Ecuador - Pedernales Prefeasibility_Report

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Environment and community based framework for designing

afforestation, reforestation and revegetation projects in the

CDM: methodology development and case studies

Pre-feasibility Study Report

Ecuadorian Coastal Site

María Belén Herrera, Luis Fernando Jara and Verónica VillavicencioProfafor

2007

www.joanneum.at/encofor

FUNDACIÓN CETEFORFUNDACIÓN CETEFOR



WP 1/2 Pre-feasibility Study Ecuadorian Coastal Site 2

Table of Contents

TABLE OF CONTENTS...........................................................................................................................2 LIST OF TABLES......................................................................................................................................3

LIST OF ABBREVIATIONS .................................................................................................................... 4

1. SUMMARY OF THE PROJECT IDEA.........................................................................................7

2. DEFINITION OF PROJECT BOUNDARIES.............. ............ .............. ............. ............ .............. 8

2.1. SPATIAL DELINEATION OF PROJECT AREA ........................................................................................8 2.2. SELECTED ACTIVITY........................................................................................................................8

3. BASELINE DEFINITION ...............................................................................................................9

3.1. ACTUAL LAND USE AND TREND OF LAND USE CHANGE ............ ............. ............ .............. 9 3.2. ACTUAL SOCIO-ECONOMIC SITUATION AND TREND....... ............ ............. .............. ......... 11

3.3. BASELINE DESCRIPTION ............................................................................................................11

3.4 BASELINE CARBON EFFECTS.............. ............ ............. .............. ............ ............. .............. ......... 12

4. GREENHOUSE GAS REDUCTION POTENTIAL............. ............ .............. ............. .............. .. 12

4.1. LAND SUITABILITY MAP FOR SELECTED TREE SPECIES ............ ............. .............. ......... 12

4.2. PRELIMINARY ESTIMATION OF CARBON EFFECTS... ............ .............. ............. .............. .. 12

4.3. NET CARBON EFFECTS OF THE PROJECT ............................................................................16

5. ECONOMIC ANALYSIS........... .............. ............. .............. ............ .............. ............. ............ ........ 17

6. INSTITUTIONAL ISSUES.............. ............. ............. ............. ............ .............. ............. .............. .. 22

6.1. ISSUES AT THE NATIONAL LEVEL...................................................................................................22 6.2. ISSUES AT THE PROJECT LEVEL...................................................................................................... 23

7. SOCIAL ISSUES............. ............ .............. ............. .............. ............ .............. ............. ............ ........ 23

7.1. IDENTIFICATION AND CHARACTERISATION OF RELEVANT SOCIAL GROUPS.....................................23 7.2. POTENTIAL SOCIAL IMPACTS .........................................................................................................23 7.3. PLANNING OF SOCIAL PROCESSES (INCLUDING PARTICIPATION, COMMUNICATION AND LEAKAGE

AVOIDANCE ACTIVITIES) ..............................................................................................................................24

8. ENVIRONMENTAL ISSUES.......... ............. ............ .............. ............ .............. ............. .............. .. 25 8.1. E NVIRONMENTAL RISKS ................................................................................................................ 25 8.2. E NVIRONMENTAL BENEFITS ..........................................................................................................26

REFERENCES......................................................................................................................................... 28




List of Tables

Table 1: Land Use of Pedernales pre-selected area 4

Table 2: Average carbon stock of Pedernales 6

Table 3: Carbon storage on the project area 9

Table 4: Carbon storage of the baseline scenario 10

Table 5: Plantation establishment and maintenance costs for teak (Tectona grandis)

and mixed plantation with native species 11

Table 6: Timber revenues of Coastal area 11

Table 7: Validation, monitoring and verification costs 13

Table 8: Carbon benefits 13

Table 9: Costs and Benefits of 30-year project 14




List of Abbreviations

FACE Face Foundation

IWMI International Water Management Institute

SIGAGRO Sistema de Información Geográfica y Agropecuaria

ODEPLAN Vicepresidency Planning Office

SIISE Ecuadorian Social Indicators Integrated System

GIS Geographic Information SystemPROFAFOR Programa Face de Forestación del Ecuador S.A.




1. Summary of the Project Idea

The project is oriented to develop mixed reforestation with local species andmonospecific with one exotic species on a commercial scale. The expected results of the project are the mitigation of greenhouse gases effects in the atmosphere, particularlyCO2 (carbon dioxide), and to obtain sustainable benefits for all groups involved in the project.

