Invest in Forest Belts to Reduce CO2 and Prevent Soil Erosion

Center for Russian Environmental Policy

Sequestration of Greenhouse Gases by
Forest Belts on Agricultural Lands

Investment Project

Moscow
2002

This investment project was made possible through support provided by the
Institute for Sustainable Communities of Montpelier, Vermont U.S.A. and the
USAID. The opinions expressed herein are those of the author(s) and do not
necessarily reflect the views of the Institute for Sustainable Communities or the
USAID. Furthermore, the mention of trade names or commercial products does
not constitute endorsement or recommendation for use.

Authors: Project Manager A.V. Stetsenko, senior researcher,
Department of Economics, Lomonosov State
University, Moscow, Cand. Sci. (Econ.);
V.N. Sidorenko, senior researcher, Department of
Economics, Lomonosov State University, Moscow,
Cand. Sci. (Econ., Phys.&Math.);
N.V. Luzhetskaya, researcher, Department of Law,
Lomonosov State University, Moscow;
V.V. Shatailov, researcher, Department of Soil
Science, Lomonosov State University, Moscow;
A.V. Kulevsky, researcher, Department of
Computational Mathematics and Cybernetics,
Lomonosov State University, Moscow
Advisors: V.M. Zakharov, Director of Center for Russian
Environmental Policy, RAS Corresponding
Member;
S.N. Bobylev, Professor, Department of
Economics, Lomonosov State University, Moscow.

Cover: Voronezh steppe transformed by young forest plantations. In 2001, the authors planted in
Druzhba APC, Liski District, 50 hectares of forest belts to exemplify the implementation of the idea
proposed.

ISBN 5-88971-025-7 © Center for Russian Environmental Policy 2002
© Stetsenko, A.V. 2002

2

Contents

This investment project was made possible through support
provided by the Institute for Sustainable Communities of
Montpelier, Vermont U.S.A. and the USAID. The opinions
expressed herein are those of the author(s) and do not
necessarily reflect the views of the Institute for Sustainable
Communities or the USAID. Furthermore, the mention of
trade names or commercial products does not constitute
endorsement or recommendation for use..............................2
Introduction.............................................................................5
The Essence of the Project......................................................7
Investment Proposal for Voronezh Oblast ...........................9
Assessment of the Situation .....................................................9
Economic indicators ...............................................................9
Environmental indicators ......................................................11
Social indicators ...................................................................14
Legislation.............................................................................15
Project Content.......................................................................22
Sources of finance .................................................................22
Partnerships..........................................................................22
Project timing schedule.........................................................23
Method of credit reimbursement ...........................................23
Cost-benefit analysis..............................................................23
Incidental benefits ................................................................28
Project’s risks .......................................................................29
Organization experience........................................................29
Anticipated Results.................................................................30
Economic...............................................................................30
Environmental.......................................................................30
Social.....................................................................................30
Legal......................................................................................30

3

Possibilities for Implementing the Project in Other Regions
................................................................................................31
Appendices.............................................................................32
Project’s GIS Support ...........................................................32
Calculation of Basic Parameters of the Investment Project...34

4

Introduction
The global climate warming, which in recent years has been manifested in
full force by unprecedented typhoons, floods, droughts, and fires, is directly
related to increased amounts of greenhouse gases in the atmosphere. These include
carbon dioxide CO2, methane CH4, nitrous oxide N2O, and others. In 1992, 154
states signed the Framework Convention on Climate Change in Rio de Janeiro,
and in 1997, the Kyoto Protocol was signed. The Protocol binds quantitative
commitments of advanced countries (and their domestic enterprises) and countries
with transitional economy on the restriction of greenhouse gas emissions in the
atmosphere. A number of nations, among them Japan and EU countries, have
already ratified the Kyoto Protocol. Russia is in the phase of ratification. The
essence of this system is that each country assuming such commitments is granted
an allowance for strictly definite amount of greenhouse gas emissions. Allowances
may be exceeded, but in such case, it would be necessary to buy out a right for
extra emissions from those countries that have not spent theirs in full. Complicated
mechanisms are envisaged for triggering this instrument and exercising control
over its execution. There are two basic ways to reduce the level of greenhouse
gases in the atmosphere. The first one involves reduction of greenhouse gas
emissions by industries, while the second one involves binding of greenhouse
gases by ecosystems. In the Kyoto Protocol, this is provided for in Article 3.3,
where it is proposed to allow for reduced (sequestered) carbon dioxide at the
expense of planting the so-called “Kyoto forests” in international transactions. By
Kyoto forests are meant ones planted after 1990 specially for prevention of climate
change.
Another urgent problem of the new millenium is the accelerated
degradation of agricultural lands related to erosion-induced thickening of top
fertile soils. This problem made itself felt for the first time by famine and drought
late in the 19th century. The way to resolve it was found by V.V. Dokuchaev, the
founder of soil science. In arid steppes of Voronezh Guberniya, Dokuchaev
pioneered planting a system of forest protection belts. Since that time, a principal
mechanism for prevention of soil erosion has been planting forest belts to reduce
wind and water velocity on slopes thus preventing water and wind erosion. In the
latter part of the past century, these ideas of the great Russian scientist started to be
implemented in Russia in the Great Plan of Nature Transformation, developed by
domestic scientists and adopted by the USSR government. This bore appreciable
fruit already in the early 1970s.
This project offers a way to address two problems: global climate change
and soil degradation. The authors, through the experiment conducted in
2001-2002, substantiated a possibility of planting forest belts of particular species
(maximum carbon dioxide absorbers) in the fields, in this way simultaneously
fulfilling commitments under the Kyoto Protocol. In such case, the cost of forest
belt planting is compensated for by selling greenhouse gas emissions allowances

5

to industrial enterprises. The enterprises or Carbon Funds acting on behalf of these
enterprises can become investors financing requisite works. In exchange, they get
securities confirming their real sequestration of atmospheric carbon dioxide.

The investment project is designed for Voronezh Oblast, since it was a base
region for the experiment carried out within the framework of the grant
“Dissemination of the Ecologically Sound Landscape Farming System on
Agricultural Enterprises”. The authors provide economic, social, and ecological
indicators for investors to have an idea of the condition of the region and the laws
enabling a possibility to organize shelter belts.
In Voronezh Oblast, beginning in 1996, more than 70 projects of
ecologically sound landscape farming systems have been developed. They were
created to ensure sustainable agriculture, namely: to raise yielding capacity, to
prevent erosion, to conserve fertility of soil, and to stabilize agro-ecosystems. The
authors analyzed these projects. One project on an ecologically sound landscape
system was selected as a specific example for investors and for further study.
With existing legislation taken into consideration, a contract was made
among the Center for Russian Environmental Policy, agricultural enterprise
SPKhK Druzhba, and forestry Davydovsky. In 2001, 50 hectares of forest belts
was planted within the framework of this contract.
This investment project provides a substantial analysis of costs and benefits,
methods of credit reimbursement to investors, and procedure for calculation of
attending benefits from its implementation.
As part of the project, for some Russian agrarian regions, the needs were
specified in agricultural lands to be used for shelter belts.

Why are forest belts needed?
• Prevention of droughts;
• Prevention of water and wind erosion of soil;
• Raising of yield capacity;
• Conservation of fauna and flora diversity;
• СО2 sequestration to reduce the greenhouse effect;
• Investor compensates for industrial СО2 emissions.

