Carbon trading and other Payments for Ecological Services (PES)

Forest view. Photo by Open Development Cambodia, taken on 05 December 2021. Under license CC BY-SA 4.0.

Cambodia is covered with forest, accounting for around 13.1 million hectares in 1973, and it is had fallen to 8.7 million hectares in 2014.¹ However, based on the Ministry of Environment, the forest is covered 73% of the total land area in 1965, and it is decreased to 46.86% of the country's total land area in 2018.² Because large-scale agricultural expansion and illicit logging remain important challenges, the country is considering how to connect national development objectives with sustainable management of these forest resources.

Ecological services

Ecosystem services play an important role in disaster risk reduction (DRR) by assuring food security, providing good livelihoods, minimizing natural hazards, managing erosion, purifying water, supporting pollination, soil formation, nutrient cycling, and boosting cultural services.³

The ecosystem services are listed as the following:⁴

• Non-Timber Forest Products (NTFPS): subsistence and cash income are used to reduce poverty and vulnerability to poverty.
• Carbon Stock: reducing CO2 from the atmosphere and regulating climate.
• Water Yield: supplying water or human and wildlife reducing water shortage during drought and extreme weather events.
• Habitat Quality: maintaining ecological functions, ensuring food chain, and recreation.
• Nutrient and Sediment Retention: keeping soil fertile for growing crops, protecting soil erosion from wind, rain, and flowing water.

Carbon trading

The carbon credits are traded under the Reducing Emissions from Deforestation and Degradation (REDD+) framework, which allows forested developing nations to create cash by allowing firms to avoid government pollution limitations. Cambodia strongly supported the adoption of REDD+, a global policy initiative to reduce emissions from deforestation and forest degradation, at the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties (COP) in Bali in 2007, as well as the role of sustainable forest management, conservation, and enhancement of forest carbon stocks in developing countries. During 2008-2016, the Cambodia REDD+ Programme reached significant milestones and learned significant lessons. The RGC has identified REDD+ as one of the ways for Cambodia to contribute to tackling global climate change and meeting its UNFCCC commitments.⁵

REDD+ offers governments a significant chance to improve decision-making methods and inclusive stakeholder involvement, strengthen law enforcement and benefit distribution, and combat corruption and unlawful benefit.⁶ The government developed the REDD+ Programme in Koh Kong, Mondulkiri, Kratie, Kampong Thom, Stung Treng, and Oddar Meanchey,⁷ as seen in the Cambodia National Forest Monitoring System.

REDD+ legal and policy framework

Several legal and policy frameworks support the REDD+ implementation in Cambodia as the following:

• Constitution (1993)
• Main policies
  
  • National Strategic Development Plan (2019-2023)
  • National Forest Programme (2010-2029)
  • National Policy and Strategic Plan for Green Growth (2013-2030)
  • Declaration on Land Policy
  • Policy on registration and right to use of land of indigenous people
• Main laws and legal frameworks
  • Land Law (2001)
  • Law for State Land Management in Cambodia
  • Sub-Decree on Rules and Procedures for Reclassifying Property of the State and Public Legal Entities (2006)
  • Forestry Law (2002)
  • Sub-Decree No. 79 on Community Forestry Management
  • Law on Protected Areas (2008)
  • Environmental Protection and National Resources Management Law (1996)
  • Fisheries Law (2006)
  • Law on Mineral Resource Management and Exploitation (2001)
  • Investment Law (1994)
  • Law on Foreign Exchange (1997)
  • Law on implementation of the Civil Code (2011).

National REDD+ Strategy (NRS) 2017-2026

The NRS will consolidate and complete its preparedness, establish the institutional structure, access suitable financing, and implement actions that will contribute to carbon reductions and make Cambodia eligible for result-based payments. The NRS is divided into two phases as the following:

• Phase I: Intuitive structure, evaluation of NRS implementation, a summary of upfront non-results-based budget mobilization, and transition to implementation stages.
• Phase II: Complete the transition from preparedness to implementation, focusing on achieving quantifiable outcomes.

