Climate Change Update

2011 Year in Review

Across the Conservancy, 2011 was an amazing year. We completed the largest campaign for conservation in history, raising an astounding $1.6 billion. And we refined our strategic direction with the Global Challenges/Global Solutions framework, while clarifying our mission. Against that backdrop, I am very excited to share highlights of the Global Climate Change Programs 2011 accomplishments. Over the past year, we landed huge public funding opportunities in Indonesia and Mexico, began ramping up our work to building a constituency for climate change action in the US, and expanding our network of adaptation projects for the benefit of people and nature. If I had to pick one word to describe 2011 from a climate perspective, it would be extreme. Floods ravaged Thailand. Hurricane Irene devastated the Caribbean and Northeast US. Texas suffered through its worst one-year drought in history, as crops were destroyed and wildfires burned millions of acres. And the IPCC Special Report issued in November confirmed that more economically-crippling weather disasters are to come. While these challenges are immense, a big part of the Conservancys Climate Change program is about demonstrating solutions, and we did so in many innovative ways in 2011. Our forest carbon pilot projects are creating models for protecting tropical forests while fostering sustainable economies. From Long Island to the Solomon Islands, we are engaging nature to help people adjust to changing conditions and reduce risks. Working with a small group of critical countries, we began to lay the foundation for policy solutions and transformative finance that will turn ideas into reality. And we set out to change the conversation about climate change in the Unites States by showing people how climate change affects their daily lives. I hope youll enjoy reading about these efforts in the pages that follow. Thank you for all you have done to help The Nature Conservancy find climate solutions for nature and people.

from the director

Dear Colleagues,

Sarene Marshall

HIGHLIGHTS OF 2011
Trading Debt for Nature in

Indonesia
Building Momentum to Pro-

tect Mexicos Rainforests

Protecting Island Communi-

ties in a Changing World

Climate Wizard Tool Takes on

New Life
Building a Climate Change

Constituency
Investing in Key Countries

A Look Ahead

Trading Debt for Nature in Indonesia

The Nature Conservancy and WWF joined the Indonesian and U.S. governments to sign a debt-for-nature swap agreement that will result in a $28.5M investment to help protect tropical forests and reduce climate-changing carbon pollution from Kalimantan the Indonesian part of the island of Borneo. expansion of oil palm plantations, illegal and unsustainable logging practices and coal mining.

FOREST CARBON
Building on a $2M investment by Disney
in 2010 to reforest areas in Inner Mongolia, a corporate partner provided $2M to develop a reforestation project in Sichuan, China, which will expand critical panda habitat by restoring degraded lands adjacent to existing nature preserves.

The financial agreement, made possible by the U.S. Tropical Forest Conservation Act, allows Indonesia to redirect a portion of its foreign debt to investments in forest conservation efforts. Under the terms of the swap, the Conservancy and WWF each The deal focuses on creating models for must contribute $2M towards the $28.5M forest conservation and sustainable ecodeal. Over the nomic develnext eight opment in This deal will demonstrate how Indonesia can grow years, approxiBerau and and create jobs in a smarter way that minimizes impact mately $12M two other on the forest, improves the livelihoods of local commuof this will districts in nities and ultimately allows the government to achieve flow to the Borneo all its twin goals of 7 percent economic growth and up to a Berau Forest three of 41 percent reduction in carbon emissions by 2020, says Carbon Prowhich contain Greg Fishbein, Managing Director of the Global Climate gram. With carbon-rich Change Teams Forest Carbon Program. additional tropical forest funds going to and vast biodiother REDD+ activities in Indonesia, the versity to demonstrate how economic goal is to accelerating the development of and climate objectives can be achieved. similar forest carbon programs throughout Reducing carbon emissions from the forest the country. sector is critical for Indonesia, as deforestation and degradation account for more than 60 percent of Indonesias total carbon emissions. For the past three years, the Conservancys Asia-Pacific Forest Program and the Global Climate Change Team have been working with governments, businesses, local communities and other NGOs to develop the Berau Forest Carbon Program as a model to address major threats to the forests and biodiversity of Borneo, such as

The Tensas River Basin and Bayou Bartholomew reforestation projects in Louisiana became the first Conservancy projects, and among the first land-use projects of any kind in the U.S., to be validated under the Verified Carbon Standard, the leading standard in the voluntary carbon market.

