REDD projects, green economy
“The challenge is that the project management knowledge has to be imported. A lot of the projects that are being approved now are with foreign partners.”
—Edgar van der Meer, NRG Expert, Toronto, Ontario, Canada
in place while hoping to find talent later. Companies have begun to recognize the advantages of project management and invest in developing new talent, says Bojan Knezovic, CAPM, PMP, head of the PMO office at Citi’s Chile Technology Services Center, a PMI Global Executive Council member in Santiago, Chile. But that’s a longer-term solution. Right now, “there are people that have 20 or 30 years’ experience and are skilled, but not in project management. So everyone does the best they can, but they often fail,” Mr. Knezovic says.
Some of these failures can be attributed to a business and government culture that eschews rigid organization and project structures, he adds, citing a general disregard for “process, planning and control, which are what we are trying to implement with project management practices,” he says. “Oftentimes, implementing a shift in company culture is very difficult.”
Chilean Sen. Guido Girardi recently summarized his country’s potential and challenges this way: “Chile is truly a Saudi Arabia of renewable energy, but it lacks vision, policies and decision-making.”
To fill in the project management gaps, the government has opened the door to foreign investors and partnerships. This approach will help ensure that utility companies can meet the government-imposed 2025 deadline, especially after they’ve completed relatively straightforward renewable projects and begin tackling projects complicated by local politics and/or environmental concerns that could cause delays and stakeholder challenges.
But if Chile’s government can go beyond creating ambitious goals and a carbon tax by working to ensure that private industry, permitting regulations and local stakeholders all move together in the right direction, it could become a project management model for other South American countries. Conditions aren’t quite where they need to be, but they appear to be turning a corner, says Johannes Dietsche, general manager of TRITEC-Intervento, a Santiago-based solar energy development company.
Developing renewable projects in Chile “is really complicated compared to Europe,” Mr. Dietsche says. “But compared with other countries in South America, we think it’s easier to realize projects.” —Clay Dillow
REDD Projects, Green Economy
Deforestation is a significant cause of climate change: Every year during the 2000s, 13 million hectares (32 million acres)—an area roughly the size of Greece—were deforested, releasing stored carbon into the atmosphere. Twenty-five countries have no forests left, and 29 are down to less than 10 percent of their original forest cover.
The problem is clear, yet forest preservation efforts are complicated by the 1.6 billion people whose livelihoods depend on forests, including cutting trees down for wood and pasture lands. To address this quandary, in March 2014 the United Nations called for an annual US$30 billion investment in tropical forest conservation through REDD+ projects, which allow developed countries to offset their carbon emissions by funding forest conservation projects in developing countries—such as Brazil and Indonesia— where deforestation is most egregious.
REDD stands for “reducing emissions from deforestation and forest degradation in developing countries.” The U.N. formalized it as an approach for combating climate change in 2008 and later expanded REDD to encompass efforts to sustainably manage and enhance forest carbon stocks—thus “REDD+.”
The U.N.’s recent call to global action is as ambitious as the stakes are high. Despite the bumpy history of the REDD+ approach—stakeholder and financial challenges have cropped up in many projects—the U.N. bills it as a win-win-win for the environment, investors and forest-dependent communities. REDD+ projects are supposed to slow climate change while stimulating local green industries such as ecotourism and sustainable commodities, creating jobs and increasing rural incomes.
Achim Steiner, executive director of the U.N. Environment Programme, said the REDD+ approach can usher in models of governance and equity that would build a better forest economy that includes all stakeholders. It’s “an opportunity … to pursue a more sustainable development pathway,” Mr. Steiner said in a statement.
Deforestation is one major cause of climate change.
A farmer in Sovanna Baitong, Cambodia
PHOTOS COURTESY OF CODE REDD
Complications on the Ground
The REDD approach has been slow to catch on. Funding from bilateral and multilateral organizations (the U.S. Agency for International Development, or USAID, and the World Bank, for example), along with private investments and donations, has totaled US$6.27 billion thus far. That’s a far cry from what the U.N. says is needed to combat climate change. And much of the committed funds have not yet been spent.