6

The Essence of the Project
In the process of economic activity, industrial enterprises emit greenhouse
gases in the atmosphere. There are six greenhouse gases: carbon dioxide CO2,
methane CH4, nitrous oxide N2O, hydrofluorocarbons HFCs, perfluorocarbons
PFCs, and sulfur hexafluoride SF6. Carbon dioxide is the main greenhouse gas
affecting global climate change.
Beginning in 2008, signatories to the Kyoto Protocol will organize a global
market for trading in greenhouse gas emissions allowances, as well as local
intrastate markets. Enterprises emitting greenhouse gases in the atmosphere will be
assigned atmospheric emissions limits. In case of reduction of emissions, the
enterprise will be able to sell the surplus, whereas in case of exceeding the limit, it
will have to pay penalties or buy additional allowances. Increasing one’s
allowance on additional greenhouse gas emissions in the atmosphere will be
possible through introducing technology innovations, or purchasing allowances on
the market, or financing sequestration or reduction of greenhouse gas emissions of
a third party (agricultural cooperative, forestry, etc.).
This project deals with the resolution of two problems: global climate
change and soil degradation.
Forest belts located on farming lands and planted after 1990 are classified
as “Kyoto forests” (Article 3.3 of the Kyoto Protocol), and, accordingly, their
stock of carbon dioxide will be credited against allowance of enterprises.
In this project, enterprises or Carbon Funds are offered the cheapest method
for enlarging their emissions allowances through the investment in planting forest
belts to obtain in exchange securities confirming the real sequestration of carbon
dioxide by forest belts. The investor identifies the amount of greenhouse gases to
be reduced. The Center for Russian Environmental Policy, using methodologies
developed by the authors1, will help select breeds of trees to enable sequestration
of the specified carbon dioxide amount and calculate the forest belt area. To
calculate the forest belt area, it is necessary to divide the reduced greenhouse gas
emissions amount into the amount of carbon dioxide absorbed (sequestered) by the
forest belt.
One hectare of forest shelter absorbs about 4 tons of carbon dioxide per
year. The amount of sequestered carbon dioxide (CO2) essentially depends on the
breed of the tree, as well as on the geographic and climatic conditions this tree
grows in. More detailed information on this is given in sections “Method of Credit
Reimbursement” and “Partnerships”.
The investment project was developed for Voronezh Oblast, because it was
chosen for experiment within the framework of the grant “Dissemination of the
Ecologically Sound Landscape Farming System on Agricultural Enterprises”
1
More detailed description of the procedure to calculate sequestration is given in the book: S.N.
Bobylev, O.E. Medvedeva, V.N. Sidorenko, S.V. Soloviova, A.V. Stetsenko, and A.V. Zhushev.
Economic Evaluation of Biodiversity.

7

provided by the Institute of Sustainable Communities. The authors discussed
economic, social, and environmental indicators for investors to have an idea of the
condition of the region and laws enabling a possibility to organize shelter belts.
The authors analyzed projects on environmental landscape-consistent
farming available in the oblast. One promising project on an ecologically sound
landscape farming system was selected as a specific example for investors and for
further research, and, with existing legislation taken into consideration, a contract
was made. In 2001, 50 hectares of forest belts was planted within the framework
of this contract. In this way, the groundwork was laid for actual implementation of
the project.
When preparing the project, a foundation was laid for handling a
geoinformation system and database, and mathematical and economic models
were developed for computation of sequestered carbon dioxide stocks.
Investors interested in more detailed information for implementation of the
project can get it in the Center for Russian Environmental Policy.

8

Investment Proposal for Voronezh Oblast

Assessment of the Situation

Economic indicators
Voronezh Oblast was set up in 1934 as a result of breaking up Central
Chernozem Oblast with Voronezh as its center. The predecessor of Central
Chernozem Oblast was Voronezh Guberniya (1725-1928). In 1711-1725,
Voronezh had been the center of Azov Guberniya. Voronezh Oblast is situated in
the south of Central Russia. It borders Ukraine and Rostov Oblast in the south,
Belgorod Oblast in the west, Kursk Oblast in north-west, the oblasts of Lipetsk
and Tambov in the north, and Volgograd Oblast in the north-east. Area: 52.4
thous. sq. km; population: 2490 thous. people, of which 61.6% urban.
Voronezh Oblast is located within the Central Russian Hills (elevation up to
268 m), with Oka-Don Valley in the east. The main rivers are the Don and its
tributaries the Khopyor and the Bityug.
The oblast soils are predominantly chernozems (black soils). Vegetation:
vast forest tracks, primarily oak woods and pine forests, with occasional native
steppes (mostly plowed). The characteristic features of the oblast are a big share of
rural population and its attractiveness for migrants from the North Caucasus. Over
94% of the population are Russians; it is to be noted that here, there are some
territories of compact habitation of Ukrainians, which can be found nowhere else
in Russia. A major part of the southern population in Voronezh Oblast classifies
themselves as Don Cossacks. Despite the unfavorable birth and death rates, the
total number of population is stable, with average male life span among the highest
in Russia. The oblast has an advantageous transportation and geographic situation.
There are nonferrous metal ore deposits and signs of the presence of diamonds.
For cultivation of rich soil, there is big enough rural population that has not lost
habits of work. The economic structure in general is quite balanced.
In the oblast center, a considerable number of technologically advanced
industrial enterprises are focused. The disadvantages are an excessive share of
defense plants and irregularity of economic development throughout the oblast.
The principal industrial centers are Voronezh, Borisoglebsk, Liski, Rossosh, and
Valuiki.
The oblast’s main wealth is its chernozem soil, a solid base for highly
developed agriculture.
The oblast specializes in production and processing of agricultural products,
mechanical engineering, and electric power engineering. The most technically

9

perfect Novovoronezh Nuclear Power Station is located here. Local machine-
building enterprises manufacture products known far beyond the oblast
boundaries: Record television sets, radio sets, IL-96-30 passenger airbuses and
other aircraft modifications, power units for space rocket systems and aviation,
machine tools, excavators, agricultural equipment, heavy press equipment, and
machinery and equipment for defense purposes. Also, chemical and
pharmaceutical industries are developed.

Table 1. General social and economic situation in Voronezh Oblast in 1998
1998 1998 in 1997 in
% against % against
1997 1996
Economic indicators
Industrial output, mln. rubles 14653.3 91.8 103.6
Volume of contract work, mln. rubles 1977.6 94.1 87.1
Agricultural output, mln. rubles 2861.7 88.6 х
Commercial freight turnover, mln. tons per km 17646.6 89.0 х
including rail freight traffic 17239.7 88.5 х
Scope of communication services, mln. rubles2 491.6 101.6 136.0
Retail turnover, mln. rubles 11780.0 97.7 92.4
Scope of paid public services, mln. rubles 2492.4 94.8 102.0

The largest industrial enterprises are the Novovoronezh Nuclear Power
Station (production of electricity), and AOOT Comintern Tyazhex (cast materials,
steel, excavators, and domestic electric appliances). There is a heavy power press
plant manufacturing forging presses and spare units for them, automatic and
semiautomatic machine-building lines, and mechanical forging and stamping
presses. OAO Refractory Plant in Semiluki produces construction bricks, sawn
timber, and refractory products. GP Dzerzhinsky Diesel Locomotive Repair Plant
manufactures cast materials, welded metal structures, and stampings. The
affiliation of ZAO Voronezhkhimfarmvremya Pharmaceutical Production
Company produces blood and plasma substitutes, medicinal preparations,
papaverine, and drugs for cardiovascular diseases. AOOT Voronezhselmash
fabricates sorting machines, grain cleaners, machines for plant breeding, and other
agricultural machines. OAO Voronezh Machine Tool Plant manufactures metal-
cutting machine tools, whereas TOO Ceramic Plant Production and Commercial
Company produces ceramic and glazed tiles. OAO Chemical Machine-Building
Plant manufactures air-cooled apparatus, and chemical equipment and spare parts
to it. AOOT Boiler Mechanical Works makes cast iron products, radiators, and

2
Relative indices are given in current prices.

10

heating convectors. AOOT Meat Plant produces sausages, canned products, meat,
and animal fats.
In 1998, a higher output was noted in food industry (by 9.6%) and in
production of construction materials (by 5.5%). Facilities of forestry and wood-
processing industry ended the year without reduction in output. There increased
production of medical equipment, mine loaders (two-fold), door blocks,
medications (by 34—36%), prefabricated reinforced concrete structures, low-
power motors, chemical equipment, construction lime, ceramic wall tiles, non-
metallic constructional materials, and mineral fertilizers (by 5—18%).
In 1998, industrial enterprises obtained a profit totaling 747 million rubles.
Yet, the share of unprofitable businesses remained high (46%), with the loss
totaling 463 million rubles. In 1999, 2900.2 million rubles was invested in the
development of economy and social sphere.
Power engineering enterprises laid 428 km of power lines, communication
facilities put into operation automatic telephone stations for 27.7 thousand urban
users and 4.4 thousand rural users, and 55 km of public hard roads was built.
In recent years, the individual sector share in agricultural production has
grown, with about 45% of produce made by subsidiary farms.
The number of farming households in the oblast is 3130, with their overall
area of 165.8 thousand hectares. The average land area of one farm is 53 hectares.
In the structure of farmers’ agricultural production, there prevails grain crop
growing. They gathered a little more than 3 percent of grain and sugar beet and 5
percent of sunflower seeds. The portion of animal breeding produce is not big. Out
of the overall volume of the oblast’s produce, farmers produced 0.7% of meat and
0.5% of milk.
The gross grain yield made 1669.8 thousand tons. The reduction in grain
production volume as compared to the preceding years was on the account of
drought-related decline in the level of crop yield and decreased growing areas.