The TNC Rio Bravo project in Belize

recently became one of the first validated and verified REDD projects under VCS globally, with 1.6 million tons of offsets available for sale.

The Conservancy raised over $400K

collectively, from a major publishing company and a leading outdoor adventure company to fund forest carbon offset projects in Louisiana. Through our Voluntary Online Offset Program, Delta Air Lines customers continued their support of our forest projects to offset the impact of their flights, resulting in over $250K having been raised through this program since 2008.

The World Bank-administered Forest

Carbon Partnership Facility which the Conservancy co-founded in 2007 solidified its status as the worlds leading vehicle for national REDD+ capacity building (aka, readiness). The Readiness and Carbon Funds have been fully capitalized, surpassing $440M, and the Carbon Fund opened for business this year.

Building Momentum to Protect Mexicos Rainforests

The Nature Conservancy received a $29M USAID grant in July to conserve diminishing rainforests and promote Mexicos sustainable development. The consortium, led by the Conservancy, with staff from the Mexico Program and Global Climate Change Team, involves partners such as Rainforest Alliance, Fondo Mexicano para la Conservacin de la Naturaleza, the Carnegie Institution for Science and Woods Hole Research Center, with over 60 years of combined global experience and on-the-ground presence in Mexico. The $29M is part of a larger, five-year $70M USAID investment, to support Mexican initiatives to reduce emissions and address climate change. The program will support: a lowemissions development strategy focused on monitoring, reporting and verifying levels of carbon pollution, and a REDD+ strategy to protect forests and improve forestry management for its climate benefits. Consortium members bring solid science and financial analysis capacity, experience in building sustainable livelihoods for forest dependent communities and demonstrated capacity to deliver policy results at local, national and global scale. We will collaborate with other local organizations and communities to support the Mexican governments efforts to strengthen policies and financing for REDD+ preparedness, low-carbon development and climate change solutions.

The Conservancy received over $10M

from USAID for REDD+ efforts in the Amazon Brazil, Colombia, Ecuador and Peru. In Brazil, we will help Para and Mato Grosso develop state-wide REDD+ programs and demonstrate how to implement key aspects of those programs on the agricultural frontier.

In April, Conservancy trustees, donors

and close friends who share an interest in climate change came together in New York City for REDD+ AHEAD, a one-day advisory session focused on the Conservancys course forward in making REDD+ a truly catalytic approach to addressing climate change, protecting forests and creating alternative economic opportunities in developing countries.

Protecting Island Communities in a Changing World

Low-lying, cash-strapped small Island states are among the most vulnerable nations in the world to climate change. Real-life impacts of increased storm surges, changes in seasonal weather patterns and king tides that wash over whole islands present everyday challenges, while small islands have a unique exposure to sea-level rise, from which they cannot run. With funding from the German governments International Climate Initiative (ICI), the Conservancy is helping build the resilience of island people in the Asia-Pacific Region by blending local knowledge and cutting-edge science to inform plans for the future. Through this project, several communities in the Marshall Islands, Papua New Guinea and the Solomon Islands have taken their destiny into their own hands. They are creating participatory videos developing 3D models , and reenergizing time-honored traditions to raise awareness about climate impacts, visualize their lands and waters and identify solutions ranging from solar energy and oyster farming to better fisheries and marine management, mangrove restoration and forest and reef conservation. Generating and capturing funds from bilateral, multilateral and innovative sources to expand the use of nature-based strategies for responding to climate change is a key goal of the Global Climate Change Team. Informed by this work in Asia-Pacific - and other projects, especially in the Caribbean - we are reaching out to policy-makers and funders to educate them about the role forest and reef conservation can play in supporting resilient ecosystems and communities. At the UN climate talks in Durban South Africa, the Conservancy utilized its strong political relationships and real-world experience with naturebased strategies to convene several key small island governments and public funders. The goal was to foster interest in creating Debt for Adaptation swaps or other new funding streams to support climate-resilient coastal development through smart planning and investments in natural infrastructure.

PREPAREDNESS AND RESPONSE

The arid US Southwest is a bellwether
of climate change in North America. In Arizona, Colorado, New Mexico and Utah temperature rise and drought have led to devastating fires, insect outbreaks and forest dieback. The Global Climate Change Team is working with these state chapters to increase the resilience of healthy forests to help reduce impacts on nearby cities. Early results show promise: in the devastating Arizona fire this year, sound forest management likely saved many homes and dollars.

