A Project on Marketing

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					                        REDD Project Feasibility Tool
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Instructions:
                       REDD Project Feasibility Tool
SOCIALCARBON®: Divaldo Rezende, Diego Serrano, Cecília Michellis, Naomi Kawasaki and Guilherme Lefreve.
Climate Community & Biodiversity Alliance: Steven Panfil
Version 1, September 2009
info@socialcarbon.org or info@climate-standards.org


This tool was created to facilitate the assessment of the economic feasibility of potential REDD projects. Many
factors influence the viability of a REDD project and we recommend that project developers conduct a careful
review of their project against the standards that they want to use such as the Climate, Community & Biodiversity
(CCB) Standards, the SOCIALCARBON Standard, the Voluntary Carbon Standard (VCS) and others to determine if
the project is likely to meet legal and other criteria which are essential for project viability.

This tool is designed to support an analysis of project feasibility, to help a project developer to decide if the project
could generate sufficient resources to implement and to maintain the project. All of the values, costs and revenues
predicted in this analysis are preliminary assumptions and can vary during the project development, implementation
and sale of carbon credits. This tool may not be appropriate for all projects and we recommend that the user consult
with the relevant experts before making investments based on the results of this tool.

This tool consists of three worksheets. The first, "Emissions Reductions", will assist project developers in estimating
the potential carbon credits that a project could generate. The second, "Financial Analysis", assists project
developers to estimate the potential economic returns of the project. The final "PDD Costs" worksheet is a template
that may help to estimate the costs of developing a Project Design Document (PDD).
Each worksheet has cells marked in BLUE in which the user must insert values that are appropriate for their
project. These cells currently have sample data which much be modified to fit the project being evaluated. Small
variations in some of these values (e.g. projected deforestation rates) may have a large impact on the results of the
model so accurate estimates are essential.
  Intructions: complete all the blue cells


                                     Assumptions
Description                        Value                        Explanation

                                            The area in which carbon stocks and
                                            greenhouse gas emissions will be measured
total project area (hectares)        50,000 throughout the life of the project.

                                            The estimated average deforestation rate for
Baseline deforestation rate                 the area if the project is not implemeneted.
(%/yr)                                0.60% This is the 'business-as-usual' scenario.
Projected deforestation rate for
the first 5 years of project                The projected average deforestation rate
implementation (%/yr)                 0.40% during the first five years of project activities.
Projected deforestation rate                The projected average deforestation rate
after 5th year of project                   after the first five years of project activities
implementation (%/yr)                 0.20% until the end of the life of the project
Average carbon stock in intact
forest in the project area                   May include above ground, below ground,
(tCO2eq/ha)                              549 and dead carbon pools
                                             This is the carbon stock of the land after it is
Average carbon stock of land                 deforested and converted to other use. Must
after conversion (tCO2eq/ha)             100 include all pools used above.

                                                The period during which emissions
                                                reductions will be monitored. The table
                                                below to estimate credits generated must be
Project Lifetime (years)                     40 modified to match the chosen project lifetime

                                            % of credits generated that must be
                                            deposited in a fund used to insure against
                                            non-permanence. This is a requirement of
                                            certification schemes like the Voluntary
                                            Carbon Standard. The buffer amount
Non-permanence buffer (%)               25% depends on an assessment of project risk.



Estimation of REDD Credits generated
          Description              year 0                          year 1
Baseline: Remaining area of
forest in the absence of the
project activities (ha)              50,000                                       49,700.00

Forest area remaining under
project activities (ha)              50,000                                           49,800
Cumulative area of avoided
deforestation due to REDD
project activities (ha)                   -                                    100
Annual area where the
deforestation was avoided
(ha)                                                                           100
Gross emissions reductions
(tCO2eq/year)                                                               44,900
Credits deposited in non-
permanence buffer                                                           11,225

Net Credits generated                                                       33,675

Estimated Project Totals
                                   Cumulative
                                    Emission
                                    reduction
                                     credits
Avoided deforestation total area generated       Average emissions reductions
during the project lifetime (ha)  (tCO2eq/ha)           (tCO2eq/year)
                            6,389    2,151,345                               53,784
                                                               Forest Conserved (ha)
                         60,000



                         50,000
    Hectares of forest




                         40,000



                         30,000



                         20,000



                         10,000



                             -
                                     1        6        11        16        21        26