The project involves a total area of about 42,000 ha. Reforestation will take place in anapprox. 3,000 ha of selected sites of pastures. The selected area belongs mostly to private owners. Reforestation will be established through multi–specific and uneven plantations. The production system will focus on commercial scale wood production,with a rotation length of 25 years.

The Profafor/Face program methodology will be applied, which includes a contract with

the land owner. The contract will specify the following parameters: the investor willcover establishment and management costs of the plantation and the Certified EmissionsReduction (CER´s) will belong to the investor. 100% of the timber will belong to theland owner. If at the end of the first rotation period (25 years) the owner decides not toreplant the contract area, the land owner must refund 30% of the stand wood net valueto the investor.

Currently, land use of the area are Savoya ( Panicum maximum) pastures for cattleraising (Zebu race), temporary crops, and emerging re-vegetation, as a result of agricultural or abandonment pastures (secondary forest). Laurel (Cordia aliodora),saman (Samanea saman), pachaco (Schizolobium parahybum), tagua (Microcarphas

pashitelephas), and some spots of shrub vegetation are the components of thesesecondary forests.

The project will serve as a CDM experience for Ecuador. Additionally, it will createstakeholder awareness of the need to be environmental friendly and conscientiousness innatural resource conservation.

Project baseline scenario is pasture. If the project wouldn’t develop, land use will be pastures, which has increased in the last years. Cultivated pastures in PedernalesMunicipality cover 61% of the total area (Agropecuary Census, 2000).

Total estimated net athropogenic GHG removals by sinks (tonnes of CO2e): 7,329,000

Total costs of plantation establishment and maintenance is USD$ 10,330,4421 Total carbon costs USD$ 533,578Total Revenue (excl. carbon credits, extraordinary incomes): USD$ 38,466,900Revenue of carbon credits: USD $ 19,453,908.

1 PROFAFOR, experience of previous plantation.




Net Revenues including carbon credits: USD $ 47,056,787

2. Definition of Project Boundaries

2.1. Spatial delineation of project area

The project area is located in Northern Manabí Province, within the Municipality of Pedernales, at the Eastern and Western part of the Pata de Pájaro protected forest. Thetotal surface of the pre-selected area is around of 42,000 ha.

The total project site is within the area formed by the following extreme UTMcoordinates2: North: 638215; 10004656; East: 638693; 10003620; South: 606607;9993798; West: 607126; 10009562.

The total site area has an altitude that varies from 100 to 300 masl and the majority of

the area is located on slopes from 25% to 55%.The area of influence is about one kilometer around the project site, excluding the protected forest Pata de Pájaro. The maximum altitude of the area of influence reaches400 masl and is similar in slope and land use as the area inside the project boundaries.

2.2. Selected activity

The project will be implemented in 70% of the area with teak (Tectona grandis) and30% of the area with native species such as “guayacan rosado” (Tabebuia rosea), “guayacan amarillo” (Tabebuia crysanta), “caoba” (Switenia macropylla), “caoba

veteado” (Platimiscium pinnatum), and “chuncho” (Cedrelinga cateniformis).

Seedling production will be in plastic containers in a forest nursery located near the site.Plantation density for mixed plantation (native species) will be 417 plants per hectarewith an initial planting distance of 6 x 4m. Plantation density for teak will be 625 plants per hectare (initial planting distance of 4 x 4m). Planting schedule will be 750 ha per year (70% of the area with teak and 30% of the area with native species), for the first 4years.

Plantation management will include weeding, fertilization and control, pruning,thinning, and selective cutting, besides fire prevention activities such as creating 3meter-wide firebreaks, which will have permanent maintenance.

Pruning will be carried out once the crowns start overlapping (age 4 – 8 - 12 yr), and branches will be collected and located on strips every 10 m. Thinning will be at year 10 – 20 yr, considering tree performance.

2 All the digital information is managed into a GIS environment, projection PSAD 56.




A surveillance and monitoring program will be developed and implemented to control plantation performance and prevent any type of forest fire, pests and diseases.Monitoring activities will begin in year 5 and will be carried out every five years. Theaim is to evaluate the plantation, understand the dynamic process of vegetation insideand outside the forest, prevent any plant health problems such as pests and diseases, andestablish a basis for optimising forestry treatment and controlling plantation growth.This consists of establishing permanent plots using randomly stratified sampling, with proportional distribution in the area.

