C ASE STUDY
Noel Kempff Mercado Climate Action Project
© Hermes Justiniano
The Noel Kempff Mercado Climate Action Project (“Noel Kempff”) provides an example of how REDD projects might be designed to analyze the risk of, prevent, monitor, calculate and account for leakage. The project considered both activity-shifting leakage and market leakage in its design and analysis. Since the project had two separate components—avoided deforestation and avoided forest degradation—with different actors and drivers, the treatment of leakage was distinct for each component.
Avoided Deforestation Leakage For the avoided deforestation component, the potential for activity-shifting leakage was from local communities living along the border of the project area, in the form of subsistence agricultural expansion. Therefore, the communities were the focus of extensive community development activities associated with the project design, meant to both improve livelihoods and prevent leakage, including: the formation of an official indigenous organization, application for and granting of legal land tenure, educational campaigns, healthcare, workshops in sustainable agriculture, alternative employment opportunities and development of a management plan for sustainable forestry in ancestral lands. As a result of these activities, it was anticipated that there would be no activityshifting leakage from the avoided deforestation component of the project. Nevertheless, it is being monitored as described in
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“Leakage Monitoring.” Similarly, as the threat of deforestation came from subsistence agricultural expansion and not commercial agricultural expansion, it was anticipated that there was no risk of market leakage.
Avoided Forest Degradation Leakage The potential for activity-shifting leakage from the avoided forest degradation component of the project was from area timber harvesters, who were compensated to give up their harvesting rights in the project area and who might have begun new harvesting activities elsewhere. To avoid this, project developers negotiated the “Agreement to Prevent the Displacement of Noel Kempff Environmental Benefits,” signed on January 16, 1997 by the former concessionaires, preventing them from initiating new logging activities for a period of five years, as well as allowing Bolivian project partner FAN to monitor their activities outside the project area. Furthermore, project developers closed sawmills operated within the concessions and purchased/retired harvesting equipment from concessionaires (as part of the overall concession buyout). Many concessionaires take out loans when purchasing equipment, and thus must harvest to generate income and pay off the loans. Purchasing and retiring the equipment took away the pressure for concessionaires to shift harvest activities elsewhere by taking away the debt associated with the equipment.
R ed u cing E missions from D eforestation and D egradation ( R E D D )