                                                                Project lifetime (years)




year 2                           year 3    year 4    year 5    year 6    year 7      year 8


        49,402                    49,105    48,811    48,518    48,227     47,937     47,650


        49,601                    49,402    49,205    49,008    48,910     48,812     48,715
  199      297      394      490      683      875     1,065


   99       98       97       96      193      192      190

44,451   44,005   43,563   43,124   86,698   86,002   85,310

11,113   11,001   10,891   10,781   21,675   21,500   21,328

33,338   33,004   32,672   32,343   65,024   64,501   63,983
erved (ha)




                                                   Cumulative area of
                                                   avoided deforestation
                                                   due to REDD project
                                                   activities (ha)
                                                   Baseline: Remaining
                                                   area of forest in the
                                                   absence of the project
                                                   activities (ha)
                                                   Forest area remaining
                                                   under project activities
                                                   (ha)




             31        36            41




             year 9    year 10       year 11       year 12          year 13     year 14    year 15    year 16


              47,364        47,080        46,797      46,516           46,237     45,960     45,684     45,410


              48,617        48,520        48,423      48,326           48,229     48,133     48,037     47,941
 1,253    1,440    1,626    1,810    1,992    2,173    2,352    2,530


  188      187      185      184      182      181      179      178

84,623   83,940   83,262   82,588   81,919   81,254   80,593   79,936

21,156   20,985   20,815   20,647   20,480   20,313   20,148   19,984

63,467   62,955   62,446   61,941   61,439   60,940   60,445   59,952
year 17    year 18    year 19    year 20    year 21    year 22    year 23    year 24


  45,138     44,867     44,598     44,330     44,064     43,800     43,537     43,276


  47,845     47,749     47,653     47,558     47,463     47,368     47,273     47,179
 2,707    2,882    3,056    3,228    3,399    3,568    3,737    3,903


  177      175      174      172      171      169      168      167

79,284   78,636   77,993   77,353   76,718   76,087   75,460   74,837

19,821   19,659   19,498   19,338   19,179   19,022   18,865   18,709

59,463   58,977   58,494   58,015   57,538   57,065   56,595   56,128
year 25    year 26    year 27    year 28    year 29    year 30    year 31    year 32


  43,016     42,758     42,501     42,246     41,993     41,741     41,490     41,241


  47,084     46,990     46,896     46,803     46,709     46,615     46,522     46,429
 4,068    4,232    4,395    4,556    4,716    4,875    5,032    5,188


  165      164      163      161      160      159      157      156

74,218   73,603   72,992   72,386   71,783   71,184   70,589   69,998

18,554   18,401   18,248   18,096   17,946   17,796   17,647   17,500

55,663   55,202   54,744   54,289   53,837   53,388   52,942   52,499
year 33    year 34    year 35    year 36    year 37    year 38    year 39    year 40


  40,994     40,748     40,504     40,261     40,019     39,779     39,540     39,303


  46,336     46,244     46,151     46,059     45,967     45,875     45,783     45,692
 5,342    5,496    5,648    5,798    5,948    6,096    6,243    6,389


  155      153      152      151      149      148      147      146

69,411   68,828   68,248   67,673   67,101   66,533   65,969   65,408

17,353   17,207   17,062   16,918   16,775   16,633   16,492   16,352

52,058   51,621   51,186   50,755   50,326   49,900   49,477   49,056
Intructions: complete all the blue cells:

                                                                        Assumptions
Description                                             Value              Explanation
                                                                    Estimated price per credit at
Sale Price of credits ($)                               $5.00               time of sale
Brokerage fee (%)                                       7.50%         Commercialization fee


Registration ($/tCO2e)                                  $0.05         Fee charged by registry


                                                                        Total fees charged by
Certification fee ($/tCO2e)                             $0.03       standards body (VCS, CCBA,
                                                                       SOCIALCARBON etc.)
Sales Tax (if applicable) (%)                          15.00%
Tax on net income (if applicable) (%)                  15.00%

                                   Important notes: All cost information must be entered as a negative number.
                                                    The table should be adjusted to represent the actual project
                                                    The table currently shows revenues only at the time of verifi
                                                    expect revenues to be generated at a different frequency, fo
                                                    forward.