Permanent plots will be rectangular of 500 m² (10x50m), with evaluation of naturalvegetation (“brinzal”, “latizal” and “fustal”)3 besides the trees planted inside each plot.Field information will be collected for each plot, with reference to generalcharacteristics such as land owner name, contract number, date of plantation, date of evaluation, number of plot, number of compartment, species, slope, person responsible,and average height. Later on, this information will be included in a database.

The products obtained will be sawn wood, which has a very attractive domestic andinternational market, fence poles and fuelwood.

The project didn’t include a harvest process; the wood will be sold at the plantation site(stand wood).

3. Baseline definition

3.1. Actual land use and trend of land use change

According to Ecopar Land Use Map4, the total project area has the following land usecategories:

3 Brinzal.- tree vegetation higher than 0,3m but less than 1,3m of total highLatizal.- tree vegetation higher than 1.3 m. and less than 10 cm of DBHFustal.- tree vegetation higher than 10 cm. of DBH

4 Segarra, P., Hofstede, R., Gavilanes, M., Aguirre, N., Delgado, S., 2000, Informe Técnico del Sistemade Información Geográfica para la determinación de zonas potenciales para reforestación en la cordilleraMache Chindul y su área de influencia. Land use map 1:100,000 scale, ECOPAR, PROFAFOR, Quito,Ecuador.




Table 1: Land Use of Pedernales pre-selected area.

Land Use Area

(ha)

Percentage

(%)Pasture (managed and natural) 16,566 40

Pasture with patches of forestry 7.,94 18 Natural vegetation 5,303 13Permanent crops (fruits, coffee,cocoa, banana)

3,980 10

Temporary crops 2,380 5.7Mangroves 108 0.2Shrimp pounds 12 0.02Areas covered with clouds 4,837 11Areas without classification(shadow, urban)

999 2

TOTAL 41,779 100

In general, pastures are the main land use of the Pedernales project area (58%). Theseareas are dedicated to livestock breeding for beef and recently it has double a purpose: beef and milk production. Most common cattle species are Brahman (locally named zebu) and Brown Swiss.

Property owners usually change land use from natural forest, natural vegetation or temporary and permanent crops to pastures because of economical reasons. The trendseems to continue because of the profitability of this activity, the daily income obtainedfrom milk sales and cultural practice of the people.

The common steps in order to achieve the establishment of pastures are5:

1. Elimination of low and shrub vegetation.2. Forest cutting.3. Burning residual material.4. Planting temporary or permanent crops associated with pastures, i.e.:

4.1 Maize (during 3 years approx.) or 4.2 Coffee or cacao (during 10 years approx.)

5. Maintenance of the pasture.

It takes two years from the elimination of low and shrub vegetation to plantingtemporary or permanent crops associated with pastures. These activities have been usedover the last twenty years. The most common cultivated pasture is saboya (Panicum

maximum).

The most interesting species for land owners within the project area (for agroforestry or plantation systems) are teak (Tectona grandis), mahogany (Swietenia macrophylla),amarillo (Centrolobium platinense), laurel (Cordia alliodora) and fernán sánchez(Triplaris cumingiana).

5 Field work questionnaries. July, 2005




3.2. Actual socio-economic situation and trend

The average number of family members in the project area is five. 30% of the people arestudying or have finished elementary school, 40% are studying or have finished high-

school or technical school (non-university level), 25% have finished or are studying atuniversity level, and the remaining 5% of the people do not have approved any officialeducation level.

According to interviews, 26% of the population has access to health services, buthospitals and specialized medical care are available only in Pedernales. In the area, thereis no sewer system available. In relation to public services, about 60% of the populationhas electricity, 57% has drinkable water, 9% has access to telephone services andmobile service is also available.

Main income sources come from cattle raising, aquaculture (swrimps cultivation),

permanent crops, plantations such as african palm, banana, coffee, and cocoa. Also, itcomes from different sources including working in diverse professional activities, publicadministration and real state.

Migration affects 45% of the population within the region. It is caused mainly byeducation opportunities, lack of labor, opportunities to increase their incomes andothers. Cities with more services and a bigger population like Guayaquil and other coastal towns are frequent destinations for migrant people from the Manabi region.

Due to shrimp production in nearby zones; people will immigrate to those placeslooking for employment sources in the future.

The average size of individual plots in the project area is 200 hectares but there are also properties bigger than 200 hectares (35%). 78% of the interviewed land owners areinterested in establishing plantation. Most of them (67 %) would prefer agroforestrysystems on the boundaries of their plots. About 33% of the land owners would beinterested in forest plantations within plots of 50 hectares.