Environmental indicators

The basis of agricultural production is the use of farming lands. The
economic value of different types of agricultural lands is variable. So is their role
in ensuring an ecological balance on agricultural landscapes. The use of arable
land is generally economically effective. The intensive exploitation of these lands,
however, entails noticeable negative environmental impacts. The use of fallow
land and low-yield farmland produces the lowest economic result, although it is
precisely such lands that are capable of performing stabilizing ecological
functions. The aggravation of ecological condition of the lands is due to the
disturbed structure of agricultural lands, prevalence of arable lands.

11

The problem of building environmentally sustainable agricultural
landscapes while conserving biological diversity is tackled based on the
identification of the best proportions in the land management pattern, different
types of land. A territory suitable for agriculture should be used as productive
farmland – arable land. At the same time, however, natural ecosystems that
constitute low-productive lands should be conserved in this territory. In particular,
forest protection belts. It is exactly the plots of uncultivated land that prevent the
occurrence and development of water and wind erosions as well as soil
degradation. They are a habitat for useful fauna. It is not uncommon that
endangered plant and animal species inhabit there. Through the conservation and
rehabilitation of low-productive lands, it is possible not only to ensure a high
ecological balance of the landscape, but also to obtain a higher economic result
from the utilization of arable land. Eventually, natural ecosystems promote higher
soil fertility.
Land resources are basically presented by chernozems (80%). Over 10
years, the arable land area has reduced by more than 200 thousand hectares
(almost by 7%), which is explained by its transfer from the agricultural-purpose
land status into the purview of the local authorities or made available for citizens’
personal use. Today, the biggest areas belong to agricultural enterprises,
organizations and citizens – 4 million hectares (76.7%), and human settlement
administrations – almost 688 thousand hectares (13.2%). Forest resources account
for 392 thousand hectares, or 7.5%. The negative impact on the state of land
resources is exacerbated by the agricultural crisis. Chernozem soils continue
degrading. The destructive factor is the crisis-related intensification of “depletive”
land management.
The fact that humus, the main soil productivity parameter, remains
relatively stable is solely explained by its stock built up prior to the early 1990s.
There is virtually no compensation for this stock. Over the last decade, the
application of organic fertilizers has gone down 2.5 times and mineral ones 8 to 9
times. For five years, no integrated agrochemical cultivation has been done.
Liming of acid soils and application of gypsum in alkali soils is exercised in
extremely low volumes. Despite the fact that 965.1 thousand hectares experience
water erosion and 145.2 thousand hectares experience wind erosion, the scope of
agrotechnical, forest-reclamation, and hydraulic engineering steps has been
dramatically reduced. Thus, in 1998, only 94.6 hectares of forest protection belts
was laid down, with several times less high-water banks and check dams built.
The Voronezh Oblast’s large-scale initiative on promoting novel farming
systems was backed by the Ministry of Agriculture and Food of the Russian
Federation.
In each district, base farms were identified to plant forest belts there. Today,
there are more than 70 such farms, for which projects on ecologically sound
landscape farming systems have been developed. In order to coordinate work and

12

make it more efficient, an oblast productivity headquarters and a coordination
board of scientists and experts have been established. A methodological guide
named “Design and Implementation of Ecologically Sound Landscape Systems on
Agricultural Enterprises in Voronezh Oblast” has been developed and published.
Within the framework of the program on promotion of new farming
systems, projects have been developed on planting 8720 hectares of forest belts in
addition to the available 11.4 thousand hectares (Table 2).

Table 2. Projected planting in Voronezh Oblast
Ligneous breeds Hectares
Oak 180
Poplar 3360
Birch-tree 2420
Maple 540
Ash-tree 500
False acacia 1130
Pine 350
Elm 240
Total for trees 8720
Bushes (honeysuckle, currant) 280

One pressing problem, which remains unsolved, is air pollution in
populated areas, primarily due to motor transport exhaust emissions. The air
condition in towns has been for a long time estimated as medium-polluted.
According to information provided by the oblast hydrometeorological center and
the committee for ecology, the overall pollutants discharge in the atmosphere from
all polluters has grown by more than 31 thousand tons (7.1%) to make 439.7
thousand tons. In so doing, emissions from stationary polluters have reduced by
7.2 thousand tons to come to 56.1 thousand tons, whereas ones from mobile
polluters have grown by 36.4 thousand tons to come to 373.6 thousand tons.
The major polluters are transport agencies (22%), as well as enterprises of
food industry (20%) and power engineering (15%). For transport agencies,
emissions have increased by 2 thousand tons, whereas for the latter branches they
decreased by 1.5 and 1.0 thousand tons, respectively.

13

Social indicators

In addition to the natural wealth and the agroindustrial potential gained over
the post-war period, an important prerequisite for progress in the oblast is the
availability of advanced scientific and technological potential and highly qualified
personnel. The leading enterprises, such as Voronezh Airplane-Building
Company, Ltd., Voronezh Communication Research Institute, Voronezh Signal
Plant, Chemical Automatics Design Bureau, Electric Lamp Plant, and others, have
retained R&D and big pilot and design facilities within their structure. On the
whole, the economic structure is quite balanced and provided with labor resources.
The level of unemployment is Russian mean.
The basic drawbacks restraining economy progress are a cutback in
production and an excessive share at defense facilities of undemanded high-tech
civil productions that suffered most of all from crisis processes and a dramatic
decline in solvent demand on their primary products. In terms of the average per
capita income, the oblast ranks 36, lagging behind the Russian mean level by 30%.
Analysis demonstrated that in 1998, the natural population loss decreased
by 4.5% as compared to the previous year and made 21.3 thousand people. The
death rate exceeded the birth rate 2.1 times.

Table 3. Oblast social indicators in 1998
1998 1998 in % 1997 in %
against against
1997 1996
Real disposable cash income 91.2 102.4
Calculated average monthly earnings:
nominal (rubles) 670.0 111.7 159.3
real (rubles) 64.2 102.7
Number of people with income below 786.7 131.2 95.4
subsistence minimum (thousand people)
(% of the entire population) 31.7 х х
Total number of unemployed (thousand 89.3 101.2 99.3
people)
Officially registered number of unemployed 18.4 68.1 94.9
(thousand people)
Consumer price index for goods and 173.9 124.3 117.9
services
Producer’s price index for industrial 125.9 110.1 122.5
products

14

The causes for death of each second individual were circulatory diseases, of
each twelfth accidents, poisoning and traumas, of each fifth respiratory diseases.
The number of infants died under one year has grown by 6.7%.
Sixty-four percent of the population had incomes below the average level;
28.2 percent of cash income fell on 10 percent of the most well-off population and
only 2.3 percent fell on 10 percent of the least well-off population. Hence, the
income ratio of these population groups was 12.5.
The size of subsistence minimum as of December 1998 made 531.7 rubles,
having increased by 65.1 percent as compared to December 1997. For 31.7 percent
of the population, the average per capita income was below the subsistence
minimum. The average monthly earnings made 244 rubles or 67.4 percent of the
subsistence minimum. The sum of additional resources needed to raise the
earnings of low-income population groups to the subsistence minimum level made
94.8 million rubles or 5.9 percent relative to the total income volume.

