Coldplay conundrum: how to reduce the risk of failure for environmental projects



File 20180709 122277 1hwc3zh.jpg?ixlib=rb 1.1
As part of its commitment under the Paris Agreement, New Zealand’s government has committed to planting one billion trees within a decade.
from http://www.shutterstock.com, CC BY-SA

David Hall, Auckland University of Technology

New Zealand’s government has committed to planting one billion trees as part of a transition to a low-emission economy, in line with its commitments under the Paris Agreement.

The One Billion Trees Programme promises to deliver combined benefits, not only by offsetting greenhouse gas emissions, but also reducing erosion on marginal land. However, unless funding is closely tied to successful outcomes, this public investment risks failing in its environmental and political ambitions.

We have developed a results-based bond financing scheme that would remove the risk from forest planting and could be applied to forest and landscape restoration initiatives elsewhere in the world.




Read more:
Green bonds are taking off – and could help save the planet


The Coldplay conundrum

Globally, we face a major financing gap to fund the infrastructure required to mitigate the causes of climate change and to adapt to the consequences. The scale of global investment isn’t equal to the scale of the challenge. The Global Commission on the Economy and Climate estimates that core infrastructure investment needs to nearly double to about $6 trillion annually up until 2030.

The barriers to investment are many, but one is simply the risk of failure. I call this “the Coldplay conundrum”, after the British soft-rock band’s attempt to offset the greenhouse gas emissions created by their second album, A Rush of Blood to the Head. Money was transferred to southern India for the planting of 10,000 mango trees, yet, some years later, much of it hadn’t made it to landowners and, as a result, few trees survived. Coldplay, for all their green ambitions, ended up with egg on their face.

Politicians face the same risk when they embark on projects to deliver environmental outcomes. Although voters expect governments to deliver various public goods, there is also an expectation that public money will be managed effectively, efficiently and responsibly in doing so. Failing on either front could attract the wrath of the electorate.

The New Zealand government faces just this conundrum over its plan to plant a billion trees over the coming decade. It already manages various grants schemes, such as the Afforestation Grant Scheme and Erosion Control Funding Programme. But upscaling these could produce poor results if funding isn’t closely tied to successful outcomes.

A better solution

Results-based financing helps to manage this political risk. The idea is that governments only hand over the money once the desired outcomes are successfully delivered. The New Zealand government might guarantee to pay for trees that are successfully established, thereby attracting private and social sector parties to do this work – and to do it well. This contrasts with more common funding models, such as grants or output-based contracts, which might lead to success, but might also go the way of Coldplay.

My collaborator, investment specialist Sam Lindsay, and I have designed the Native Forest Bond Scheme, a results-based financing structure that would take the risk out of forest planting for the government, to enable innovation over business-as-usual. It is specifically designed to address the challenge of establishing continuous native forest on erosion-prone marginal land.

This is one of New Zealand’s most pressing environmental challenges. About 11% of the country’s total land area is mildly to severely erosion-prone but currently in pasture. Extreme weather events – which are expected to increase as a consequence of climate change – can trigger mass erosion, with costly damage to public and private property. Pastoral land, or land where forest was recently cleared, is particularly vulnerable.

Recent events in the Tasman District and Tolaga Bay, where torrents of sediment and forestry debris were flushed out of vulnerable catchments onto neighbouring properties and waterways, are a hint of the adaptation challenges to come.

Establishing permanent forest on this land is a no-brainer. It would increase land resilience and create large carbon stocks to offset emissions from elsewhere in New Zealand’s economy. A succession of reports, most recently by Vivid Economics and the Productivity Commission, have all highlighted the essential role of afforestation in meeting New Zealand’s Paris Agreement commitments. But landowners need help, because they often lack the cash, time or expertise to establish forests successfully.

Riding the global trend

The Native Forest Bond Scheme brings together parties around this common cause. Government provides the guarantee to pay for successful forest outcomes that generate significant public value through erosion control, carbon sequestration, meaningful regional jobs and greater biodiversity. Investors provide upfront capital for forest planting by purchasing the bond.

If outcome targets are successfully met, then investors are rewarded with interest payments, but if the planting programme underperforms, then investors bear the risk of project failure. By reallocating risks and incentives, the scheme enables parties to do what otherwise might not have been done.