Still, hundreds of projects are underway around the world. For example, the World Wildlife Fund (WWF) is a partner in a US$28.5 million project to preserve forests in three Indonesian districts. Zulfira Warta, REDD+ project coordinator at WWF-Indonesia, says the initiative funded by USAID ensures investment in efforts to sustainably manage these forests and that local community groups have helped develop strategies.
Other projects have been slowed by landownership disputes or have faced charges of fund mismanagement and exclusion of indigenous communities. In Nepal, a four-year, US$300,000 pilot project developed a REDD+ infrastructure but local forest communities did not reap significant benefits, according to a study published in 2014 in the Journal of Environmental Management. Still, in April a Carbon Fund meeting organized by the World Bank’s Forest Carbon Partnership Facility committed up to US$70 million for a five-year project to scale up the country’s REDD+ initiatives beginning next year.
Funding has totaled
US$6.27 billion thus far. That’s a far cry from what the U.N. says is needed to combat climate change.
“We need to create the enabling conditions required for REDD+ to succeed, from good governance and sustainable financial policies to equitable distribution of benefits.”
—Achim Steiner, U.N. Environment Programme
More than half of the villages involved with REDD+ projects surveyed by the Center for International Forestry Research (CIFOR) said their land tenure was insecure, according to an April report. Nearly 20 percent have been unable to keep unwanted people from using their forests.
But one of the central challenges of REDD+ is funding, says William Sunderlin, lead author of the CIFOR study. “In order for REDD+ to realize its potential, it must successfully pay the opportunity costs of forest land conversion. The current amount of funding is many orders of magnitude smaller than that,” he says.
Efforts are underway to improve the outlook for the REDD+ approach. Indonesia has begun creating a centralized land tenure map that will be used to resolve competing claims on forest lands. Brazil has made forest tenure reform an integral part of its environmental goals. And the U.N. is working to safeguard the rights of indigenous people impacted by REDD+ projects and secure funding.
“We need to create the enabling conditions required for REDD+ to succeed, from good governance and sustainable financial policies to equitable distribution of benefits,” Mr. Steiner said. “These enabling conditions are themselves the building blocks for an inclusive green economy.” —Ambreen Ali
A BOOST FOR SOUTH AFRICA
South Africa’s sluggish economy is no longer Africa’s largest: Nigeria claimed those bragging rights this year. But South Africa’s laggard performance isn’t an isolated problem—it’s an obstacle to sub-Saharan Africa’s overall growth, according to an April 2014 International Monetary Fund report. That raises the stakes for a new €100 million European Union (EU) effort to bolster South Africa’s economy through infrastructure projects there and in neighboring countries. The EU’s Infrastructure Investment Programme for South Africa (IIPSA) launched last year, and experts say it has the potential to address the country’s infrastructure project backlog—if South Africa can find the necessary talent.
Building modern infrastructure is essential to South Africa’s economic growth, and the country’s ruling government understands this, according to Gregory Skeen, PMP, professional engineer and project development manager at Group Five Construction, Investments and Concessions, Johannesburg, South Africa.
The Twin Tower construction site in the fast-growing business hub of Sandton, South Africa
Even after the country spent more than US$3 billion to build and upgrade stadiums, roads, railroads and airports for the 2010 FIFA World Cup, a large backlog of projects remains in sectors including transportation, energy, telecommunications and healthcare. Examples include a US$18.8 billion expansion of the country’s rail network to boost coal exports and the long-delayed Nuclear-1 power station project.
“The real goal of many of these projects is longterm economic improvement,” Mr. Skeen says. “South Africa’s economy grew by about 2 percent in 2013. That’s okay for a developed economy, but an emerging economy like ours needs more like 6 or 7 percent GDP growth to start reducing a 25-percent unemployment rate.”
He and other project practitioners say new EU-facilitated projects can only help move the country forward—provided the projects can overcome lingering challenges that threaten their progress. The EU has warned that without a substantial uptick in infrastructure investments, whether public or private, South Africa “faces various risks in meeting
PM NETWORK SEPTEMBER 2014 WWW.PMI.ORG