Noel Kempff Mercado Climate Action Project

Below is a short history of The Nature Conservancy's (TNC) recently publicized success story: The Noel Kempff Mercado Climate Action Project in Bolivia.

It is a stirring example of how using "avoided deforestation" as a tool for emissions reduction in developing countries can promote substantive GHG mitigation and enhance local livelihoods.

Importantly, it also illustrates the strengths of a participatory, co-management strategy for projects' development, implementation, and subsequent monitoring and evaluation. The stakeholders involved included TNC, the Bolivian government, local indigenous communities, and three private energy companies.

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In 1996, The Nature Conservancy teamed up with the government of Bolivia and a Bolivian conservation organization, Fundación Amigos de la Naturaleza, to stop logging activities around the Noel Kempff Mercado National Park. After these ex-logging areas were assimilated into the Park, The Nature Conservancy convinced AEP, BP, and PacifiCorp to help fund development and conservation activities in exchange for a share of verified carbon offsets generated over the next thirty years. The Noel Kempff Mercado Climate Action Project (NK-CAP) was born. NK-CAP is one of the first large-scale REDD projects and in 2005 became the first one to be third party verified using the strict Clean Development Mechanism (CDM) standards set by the Kyoto Protocol. This means that NK-CAP has produced real, measurable, and additional emissions reductions coupled with sustainable development benefits. It is also a prime example of the co-management strategy, with participation from NGOs, non-profits, for-profit energy companies, the government of Bolivia, and multiple indigenous communities. (TNC 2009)

This strategy succeeded in conquering the first obstacle facing many sustainable development-intensive mitigation projects, that of upfront costs, which were supplied by the three energy companies in return for 51% of future offsets created over the 30-year life span of the project. The Bolivian Government received the other 49% of offsets for shutting down the timber operations and expanding the Park and has since agreed to use them to fund development, park management, and other necessary activities. (2009)

As a result, NK-CAP benefits from both the halting of deforestation from local agriculture and from forest degradation from local logging activities, in the end avoiding 1,034,107 metric tons of CO2 between 1997 and 2005 with an estimated 5,838,813 metric ton mitigation capacity over the 30 years. It preserves a complex and diverse ecosystem, designated a UNESCO World Heritage Site, and the NGO-government-business co-management structure succeeded in helping the indigenous communities gain land title and legal status as “Communities of Native peoples.” It has raised $8.25 million in carbon financing and promotes a variety of alternative economic activities such as ecotourism and community forestry. It has also worked to dramatically improve healthcare and educational facilities. (2009)

The emissions reductions gained were verified by a third-party organization, Société Générale de Surveillance, and conformed to the CDM’s standards of verified, measurable, and real reductions, taking leakage, impermanence, additionality, and uncertainty into account. After comparing the baseline emissions to the after-effect, as well as noting that the project activities would not have been possible without the Project coming together, the emissions reductions were deemed additional. (2009)

Leakage was considered in two forms, activity-shifting and market, and in both cases were stringently controlled for with intensive prevention activities. The biggest contribution to leakage control was the granting of property rights to the communities, allowing them to practice sustainable forestry on adjacent lands. This diminished deforestation potential inside the Park and actually decreased carbon emissions compared to the timber concessions’ prior status quo. (2009)

Permanence of carbon offsets is protected legally, financially, and institutionally thanks to the national park designation of the land; the Bolivian Government’s personal stake in its success; the community development opportunities dissuading deforestation; and an insurance buffer calculation for fire risk of 5%, with greater buffer requirements of 20% in writing. (2009)
Fundación Amigos de la Naturaleza conducted in 2005 a voluntary socioeconomic impact assessment of human, natural, physical, and financial capital, ultimately concluding that the overall project was beneficial to the community. Specific SD benefits have included livelihood enhancement from improved access to public services, full participation in park management, sustainable forestry training, and the legal standing to aggregate as the Central Indígena Bajo Paraguá. It is important to recognize that without the Project’s intensive co-management structure the likelihood of these community benefits would be greatly diminished if possible at all. (2009)

Indeed, this co-management strategy’s fingerprints are all over the NK-CAP. Whether the satellite imaging to determine the deforestation baseline or the upfront costs covered by energy companies, the grand ecological, social, and climate-related benefits accrued would not have been possible without the collaboration and communication between the various actors and myriad agencies. As the first REDD project to be verified by a third-party to meet CDM criteria, the Noel Kempff Mercado Climate Action Project has proven that deforestation and degradation conservation can effectively mitigate climate change with measurable, real, and additional emissions reductions, all the while producing substantive sustainable development benefits. It has shown successful leakage prevention and carbon insurance in action and surmounted transaction costs to enlist energy companies alongside environmentalists. It has not been a flawless project execution, as its original estimation for emissions reductions attests, having overshot its mark by almost 90% at last count (2009). However, its groundbreaking findings illustrate the potential for mitigatory, conservation, and development dividends to co-evolve and flourish for years to come.

Sources Cited:

The Nature Conservancy. 2009. “Noel Kempff Mercado Climate Action Project: A Case Study in Reducing Emissions from Deforestation and Degradation.”

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