Possibilities for carrying out a Land Use and Land Use Change and Forestry Clean Development Mechanism project in Tanzania

The release of greenhouse gases into the atmosphere is a likely cause in climate change. The largest amounts of these gases are released from the burning of fossil fuels, by deforestation and certain methods of farming. Climate change will most likely change conditions on Earth. The developing countries will probably suffer the most from the upcoming changes and will simultaneously have the smallest means to influence their situation. The Clean Development Mechanism (CDM) is one of three flexibility mechanisms in the Kyoto Protocol. CDM enables developed countries to implement projects that reduce greenhouse gas emissions in developing countries. These projects shall increase transfer of technology and capital and contribute to sustainable development in developing countries. In return, the developed countries receive Certified Emission Reductions (CER), which can be used to meet their own emission targets under the Kyoto Protocol. Today most of the CDM projects are carried out in Asia and South America, only two percent of the approved projects are preformed in sub-Sahara Africa. The approved CDM projects are carried out in a restricted number of areas and only one Land Use, Land Use Change and Forestry (LULUCF) CDM projects have been implemented today. Therefore, the focus of this master thesis is on the potential for carrying out a LULUCF CDM project in an African country. Tanzania has been chosen since it is a country which Sweden has strong connections with. The purpose of the master thesis is to examine the potential for carrying out LULUCF CDM projects in Tanzania and the following three research questions are used. 1) Will it be economically feasible to carry out LULUCF CDM projects in Tanzania? 2) Are the institutional requirements for LULUCF CDM projects fulfilled in Tanzania? 3) Will LULUCF CDM projects contribute to sustainable development in Tanzania? To understand the economic feasibility of this type of CDM project a case study was made at Swedish Cooperative Centre and Vi Agroforestry Programme in Mwanza. The organization has had an agroforestry project in the region since 1994 and is today planning to develop a CDM project. During the case study data was collected and used for calculations for 12 different cases. The capacity for CDM and CDM projects contribution to sustainable development was investigated through interviews in Dar Es Salaam. The result from the case study shows that only 50 percent of the cases are profitable and only five cases out of 12 needs a reasonable number of households to break even. Therefore, it can be slightly difficult to make this LULUCF CDM project profitable. The price of CERs, have the largest positive impact on the profitability which tells us that the CER price is the most important factor for this project to carry itself. The results from the interviews show that there is a lack of knowledge and awareness about the mechanism within the country in general and especially the LULUCF CDM projects. There is a great requirement of resources like skilled workforce, education etc. The administration of these projects is bureaucratic and, therefore, costly. The interviewees agree that CDM projects most likely contribute to sustainable development in Tanzania. In which extent it contributes to sustainable development the interviewees agree that it depends on which type of CDM project that is developed. The interviewees say that they believe that LULUCF CDM projects contributes more than other projects since it reach out to the grassroots level and in general LULUCF projects is in cooperation with the local people. The conclusion is that it is possible to carry out LULUCF CDM projects in Tanzania. However, the institutional structure needs to be more developed in order to handle CDM projects more effectively. If the awareness, knowledge and the institutional structure were improved, the financial issue would not cause a barrier. It is difficult to make LULUCF CDM projects economically feasible but this type of project will most likely contribute to sustainable development