Legislation

Analyzing effective federal legislation and Voronezh Oblast legislation, the
authors attempted to find out to what extent the laws enable the implementation of
the system of ecologically sound landscape farming.
Federal Law on Protection of the Environment, No 7-FZ of 10 January 2002
sets forth general environmental requirements to be observed in agriculture. The
essence is as follows: enterprises, associations, organizations, and citizens
managing farming are obliged to exercise a set of measures to protect soils, water
bodies, forests, flora, and fauna from harmful impacts of spontaneous natural
forces, side effects of using sophisticated agricultural equipment, chemicals and
amelioration work, and from other factors that deteriorate the condition of the
natural environment and, as a consequence, cause damage to human health.
Article 8 of Federal Law on Government Regulation of Ensuring
Productivity of Agricultural-Purpose Lands, No 101-FZ of 16 July 1998 contains a
rule binding individuals that use plots of land to manage production of agricultural
products by methods enabling reproduction of agricultural land fertility, as well as
precluding or restricting adverse impact of such activity on the natural
environment.
The above requirements were, to some extent, further specified in the Land
Code of the Russian Federation of 28 September 2001 (RFLC). In conformity with
i. 1 of Article 12 of RFLC, the use of lands must be exercised by methods enabling
conservation of ecological systems, preservation of land capability of being a
means of production in agriculture, a foundation for handling economic activity.
The aims of land protection are first, prevention of degradation, pollution, littering,

15

and other harmful effects of economic activity; and second, ensuring of
improvement and restoration of lands subjected to the above-mentioned adverse
effects. Proceeding from these aims, Article 13 of RFLC defines the content of
rules for land protection.
By Decree of the RF Government No 380 of 8 November 2001, the State
Integrated Program on Raising Soil Productivity in Russia was adopted. The
program envisages that the realization by landed proprietors, landowners, and land
users of steps to improve soil productivity is exercised through the development
and implementation of farming and land-use systems. Patterns and projects of
land-use systems represent a mechanism for realization of regional programs at the
level of districts, land-users, landed proprietors, and landowners. Using these
patterns and projects allows implementation of balanced ecologically sound
landscape farming systems, as well as agricultural forest improvement,
hydroamelioration, soil improvement, and other steps targeted at raising and
maintaining soil fertility.
The federal targeted program “Development of the Land Reform in the
Russian Federation in 1999-2002”, approved by Decree of the RF Government No
694 of 26 June 1999, provides for development of a system of land protection
from degradation and other negative phenomena, conservation of degraded lands
and their restoration, and regulations on the procedure for transfer of low-
productive farmland into other category of land.
The Concept of Government Policy in the Field of Public Healthy Diet of
the Russian Federation for the Period up to 2005, approved by Decree of the RF
Government, N 917 of 10 August 1998, envisages implementation of a series of
measures on development of integrated farming systems, creation of high-
productive and environmentally balanced agrosystems to enable considerable
growth in the yield capacity of agricultural crops and productivity of cattle.
Of interest is the National Environmental Action Plan of the Russian
Federation for 1999-2001. In this document, it is noted that the condition of
Russian lands utilized for economic activity remains unsatisfactory. The depletive
agricultural land use under the economic crisis presents, in terms of its
consequences, a real threat to Russia’s national security. Especially dangerous for
the ecological condition of agricultural lands is the reduction of the general
standard of farming and failure to exercise obligatory soil-protection and other
environmental steps. The increasing anthropogenic load exacerbates the processes
of degradation of agricultural lands. In most of Russia’s main agricultural regions,
the tillage share on the territory exceeds environmentally admissible limits leading
to aggravated degradation of soil and deterioration of the hydrological regime of
water collection basins, decreases the capability of natural complexes to be self-
regulatory and to sustain productivity of agricultural lands.
To summarize, we could clearly identify the principal legal trends in the
sphere of agricultural land use. These trends are associated with the intensification

16

of the use of these lands, consideration for environmental factors and their
environmental assessment. The case in point is the promotion of ecologically
sound landscape farming; development of landscape systems based on the most
rational combination of agricultural and other lands, and establishment of
scientifically substantiated standards for each environmental zone; identification of
ecologically allowable limits of the tillage share on the territory; environmentally-
friendly farm managing enabling higher productivity of agricultural land and
restoration of natural complexes. Such policy is to promote building
environmentally balanced agricultural landscapes and farming systems.
Article 22 of LC classifies as agricultural-purpose lands ones that are
purposefully used in agricultural production for exercising various kinds of
activity as specified above. These are lands made available for farming needs, i. e.
farmlands, which are now used in agriculture, and lands designated for these
purposes. The above-mentioned territories must be beyond the limits of
settlements.
Agricultural-purpose lands are divided into two basic categories. Their
major part is farmland, i.e. lands used as a means of production. The other
category constitutes lands used as a territorial basis for location of intrafarm roads
and service lines. On these lands, there may be closed water bodies or structures
used for production, storage and primary processing of agricultural products, i.e.
real property facilities to serve immediate agricultural needs. Lands covered with
wood and shrub vegetation, designated to protect lands from various adverse
impacts, hold a special position. On one hand, they are utilized as a means of
production for growing this sort of vegetation, but on the other hand, as a
territorial basis for its location.
In compliance with i. 1 of Article 79 of RFLC, farmland, depending on its
natural properties and economic expediency of utilization for the purposes of plant
or cattle breeding, is classified into the following categories: farmland, hay land,
pasture, fallow land, and land occupied by perennial plantations (gardens,
vineyards, etc.).
By agricultural-purpose lands are meant ones located beyond the limits of
settlements and made available for agricultural needs as well as ones designated
for these purposes.
The agricultural-purpose lands are subdivided into farmlands, lands
occupied by intrafarm roads, service lines, or wood and shrub vegetation to enable
protection of lands from negative (adverse) natural, anthropogenic and
technogenic phenomena, closed water bodies, as well as buildings and structures
used for production, storage and primary processing of agricultural products.
Legislation does not prohibit transfer of one type of farmlands into another.
However, the transfer of farmlands from one type into another is not properly
regulated by the federal land legislation.
In legislation of the Subjects of the Russian Federation, the issue of optimal

17

proportion among different types of farmland received more attention than at the
federal level. For example, the Law of Voronezh Oblast on Land Management No
22-II-OZ of 27 November 1997, sets forth in Article 1 development of a set of
measures to ensure the best proportion of farming lands and to improve the
amelioration system, as well as to conserve and raise soil productivity as a major
line in the land management. In conformity with Article 4, in the process of land
management enabling reproduction of soil productivity as well as conservation and
improvement of natural landscapes, a set of design and survey works should be
conducted for agricultural enterprises, cooperatives, and peasant farms on design
of intrafarm land management (ecologically sound landscape farming systems)
including erosion-protection steps. These works are aimed at organization of
rational use and protection of lands with account for economic interests of their
proprietors while observing proper conditions and regime of land use.
In order to make up for the deficiency in federal land legislation, special
statutory acts were adopted at the level of the RF Subjects to regulate the
procedure for transfer of one type of farmland into another:
Decree of the Voronezh Oblast Administration on the Procedure for
Transfer of Farming Land of Oblast Agricultural Organizations into Other Lands
No 978 of 14 October 1998 (with alterations of 16 August 1999); Decree of the
Government of Sverdlovsk Oblast on the Provisional Procedure for Transfer of
Valuable Farmlands into Less Valuable Farmlands No 730-p of 22 August 1997;
Decree of the Government of the Republic of Mordovia on Approval of the
Regulations on the Procedure for Transfer of Low-Productive Unused and
Irrationally Used Farmlands of Agricultural Organizations, Peasant Farms,
Subsidiary Farms, Industrial Enterprises and Establishments Engaged in
Agricultural Production into Other, Less Valuable Lands No 502 of 4 October
1999.
Article 65 of RFLC sets forth a principle of payment for the use of land
regardless of what title a natural person or a legal entity has to use the plot of land.
The RF Law on Payment for Land of 11 October 1991 (revision of 31 December
1999) provides for a system for regulation of payment for land. There is also
Instruction of the RG Ministry for Taxes on Enforcement of the Law of the
Russian Federation on Payment for Land No 56 of 21 February 2000.
The prime objective of payment for land is to encourage rational use,
protection, and development of land, as well as to raise productivity of soil.
Legislative bodies in the RF Subjects, proceeding from the average size of
tax on one hectare of arable land and cadaster assessment of farmland, establish
concrete rates of land tax depending on the group of soils of arable land, as well as
perennial plantations, hay land, and pastures. Minimum rates of land tax on one
hectare of arable land and other agricultural lands are established by legislative
bodies of the RF Subjects. The sum of land tax may be adjusted depending on the
location of payer’s land.