3.3. Baseline description

Without the project the following scenarios will be presented:

A) Without project and constant or increasing beef price scenario.Land owners decide to maintain their pastures. Some will burn pastures annually(November to December) to keep them clean, growth and pests’ control, and then letthe cattle graze (January to April).

B) Without project and decreasing beef price scenario.Beef prices have dropped over the past ten years and some land owners have decidedto abandon their properties. Then fallow or young secondary forests appear as a




result of natural regeneration. Usually, areas are only abandoned for a maximum of three years. Then land owners decide to burn again and establish new pastures.

These two patterns have been occurring over the past 20 years.

3.4. Baseline carbon effects

Table 2: Average carbon stock of Pedernales

Type Average carbon*Pastures 3.5 to 5 tC/ha aboveground

1.9 to 2 tC/ha roots*5 tC/ha**

Secondary forest 100 tC/ha after 30 years**

*Field data november/2003

** Koning, F., Olschewski, R., Veldkamp, E., Benítez, P., Laclau P., López, M., Urquiza, M., Schlichter, T., 2002 .Evaluation of the CO2 sequestration potential of afforestation projects and secondary forests in two different climate zones of SouthAmerica, GTZ, TÖB, Eschborn.

The baseline is estimated at 5 tC/ha for pastures, including some shadow trees per ha(Palm et al., 2000; Benitez et al., 2001) mentioned in Koning et al., 2002.

This value is assumed over the total period of the project.

4. Greenhouse Gas Reduction Potential

4.1. Land suitability map for selected tree species

The Ecological and land suitability maps for the six proposed tree species are:




A- Scenario -1




B- Scenario 2

Zomer et al – IWMI. 2005, Prefeasibility Report – Costa Case Study (Draft), Issue/ Rev.No:0.5.




4.2. Preliminary estimation of carbon effects

According to the scenario proposed for the project, the next table shows the carbonequivalent storage on the area during 30 years project period.

Table 3: Carbon storage on the project area

Year

No.

Year

Accumulative

estimation of

anthropogenic

GHG removals by

sinks in tones of

CO2e

1 2007 3,668

2 2008 11,004

3 2009 23,415

4 2010 45,246

5 2011 69,014

6 2012 112,928

7 2013 170,997

8 2014 229,731

9 2015 348,397

10 2016 473,637

11 2017 599,011

12 2018 742,386

13 2019 850,992

14 2020 950,721

15 2021 1,055,549

16 2022 1,157,693

17 2023 1,267,887

18 2024 1,381,704

19 2025 1,494,425

20 2026 1,706,390

21 2027 1,940,704

22 2028 2,210,280

23 2029 2,522,944

24 2030 2,796,043

25 2031 3,111,032




26 2032 245,087

27 2033 1,736,356

28 2034 937,620

29 2035 45,246

30 2036 69,014

Figure 1: Accumulative estimation of anthropogenic GHG removals by sinks in

tones of CO2e

0

500.000

1.000.000

1.500.000

2.000.000

2.500.000

3.000.000

3.500.000

0 5 10 15 20 25 30

years after project start

C u m u l a t i v e c a r b o

n ,

t C O 2

.

Natives

Teak

Total

The figure shows the accumulative estimation of CO2e by sinks in the project lifetime.

4.3. Net carbon effects of the project

According to DSS tool baseline scenario the average carbon of a project scenario is asfollow:

Table 4: Net carbon effects of the project

Years

Estimation of

baseline net GHG

removals by sinks

(t CO2e)

Estimation of actual net GHG

removals by sinks (t CO2e)

Net carbon

effects of the

project

2007 13,751.25 3,668 -10,083.252008 13,751.25 11,004 -2,747.252009 13,751.25 23,415 9,663.752010 13,751.25 45,246 31,494.752011 55,005 69,014 14,0092012 55,005 112,928 57,9232013 55,005 170,997 115,9922014 55,005 229,731 174,726




2015 55,005 348,397 293,3922016 55,005 473,637 418,6322017 55,005 599,011 544,0062018 55,005 742,386 687,3812019 55,005 850,992 795,987

2020 55,005 950,721 895,7162021 55,005 1,055,549 1,000,5442022 55,005 1,157,693 1,102,6882023 55,005 1,267,887 1,212,8822024 55,005 1,381,704 1,326,6992025 55,005 1,494,425 1,439,4202026 55,005 1,706,390 1,651,3852027 55,005 1,940,704 1,885,6992028 55,005 2,210,280 2,155,2752029 55,005 2,522,944 2,467,9392030 55,005 2,796,043 2,741,0382031 55,005 3,111,032 3,056,0272032 55,005 245,087 190,082

2033 55,005 1,736,356 1,681,3512034 55,005 937,620 882,6152035 55,005 45,246 -9,7592036 55,005 69,014 14,009

5. Economic Analysis

The economic analysis was made using the financial DSS tool developed by Encofor project.

