Walia Special Edition on the Bale Mountains (2011) - Zoologische ...

fundamental factor determining its progress and implementation is the economic feasibility of the
project. From the parks perspective, the project will be feasible if it can generate enough income
to cover the costs of forest conservation while also providing some community benefits. Ideally
however, the project will generate enough income to meet the basic funding requirements while also
generating a profit that can be used to fund other park management areas.
Carbon content calculation
Carbon content was estimated from biomass calculations (Brown 1997; Brown and Lugo 1992;
Hariah et al. 2001), (see Watson et al. 2008 for a detailed description).Once above ground biomass
was determined, carbon content was calculated by assuming that the carbon concentration of
biomass varies minimally between trees and tree components and that 50% of biomass is carbon
(FAO, 2003). On carbon markets, carbon emission reductions are traded in units of carbon dioxide
equivalents. Therefore, to translate carbon stock into CO we multiplied the tonnes of carbon per
2
hectare by the ratio of the molecular weight of carbon dioxide to that of carbon (i.e. 44/12) giving
tCO /ha. 2
Teshome et al. (this edition) showed that the rate of deforestation in the Harenna forest was
1505 ha between 2000-2005 Although, this scenario will change as the new boundary of the park
is agreed between stakeholders, more recent data is analysed and from anticipated standardisation
of REDD methodologies in the near future, we used this rate as our basis for our project feasibility
assessment. Taking this rate of deforestation and the above carbon content calculations each year
1,147,813 tCO are emitted from the Harenna forest within the park boundary.
2
Financial feasibility
The financial feasibility of this project for the park was calculated using different models comprised
of different percentages of avoided deforestation, assuming 1505 ha was 100%. For example 5%
avoided deforestation would imply that 75 ha of forest were prevented from being deforested per
year. Each avoided deforestation scenario was then modelled with three different prices per ton of
carbon, $4, $6, and $20. The average price for carbon credits generated from Avoided Deforestation
in 2008 was $6.3 per tCO e, ranging from $4 -$28 per tCO e (2009 Carbon Market Finance),
2 2
however, this price per tCO e has dramatically decreased in 2010 (Ecosystem Market Place 2010).
2
A detailed costing of forest conservation and project development were carried out in Kinahan
(2009, 2010). The minimum costs needed to be covered by the project were project transaction
costs taking into account 30% buffer costs, enforcement, monitoring and community and livelihood
development costs. Once these costs were met only then was the remaining income modelled for
revenue sharing. For the purpose of this analysis we modelled an equal tri-party revenue share
(EWCA, OFWE and communities). However it should be noted that this is hypothetical only and in
reality, the details of how such revenue is to be shared has not yet been finalised.
Figure 1 shows that excluding revenue sharing, the park must avoid approximately 12%
deforestation at $4 per tCO 7% at $6 per tCO or any amount at $20 per tCO in order to breakeven
2, 2 2
<strong>Walia</strong>-<strong>Special</strong> <strong>Edition</strong> on the Bale Mountains 300