18

The land tax is a local tax. Within the framework of effective legislation, a
possibility is provided at the level of the RF Subjects, to differentiate rates of land
charges in order to encourage, within certain limits, building of ecologically
optimal structure of farmland through increasing the economic value of forest
protection belts and other types of land.
In Voronezh Oblast, a number of statutory acts are in effect to regulate
relations with respect to organization and operation of the ecologically sound
landscape farming system. In particular:
- The Law of Voronezh Oblast of 25 May 1995 on Regulation of Land
Relations in Voronezh Oblast;
- The Law of Voronezh Oblast of 27 November 1997 on Land
Management;
- The Law of Voronezh Oblast of 27 November 1997 on State Land
Cadaster in Voronezh Oblast;
- Decree of the Administration of Voronezh Oblast on Implementation of
Environmental (Ecologically sound landscape) Farming Systems in the
Oblast;
- Decree of the Oblast Duma of 2 October 1997 No 151-P-OD on the
Regulations of Forestry Management in Forest Protection Belts on
Agricultural-Purpose Lands in Voronezh Oblast.
The Regulations of Forestry Management in Forest Protection Belts on
Agricultural-Purpose Lands in Voronezh Oblast were developed in conformity
with the Laws of the Russian Federation on Protection of the Natural
Environment, on Special Protection Areas, and on Amelioration, as well as the
Forest Code of the Russian Federation and other federal and oblast statutory acts.
The Regulations set forth a procedure for managing forestry in forest protection
plantations on agricultural lands in Voronezh Oblast.
The forest protection plantations on agricultural-purpose lands in Voronezh
Oblast (hereinafter, plantations) include
- all types of forest belts;
- plantations on slopes and bottoms of ravines and gullies;
- protection plantations on sands and lands unsuitable for cultivation;
- other protection wood and shrub vegetation.
Territories occupied by protection plantations, due to their environmental
role, are classified as special protected areas of oblast significance. For them, the
Regulations set forth a special forestry management regime.
Decrees of local authorities on issues related to utilization of forest
plantations must not contradict to these Regulations.
The procedure for forestry management envisaged in these regulations is
binding for legal entities and natural persons, including owners, users and lessees
of agricultural-purpose land with above-mentioned plantations regardless of the
form of ownership.

19

Lands covered with wood and shrub vegetation, designated to protect lands
from various adverse impacts, hold a special position. On one hand, they are
utilized as a means of production for growing this sort of vegetation, but on the
other hand, as a territorial basis for its location.
Lands covered with wood and shrub vegetation, designated to protect lands
from adverse natural, anthropogenic, and technogenic phenomena (shelter belts)
have a special legal regime defined in forest legislation and the laws on land
amelioration.
In compliance with Article 134 of RFLC, wood and shrub vegetation,
located on agricultural-purpose lands, is designated for protecting lands from
adverse natural, anthropogenic, and technogenic phenomena through the use of
soil-protection, water-regulation, and other properties of forest vegetation.
Cutting of wood and shrub vegetation located on agricultural lands should
ensure improvement of the state of this vegetation. It is admissible to cut wood and
shrub vegetation for remediation, sanitary, restoration, renewal and some other
purposes.
Issues relating to creation of such forest plantations are regulated by the
Federal Law on Amelioration of Lands. Article 2 of the Law defines land
amelioration as radical improvement of lands through the arrangement of
hydraulic-engineering, improvement, chemical, erosion-protection, forest-
reclamation, agrotechnical, and other amelioration-related steps.
Article 5 of the Law emphasizes one type of land amelioration –
agricultural forest reclamation. Agricultural forest reclamation consists in
arranging a set of amelioration steps to ensure radical improvement of lands
through the use of soil-protection, water-regulation, and other properties of forest
protection plantations.
The Federal Law on Amelioration of Lands (Article 10) regulates issues of
ownership of amelioration systems and detached hydraulic engineering facilities.
In compliance with the RF civil legislation, they may be in private, state,
municipal, and other forms of ownership.
Plots of land, classified according to the established procedure as
amelioration lands, are made available and withdrawn for conducting amelioration
steps in conformity with the RF land legislation (Article 26). Plots of land
bordering on lands (being) ameliorated can be used for ensuring amelioration of
lands by right of restricted use of an alien plot of land (servitude) in compliance
with the RF land legislation.
According to Article 27 of the Law on Amelioration, acceptance for
operation of amelioration systems, detached hydraulic engineering facilities and
forest protection plantations is exercised according to the procedure established by
the federal executive body in charge of agriculture.
Citizens and legal entities operating amelioration systems, detached
hydraulic engineering facilities, and forest protection plantations, are obliged to

20

maintain the above-mentioned facilities in good order and take measures to
prevent damage thereof. The rules for operation of amelioration systems and
hydraulic engineering facilities, as well as the rules for maintenance of forest
protection plantations are established by the federal body and executive power in
charge of agriculture as agreed upon with the special authorized government
agency for environmental protection, special authorized government body in
charge of control of the use and protection of water resources, the federal body in
charge of land resources and land management, the special authorized body of
forestry control, and other government agencies concerned.
The rules for operation of amelioration systems and hydraulic engineering
facilities, as well as the rules for maintenance of forest protection plantations are
obligatory for all citizens and legal entities.
The Law on Amelioration (Article 30) sets forth conditions that must be
met to ensure protection of amelioration systems, hydraulic engineering facilities,
and forest protection plantations. Thus, construction on lands (being) ameliorated
of projects or arrangement of other works not designated for amelioration of lands,
must not deteriorate water, air or nutritive regimes of soil on lands (being)
ameliorated, or hamper the operation of amelioration systems, hydraulic
engineering facilities, and forest protection plantations. Any activity on lands
(being) ameliorated should be carried out in conformity with requirements of
special authorized government bodies in the field of land improvement.
Construction and operation of communication and power lines, pipelines, roads,
and other facilities on ameliorated lands should be carried out upon agreement
with special authorized government agencies in the field of land improvement.
One line in the implementation of the Kyoto Protocol and UN Framework
Convention on Climate Change is a full-scale account in the carbon balance of
forests and forest protection plantations on agricultural lands; attraction of
investments into Russia given a guarantee of targeted use of these resources for
projects on sustainable development to ensure energy efficiency and saving,
alternative use of energy, reforestation and afforestation based on strict observance
of principles of sustainable forest use and raising of farming efficiency.
In some countries, domestic allowance trading has already begun; in
particular, in the Unites States, sulfur dioxide emissions allowance trading is being
successfully implemented. In Great Britain, trading in greenhouse gas emissions
allowances has been arranged. The European Union has made a decision to
commence internal trading in greenhouse gas emissions allowances in 2005.

21

Project Content

Sources of finance
- Carbon funds.
- Environmental funds.
- Enterprises interested in greenhouse gas emissions reduction and in
acquisition of “carbon” allowances.
- Banks.
- Environmental-image-conscious enterprises.