• Investments

There will be a contract or an agreement, where investor and land owner agree to use theland as a contribution to the project.

• Forest plantation costs

The following table summarizes the costs required for the establishment andmaintenance of plantation

Table 5: Plantation establishment and maintenance costs for teak (Tectona grandis)

and mixed plantation with native species

Activities USD $

Establishment 6,910,028

Maintenance 2,180,761Administration (9%) andunforeseen expenses (3%) 1,239,653Total 10,330,442




Teak plantation will be established in 70% of the area.

Mixed native species will be established in 30% of the area.

Establishment and maintenance costs include: labour, materials and tools, technicalassistance, transportation and equipment. Thinning and harvesting costs are not included

because the timber will be sold at the site (stand wood) and the buyer will cover all theexpenses (labour and tools). Labour is considered at USD 8/day, which is the minimumlegal wage established by law.

All the costs were based on the Profafor experience.According to the interviews land costs in the project area are as follows:

General average costs per hectare ranges from USD$ 500 to USD$ 600

• Timber revenues:

The project considers selling timber on the site (stand wood). According to the current

market, prices are:

Table 6: Timber revenues of Coastal area

Timber

Revenues

TypeVolume*

(m3/ha)

Teak

Volume*

(m3/ha)

Native species

Price**

(USD/m3)

Teak

Price**

(USD/m3)

Natives

Sawn wood First thinning - 11 - 25

Second thinning 50 85 50 50

Final harvest 100 100 70 80

Fence poles First thinning 9 10 20 17Second thinning 11 30 20 17


Lighting poles First thinning 36 - 25 -

Second thinning 18 - 25 -

Fuelwood First thinning 11 14 2 2

Second thinning - 50 - 2


*According yield tables** Asoteca expert information




Cumulative total timber volume at the end of a 25-year rotation of teak will be 708,1m3/ha6 (including thinning).

Cumulative total timber volume at the end of a 25-year rotation of native species will be858,6 m3/ha7 (including thinning).

• Validation, monitoring and verification costs

The costs of the project design, monitoring, verification and auditing are obtained fromPROFAFOR experience (2005). The following table shows the values:

Table 7: Validation, monitoring and verification costs

Activities Cost

Baseline Study, Monitoring Plan US$ 30,000

Monitoring US$ 37,500 *

Verification, validation and auditing US$ 45,500 **

*it considers US$ 8,000 every five years

** it considers US$ 13,000 of verification and validation in the first year and US$ 6,500 of auditing everyfive years. It considers costs for a rotation period of 25 years.

• Carbon benefits

The carbon benefits are expressed in the following table:

Table 8: Carbon benefits

YeartCER

(tCO2e)

Carbon tCER

Revenue

5 69,014 207,04210 473,637 1,420,91115 1,055,549 3,166,64720 1,706,390 5,119,17015 3,111,032 9,333,09630 69,014 207,042

*carbon price consider US$ 3,00 per credit

6 Profafor calculations based on: Chavez, E., Fonseca, W., 1991. Teca, especie de árbol de uso múltipleen América Central Turrialba, Costa Rica. Informe Técnico No. 179. 47p.

7Pofafor calculations based on: CATIE –FUNDECOR. 1994, Laurel (Cordia alliodora), especie de arbolde uso multiple en América Central, Costa RicaProfafor calculations based on: CATIE. 1991,




• Cash flow and IRR

The following table summarizes costs and benefits for the 30-year project.