                                                            2009            2010
                 Expected Revenues
                                                           year 0          year 1
Gross income
Credits generated                                            -            33,675
Gross Revenue from sale of credits
Sales Tax                                                    -                -
Revenue after Sales Tax                                      -                -


                                                            2009            2010
            Carbon Project Cycle Costs
                                                           year 0          year 1
Investment REDD - Project Cycle
Project Design Document (PDD)                           (130,000)
Validation (Audit PDD)                                   (20,000)
Carbon stock monitoring and Modeling Adjustment
Verification (Audit monitoring reports)
Registration fees
Certification fees
Brokerage fees                                                                -
Total Project Cycle Costs                               (150,000)             -


 Project Implementation (conservation activities)           2009            2010
                       Cost                                year 0          year 1
Startup costs:
Land Acquisition                                        (100,000)
Project approval by relevant authorities                 (10,000)
Project marketing                                 -
Legal costs                                    (1,000)
Total Startup Costs                          (111,000)

Implementation costs (annual):
Activities to reduce deforestation           (100,000)    (20,000)
Environmental monitoring                          -           -
Social monitoring                                 -           -
Marketing of the project                          -           -
Total Annual Implementation Costs            (100,000)    (20,000)
Total Investment - Project Implementation    (211,000)    (20,000)

Financial Analysis
Revenue after Sales Tax                           -           -
Total Project Cycle Costs                    (150,000)        -
Total implementation costs                   (211,000)    (20,000)
Operational Result (EBITDA) including
implementation costs                         (361,000)   (381,000)
Net income before tax                        (361,000)    (20,000)
Income tax                                        -           -
Net income after tax                         (361,000)    (20,000)
IRR                                               25%
Net Present Value (10%)                     1,119,017
           Assumptions
              Explanation                             For more information:
        Estimated price per credit at
                time of sale
          Commercialization fee

                                  APX VCS Registry
          Fee charged by registry
                                  TZ1 Registry
                                  Caisse des Depots VCS Registry
           Total fees charged by  CCBA does not charge a certification fee
       standards body (VCS, CCBA, SOCIALCARBON does not charge a certification fee
          SOCIALCARBON etc.)      VCS fees




st information must be entered as a negative number.
ble should be adjusted to represent the actual project length.
ble currently shows revenues only at the time of verification. This should be modified if you
  revenues to be generated at a different frequency, for example annually if credits are sold
 d.


                                2011          2012           2013          2014          2015      2016      2017
                               year 2        year 3         year 4        year 5        year 6    year 7    year 8

                              33,338        33,004         32,672        32,343       65,024     64,501    63,983
                                                                        825,165
                                 -             -              -        (123,775)          -         -         -
                                 -             -              -         948,940           -         -         -


                                2011          2012           2013          2014          2015      2016      2017
                               year 2        year 3         year 4        year 5        year 6    year 7    year 8


                                                                        (10,000)
                                                                        (50,000)
                                                                        (14,000)
                                                                         (8,252)
                                                                         (4,951)
                                 -             -              -         (61,887)          -         -         -
                                 -             -              -        (149,090)          -         -         -


                                2011          2012           2013          2014          2015      2016      2017
                               year 2        year 3         year 4        year 5        year 6    year 7    year 8
 (20,000)    (20,000)    (20,000)    (20,000)   (20,000)   (20,000)   (20,000)
     -           -       (10,000)        -          -          -          -
     -           -       (10,000)        -          -          -          -
     -           -           -           -          -          -          -
 (20,000)    (20,000)    (40,000)    (20,000)   (20,000)   (20,000)   (20,000)
 (20,000)    (20,000)    (40,000)    (20,000)   (20,000)   (20,000)   (20,000)


     -           -           -       948,940        -          -          -
     -           -           -      (149,090)       -          -          -
 (20,000)    (20,000)    (40,000)    (20,000)   (20,000)   (20,000)   (20,000)

(401,000)   (421,000)   (461,000)   318,850     298,850    278,850    258,850
 (20,000)    (20,000)    (40,000)   779,850     (20,000)   (20,000)   (20,000)
     -           -           -      116,977         -          -          -
 (20,000)    (20,000)    (40,000)   662,872     (20,000)   (20,000)   (20,000)
  2018         2019        2020      2021      2022      2023         2024
 year 9      year 10     year 11   year 12   year 13   year 14      year 15

