Biofuels Initiative
Engaging the private sector in CDM
EIT capacity building
CDM in rubber study
OPEC study
CDM in Least Developed Countries
Plurilateral GHG trading

CDM Rubber Study

Project Proposal: CDM Rubber Study Project
Title CDM Rubber Study
Duration 8 months
Participating countries Malaysia, Indonesia
Implementing Agency UNCTAD/Earth Council Institute Carbon Market Programme
Cooperating Agencies International Rubber Group Secretariat (IRSG)
Slovakia
Slovenia

Objectives

The goal of this project is to promote the possibility of Clean Development Mechanism (CDM) investment in the rubber commodity sector. The objectives are to:

• Analyze the potential of CDM projects in the rubber commodity sector,
• Dialogue with the stakeholders and potential investors in CDM projects in this sector in the participating countries, and
• Identify possible next steps to promote and facilitate CDM investments in this commodity sector.

Project rationale

The project will focus on the CDM potential resulting from the possible introduction of new processes, technologies and practices that may result in additional reductions in greenhouse gases (GHG) in the rubber commodity sector, such as recent genetic engineering developments that promise more wood and latex in rubber trees. Since rubber trees are grown over long periods of time (20-30 years) as managed forests, the possibility of sequestering more carbon resulting from new genetic technology and forestry practices, for example, is at the onset a possibility worth exploring. The effect would be greater carbon sequestration in existing managed forests.

The introduction of bagasse energy technologies in some early CDM pilot projects in the sugar sector also points to other possibilities that may also exist in the rubber sector. Since, rubber production involves relatively inefficient use of large amounts of energy in its production, from the use of firewood in smallholdings to coal-fired energy plants in large plantations, energy-efficient technology can be applied.

The combination of both CDM possibilities - rubber plantations as carbon sinks and the introduction of more energy-efficient technology in rubber production - may present some innovative means of reducing the high transaction costs of CDM projects. The project will investigate both perspectives as well as the legal and institutional issues and barriers relevant to the eligibility of potential CDM projects in the rubber sector.

Depending on the results of the study, and in order to move from research to action, the project also proposes to organize stakeholder forums that will bring potential CDM investors and project hosts (buyers and sellers) together. The Market Forum will provide a venue to identify a plan of action to promote and facilitate CDM investments in the rubber sector.

Possible outcomes from this project include a feasibility study of CDM in the rubber sector, greater awareness by stakeholders (potential project investors and hosts) of their sectors' CDM potential, additional investments in the covered commodity sectors, and increased environmental protection and potential for more sustainable development.

Given the continued decline in real prices of rubber in the world market, it is worth exploring if CDM can be an additional incentive for investment in the rubber sector. CDM investment projects have great potential to promote sustainable development in the struggling rubber sector.

Project activities

The project will undertake the following activities in cooperation with the participating countries:

• A CDM feasibility study in the rubber sector - The study will look at the full production cycle of the rubber commodity and identify both carbon sequestration or sink projects as well as energy efficiency projects. The study will be reported in a manner that can shared with the rubber sector stakeholders in business terms. It would include:
  a. Assessment of technologies, practices that can result in carbon credits in the rubber sector, identifying the most feasible and practical possibilities and potential projects; and
  b. Assessment of the eligibility of the possibilities and potential projects for the CDM, analyzing the issues and barriers that may be involved in potential CDM investments and projects in the rubber sector;
• Meetings and workshop with local stakeholders and potential buyers/investors in the rubber sector - The meetings will provide a process to solicit inputs in the implementation of the study. Inputs might include views and information on promising technologies and practices that exist or in development in the sector, investment and resource issues, and market issues. The workshop will bring potential buyers and sellers in CDM projects in the rubber sector together. The study above will be presented and used as framework for discussion and planning. Ultimately, if the study points to the feasibility of CDM in the rubber sector, the dialogue with stakeholders will lead to the initial development of a CDM promotion plan of action.

Project implementation

The project will be implemented initially in Asia (Malaysia and Indonesia) and will involve the cooperation of the following institutions:

National/Sector level

• Rubber growers, plantations and processing entities
• Rubber genetic engineering research (Malaysia)
• National climate change focal points

International level

• International Rubber Group Secretariat (IRSG)
• UNEP/Risoe Collaborating Centre on Energy and Environment

The project will bring rubber stakeholders, technology experts, and CDM experts at the national and international levels. In order to ensure that the study is grounded and takes into account the conditions and situation faced by rubber stakeholders, the project will mobilize local teams to provide systematic inputs into the implementation of the study. The local teams will undertake bottom-up assessments as well as provide financial and other resource information with guidance from international team of experts assembled through the project.

"Project Proposal: CDM Challenges and Opportunities in The Rubber Commodity Sector" (with Annex: Background on the Kyoto Protocol and Clean Development Mechanism) Download (52.1 KB, .PDF)

Contact Information

UNCTAD/Earth Council Carbon Market Programme

Mr. Lucas Assuncao
Coordinator Climate Change and BIOTRADE Initiative
UNCTAD Palais des Nations 1211 Geneva 10, Switzerland
Tel +41-22-917-5731
Fax +41-22-917-0504
Email: lucas.assuncao@unctad.org

Mr. Gao Pronove
Programme Advisor UNCTAD
Tel +1-952-922-9445
Fax +1-646-219-0028
Email: gao@govida.net