Table 9: Costs and Benefits of 30-year project

Year

Project Costsexcl. Carbon

US$Carbon Costs

US$

ProjectRevenues

excl. CarbonUS$

Carbon RevenuesUS$

Net Revenues,including Carbon

US$

1 1,021,573 57,500 0 0 -1,079,073

2 1,059,745 0 0 0 -1,059,745

3 1,097,009 0 0 0 -1,097,009

4 1,316,353 0 0 0 -1,316,353

5 294,278 18,641 0 207,042 -105,877

6 267,533 0 0 0 -267,533

7 274,118 0 0 0 -274,118

8 288,230 0 0 0 -288,230

9 274,118 0 0 0 -274,118

10 287,693 42,918 684,975 1,420,911 1,775,275

11 274,118 0 684,975 0 410,857

12 288,230 0 684,975 0 396,745

13 274,118 0 684,975 0 410,857

14 214,982 0 0 0 -214,982

15 294,278 77,833 0 3,166,647 2,794,536

16 179,366 0 0 0 -179,366

17 224,390 0 0 0 -224,390

18 165,254 0 0 0 -165,254

19 224,390 0 0 0 -224,390

20 199,526 116,883 2,757,750 5,119,170 7,560,510

21 224,390 0 2,757,750 0 2,533,360

22 165,254 0 2,757,750 0 2,592,496

23 224,390 0 2,757,750 0 2,533,360

24 165,254 0 0 0 -165,254

25 185,414 201,162 6,174,000 9,333,096 15,120,520

26 165,254 0 6,174,000 0 6,008,746

27 165,254 0 6,174,000 0 6,008,746

28 165,254 0 6,174,000 0 6,008,746

29 165,254 0 0 0 -165,254

30 185,414 18,641 0 207,042 2,987

Total 10,330,442 533,578 38,466,900 19,453,908 47,056,787

Profit:

IRR on Capital (with CDM) 19. 5 %IRR on Capital (without CDM) 8. 8 %

Discount rate: 6%




The project needs a total capital of US$ 10,864,020.

Project costs include the establishment and maintenance of the plantation.Costs from the years 26 to 30 are related to monitoring, technical assistance andsurveillance of the project contract area.

• FinancingThe project will require financing in the first 10 years; an option could be a loan from a private bank with low interest rates, long term repayment and interest conditions; suchconditions might be found at the Interamerican Development Bank or KFW.

Risks associated to the project

Natural risks

Erosion process is the main natural risk of the project area, 95% of the land owners believe that their lands are moderate eroded.8

Forest fires originated by long and intense periods of drought; represent a risk for thestability of the plantation. 61 % of the land owners consider that forest fires are rarelyoccurred.

Another natural risk is forest pest and diseases which can affect the normal growth andyield of the plantation, especially for the monospecific plantation (teak).

The area is rarely affected by flooding but it is considered as a possible natural risk.

Human induced risks

Provoked fires are one of the human induced risks of the area and it becomes worse insummer time. It mostly obeys to agricultural practices in a way of pasture regenerationand ticks extermination.

Due to the fact that some pastures will be used for reforestation, there might be a risk of induced crops within the plantation.

No compliance of contract obligations due to the long period of the contract makesanother human induced risk. People in the area are not used to long-term projects and/or

incomes.

Market risks

Possible risks include wood price fluctuations, which are market-dependant (supply anddemand) and carbon price fluctuations on international markets.

8 Profafor, field work questionnaries (23 interviews). July, 2005




Meat and agricultural products price changes during certain periods over the length of the project. It might tempt people to reduce the area of forest plantations or to moveanimal grazing and breeding to other areas (secondary forest, natural forest) reducing the positive effects in the storage carbon, and consequently, the possibility to get therequired GHG credits for the project.

In any case, all risks can be avoided taking into account mitigation measures,appropriate information workshops and meetings with the local population. Alsoavoiding false expectations about prices and markets is a way to reduce negative effects.

Pre-feasibility studies are important and need support of good management andmonitoring activities during the entire project lifetime. Co-operation and teamwork among institutions and communities is also imperative to keep the project movingforward and being sustainable.

6. Institutional Issues

6.1. Issues at the national level

The Designated National Authority (DNA) of Ecuador has not defined the criteria andindicators for the following issues: sustainable development, environmental and socialimpact assessment, the Modified Genetic Organism (MGO), invasive introduced speciesand forest definition.

Legally, Article 266 of the State’s Political Constitution encourages afforestation andreforestation projects. Forest Law and the Conservation of Natural Areas and Wild Life(Cod. 2004-017, RO-S 418) regulate forest activities. Articles 12 to 19 states thatafforestation and reforestation on potential forest lands is obligatory and of publicinterest, and prohibit other uses. At the same time, Articles 54 mentions that no landtaxes will be paid to the rural property for forest lands covered with natural forests or cultivated, protective vegetation and those planted with timber species that fulfil theforest law regulations. Furthermore, Article 56 states, forest lands of private propertycovered with protected forest or permanent production forest and those withinforestation or reforestation plans won’t be affected by agrarian reform.

