What guarentees does the Plan Vivo System offer to investors?

Investors must be aware that there is a risk in investing in Plan Vivo projecs, however the Plan Vivo system includes the following risk management strategies.

Project risks

Risk Buffer

Plan Vivo projects are required to hold risk buffers, which are reserves of unsold carbon benefits to cover unforeseen losses in carbon stocks. This may be from extreme weather events.

This buffer must include a 10 to 20 percent extra buffer of carbon maintained by each farmer to cover any unintended losses from disease or fire for example. In Uganda 2006 tree losses were less than 5 percent.

Requirements for payments

The farmers are paid in installments, so that they have incentive to adopt and adhere to the plan. An equal share is given in years 1,2,3,5, and 10.

Land ownership

Farmers have ownership of the land which acts as an additional incentive to manage the land in a responsible manner.

Additionality

The amount of carbon in the ecosystem needs to be calcualted relative to the baseline, which is difficult to calculate. In order for the project to be additional the carbon sequestered needs to be additional to the scenario in the absence of the project. Expertise available for Plan Vivo project (for example its affilation with the University of Edinburgh, and links with previous research done in those areas ensure that calculations are accurate, and any estimates are suitably conservative.

Accounting for leakage

Leakage is a potential worry if forest is being replanted and protected as firewood will still be required by the community. The combination of agroforestry (which can provide firewood) and forest regeneration also reduces the pressure on the forest. The project has low leakage potential farmers are required to show that areas of forestry / agroforestry will not displace significant areas of crop production. Carbon income is often used to increase the productivity of farming systems reducing the need to produce using slash and burn methods.

Natural disasters

Fire, pests, diseases, droughts, hurricanes (and other adverse weather conditions) may affect tree growth and therefore the amount of carbon sequestered in the project. These risks may be increased by climate change. The risk buffer is maintained to account for natural risks.

Certificate risk

Traceability

All transactions refer to unique serial codes which enable sales of carbon to be traced back to individual producers. This information is recorded in country and is reviewed by BR&D during the annual review.

Buyer records

Wooden Plan Vivo certificates have unique identification numbers to ensure they are genuine, and issuance is recorded in a database (this will shortly be available online so buyers can check the validity of their offsets).

Read about existing Plan Vivo projects.

Or learn more about project development.

This page is currently under construction.