Emission and forest-removed GHG

According to Cambodian assessments, yearly GHG emissions from deforestation accounted for 34,148,629 tCO₂ from 2006 to 2010, and 151,267,528 tCO₂ from 2010 to 2014, a fourfold increase. The remaining forest region in Cambodia acts as a carbon sink. From 2006 to 2010, Cambodia's forest-removed GHG accounted for an annual average of -6,626,046 tCO₂ and -20,298,825 tCO₂ from 2010 to 2014.  Consequently, the total GHG inputs from deforestation and removal by the sink are 158,491,286 tCO₂. It corresponds to an annual average of 79,245,643 tCO₂.⁸

In December 2021, the National Council for Sustainable Development (NCSD) and the Ministry of Environment released an official report titled "Cambodia's Long-Term Strategy for Carbon Neutrality (LTS4CN)." Every five years, the LTS4CN will be evaluated. According to the LTS4CN simulation, Cambodia may reach carbon neutrality by 2050, with the Forestry and Other Land Use (FOLU) sector producing a total carbon sink of 50 megatons of CO2 equivalent (MtCO2e). The energy industry is predicted to be the largest emitter of CO2e in 2050, with 28 MtCO2e, followed by agriculture with 19 MtCO2e. The waste and Industrial Processes and Product Use (IPPU) industries are allowed to release 1.6 and 1.2 million tons of CO2e, respectively.⁹

By 2030, loss of forestry and other land use will account for 49% of Cambodia’s annual greenhouse gas emissions, followed by the energy sector 22% and agriculture 17.5%.¹⁰

REDD+ Projects in Cambodia

Cambodia has a protected area of 7.3 million hectares or about 41% of the country.¹¹ From 2016 to 2020, Cambodia earned $11.6 million from the sale of carbon credits in Keo Seima Wildlife Sanctuary in Mondulkiri Province and the REDD+ project at Southern Cardamom National Park in Koh Kong Province.¹²

Map of Natural Protected Areas (NPA) in Cambodia (1993-2023)

The registered REDD+ projects are the Tumring REDD+ project, Reduced emission from deforestation and degradation in Keo Seima Wildlife Sanctuary, and the Southern Cardamon REDD+ project, while a project is in the pipeline, Cambodia National Animal. From 2013 to 2017, the verified emission reductions are 20,336,462 million tCO2e.¹³

• Tumring REDD+ Project (TRP): encompasses roughly 66,645 hectares of land in central Cambodia, west of the Mekong River, and is located on the southwestern fringe of the recently proclaimed Prey Lang Wildlife Sanctuary (PLWS).¹⁴ The project will result in a reduction of 3.9 million tCO2e emissions over a 10-year timeframe.¹⁵
• Seima Protection Forest (SPF): is 292,690 acres in size. It is located in eastern Cambodia, primarily in the province of Mondulkiri, with a tiny section extending into Kratie Province. The REDD+ project area encompasses 166,983 acres of forest in the SPF Core Protection Area.¹⁶ The Keo Seima Wildlife Sanctuary REDD+ area holds more than 75 million tonnes of CO2e.¹⁷
• Southern Cardamom REDD+ Project (SCRP): The 445,339 hectares SCRP includes sections of the Southern Cardamom National Park and the Tatai Wildlife Sanctuary, and it will conserve an important component of the Cardamom Mountains Rainforest Ecoregion, which is one of the world's 200 most significant areas for biodiversity protection. The Project's climate advantages include the avoidance of about 12 million tCO2e emissions during the first monitoring period and over 115,000 million tCO2e emissions during the Project's lifespan.¹⁸ The project prevents more than 3,000,000 tons of carbon emissions annually.¹⁹
• Oddar Meanchey Community REDD+ Project: The project covers 63,831 hectares of evergreen and dry deciduous forest located in the northwestern part of Cambodia. Over the course of 30 years, the project is expected to generate 8.2 million tons of Verified Emission Reductions (VCRs).²⁰
• Prey Lang Wildlife Sanctuary - Stung Treng REDD+ project: The project covers 431,683 hectares located in Kretie, Kampong Thom, Stung Treng, and Preah Vihear provinces. The project is expected to reduce emission 4,231,109.2 tCO2e.²¹

Related to Carbon trading and other Payments for Ecological Services (PES)

• Environmental and biodiversity protection
• Climate change
• Forests and forestry
• Environment and natural resources policy and administration
• Environment and natural resources