Partnerships
Project participants:
The Investor, advancing credits for planting forest belts, obtains in
exchange a right to dispose additionally arising “carbon allowances”, i.e. rights for
extra greenhouse gas emissions.
The Agricultural Production Cooperative (APC), making available an
area for planting forest belts, improves the yielding capacity on its agricultural
lands and fulfills its obligations while taking care of soil fertility.
Forestries (Leskhozes), on a contractual basis, plant forest belts and take
care of trees for a definite period of time depending on a particular breed.
The Center for Russian Environmental Policy acts as an agency
concluding contracts on planting forest belts; approves their breeds and calculates
the area of forest belts needed for the investor to sequester a definite amount of
carbon dioxide; executes securities confirming additional reduction of greenhouse
gases by the investor; tracks growths and falls of securities value on the “carbon
market”; conducts monitoring of planted shelter belts; helps the investor hold
promotion actions aimed at improving the investor’s environmental image.
The Center has prepared a package of typical contracts with APCs and
forestries, which is essential for the implementation of the project.
To calculate costs, benefits, and other parameters of the investment project,
it is necessary to multiply parameters given in tables 3—7 by areas of forest belts
planted.

22

Project timing schedule

Table 4. Calendar plan
Period
Planting of forest belts Spring
Additional planting of Autumn of the first year or
plants spring of the second year
Taking care of forest Spring of the eighth and
belts seventeenth years
Monitoring Every year

Method of credit reimbursement

Credits are to be repaid by documentary and nondocumentary securities
enabling reduced costs involved in financing of the right to greenhouse gas
emissions in the process of industrial production.
Credits are expected to be redeemed as carbon is sequestered by forest belts, i.e.
as respective securities are emitted.

Cost-benefit analysis

The project foresees the following benefits:
- forest belts absorb the greenhouse gas (СО2) from the atmosphere;
- sustainable agriculture;
- higher soil productivity;
- higher yield capacity3;
- protection of soil from water and wind erosion.
The project involves the following expected costs:
- capital input (forest belt planting);

3
Raising yield capacity in agricultural enterprises, in which ecologically sound landscape farming is
implemented; according to estimation, additional revenues Druzhba APC (Liski District) is to obtain
for initial 6 years of the application of the ecologically sound landscape farming system will make 557
million rubles (in 1991 prices). Consequently, the system development expenses will pay back on the
7th year after planting.

23

- current outlays (maintaining the forest belts in a viable condition,
monitoring of the system).
Capital input was calculated based on the cost of planting 50 hectares of
forest belts in Druzhba APC, Liski District of Voronezh Oblast. The computation
was supported by the Institute of Sustainable Communities as part of the project
“Dissemination of the Ecologically Sound Landscape Farming System on
Agricultural Enterprises”. Planting expenses are given in Table 5. It is not by
accident that we chose the calculation of costs per one hectare. The investor may
choose any amount of the greenhouse gas to be reduced within a certain period of
time. The Center for Russian Environmental Policy, depending on the investor’s
demands, calculates the area, needed to sequester the requisite amount of carbon
dioxide for definite time, and the costs involved (according to Table 5).
Current expenses to maintain the forest belts in a viable condition and
monitoring of the system will make 3 US dollars per one hectare a year. Each 8th
and 17th year, it will be necessary to bear expenses related to taking care of forest
plantations (cleaning/planting) at the rate of US $50.
The investment project shows costs of planting 1 hectare of forest belts
(Table 5). The investor (industrial enterprise), depending on current atmospheric
emissions of carbon dioxide, identifies the need in acquisition of greenhouse gas
emissions allowance. The Center for Russian Environmental Policy will help to
make quite exact calculation of expenses needed for emissions compensation by
planting forest belts. In so doing, the Center will enable a tailor-made project. This
book will help to make first approximation calculations. To this end, the amount of
greenhouse gas emissions to be cut must be divided into the amount of carbon
dioxide sequestered by the forest belt. By way of example, Appendix Table 1 is
presented to illustrate carbon stocks in ton/hectare for one tree species typical of
Voronezh Oblast.
One hectare of forest belt absorbs annually about one ton of carbon4. The
amount of removed carbon dioxide is defined by multiplication of the carbon
volume by 3.66 (molecular weight of carbon dioxide, CO2, as compared to the
carbon atom, C). Consequently, one hectare of forest belt removes about 4 tons of
СО2. The amount of sequestered carbon dioxide depends on the breed and age of
the tree, geographic and climatic conditions the tree grows in. The methodology
for carbon dioxide sequestration by forests was developed by the International
Forest Institute and first published by the Center for Russian Environmental Policy
in 19955.
Table 12 provides examples of areas, both in Voronezh Oblast and in other
4
More detailed description of the procedure to calculate sequestration is given in the book: S.N.
Bobylev, O.E. Medvedeva, V.N. Sidorenko, S.V. Soloviova, A.V. Stetsenko, and A.V. Zhushev.
Economic Evaluation of Biodiversity.
5
A.S. Isaeva, G.I. Korovina, D.G. Zamolodchikova, et al. Environmental Problems of Carbon Dioxide
Removals by Means of Reforestation and Afforestation in Russia (Analytical Survey). Moscow, Center
for Russian Environmental Policy, 1995. 153 p.

24

regions, allocated for forest belt planting. Thus, for instance, in Voronezh Oblast,
there is an area of 8720 hectares designated for planting.
The total costs of planting and care of one hectare of forest belt make up
282 US dollars. The maintenance costs on the 8 th and 17th years are discounted and
reduced to the costs at the onset of the project, and included in the overall
expenses. The planting costs on the 1st year after beginning of financing comprise
the cost of planting material, preparation of soil, depreciation of equipment, and
workers’ wages (Table 5).

Table 5. Calculation of costs to create 1 hectare of protection forest belts on
lands of agricultural enterprises in Liski District, Voronezh Oblast6

Type of expenditure Amount, rubles Cost, USD
Transportation expenses, fuels
and lubricants 350 11
Planting material 3450 109
Payment for work 2880 91
Preparation of soil for planting 250 8
Maintenance of forest plantations 2000 63
Total for 1 hectare 8930 282

The estimates for basic parameters of the investment project (scenarios 1—
5) given below are calculated in US dollars for one hectare. To obtain the main
project parameters with particular area of forest belts to be planted taken into
account, it is necessary to multiply these per hectare estimates by the land area.
Depending on the potential price in 2008, the project foresees different payback
periods as given in tables 6—10 and discussed in five scenarios. Starting from the
time of payback, calculated for each of the five scenarios in tables 6—10, the
forest belts will bring in a pure “carbon” profit.

6
The computations are based on standard flow charts of the Voronezh Labor Standard Research
Laboratory.

25

Table 6. Scenario 1
Рсо2= US $5/t of СО2
Bank interest, i 2% 5% 8% 10 %
Net present value, NPV 102 12
Payback period (years) 17 21 32 unprofita
ble
Internal Profit Rate, IPR 6% 6%
Profitability index, PI 0.31 0.039

Table 7. Scenario 27
Net present value, NPV 569 347 205 138
Payback period (years) 8 10 11 11
Internal Profit Rate, IPR 17 % 17 % 17% 17 %
Profitability index, PI 1.74 1.14 0.71 0.49

Table 8. Scenario 3
Internal Profit Rate, IPR 27 % 27 % 27% 27 %

Table 9. Scenario 4
Internal Profit Rate, IPR 36% 36% 36% 36%

Table 10. Scenario 5

7
Calculation of basic parameters of the investment project for scenario 2 at РСО2= US $10 and i=10% is
given in Appendix Table 1.

26

Internal Profit Rate, IPR 31% 31% 31% 31%
Minimal price of 1 ton of removed carbon dioxide (СО2) at a 10% discount rate is 7 US dollars.