63,467       62,955     62,446     61,941    61,439    60,940       60,445
          1,599,649                                              1,536,056
   -       (239,947)        -         -         -         -       (230,408)
   -      1,839,597         -         -         -         -      1,766,464


  2018         2019        2020      2021      2022      2023         2024
 year 9      year 10     year 11   year 12   year 13   year 14      year 15


                        (10,000)
                        (50,000)
                        (14,000)
                        (19,119)
                        (11,471)
   -       (119,974)        -         -         -         -       (115,204)
   -       (119,974)   (104,590)      -         -         -       (115,204)


  2018         2019        2020      2021      2022      2023         2024
 year 9      year 10     year 11   year 12   year 13   year 14      year 15
(20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)
    -        (10,000)         -            -            -            -            -
    -        (10,000)         -            -            -            -            -
    -            -            -            -            -            -            -
(20,000)     (40,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)
(20,000)     (40,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)


    -      1,839,597          -            -            -            -      1,766,464
    -       (119,974)    (104,590)         -            -            -       (115,204)
(20,000)     (40,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)

238,850    1,918,473    1,793,883    1,773,883    1,753,883    1,733,883    3,365,143
(20,000)   1,679,623     (124,590)     (20,000)     (20,000)     (20,000)   1,631,260
    -        251,943          -            -            -            -        244,689
(20,000)   1,427,680     (124,590)     (20,000)     (20,000)     (20,000)   1,386,571
  2025        2026      2027      2028         2029      2030      2031
year 16     year 17   year 18   year 19      year 20   year 21   year 22

59,952     59,463     58,977    58,494       58,015    57,538    57,065
                                          1,474,509
   -           -         -         -       (221,176)      -         -
   -           -         -         -      1,695,685       -         -


  2025        2026      2027      2028         2029      2030      2031
year 16     year 17   year 18   year 19      year 20   year 21   year 22


           (10,000)
           (50,000)
           (14,000)
           (18,209)
           (10,925)
   -           -         -         -       (110,588)      -         -
   -      (103,134)      -         -       (110,588)      -         -


  2025        2026      2027      2028         2029      2030      2031
year 16     year 17   year 18   year 19      year 20   year 21   year 22
  (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)
  (10,000)         -            -            -            -            -        (10,000)
  (10,000)         -            -            -            -            -        (10,000)
      -            -            -            -            -            -            -
  (40,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (40,000)
  (40,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (40,000)


      -            -            -            -      1,695,685          -            -
      -       (103,134)         -            -       (110,588)         -            -
  (40,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (40,000)

3,325,143    3,202,008    3,182,008    3,162,008    4,727,105    4,707,105    4,667,105
  (40,000)    (123,134)     (20,000)     (20,000)   1,565,097      (20,000)     (40,000)
      -            -            -            -        234,765          -            -
  (40,000)    (123,134)     (20,000)     (20,000)   1,330,332      (20,000)     (40,000)
    2032      2033         2034      2035      2036      2037        2038
  year 23   year 24      year 25   year 26   year 27   year 28     year 29

 56,595     56,128       55,663    55,202    54,744    54,289     53,837
                      1,414,946
     -         -       (212,242)      -         -         -           -
     -         -      1,627,187       -         -         -           -


    2032      2033         2034      2035      2036      2037        2038
  year 23   year 24      year 25   year 26   year 27   year 28     year 29


 (10,000)                                                         (10,000)
 (50,000)                                                         (50,000)
 (14,000)                                                         (14,000)
 (17,334)                                                         (16,493)
 (10,401)                                                          (9,896)
     -         -       (106,121)      -         -         -           -
(101,735)      -       (106,121)      -         -         -      (100,389)


    2032      2033         2034      2035      2036      2037        2038
  year 23   year 24      year 25   year 26   year 27   year 28     year 29
  (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)
      -            -            -            -            -        (10,000)         -
      -            -            -            -            -        (10,000)         -
      -            -            -            -            -            -            -
  (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (40,000)     (20,000)
  (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (40,000)     (20,000)


      -            -      1,627,187          -            -            -            -
 (101,735)         -       (106,121)         -            -            -       (100,389)
  (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (40,000)     (20,000)