Globally, other organisations are turning to results-based financing to create greener landscapes. At the city level, DC Water successfully issued such a bond to establish green infrastructure in Washington D.C., purchased by Goldman Sachs and the Calvert Foundation. At the international level, The Nature Conservancy and Climate Bonds Initiative are exploring the feasibility of sustainable land bonds, where developing countries would issue bonds to raise capital for land use change, and developed countries would then offset the interest payments as long as these changes are successful.

The ConversationThe Native Forest Bond Scheme is a tool for more effective financing of environmental outcomes. By tying funding to results, it creates a more credible commitment to the expectations of the Paris Agreement and UN Sustainable Development Goals. Without rethinking public investment, noble ambitions may ring hollow.

David Hall, Senior Researcher in Politics, Auckland University of Technology

This article was originally published on The Conversation. Read the original article.

Massive road and rail projects could be Africa’s greatest environmental challenge


Bill Laurance, James Cook University

Africa’s natural environments and spectacular wildlife are about to face their biggest challenge ever. In a paper published today in Current Biology, my colleagues and I assess the dramatic environmental changes that will be driven by an infrastructure-expansion scheme so sweeping in scope, it is dwarfing anything the Earth’s biggest continent has ever been forced to endure.

People, food and mining

Africa’s population is exploding – expected nearly to quadruple this century, according to the United Nations. With that, comes an escalating need to improve food production and food security.

In addition, Africa today is experiencing a frenzy of mining activity, with most of the investment coming from overseas. China, for instance, is investing over US$100 billion annually, with India, Brazil, Canada and Australia also being big foreign investors.

To feed its growing population and move its minerals to shipping ports for export, Africa needs better roads and railroads. When located in the right places, improved transportation can do a lot of good. It makes it easier for farmers to get access to fertiliser and new farming technologies, and cheaper to get crops to urban markets with less spoilage. It can also encourage rural investment while improving livelihoods, access to health services, and education for local residents.

Improved transportation is especially important for Africa’s agriculture, which is badly under-performing. In many areas, large “yield gaps” exist between what could be produced under ideal conditions and what is actually being produced. With better farming, Africa’s yields could be doubled or even tripled without clearing one more hectare of land.

Using rudimentary methods, small-scale farmers eke out a living in Gabon.
William Laurance

Pandora’s box

However, there is another side to new transportation projects — a dark side, especially for the environment. When located in areas with high environmental values, new roads or railroads can open a Pandora’s box of problems.

Roads slicing into remote areas can lead to range of legal and illegal human land uses. For instance, in the Amazon, 95% of all deforestation occurs within five kilometres of a road; and for every kilometre of legal road there are three kilometres of illegal roads. In the Congo Basin, forest elephants decline sharply, and signs of hunters and poachers increase, up to 50 kilometres from roads.

A forest elephant shot by poachers.
Ralph Buij

In the wrong places, roads can facilitate invasions of natural areas by illegal miners, colonists, loggers and land speculators. In my view, the explosive expansion of roads today is probably the greatest single peril to the world’s natural environments and wildlife.

Africa’s ‘development corridors’

Earlier studies that my colleagues and I conducted, including a major study published in Nature last year, suggest Africa is likely to be a global epicentre of environmental conflict. A key reason: an unprecedented scheme to dramatically expand African roads, railroads and energy infrastructure.

In total, we have identified 33 massive “development corridors” that are being proposed or are underway. At the heart of each corridor is a road or railroad, sometimes accompanied by a pipeline or power line.

The 33 development corridors that are being proposed or constructed in sub-Saharan Afirca.
William F. Laurance et al. (2015) Current Biology.

The projects have a variety of proponents, including the African Development Bank, national governments, international donors and lenders, and commercial agricultural and mining interests. They’re intended to promote large-scale development and their scope is breathtaking.

If completed in their entirety, the corridors will total over 53,000 kilometres in length, crisscrossing the African continent. Some individual corridors are over 4,000 kilometres long.

Will these corridors generate key social and economic benefits, or will they cause great environmental harm? To address this question, we looked at three factors, focusing on a 50-kilometre-wide band laid over the top of each corridor.

First, we assessed the “natural values” of each corridor, by combining data on its biodiversity, endangered species, critical habitats for wildlife, and the carbon storage and climate-regulating benefits of its native vegetation.

