. (macauhub)

The Italian energy company ENI is spending 200,000 US dollars a day on security for its drillship “SAIPEM 10000” off the coast of Cabo Delgado province in northern Mozambique.

(2012-05-14) The Niassa National Reserve in Mozambique will have new management as of September in order to overcome the conflict of interests between the current private management and conservation of natural resources, said the spokesman for the Mozambican Council of Ministers.

According to the decision from the Council of Ministers, management by Sociedade de Investimentos do Niassa, which is part-owned by the State, via stake-holding company Instituto de Gestão das Participações do Estado, will end this year and a management structure is being prepared to ensure the main objective, which is conservation of forestry and wildlife resources.

Cited by Mozambican daily newspaper Notícias, Alberto Nkutumula said that the current 10-year contract due to end in September would not be renewed.

The Niassa Reserve covers an area that includes Cabo Delgado province and one third of Niassa province. It was established in the 1950s and since then its size has changed.

The reserve currently covers 42,000 square kilometres, which is twice the size of Kruger national park in South Africa, and has a high concentration of wildlife, which has yet to be explored.

Based on a survey in 2002 it is estimated that the area is home to 12,000 elephants, 2,500 buffalo, 10,000 impala, and 200 wild dogs (at risk of extinction) and there are also lions, leopards, hyenas, and zebras amongst other wild species.