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The Royal Tour film amplifies Dar carbon credit market investment potential

The Royal Tour film amplifies Dar carbon credit market investment potential

BUSINESS and finance section of the “Daily News’ on 27th January 2021, had an article that captured my mind on research report that I was personally involved and presented its findings in 1998.

Funded by EU and UK through London South Bank University, in collaboration with institute of development studies at University of Dar es salaam and Nairobi University, the study findings among other policy issues recommended on how Tanzania could earn millions on carbon trading for offsetting carbon dioxide from its forests, both from industrial and natural forests.

Learning, that Katavi villages earn 300m/- for offsetting carbon dioxide, hence hit my memory on recommendations tabled before the government following a three-year study 1996-98 on construction wood markets in Tanzania and Kenya.

The study drew experts from four research institutions comprising the Department of Land Development at the University of Nairobi, Kenya; the Department of Forest Industry Market Studies of the Swedish University of Agricultural Sciences at Uppsala; the School of Construction at the South Bank University, London UK, and Institute of development studies, at the University of Dar es Salaam Tanzania.

Focusing on construction wood markets, the study analysed and assessed in detail the extraction activities, from both industrial and non-industrial forests in Tanzania dissecting the timber trade and use of hard and soft wood, poles, sawn timber treated and untreated, and other forest products within the built environment comprising buildings, fencing, scaffolding, infrastructure, furniture, and so forth in four economic effective African cities.

It also scanned gaps and loopholes in revenue loss along the value chains and its supply networks, how government was missing certain revenues due to flawless in the regulations governing extraction and transportations of forest products in Tanzania and Kenya.

Now 26 years down the line, I am thrilled to hear from President Samia Suluhu Hassan in her interview with Tido Mhando mentioning Royal Tour Documentary in addition to in-selling the country’s tourist potential aimed at bringing bank on stage Tanzania, the land of Zanzibar, Kilimanjaro and Serengeti, the documentary also has incited and encouraged investors yearning to come to Tanzania to invest on carbon trading market.

Premeditated and managed well, investment in this area could give a boost to government coffer to supplement other sources of revenue to the government.

Recommendations on how Tanzania could earn millions of dollars from carbon trading through offsetting carbon dioxide given its industrial forest land in addition to village and private industrialist industrial forest plantations need reconsideration and, in my opinion, this could be yet another low handing fruits source of revenue to boost country’s coffers.

From 1950 to date, industrial forest plantations under government of Tanzania alone covers total of 156,062 hectare including Meru/Usa, Arusha, Kiwira, Mbeya, West and North Kilimanjaro, Mtibwa, Morogoro, Shume/Magamba, Tanga, Sao Hill, Iringa and the latest Silayo plantation established and re-launched by Dr JPM in 2021.

This is apart from village forests, and privately own plantations whose total area is vast. Research to-date by experts such as Lester R Brown, the man considered one of the great pioneer environmentalists in the field, indicates that a newly planted tree such as pine species that are dominant species in most of the government and private plantations with about 78 per cent of the total area planted for instance spreading-leaved pine, slash pine and Caribbean pine or cypress and eucalyptus, that are found in SaoHill forest and teak in the tropics can remove up to 50 kilograms of CO2 from the atmosphere each year during its growth period of 20–50 years.

According to studies, (see Myers and Goreau) typical tropical tree plantations of pine and eucalyptus can sequester an average of ten tons of carbon per hectare per year. In fact, Tanzania could realise more revenue from carbon credit as initiatives to plant more trees takes place in all its plantations meaning new plants for replenishment of harvested areas and new plots at Silayo Plantation.

This is the case because the amount of CO2 a tree sequesters varies based on the growth rate, age, and species of the tree. Young, quickly growing trees uptake more carbon than mature trees with a slower growth rate.

Studies on sequestration todate (see Dexter Dombro, also backed up by Science Daily), indicate that tropical forests remove a massive 4.8 billion tonnes of CO2 emissions from the atmosphere each year.

This includes an earlier unknown carbon sink in Africa, mopping up 1.2 billion tonnes of CO2 each year. Statistically, studies indicate that African tropical forests absorb around 600kg (1,323 lbs) of carbon per hectare per year.

For instance the newly Silayo Plantation with 15,000kg (33,000lbs) per hectare per year divided by 600 trees per hectare results in an average of 25 kg (55lbs) of carbon sequestered per tree per year.

Evidence from the UNE, the FAO scientists and environmentalist from around the world, all point to the fact that in a tropical climate a tree will sequester a minimum of around 25kg of CO2 per year for a useful life span of 40 years—for instance 1000Kg per tree planted in its 40-year useful lifetime.

It might sound as unmanageable venture, but progressively, many countries around the world, which are seeing the sights on all sources possible to improve their county’s fiscals, have been earning millions of dollars each year through carbon trading by offsetting carbon dioxide.

Carbon trading is a market-based system to reduce greenhouse gases contributing to global warming, particularly carbon dioxide. Hence, countries with sizeable professionally managed forests such as Tanzania with its total 156,062ha of forest plantations, under these trading mechanisms can take part in cutting emissions through selling those credits for money.

At present, the development of industrial forest plantations as carbon offsets has evolved towards a market mechanism. Twenty-four years ago, the adoption of the Kyoto Protocol in my recollection initiated a strong increase in investment in plantations as carbon sinks, although the legal and policy instruments and guidelines for management continue to be debated to-date.

Isn’t my intention to get into net gritty on how carbon market works and how Tanzania has been missing this earning opportunity, to bring into open that carbon markets work in similar way to financial markets and currency used on this market is carbon credits.

It is also important to understand that price is determined by one ton of C02 might vary depending on the type of the market. Nonetheless as of 2009, the price per ton ranged from US$2.31 to US$15 per ton of C02 offset. While leaving calculations to the experts in the field, since establishment of the forests discussed above, how much millions Tanzania have been missing each year from the time forest are established to the time trees are harvested?

Is Tanzania too late on seeing how much as country could earn from our industrial and traditional forest? Going by The Royal Tour film, it is time to open eyes and widen sources of revenue to boost government coffers to fund government development projects. Katavi villagers earning story is just like sand drop in the ocean.

It is not time to be complacent of having industrial plantations and preserving natural forest everywhere but as country, not being rewarded as a result. It is time to earn rewards as a nation by attracting investors willing to invest in offsetting carbon dioxide business.

Global sanctity and the  question of markets

WHAT one could christen it as a ...

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Author: Dr HILDEBRAND SHAYO

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