4,545,371    4,525,371    6,026,437    6,006,437    5,986,437    5,946,437    5,826,048
 (121,735)     (20,000)   1,501,066      (20,000)     (20,000)     (40,000)    (120,389)
      -            -        225,160          -            -            -            -
 (121,735)     (20,000)   1,275,907      (20,000)     (20,000)     (40,000)    (120,389)
     2039      2040      2041      2042      2043         2044      2045
   year 30   year 31   year 32   year 33   year 34      year 35   year 36

   53,388    52,942    52,499    52,058    51,621       51,186    50,755
1,357,306                                            1,301,531
 (203,596)      -         -         -         -       (195,230)      -
1,560,902       -         -         -         -      1,496,761       -


     2039      2040      2041      2042      2043         2044      2045
   year 30   year 31   year 32   year 33   year 34      year 35   year 36


                                                       (10,000)
                                                       (50,000)
                                                       (14,000)
                                                       (15,685)
                                                        (9,411)
 (101,798)      -         -         -         -        (97,615)      -
 (101,798)      -         -         -         -       (196,710)      -


     2039      2040      2041      2042      2043         2044      2045
   year 30   year 31   year 32   year 33   year 34      year 35   year 36
  (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)     (20,000)
      -            -            -            -        (10,000)         -            -
      -            -            -            -        (10,000)         -            -
      -            -            -            -            -            -            -
  (20,000)     (20,000)     (20,000)     (20,000)     (40,000)     (20,000)     (20,000)
  (20,000)     (20,000)     (20,000)     (20,000)     (40,000)     (20,000)     (20,000)


1,560,902          -            -            -            -      1,496,761          -
 (101,798)         -            -            -            -       (196,710)         -
  (20,000)     (20,000)     (20,000)     (20,000)     (40,000)     (20,000)     (20,000)

7,265,152    7,245,152    7,225,152    7,205,152    7,165,152    8,445,202    8,425,202
1,439,104      (20,000)     (20,000)     (20,000)     (40,000)   1,280,050      (20,000)
  215,866          -            -            -            -        192,008          -
1,223,238      (20,000)     (20,000)     (20,000)     (40,000)   1,088,043      (20,000)
  2046      2047      2048         2049
year 37   year 38   year 39      year 40

50,326    49,900    49,477       49,056
                              1,247,564
   -         -         -       (187,135)
   -         -         -      1,434,699


  2046      2047      2048         2049
year 37   year 38   year 39      year 40


                                (10,000)
                                (50,000)
                                (14,000)
                                (12,476)
                                 (7,485)
   -         -         -        (93,567)
   -         -         -       (187,528)


  2046      2047      2048         2049
year 37   year 38   year 39      year 40
  (20,000)     (20,000)     (20,000)     (20,000)
      -            -            -        (10,000)
      -            -            -        (10,000)
      -            -            -            -
  (20,000)     (20,000)     (20,000)     (40,000)
  (20,000)     (20,000)     (20,000)     (40,000)


      -            -            -      1,434,699
      -            -            -       (187,528)
  (20,000)     (20,000)     (20,000)     (40,000)

8,405,202    8,385,202    8,365,202    9,572,373
  (20,000)     (20,000)     (20,000)   1,207,171
      -            -            -        181,076
  (20,000)     (20,000)     (20,000)   1,026,095
This worksheet is designed to help project proponents to estimate the cost of developing a project
design document (PDD). The line items below represent many of the costs involved in developing a
                 PDD, but should be modified to suit the context of each project.
                        Intructions: complete all the blue cells

Note: All cost information must be entered as a negative number
Greenhouse gas component
         Estimate of baseline and with-project deforestation rates
         Measurement of carbon stocks
Social Component
         Description of current social conditions in the project zone.
         Description of likely without-project social conditions
         Participatory project design
         Social impact monitoring plan
Environmental Component
         Description of current biodiversity and other environmental conditions
         Projection of likely without-project biodiversity and other environmental conditions
         Environmental monitoring plan
TOTAL Project Design and PDD preparation
of developing a project
 volved in developing a
oject.




               (30,000)
               (40,000)

               (10,000)
                (5,000)
               (10,000)
                (5,000)

               (20,000)
                (5,000)
                (5,000)
              (130,000)

				
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Description: A Project on Marketing document sample