27

Incidental benefits

Agricultural producer’s benefits. When drawing up the project, the
designers calculated additional benefits related to higher yield capacity of crops.
The calculation was based on Goscomstat (the State Committee for Statistics) data
on Voronezh Oblast for 1999. The plant production calculated per 1 hectare of
cropped land made US $155/hectare. Owing to forest belt planting (according to
O.G. Kotlyarova)8, by the ninth year after planting forest belts, the yield capacity
will go up by 19.6—31.2%. To calculate minimal accidental benefits, some
assumptions were made. A 15-m wide forest belt frames a 400 m x 1000 m field.
The forest belt has a positive effect not only on these 40 hectares, but on the
adjoining area as well. The overall territory, on which the forest belt produces a
positive effect, is 120 hectares for the forest belt area of 4 hectares. The growth in
yield capacity was assumed linear for 10 years followed by stabilization. The
estimate was at least US $30/hectare extra for crops at market prices on
agricultural produce a year. Total discounted accidental benefits calculated per 1
hectare are presented in Table 11.

Table11. Total discounted accidental benefits
Bank interest, i (discount rate, %) 2% 5% 8% 10 %
Total discounted accidental benefits from 11.1 7.7 5.6 4.5
higher yield capacity (thous. US
$/hectare)
Period of project payback due to raising 3 3 4 4
yield capacity (years), without СО2 taken
into account

Investor’s benefits. Improving the company’s image. Today, one can see
labels of environmentally sound goods not only on food staffs, but also on
industrial products, such as computers, automobiles, etc. This means that the
producers invest in environmental steps, for instance, forest planting. This
environmental mechanism is already effective in the world, especially in countries
possessing free territories suitable for planting forests.

8
Kotlyarova, O.G. and Kotlyarova E.G., Forest Amelioration in Landscape-Consistent Farming
Systems / Agricultural Forest Reclamation: Problems, Methods of Decision, and Prospects. Volgograd,
VNIALMI, 2001, pp. 118-120. (See table Dynamics of Crop Yield Capacity in Eastern Areas of
Belgorod Oblast for 1981-2000)

28

Project’s risks

The project’s risks can be basically classified into two groups: natural and
economic. Natural risks include destruction or damage of forest belts resulting
from fires, illnesses and cattle bite on forest plantations.
Economic risks are associated with variation of the world market price of
one ton of carbon. Analysis results for this risk are presented in scenarios 1—5.
One most important risk is a forest belt loss as a result of a fire, illness,
drought, or destruction by insects or (in the first 5 years) cattle. These risks could
be reduced on account of responsibility to be born within first 5 years, in
conformity with the agreement (contract), by the leskhoz that plants forest belts
and additional trees in place of fallen ones. Then, the functions of protection from
negative effects go to the APC on the territory of which the forest belts were
planted. Fire risks in forest belts are significantly lower than in forest tracks due to
the fact that forest belts are far apart and have a 7—10 times more elongated
shape. Therefore, on occurrence of fire, no large shelter belt area is likely to be
burnt out.

Organization experience

Under the aegis of the Center for Russian Environmental Policy, a survey of
pioneering developments was published on addressing the carbon dioxide
problem: how to ensure sequestration of industrial CO2 emissions by means of
large-scale forest planting in Russia. The proposals on actions targeted at carbon
dioxide removal by afforestation, which were prepared by Russia’s prominent
experts in the field of forestry, aroused international interest at the World
Conference on Climate Change in Kyoto (Japan) in 1997.
The Center for Russian Environmental Policy (CREP) organized and held
Round Table meetings on raising the economic value of natural resources within
the framework of the project “Priorities for Russian Environmental Policy: from
the Federal Center to Regions”, which has been implemented for two years and is
supported by the MacArthur Foundation, the Mott Foundation, The Trust for
Mutual Understanding, and the Round Table of Russian Environmental
Organizations; CREP issues the bulletin “Towards a Sustainable Russia”; CREP
took part in the preparation for the workshop “Participation of Russia in the
Prevention of Global Climate Change”. The workshop’s outcome was the
establishment of the general stand of Russian NGOs towards the Sixth Round of
negotiations of the Parties to the UN Framework Convention on Climate Change.
In 2001, planting of forest belts was exercised on 50 hectares of land in
Druzhba APC, Liski District, Voronezh Oblast.

29

Anticipated Results

Economic
The project’s principal economic results are as follows:
- Raising APC productivity and yield capacity;
- Raising economic efficiency of agriculture;
- Raising the value of lands belonging to agricultural enterprises (LPCs);
- Reducing investor’s (investors’) environmental expenses on account of
acquisition of “carbon allowances”;
- Raising the value of investor’s products on account of improvement of the
environmental image (environmental reputation).

Environmental
The project’s environmental benefits are:
- Reduced water and wind erosion of soils;
- Reduced drought intensity at the expense of creation of a favorable
microclimate for crops;
- Creation of migration ways for animals and birds under agricultural
landscape conditions;
- СО2 removals.

Social
The project’s social benefits are:
- Raising the investor’s status in the eyes of the public;
- Raising the social and political status of the administration of the oblast, in
which this investment project is implemented;
- Arranging recreation zones to promote public health;
- Changing the population’s attitude to protection of the environment.

Legal
The project’s institutional benefits are:
- Creating precedents of disseminating positive practices associated with the
ecologically sound landscape farming in agricultural enterprises;
- Improving land management in the region;
- Creating an environmental and legal mechanism for soil protection in
conformity with effective federal and regional legislation.

30

Possibilities for Implementing the Project in
Other Regions
Geographic coverage. The project can be implemented in all Russian
agricultural regions. The most effective and economically attractive seems to be
the dissemination of the project in southern regions of Russia’s European part
(forest-steppe and steppe zones). This is explained by the availability of vast
farmland, the dominance of the agroindustrial complex in the economic structure,
favorable climatic conditions for plant growth, the necessity of maintaining soil
productivity (prevention of soil erosion, improvement of water regime in these
territories, etc.), and other accidental benefits.
Within the framework of this study, oblast and republican authorities
confirmed their need in creating forest belts in these regions. Data on forest belt
areas are given in Table 12.

Table 12. Potential areas for planting forest belts in some regions9

Region Area, hectares
Voronezh Oblast10 8720
Republic of Buryatia 500
Belgorod Oblast 10400
Kaliningrad Oblast 1500
Volgograd Oblast 500

9
See Appendices.
10
In this region, the area is given for various cities and towns (Table 2).

31

Appendices
Project’s GIS Support
Modern geoinformation systems (GIS) represent a new type of integrated
information systems, which, on one hand, include data processing procedures of
many existing automatic systems, and, on the other hand, possess specific features
of data arrangement and processing.
Transition to automatic procedures for creating and handling electronic
maps using GIS has a number of advantages:
• improvement of precision of cartographic information;
• reduction of labor input in fabrication of products; and
• raising of labor productivity at the expense of automation or
elimination of some operations
The methodological basis for GIS data processing is digital locality
simulation combining processes of primary information collection, simulation and
updating, as well as document processing and formation. The state-of-the-art
technological facilities allow automation of field and laboratory works.
Aerial and satellite photographs constitute remarkable substrates for digital
representation of GIS data: they contain coordinates together with images. For the
purposes of this project, we used satellite photographs (courtesy SCANEX) of
Voronezh Oblast and Liski District. One such photo is presented on the back
flyleaf. It shows the river Don and the Druzhba farmland, with 50 hectares of new
forest belts protecting the fields.
Using the Mapinfo software shell, satellite photographs were linked with
available cartographic materials to generate electronic maps allowing transition
from the all-Russia level to the level of oblast, district, individual economy (APC
Druzhba), and down to one plantation or a group of forest protection plantations.
On the APC Druzhba maps, there can be seen 50 hectares of forest belts planted as
part of the project. In parallel with this effort, a database was built to store
information for each plantation: administrative identity, type of forest plant, date
of planting, area, tree breed, state of vegetation, etc.
The resulting electronic map is arranged as a multitude of layers (covers).
The layers are built based on a combination of spatial objects (or a data set) having
common properties or functional features. For such maps, three layer types were
used as follows:
(1) Layers of topographic, little-changed objects (administrative borders,
water bodies, built-up territories, forests, etc.);
(2) Topographic layer carrying information about planted forest plantations
(area of forest belts, their location, configuration, species of planted trees, etc.).
This layer is updated by adding data on new plantations, fellings, fires, etc., or
changes in the state of existing forest plantations;