In partnership with the Global Climate

Change Team, the China Program developed a comprehensive climate change business plan for greater impact at the site, national and international level. Following Conservancy presentations on nature-based adaptation to Chinese officials in Beijing, a Conservancy alliance with the National Poverty Alleviation Office is underway to demonstrate how natural solutions can help improve the wellbeing of people.

2011 saw an important addition to the

Conservancys collaborative partnership with the Forest Service, Interior Department and Bureau of Land Management: a new Adaptation Learning Network designed to spread nature- based adaptation approaches across the US in key federal agencies, provide support and funding to our adaptation field work and link on-the-ground efforts to the federal guidance that calls for all agencies to implement nature-based approaches.

Climate Wizard Tool Takes on New Life

This year, the Global Climate Change Team launched the Climate Wizard Custom web application to give people the opportunity to analyze historic climate information and future climate change projections for anywhere in the world. Users can input their specific location of interest, time period and climate variables, and the tool provides a custom webpage for exploring the results. This application, which is free and available to the public, has already been used in a number of studies: assessing the dangers of extreme floods to dam operations in Chile; helping the U.S. Department of Defense determine the future water balance of the Tigris and Euphrates River systems; predicting vegetation shifts in southeastern Colorado; and developing climate resilient irrigation schedules in southern Spain. To increase the access and use of cuttingedge climate change analyses that will help people in developing countries adapt to the impacts of climate change, the Conservancy has partnered with the World Bank. The new Climate Wizard projections will be integrated into The World Banks Climate Change Knowledge Portal a central hub of information, data and reports about climate change around the world. The World Bank notes that the hope is to help policymakers worldwide prioritize actions, along with developing a robust, integrated approach for greater resilience to climate risks. First up, Climate Wizard will power World Bank regional analyses that assess and model changes in flood and drought stresses affecting agricultural productivity, food security and water availability in Africa.

TNC is working around the world to

help communities understand, prepare and respond to future climate scenarios. In 2011, ten communities in Connecticut used data and analysis from the Conservancys Coastal Resilience program for voluntary evacuations and emergency preparedness planning before Tropical Storm Irene. The Conservancy also hosted a Chinese delegation that visited sites on the US Atlantic Coast and the Gulf of Mexico to see coastal resilience in action.

Our

organization-wide efforts to demonstrate solutions on the ground and encourage governments, communities and corporations to embrace natural solutions to reducing climate impacts was strengthened as the Global Climate Change and Global Marine Teams integrated our efforts into a single strategy.

Building a Climate Change Constituency

The Nature Conservancy has a tremendous stake in avoiding the most negative impacts of climate change and a responsibility to help shape solutions. We also have a unique set of assets on our side to play a productive role in forging responses. Our bipartisan base, our science-based approach, the influence of our network of staff and supporters and our credibility with the business community and with the public make us an important influencer, convener and messenger on climate change. To achieve our climate goals, we must have in place strong and smart U.S. and international policies geared toward reducing emissions, protecting natural systems and safeguarding human well-being. Given the current U.S. political environment regarding climate change, we recognize how critical it is to lay a better foundation for a comprehensive policy solution in the future by building a climate constituency of supporters who can let their elected officials and other influencers know just how important it is to respond to this challenge. We took steps in 2011 toward laying that foundation, meeting with Ohio chapter staff and trustees to explore what a pilot campaign in that state would look like. The campaign will be focused on winning hearts and minds with politically important constituencies by illustrating how carbon pollution directly impacts the economy and lives of Ohios citizens. We hope to launch similar efforts in other strategic states, with a long-term goal of building support for federal climate legislation. Nationally, these efforts will be supported by enhanced media outreach, messaging and tools that are aimed at taking climate change out of the atmosphere and connecting it with issues of mainstream concern.

POLICY AND OUTREACH

The Conservancy is participating in the
SmarterSafer coalition, with natural partners such as American Rivers and Defenders of Wildlife, free-market think tanks such as the Competitive Enterprise Institute and insurance interests like Swiss Re. Through the coalition, we are promoting nature-based strategies to reduce impacts to people and nature from flood hazards, with a key goal of reforming the National Flood Insurance Program to incorporate nature-based solutions on the ground.