Second, we mapped human populations near each corridor, using satellite data to detect nightlights from human settlements (to avoid lands that were simply being burned, we included only places with “persistent” nightlights). We then combined the natural-value and population data to generate a conservation-value score for each corridor, reasoning that sparsely populated areas with high natural values have the greatest overall conservation value.

Finally, we estimated the potential for new roads or railroads to increase food production. Areas that scored highly had soils and climates suitable for farming but large yield gaps, were within several hours’ drive of a city or port, and were projected to see large future increases in food demand.

Costs versus benefits

When we compared the conservation value of each corridor with its potential agricultural benefits, we found huge variation among the corridors.

A two-minute video summary of our study’s main findings

A half dozen of the corridors look like a really good idea, with large benefits and limited environmental costs. However, another half dozen seem like a really bad idea, in that they’d damage critical environments, especially rainforests of the Congo Basin and West Africa and biologically rich equatorial savanna regions.

In the middle, there are 20 or so corridors that appear “marginal”. These tend to have high environmental values and high potential agricultural benefits, or vice versa.

We argue that these marginal projects should be evaluated in detail, on a case-by-case basis. If they do proceed, it should only happen under the most stringent conditions, with careful environmental assessment and land-use planning, and with specific measures in place (such as new protected areas) to limit or mitigate their impacts.

Dangers for Africa

There’s no such thing as a free ride. For Africa, the dangers of the development corridors are profound. Even if well executed, we estimate that the current avalanche of corridors would slice through over 400 protected areas and could easily degrade another 2,000 or so. This bodes poorly for Africa’s wildlife and biodiversity generally.

Wild zebras in the Serengeti.
William Laurance

Beyond this, the corridors will encourage human migration into many sparsely populated areas with high environmental values. The wild card in all this is the hundreds of billions of dollars of foreign investments pouring into Africa each year for mining. Even if a corridor is likely to yield only modest benefits for food production, it may be very difficult for governments and decision makers to say no to big mining investors.

The bottom line: it could be a fraught battle to stop even ill-advised development corridors, though not impossible. If we shine a bright light on the corridors and argue strongly that those with limited benefits and large costs are a bad idea, we may succeed in stopping or at least delaying some of the worst of them.

This is unquestionably a vital endeavour. Africa is changing faster than any continent has ever changed in human history, and it is facing unprecedented socioeconomic and environmental challenges.

The next few decades will be crucial. We could promote relatively sustainable and equitable development — or end up with an impoverished continent whose iconic natural values and wildlife have been irretrievably lost.

The Conversation

Bill Laurance, Distinguished Research Professor and Australian Laureate, James Cook University

This article was originally published on The Conversation. Read the original article.

Earth Day (April 22): Ideas for Earth Day


The following link is to a page that has a number of ideas and projects on how to celebrate Earth Day, raise awareness on environmental issues and how to take action.

For more visit:
http://www.earthday.org/earth-day-2011

NEW SOUTH WALES NATIONAL PARKS UNDER THREAT???


The New South Wales government is now considering some level of development in the national parks of New South Wales. Just what level of development that may be is yet to be made clear. It is understood that the development may include accommodation projects, various commercial enterprises and guided bush walks.

Tourism Minster Jodi McKay, a former news reader with NBN television, is waiting on a report from a government commissioned taskforce looking into ways that tourism can be increased in the state’s national parks.

The planned tourism development of national parks is a major step away from the ‘wilderness’ goals of recent times and represents a threat to the wilderness values of national parks and world heritage listed areas.

However, a certain level of development may be appropriate, given the serious deterioration of many of the amenities and signage within New South Wales national parks. Many access routes are also seriously degraded following years of poor management.

Perhaps a quality New South Wales national parks and reserves web site could be developed, with the current web site being quite dated and not particularly useful for visitors to the national parks of New South Wales. Quality information on the attractions and access to each national park would greatly improve the tourist potential of New South Wales national parks.

If quality visitor brochures/leaflets on such things as camping facilities, access routes, walking trails and park attractions could be developed and made available via PDF documents on the web site, potential visitors could plan their trips and this would certainly increase visitor numbers to the national parks.

Quality content and relevant up-to-date information on each national park, as well as well maintained access routes and facilities would encourage far more people to visit the national parks and give visitors a memorable experience.

BELOW: Footage of the Warrumbungle National Park in NSW.