How are Carbon Revenues shared equitably throughout the Forest Communities?

The historic payments made to the forest communities of Carbon Tanzania’s Ntakata Mountains Project in July represent a significant milestone in our efforts to create a nature based economy that is equitable and fair for all parts of society.

The primary goal of the project is to ensure that the wildlife rich forests of the Ntakata Mountains are protected for the benefit of the local, forest communities, its biodiversity and the global climate, and those who follow us on social media and read our regular updates from the field will know what an amazing job the village game scouts, backed up by the Village and District Governments, are doing in achieving this. But the secret sauce in our model is about to undergo its first serious taste test – the revenue sharing system. The distribution, use and accounting for community revenues is probably the most important element of our social enterprise business model, and with such significant revenue shares being available from the latest bi-annual carbon credit sales, it is critical that these funds benefit as many people as possible, support local governance structures and strengthen the communities’ ability to protect and manage their natural forests.

So how have we gone about designing and implementing this fundamental building block of the project? We asked our Tanzania operations team to give some insights into what went into creating a revenue sharing system which will ensure long term sustainable natural resource management throughout the lifetime of the project.

Alpha Jackson, Finance Manager

Alpha works with the District and Village officials to ensure that revenues are disbursed according to local government and financial regulations, and follows up on the use of the revenues in line with village, ward and District development plans. We asked Alpha to tell us what was the most challenging part of designing the revenue distribution system that ensures that all stakeholders receive fair and equitable compensation for the parts they play in protecting the Ntakata forests.

One of the biggest challenges is in the planning of the revenue distribution system and making sure you have experts on board, such as the Planning Officer, to supervise the process and to achieve a balance between community interests and district interests, which of course differ.

We balance this by addressing the community needs through the development of the Steering Committee and through the budgeting process. The Steering Committee consists of the Village Executive Officer, who is a government representative and The Village Chairman who is elected by the community to ensure that the community’s interests are represented and factored into the planning. 

Carbon Tanzania oversees the process to ensure the planning is meaningful and we request adjustments where needed so our community partners attain value for money and gain a sense of ownership over the budget. We also ensure the revenue and agreed upon budget are announced to the Village General Assembly and published on village boards for more transparency.

Another challenge is ensuring budgets are allocated correctly or the result is unfinished projects for example bricks instead of classrooms etc.

David Beroff – Technical Advisor to Project Operations

As the person responsible for planning and monitoring the daily work of the project managers and village game scouts, and ensuring that the project attains the highest standards of international certification for its carbon credits, David explains how the ground work was laid in the village communities for decisions to be made about how carbon revenues are spent.

The first step is to go to the villages and explain the concept of the carbon project and explain that the communities have certain responsibilities – specifically the protection of the forest and the responsibility to determine how the revenue will be used and to ensure that there is a proper benefit sharing mechanism in place that distributes the benefits across the entire community.

In each of our projects we have gone right into the existing political and leadership governance structures to ustilise the existing democratic, indigenous Tanzanian systems to ensure that we have as much representation as we can around the decision-making process.

In the Ntakata Mountains Project we have developed the Steering Committee made up of the elected Village Chairman and Village Executive Officer (a representative of the central government) from each of the eight villages. One Village Game Scout (VGS) from each village is also included to allow the front-line defenders of the forest to provide project updates and to make sure the finance doesn’t get separated from the conservation outcomes. The Steering Committee is responsible for making decisions around the highest-level divisions of the carbon revenues.

The first step is for the committee to decide how much revenue should be split amongst them and how much revenue is needed for any joint projects they want to do, like purchasing health insurance for the entire community. 

After agreeing to the split, each representative will go back to their villages and sit with their village development councils to make a budget for their allocation of revenue. 

The steering committee will come together again, supported by the district, and come up with a full spending plan and this is all going to happen before we even send the money to the villages. We are not telling the villages how to spend the money, but we are ensuring they have a transparent plan on how to spend and report on it.

Marc Baker, Director of Project Operations

As the Founder of Carbon Tanzania, Marc has been responsible for creating from scratch the entire project design, development and implementation model that Carbon Tanzania uses to engage with forest owning communities across Tanzania. We asked Marc to describe some of the relationships that he has built in the Ntakata landscape and its communities that he feels are fundamental to ensuring that these revenues lead to real and locally relevant socio-economic development.

We have community relationships and government relationships, both built on mutual trust.

Government relationships

We need to start with looking at the structure of the government. What you have within any district government where we work is both the people who are responsible for implementing the laws around planning and ensuring that transparency happens. Then you have the ministerial people, in this case TAMISEMI (the President’s Office – Regional Administration and Local Government), who provide oversight to revenue dispersal and ensuring that it is spent in the right way. 

What we have been working on as part of our government engagement is to ensure that everyone within the various TAMISEMI sectors that are responsible for climate change, health and local government are informed about what we are doing and how it’s working. That’s important because it means when we come to the point of handing over a cheque or transferring money the entire apparatus of government from central to district is informed of the process, so there are no surprises to anyone. 

Relationships at a district level really require you to have relationships at a national and sectorial level as well to ensure that everybody is talking to each other and there is oversight over the entire process. Then when the money arrives the system kicks in. The system is designed to roll out money into the regional and local government and ensure that the money is disbursed in a way that is structured, transparent and accountable. 

These relationships are important to ensure that the law is followed, but I think they are especially important for us, because we are working in a completely unique situation, in a very new industry. 

Community relationships

From the moment we arrive and start talking about what we do people realise very quickly that we are not an NGO doing a seminar, that we are talking about investment, we are talking about a relationship that is long term and we are talking about a relationship that is built on mutual responsibility and that mutual responsibility is then formalized contractually. For many forest communities in rural parts of Tanzania some skepticism remains until the money starts to arrive, then everyone says “wow this is real, this is serious”, and that really energizes the system to react. So, you can see that relationship is built on mutual trust, and I think that is essential, and it is built on the fact that the value system that we are offering is very clear and easy for people to understand – that you protect that forest and we deliver the money, and it is your responsibility to determine how you protect that forest. 

That is at the community level; but at the district level that definition of responsibility is also needed because that interplay is essential to deal with some of the more serious legal offences that obviously you come across on the frontier of human governance and human existence, and that is where the district relationship is important.

So you have community relationships built on mutual trust and government relationships built on mutual trust and then it is all cemented by the revenues, together with the understanding that the value that people are getting is significant, and I think one of the big elements here that we are proving very clearly is that you can stop deforestation but you can’t stop it through the traditional NGO paradigm of doing activities – you can’t stop it by having only a small campsite and you can’t stop it by having just a beekeeping project, it just isn’t going to generate enough money, that completely and utterly undervalues what it actually means for forest communities to conserve a forest, it has to be enough money for the collective of people to accept that they will take the risk of changing the narrative in which they exist.