Community MARKETS for Conservation Markets to Advance Conservation

Community MARKETS for Conservation – Markets to Advance Conservation Mission

COMACO Business Analysis Performed in May 2007 on Community Trading Centers: Lundazi and Mfuwe q WCS Conservation Efforts, WFP Contracts and COMACO leverage one another’s activities and share expenses q Getting Started – Significant Costs Associated with Establishing CTCs § Lundazi: $1. 2 M+ § Mfuwe: $400 K+ q Conclusions in May 2007 § Agro Processing – Necessity of Higher Value Add § Market Development – Existing and New Markets

2007 COMACO Financial Data – 3. 31. 08 Year End q First Full Year of Consistent Sales with Established Products q Sales Outlets have been developed with supermarket chains (Shoprite & Spara) and NGOs (Peanut Butter & HEPS) q Net Sales of 851, 133, 010 kwacha q Rice is best selling product in 2007 = 72% of Sales q Development of Soy Based Product line – HEPS (18% of Sales), Yummy Soy q Bottom Line: 2007 resulted in 349, 458, 678 kwacha operating loss – not inclusive of D&A

Climate Change Reality q Global Warming is happening – The Debate is Over § GHG at highest levels in at least 800, 000 years - Study published in journal Nature § Carbon Dioxide levels estimated to be at 380 ppm and increasing q What Does This Mean? § Poorest of Poor Most Vulnerable to Effects of Climate Change § I Didn’t Cause this Mess… § How are WE Going to Fix the Problem? § Adaptation & Mitigation Needed Now! q “Job is not to punish the polluter but to get rid of pollution” -Richard Sandor (CCX Founder)

Market Mechanisms for Climate Change q Challenge or Opportunity? – ‘It Depends’ § Incentives for Cleaner Development § Intersect with Development Priorities q Significant Need for Financial, Knowledge and Technology Transfers on Mass Scale (Design, Implementation, Dissemination) q Need for Commercially Viable Emission Reducing Innovations § Know-How to Implement Technology or Knowledge § Favorable Regulation and Policy for all Transfers § Local Capacity is Necessary – Developers, Verifiers, etc

Mandatory vs. Voluntary Markets Market Programs Market Size Trading Prices Mandatory Carbon Large - Variable – recently Markets (Kyoto $63+ Billion $35+US/CER Protocol/CDM) in 2007 Voluntary Carbon Markets Small but growing rapidly Participation Requirements Rigorous approval and verification process Significantly less than Variable/ Less Mandatory – recently stringent $6+US/VER q Its All About ‘ADDITIONALITY’ q Mandatory 2007 Offset Market: 73% China, 5% Africa q Kyoto Protocol / Voluntary Markets a Work In Progress § US Legislation – Federal or State Approach § Post 2012 Kyoto Negotiations

Kyoto Protocol Market (Mandatory Market) Offset Credit Creation Process

COMACO and Climate Change q Opportunity Exists for Smallholder through Co-Benefit Projects § Project Must Include Measurable & ADDITIONAL Steps to Generate Emission Reductions § Must be Verifiable and Monitored § Fiscal Management q Applicability of COMACO’s Model & Infrastructure § Ability to Provide Technology, Knowledge, Innovation Transfer § Organization of Producer Groups can be Leveraged to Generate Credits & Disburse Payments § Tie to COMACO Compliance Activities – Project Development & On-Going Monitoring

COMACO and Climate Change q November 2007 - Research Identified COMACO Opportunity for Accessing Carbon Markets (Triple Benefit) § Develop coordinated reforestation with agro-forestry project through COMACO producer groups – basis will be hectares of reforested land § Soil carbon capture opportunities through conservation farming of individual COMACO farmers – basis will be acres under CF § Potential for Production Fuel Switching (Small Scale), Electric Fences, biogas, Off-Grid Renewable Energy

Climate Change and SANREM Research q Adaptation: Improved Seed Stock, Soil Carbon Management, Irrigation, Watersheds, Migration, Energy, ‘Coping Strategies’ q Ownership Rights – Who Owns Stream of Carbon Credits q Implementation and Sustainability of SANREM Research § Technology & Knowledge Transfers § Financial Incentives § Pilots for Promising Technology q “So What, Then What” – Use Science and Technology Researched by SANREM to Generate Scalable Co-Benefit Methodologies for Emission and Poverty Reduction

COMACO and Markets Questions? Contact: John Fay Emerging Markets Group Email: jfay@emergingmarketsgroup. com Tel: +86 136 6115 5366