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Rwanda: Cashing in On the Nyungwe Forest Factory

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Nyungwe forest evokes images of lush vegetation, home to rare species of orchids and monkeys as well as a multitude of birds. Yet it is so much more. Amongst others, it is an air purification factory. So who is going to pay for a job well done?

Imagine that someone invented a machine to purify the air-taking out the CO2 and converting it to oxygen. In this age of climate change, that person would be a billionaire in no time.

The strange thing is that such machines already exist, all around us; they’re called trees. Yet if similar man-made machines would bring in a lot of money, then why not cash in on the natural ones operating on our soil?

That is the idea behind Payment for Ecosystem Services (PES), a concept implemented worldwide to value such natural services and realize that value. The Rwanda Office for Tourism and National Parks (ORTPN) has also jumped on the bandwagon, and is preparing a study to examine how to cash in on the PES-potential of Nyungwe forest.

Indeed, even if Rwanda’s mountain protected areas such as Nyungwe are mainly known for their biodiversity, they also deliver a continued flow of ecosystem goods and services such as watershed protection, climate regulation, pollination and scenic beauty, on which a large proportion of the rural poor depend for survival through agriculture, collection of safe drinking water and the harvesting of forest products.

Moreover, they are also crucial to the sustainability of all primary industries, tea production, coffee washing stations, etc., and the country’s economy, through the provision of water and hydroelectricity as well as regulation of local and regional climate conditions.

Therefore, conserving biodiversity is about much more than just protecting wildlife and their habitats in protected areas. It is about the maintenance of fundamental ecological processes, such as hydrological cycles and soil structure and fertility, which are central to real progress toward achieving the Vision 2020 and the Millennium Development Goals.

Comprehensive approach

The PES approach aims exactly at realizing the monetary value of such ecosystem goods and services. In the case of Nyungwe, the study will serve two purposes toward decision-making.

First, they will reveal the magnitude of the benefits that Nyungwe forest provides for stakeholders and society at large, thus helping decision makers to take a comprehensive approach toward forest management, conservation, and economic development.

It will also help to design the required instruments to capture some of the monetary value of benefits and make them available to fund conservation activities and support local communities.

According to Michel Masozera, one of the researchers carrying out the study, in the case of Nyungwe the main ecosystem services to be exploited are in the first place carbon storage and sequestration. When sequestered, carbon dioxide is prevented from entering the atmosphere by becoming fixed in places where it can be stored for long periods of time.

Trees, especially those in tropical forests, have been found to be very effective at absorbing carbon dioxide from the atmosphere through the process of photosynthesis. As the Earth’s lungs, healthy forests are able to capture and hold the greenhouse gases produced by our industries and our energy-intensive lifestyles.

Furthermore, Nyungwe also offers watershed protection services (keeping rainwater in the forest’s soil and gradually releasing it, thus preventing flooding and providing drinking water), maintenance of biodiversity and opportunity for recreation and tourism.

Market analysis

The first step in the PES process, Masozera says, is to carry out market analysis to estimate the economic value of tourism and the avoided costs of the non-market value of ecosystem services (avoided costs are the costs that could be incurred in the absence of certain services that forests provide).

The preliminary results, he remarks, indicate that the value of ecological goods and services provided by Nyungwe forest is estimated at a minimum US$ 285 million a year, with the major beneficiaries being Electrogaz, Regideso Burundi, OCIR, ORTPN and tour operators, rice farmers’ cooperative in Bugarama, and the global community.

Stored carbon is valued at an estimated US$ 162 million a year, whereas watershed protection services, water supply for irrigation, human consumption and industries, as well as flood protection are worth at an estimated US$ 117 million annually. The monetary value of biodiversity maintenance amounts to US$ 2 million, and recreation and tourism is good for at minimum US$ 3.3 million a year.

Michel Masozera points out that many of the benefits, including carbon sequestration and storage and biodiversity conservation, are global and therefore are not realized in terms of financial benefits to the local population and Rwanda, who bear the cost of conservation of Nyungwe forest.

However, he says that the recognition of this fact has encouraged the development of markets around the world in which land users are paid for environmental services that forests provide through conservation and sustainable management.

Carbon trading

That is exactly the second part of the study: identifying mechanisms to realize the value of these ecosystem services.

Several approaches to PES are being tried out around the world. When it comes to watershed protection and water supply, the direct beneficiaries are often easy to pinpoint, and they can then be charged. The same applies to scenic beauty and biodiversity protection, which in the first place benefits tourism.

It becomes more complicated, however, when it comes to carbon storage. In the end, since air does not stop flowing at borders, the whole planet benefits. Yet here too, PES can be applied, thanks to the system of carbon credits, which comes down to big polluters paying small ones. This means that countries or companies pay for the carbon storage services of Nyungwe, so that they can continue to produce excessive carbon.

This system is already being put into practice. In Honduras, for example, Pico Bonito Forests is one of eight projects worldwide certified to produce carbon credits for sale in the regulated markets established through the Kyoto Protocol’s Clean Development Mechanism. Buyers are signatory countries trying to meet their emission reduction commitments as set out by the Protocol.

Such experiences provide key lessons learned and design innovations that may be relevant to Rwanda, and Nyungwe in particular. Moreover, they highlight institutional elements that must be put in place to support and strengthen PES to maximize benefits to conservation and local communities’ livelihoods.

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