Another important regulation is related to the Environmental Management Law (No.37,RO/245, 1999), which regulates environmental issues. Article 20 specifies clearly thatall activities showing any environmental risk should count with a respective licensegranted by the Ministry of Environment. Compliance of the approved environmentalmanagement plan will be through environmental auditing.

The Ministerial Agreement No. 40/04 from Ministry of Environment (MoE) regulatesforest plantation management (pruning, thinning and final harvest). The MoE DistrictOffice, which will authorise a forest thinning, or harvest license should approve forest plantation operations. This will be base on a cutting plan presented by the forest owner.




The environmental forest authority at national and local level is the Ministry of Environment and MoE Forest District, respectively.

Pedernales Municipality as many other has elaborated a “Cantonal Development Plan”which gives a guide to territorial arrangement including land use proposal. The project

area is located in the influence area of the “Pata de Pájaro” Protected Forest.

All these administrative and legal instruments will be considered by the project.

6.2. Issues at the project level

In the administrative context, land belongs to private owners who have the authority for its management.

There is no presence of cooperatives or associations in the site.

Results of the interviews show that 100% of the interviewers have public deeds of their properties.

7. Social Issues

7.1. Identification and characterisation of relevant social groups

The project involves local private individuals/owners of the Ecuadorian coastal regionof Manabí.

Informal approaches to stakeholders through workshops and fieldwork questionnaireshave been carried out since 2004. At the moment, the level of participation of stakeholders is informative with the main purpose to evaluate and validate land usemaps, socio-economic information and other data gathered from secondary sources likesatellite imagery or national census.

Furthermore, local authorities such as the Municipality of Perdernales and the ForestDistrict office of the Ministry of Environment have been involved in previous activitiesof the project (workshops, meetings). They have known the project and had supported itwith information.

7.2. Potential social impacts

Project establishment will have positive socio-economic effects such as labour creation.An indirect effect of more jobs will be migration reduction. Wood sales will contributeto income diversification. Also, there is the advantage of rapid growth of valuable forestspecies.




People will learn about forestry and nursery maintenance, and it will constitute anexperience and development of local capacity.

The plantation will reduce the threat of land invasions. Lands will be occupied, producing and won’t be desolated and without protection.Plantation incomes could be invested in future benefits such as: education of thechildren, savings, investments, health and others.

Food security won’t be compromised in the area because the baseline is pasture.

7.3. Planning of social processes (including participation, communication and

leakage avoidance activities)

Communication

As it was mentioned before, stakeholders in the area are private owners, which speak Spanish.

The most important media of communication in the area is radio and in some placestelevision.

Communication with stakeholders has been done through key people or local leaders.

Profafor has very little experience in the area, since most of the plantations have beenestablished in the Sierra region and some in the northern area of the Coastal region. Nevertheless, workshops and training courses to introduce the Encofor project have

been well accepted.

Potential partners are people or entities who are directly or indirectly involved in the project: owners, NGO´s, public (Ministry of Environment, Provincial Government, andMunicipality Government) and private institutions (CORMADERA, ASOTECA), cattleassociations (Asociación de Ganaderos), and others.

In this case land owners are the most representative stakeholders.

Leakage identification and avoidance activities

There might be certain leakage caused by land use change (pastures to forest).Another possible leakage is people displacement to establish pastures in new areas. Itcould cause deforestation of natural forest or secondary forest in other places.

Plantation management activities such as pruning might cause leakage. It will be madethree times in a plantation lifetime, causing an estimated leakage value of 1,5 to 2 tC/ha.




Thinning will be made twice in a plantation lifetime (year 10 and 20 approx.), causingan estimated leakage of 4 to 5 tC/ha and 8 to 10 tC/ha9 respectively.

Activities like transportation of workers and materials, power saws and operator camps, petrol needs, including wood harvesting activities, could also cause carbon undesirableleakage. Mechanical spray of biological insecticides/fungicides for pests/diseasescontrol on the plantation can also cause carbon leakage.

Plantation management activities and monitoring activities will help to reduce possiblerisks. Thinning and pruning will be done with manual saws.Harvesting activities such as transportation, workers camp construction, use of power saws should be reduced to a minimum. Alternately, domesticated mules could be usedfor transportation.

To avoid pasture displacement, livestock could be managed by stabling systems and byusing improved livestock races.