The California Air and Resource Board

voted unanimously to adopt the final regulations of its cap and trade program, which takes effect in January 2012. Californias cap and trade program is anticipated to be the second largest global greenhouse gas market. The program includes a robust role for domestic forest offsets reflecting a decade of work by the Conservancy and colleagues and provides a pathway for future inclusion of REDD+ offsets.

The White House Council on Environ-

Investing in Key Countries

In June, the Global Climate Change Team launched an initiative to create enhanced international momentum for climate action by supporting key countries in putting solutions into practice. Six initial countries form the nucleus of this effort: Brazil, China, Indonesia, Mexico, the Solomon Islands and the United States. Conservancy staff from each country convened for a two-day meeting in Berlin, Germany in July to flesh out the strategy and develop a sense of shared ownership. We outlined a vision for success by creating a network of actions across countries that collectively have the potential to affect climate policy at the regional and international levels. This will be done first by working within each country to build a line of sight from on-the-ground projects (especially around REDD+, adaptation and climate finance) to national policy change, and then linking these domestic efforts by country-to-country dialogues, exchanges and other activities that could accelerate the knowledge transfer and trust essential for multilateral solutions (e.g., in the UN process). This strategy is already having a positive impact. During COP-17 in Durban, the Conservancy organized and facilitated a working dinner, hosted by the government of Mexico, to informally discuss and share experiences and challenges about REDD+ financial arrangements and benefits sharing mechanisms with the governments of Indonesia, Brazil and Peru. The participants expressed the value of this kind of setting and recognized the role the Conservancy can play in this process, noting that it should become an ongoing dialogue and deciding to meet again in February in Braslia.

mental Quality released instructions to US federal agencies in March that mandate every federal agency to develop a climate adaptation plan by June 2012 and to use ecosystem-based adaptation as a guiding principle in that plan. The Conservancy had strong input into this decision and continues to inform the process.

A strong Conservancy team attended the

UN COP-17 climate negotiations in Durban, South Africa. Durban produced a major political advance by breaking down the historical paradigm from the Kyoto Protocol and requiring new commitments from all major emitters by 2015. This means that China, India and Brazil will be included alongside the U.S., Europe and other rich countries for the first time. Outside the negotiations, the Conservancy showed its strength as a convener and thought-leader, especially on REDD+, climate adaptation and innovative finance.

To support our efforts to increase

awareness and support for climate action, the Global Climate Change Team invested in some refreshed tools. Several new brochures on our work were created. In addition, we completely redesigned the Planet Change site which has seen a 300% increase in traffic - to align with the latest internet technology and enable us to engage a wide audience to share their stories and learn about solutions.

A LOOK AHEAD
The Global Climate Change Team has a busy 2012 planned, with an emphasis on sharing knowledge, informing decision-makers and maximizing our impact by linking our on-the-ground work to strategies that affect public understanding, policy and finance on a global scale. Specific goals for the coming year include:

FOREST CARBON
We will continue to develop our REDD+ pilot projects in Indonesia and Brazil while putting lessons learned in these places into practice in our burgeoning Mexico project. We will sharpen our focus on community involvement in our forest carbon efforts to ensure that forest-dependent people have a voice and share in the benefits of REDD+. In the Forest Carbon Partnership Facility, we will develop methodologies for the Carbon Fund to invest in innovative emissions reduction programs, helping to shape strong incentives and rules for protecting tropical forests and the communities that depend upon them.

PREPAREDNESS AND RESPONSE

We will build our network of adaptation proof-of-concept initiatives around the world to demonstrate adaptation solutions that work for people and nature. We will continue to refine and develop online tools like Climate Wizard to give people robust, accessible ways to visualize climate impacts and prepare responses. And we will continue to export our most valuable resource, knowledge, by engaging our conservation partners, private land managers and public agencies to bring nature-based solutions into mainstream thinking about addressing climate change impacts.

POLICY AND OUTREACH

With an election year in the U.S. upon us, we are refining our own internal message framework so the Conservancy speaks with one voice about climate impacts and risks and the role we can play in addressing them. We will be continuing our focus on securing public funding for climate action, launching the pilot phase of our effort to build a climate constituency in the U.S. and strengthening our efforts to inject nature-based approaches into disaster risk reduction plans. Finally, we will be asking YOU to share your stories of how climate change is affecting you through our blog Planet Change and a number of outreach activities.