32

(3) Temporary subject layers to analyze intermediary results displayed,
account of dynamics of wood pulp growth or carbon removals.
Data may be processed either interactively or automatically. Using a system
of filters or preset parameters, the objects belonging to the layer may be
simultaneously scaled, moved, copied, or written in a database. In other cases (for
other modes), it is possible to prohibit editing or viewing of the layer objects.
By clicking the mouse directly on the map, one can choose either an
individual forest plantation or a group of forest plantations and obtain full
information about them. Through a system of inquiries about various criteria
(breed, age, area, type, etc.), a sample of forest plantations is created
corresponding to this inquiry. Using a mathematical model and special calculation
techniques, it is possible to identify a growth in wood pulp for selected forest
plantations for a given period of time. On that basis, the amount of sequestered
carbon can be computed. Then, the efficiency of steps taken can be calculated
using an economic model.
The data obtained can be presented, depending on the user’s desire, as a
series of maps, tables, or diagrams and printed on a paper carrier. The electronic
map provides a mobile data model allowing one to set the composition, volume
and form of the displayed data as desired by the user. The resulting information is
analyzed, and, whenever necessary, appropriate steps are developed.
Real-time modes are the basis in electronic map technologies. In the future,
when various regions are switched to the project, it is projected to unite data on
these regions within a single information system tracking input data and enabling
fast response to changes. Consequently, the use of GIS technologies allows
creation of a single information space both vertically and horizontally. In addition,
they provide a possibility of fast and dynamic representation of data, predictions
for a specified period of time, and assessment of economic efficiency of steps
taken.

33

Calculation of Basic Parameters of the Investment Project
Annex Table
Year Cost, Carbon Profit, $/ha Net profit, NPV, $/ha Investment Discoun Cost of CO2,
$/hectar stock, t/ $/ha s $/ha t rate,% $/t
ha Years
2003 250 0.00 $ - $ -250.00 $ -227 250 10% 10,00 0
2004 3 1.27 $ 46.32 $ 43.32 $ -191 1
2005 3 1.27 $ 46.32 $ 43.32 $ -159 2
2006 3 1.27 $ 46.32 $ 43.32 $ -129 3
2007 3 1.27 $ 46.32 $ 43.32 $ -102 4
2008 3 1.27 $ 46.32 $ 43.32 $ -78 5
2009 3 1.27 $ 46.32 $ 43.32 $ -56 6
2010 3 1.27 $ 46.32 $ 43.32 $ -36 7
2011 50 1.27 $ 46.32 $ -3.68 $ -37 21.20 8
2012 3 1.27 $ 46.32 $ 43.32 $ -20 9
2013 3 1.86 $ 68.08 $ 65.08 $ 2 10
2014 3 1.86 $ 68.08 $ 65.08 $ 23 11
2015 3 1.86 $ 68.08 $ 65.08 $ 42 12
2016 3 1.86 $ 68.08 $ 65.08 $ 59 13
2017 3 1.86 $ 68.08 $ 65.08 $ 75 14
2018 3 1.97 $ 72.18 $ 69.18 $ 90 15
2019 3 1.97 $ 72.18 $ 69.18 $ 103 16
2020 50 1.97 $ 72.18 $ 22.18 $ 107 9.89 17
2021 3 1.97 $ 72.18 $ 69.18 $ 119 281.09 18
2022 3 1.97 $ 72.18 $ 69.18 $ 129 PI, dml 19
2023 3 1.97 $ 71.96 $ 68.96 $ 138 0.49 20
2024 3 1.97 $ 71.96 $ 68.96 $ 147 21
2025 3 1.97 $ 71.96 $ 68.96 $ 155 22
2026 3 1.97 $ 71.96 $ 68.96 $ 162 23
2027 3 1.97 $ 71.96 $ 68.96 $ 168 24
2028 3 1.88 $ 68.66 $ 65.66 $ 173 25
2029 3 1.88 $ 68.66 $ 65.66 $ 178 26
2030 3 1.88 $ 68.66 $ 65.66 $ 183 27
2031 3 1.88 $ 68.66 $ 65.66 $ 187 28
2032 3 1.88 $ 68.66 $ 65.66 $ 191 29
2033 3 1.75 $ 64.20 $ 61.20 $ 194 30
2034 3 1.75 $ 64.20 $ 61.20 $ 197 31
2035 3 1.75 $ 64.20 $ 61.20 $ 200 32
2036 3 1.75 $ 64.20 $ 61.20 $ 202 33
2037 3 1.75 $ 64.20 $ 61.20 $ 204 34
2038 3 1.64 $ 60.10 $ 57.10 $ 206 35
2039 3 1.64 $ 60.10 $ 57.10 $ 208 36
2040 3 1.64 $ 60.10 $ 57.10 $ 209 37
2041 3 1.64 $ 60.10 $ 57.10 $ 211 38
2042 3 1.64 $ 60.10 $ 57.10 $ 212 39
2043 3 1.51 $ 55.12 $ 52.12 $ 213 40
2044 3 1.51 $ 55.12 $ 52.12 $ 214 41
2045 3 1.51 $ 55.12 $ 52.12 $ 215 42
2046 3 1.51 $ 55.12 $ 52.12 $ 215 43
2047 3 1.51 $ 55.12 $ 52.12 $ 216 44
2048 3 1.44 $ 52.70 $ 49.70 $ 217 45

34

А.V. Stetsenko, V.N. Sidorenko, N.V. Luzhetskaya, V.V. Shatailov, and A.V. Kulevsky.
Sequestration of Greenhouse Gases by Forest Belts on Agricultural Lands

Printed from a master layout prepared by the Center for Russian Environmental
Policy.
Signed for printing: 15 August 1992. Size: 210×148. Offset paper, 80g/sq.m.
2 printer’s sheets. Circulation: 1000 copies. Reform Press Publ.
Layout, design and preprint made by authors.
Cover: A. Stetsenko and V. Shatailov ©, 2002
Stetsenko, A.V., Sidorenko, V.N., Luzhetskaya, N.V., Shatailov, V.V., and Kulevsky, A.V.
P 89 Sequestration of Greenhouse Gases by Forest Belts on Agricultural Lands: In-
vestment Project. Moscow, Center for Russian Environmental Policy, 2002. – 32
p. ISBN 5-88971-025-7
This Project is meant for potential investors to finance planting of forest belts within the framework
of the Kyoto Protocol in order to prevent global climate change. The authors offer a package of docu-
ments, which they developed and tested practically, to be used for making arrangements with land users
and other interested parties.

35

The essence of the project is in growing forest belts to address problems of
global climate change and prevention of soil degradation. Forest belts, planted on
agricultural lands to protect soil from wind and water erosion and to raise yield
capacity, simultaneously function as absorbers of greenhouse gases. Hence, the
cost of shelter belt planting will be compensated for by selling of greenhouse gas
emissions allowances to industrial enterprises. Enterprises or Carbon Funds acting
on behalf of these enterprises will become investors financing planting of forest
belts. In exchange, they get securities confirming real reduction of carbon dioxide.
Using methodologies developed by the authors, the area is calculated of forest
belts requisite for sequestration of a definite amount of atmospheric carbon
dioxide.
The project presents interest for business community, carbon funds,
environmental foundations, as well as everyone interested in problems of climate
change, environmental protection, and sustainable development.

Center for Russian Environmental Policy
26 Vavilov St., Moscow 117808, Russia
Phone: +7 (095) 952 3007. E-mail: ecopolicy@ecopolicy.ru
Stetsenko, A.V.: phone: +7 (095) 4314757; e-mail: astetsenko@mtu-net.ru

36

Invest in Forest Belts to Reduce CO2 and Prevent Soil Erosion

Recommended

Recommended

More Related Content

Similar to Invest in Forest Belts to Reduce CO2 and Prevent Soil Erosion

Similar to Invest in Forest Belts to Reduce CO2 and Prevent Soil Erosion (20)

More from Elena Surovikina

More from Elena Surovikina (8)

Recently uploaded

Recently uploaded (20)

Invest in Forest Belts to Reduce CO2 and Prevent Soil Erosion