8. Environmental Issues

8.1. Environmental risks

The project causes serious erosion risk (due to slopes, tree species choice,suppression of ground vegetation or any other reason)

The project causes serious risks of soil degradation, acidification, loss of fertility(due to tree species choice or any other reason)

WATER

The project has a significant risk of depleting or significantly lowering the groundwater table (due to tree species or any other reason)

The project has a significant risk of depleting or significantly lowering the baseflowin sources and water courses supplying local people and irrigated agriculture

9 PROFAFOR, expert knowledge information.




(e.g. due to tree species or any other reason)

The project will have an adverse effect on water quality (through the use of biocidesor fertilizers or any other reason)

VEGETATION

The site is unsuitable for tree growth as a consequence of drought, waterlogging,salinity, extreme slope, elevation, lack of soil or any other site factor The project has a significant risk of outbreak of pests or diseases (due to the use of exotic tree species or any other reason)The project has a significant risk of fire damage (due to the use of teak, thefrequency of dry spells, conflicts with other land use or any other reason)The project has a significant risk of frost damage (due to unadapted species choice

or any other reason)The project has a significant risk of windthrow (due to stand density and even-agedness or any other reason)The project has a significant risk of other damage (e.g. drought, flooding, hale,landslides or any other natural or anthropogenic cause)

BIODIVERSITY

The project will replace more or less undisturbed natural ecosystems (in or outside protected areas)The used species pose a significant risk of invasive spreading in the landscape

The project contributes to the fragmentation of native vegetation

The project is a risk for one or more endemic or endangered species (both fauna andflora)

8.2. Environmental benefits

SOIL

The project will contribute to soil improvement (organic matter, carbon content,water holding capacity, fertility)The project contributes to the reduction of soil erosion (e.g. by stabilization of

banks, sand dunes, slopes, etc.)

WATER

The project contributes to protect the headwaters of a catchment

X

XX

X




The project contributes to flood risk reduction

The project contributes to baseflow regulation

The project contributes to improvement of water quality

VEGETATION

The project contributes to the restoration of bare or abandoned land

The project contributes to ecosystem adaptation to climate change

The project contributes to the stability of the ecosystem (resistance and/or resilience)

BIODIVERSITY

The project will restore forest of native or endemic species (both fauna and flora)

The project will reconnect fragmented forests (corridors)

The project will contribute to the protection or restoration of endangered or endemicspecies

For those positive environmental risks, some mitigation measures will be taken into

account such as:

In the case of fire damage risk due to frequent dry spells the considered mitigationmeasures are the following:

• Inclusion of firebreaks in the management plan, community people training andorganization of forest fire brigades.

• Use of special equipment to prevent and combat fires.

X

X

X

X

X

X



References

CATIE-FUNDECOR. 1994, Laurel (Cordia alliodora), especie de árbol de usomúltiple en América Central, Costa Rica.

Corporación de Estudios y Publicaciones. 2004, Legislación Ambiental Forestal TomoIII, Codificación de la Ley Forestal y de Conservación de Áreas Naturales y VidaSilvestre. Quito, Ecuador.

Chavez, E., Fonseca, W., 1991. Teca, especie de árbol de uso múltiple en AméricaCentral Turrialba, Costa Rica. Informe Técnico No. 179. 47p.

Galloway, G., Alomoto, V., Maldonado, E., 1991. Estudio de algunas especiesforestales en la Región Costera del Ecuador. DESFIL/AID. 152p.

Koning, F., Olschewski, R., Veldkamp, E., Benítez, P., Laclau P., López, M., Urquiza,M., Schlichter, T., 2002. Evaluation of the CO2 sequestration potential of afforestation projects and secondary forests in two different climate zones of South

America, GTZ, TÖB, Eschborn.Registro Público, 1999. Ley de Gestión Ambiental. Ley No. 37. RO/ 245 de 30 de Julio

de 1999.

PROFAFOR. 2005, Plantation costs of Pedernales.

PROFAFOR. 2005, Results of the interviews applied in the pre-selected area of Pedernales.

Segarra, P., Hofstede, R., Gavilanes, M., Aguirre, N., Delgado, S., 2000, InformeTécnico del Sistema de Información Geográfica para la determinación de zonas

potenciales para reforestación en la cordillera Mache Chindul y su área de influencia.Land use map 1:100.000 scale, ECOPAR, PROFAFOR, Quito, Ecuador.

Vozzo, A., 2002, Tropical Tree Seed Manual, United States Department of Agriculture,Forest Service.

Zomer et al – IWMI. 2005, Prefeasibility Report – Costa Case Study (Draft), Issue/Rev.No.:0.5.

Documents

Ecuador - Pedernales Prefeasibility_Report