5.6.1. Consistency with Nationally Defined Sustainable Development and/or
National Development Goals
Prospective investors in LULUCF projects and host countries may have different
priorities in selecting projects. From the investors' perspective, criteria
such as land availability and the suitability of the country to undertake the
project, the estimated GHG benefits, project cost-effectiveness, risk, and other
environmental effects are some of the major concerns. From the host country's
perspective, projects that more specifically consider regional or local land-use
priorities and significantly strengthen sustainable development contributions
will be favored. Some observers have also expressed concern that selecting only
the cheapest projects will be detrimental to non-Annex I countries if they subsequently
take on GHG emissions (Lee et al., 1997; Brown, 1998). For LULUCF projects
to be designed, conceived, and implemented successfully to provide economic
and environmental benefits, however, the support of different stakeholders of
the project-project investors, host countries, and local communities-is crucial.
The voluntary nature of host country participation in climate mitigation projects
increases the prospects that only projects that satisfy investor and host country
interests will be implemented. Moreover, host countries can take steps to ensure
that the goals of accepted projects are consistent with national and local development
and natural resource protection priorities (Intarapravich, 1995; Michaelowa
and Schmidt, 1997; Hardner et al., 2000). Dutch and Costa Rican criteria
for approval of AIJ projects, for example, state that projects should be compatible
with and supportive of sustainable development priorities of each country; fulfill
the obligations of various conventions; and enhance income opportunities and
quality of life for rural people and members of certain vulnerable groups, including
cultural minorities (Andrasko et al., 1996; Ministry of Housing, Spatial
Planning and the Environment, 1996; Subak, 2000).
One way to ensure that a mitigation project is consistent with the host country's
developmental goals is for the host country to set up a simple approval process
for accepting projects and to list criteria that are based on national and local
needs. Projects may not satisfy all criteria, but it is important to ensure
that they adhere to all applicable laws and/or regulations of the host country.
To meet national or regional sustainable development priorities, project transaction
costs should be kept low. High costs can reduce investor interest in financing
LULUCF climate mitigation projects (Section 5.2) and reduce
the proportion of funding available to promote and monitor environmental and
social aspects of implemented projects.
To achieve consistency with national and regional environmental and development
goals, it is also important to ensure that policies and programs support rather
than undermine project objectives. Changes in key policies that may affect project
sustainability either positively or negatively include financial subsidies for
forestry or agriculture, land tenure, policies to expand agricultural production,
import-export policies, and paper recycling programs (World Bank, 1997). For
example, Brazil's government-subsidized program to produce ethanol vehicle fuel
from sugarcane withered in the face of low gasoline prices (La Rovere, 1998).
Therefore, incorporating projects that minimize conflicts or institutional changes
relative to existing land-use policies in the host country may be essential.