KENYA FLOWER COUNCIL ENHANCING COMPETITIVENESS OF THE KENYAN FLOWER INDUSTRY. NATIONAL CONFERENCE SERENA HOTEL, NAIROBI 13 th NOVEMBER 2012

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1 KENYA FLOWER COUNCIL ENHANCING COMPETITIVENESS OF THE KENYAN FLOWER INDUSTRY NATIONAL CONFERENCE SERENA HOTEL, NAIROBI 13 th NOVEMBER 2012 CAMCO ADVISORY SERVICES (K) LIMITED

2 Overview of the Presentation Part 1: Impacts of Climate Change on the productivity of the Kenyan Flower Industry Part 2: Strategic Environmental Assessment (SEA)

3 Impacts of Climate Change on the Productivity of the Kenyan flower industry

4 Impacts of Climate Change on the Flower Industry The floriculture industry is vulnerable to climate change impacts for the following reasons: a) Flower cultivation is practised in areas considered arid and semi arid, which are already prone to water stress. Climate change will only further precipitate this situation. b) The industry is dependent on global aviation for the export of particularly cut flowers to Europe and other niche markets. Climate change mitigation measures imposed on the aviation industry will thus likely cascade to the floriculture industry. In summary, climate change impacts on the floriculture industry can be classified as nonmarket (direct) and market (indirect) impacts. Non market or direct impacts of climate change on the floriculture industry constitute those due to changes in the physical conditions such as temperature and rainfall change (increase or decrease) and the effect these have on the productivity of flowers. Market impacts or indirect impacts of climate change on the floriculture industry are on the tail end of the supply demand chainwheretheend product gets to the consumer. They are of both local and global nature.

5 (Source: Technical Paper, World Bank, 2011) Impacts of Climate Change contd.

6 Impacts of Climate Change contd.

7 Carbon, Water and Energy Foot printing Increasingly governments, industries, and individuals are becoming aware about the adverse effects climate change and are concerned about their own impacts on the environment. To enhance the flower industry s productivity and competitiveness, substantial capacity building is required to educate industry players on the compliance components and response measures necessary to be effective when addressing the impacts of climate change. To adapt and mitigate to climate change, activities, such as foot printing, should be undertaken to act as tools to track and reduce GHG emissions, improve water consumption, enhance resource management and ensure energy efficiency. For example, one of the flower farms audited by KAM stated that the energy conservation measures identified/recommendations could result in saving more than K.Shs 4 million which is equivalent to 20% of its annual energy bill (KFC, 2012).

8 Objectives of Foot printing CARBON WATER ENERGY Perform a review and assessment of a flower farm s current CO2 emission performance. Perform a review and assessment of a flower farm s current water usage performance. Perform a review and assessment of a flower farm s current energy consumption and potential energy efficiency. Collect information required to improve its current performance. Provide comprehensive information necessary to identify its carbon emission reduction potential and develop a carbon management strategy for cost saving opportunities. Collect information needed to identify the scale of water use in water scarce areas and the potential business risks. Provide comprehensive information necessary to inform operational decisions concerning how it manages its farms, how it works with suppliers and how it engages with governments, to reduce business risk and improve environmental sustainability. Collect information necessary to establish a continuous improvement energy management process for cut flower production and distribution. Provide comprehensive information to assist with the planning for an energy management process.

9 Carbon Reduction, Resources and Opportunities Toolkit (CaRROT) Carbon Reduction, Resources and Opportunities Toolkit (CaRROT) was developed as part of the deliverables for this study. It will provide the framework to go beyond the functions of existing carbon calculators. This tool will not only provide practical and localized GHG management solutions, but will also direct sector players to existing opportunities and resources to facilitate the transition. CaRROT s objectives are: a) raiseawarenessonthecarbon mitigation opportunities in the flower sector in East Africa. b) enhance environmental competitiveness of East Africa flower products. c) identify win win opportunities associated with GHG auditing and the flower sector with related resources. d) formulate voluntary GHG emissions standards for the floricultural sector.

10 CDM & Voluntary Markets CDM Developed/industrialised countries are bound to reduce their emission under the Kyoto Protocol and the Clean Development Mechanism (CDM) allows them to purchase CERs from projects to off set their emission reduction targets/commitments. VOLUNTARY MARKETS The voluntary market is not bound to any legally binding agreement, but maintains its integrity as it observes the accounting and verification systems of compliance markets. Carbon markets must produce and trade in certified emission reductions (CERs). Voluntary markets must produce and trade in verified emission reductions (VERs). CDM is regulated by the CDM Executive BoardinaccordancewiththeUNFCCC and the Kyoto Protocol. The voluntary markets are regulated by various standards, certification processes, and emissions registry services.

11 Comparison of CDM & Voluntary Costs Projects types, sizes and transaction costs

12 Project Example Industry Forest 1. Source: 2. Source:

13 Findings and Recommendations CHALLENGES a) No specific national floricultural legislation. RECOMMENDATIONS Establishment of policies and legislations relevant and specific to the floriculture sector in Kenya. b) Inadequate awareness of the international and regional policies by local farmers is a hindrance to effective implementation of these policies. Awareness creation on the international and regional policies in the flower industry and adequate support in the implementation process of compliance procedures/requirements. c) Inadequate representation and inclusion of the flower sector in policy making decisions has resulted in gaps in the current policies. Encourage synergy between the key stakeholders (i.e. Horticultural Crops Development Authority, Kenya Flower Council, National Environment Management Authority and the various line government ministries. Improve public private dialogue.

14 Findings and Recommendations contd. CHALLENGES d) Carbon foot printing and the issues of carbon emission caps will result in to extra expenses on the sector players in their attempts to fulfill the various market regulations and standards. e) Negative image of the flower industry propagate to the public. f) Lack of effect public private dialogue and lack of public participation in the development of policies and legislation. RECOMMENDATIONS Increased capacity building to experts in the flower sector on GHG emission reduction and climate risk assessment methods and techniques (e.g. carbon, water and energy foot printing). Trainings to be carried out using the Directorate of Industrial Training (DIT) contributions. Promotion of positive publicity of the flower sector on the media and the public at large, to eradicate the negative image and stigma that the public has of the floriculture industry. Increased government support in terms of policy, capacity building, research and development and awareness creation for the flower industry. Enhancing public private dialogue through lobbying and advocacy through KFC.

15 Strategic Environmental Assessment (SEA)

16 STRATEGIC ENVIRONMENTAL ASSESSMENT (SEA) A Strategic Environmental Assessment (SEA) is a system of incorporating environmental considerations into policies, plans and programmes (PPPs). This assignment is in furtherance to a recommendation of a technical paper that looked into the role of SEA in the flower industry in the East African countries of Ethiopia, Kenya, Tanzania and Uganda. The technical paper was commissioned by the World Bank on behalf of the KFC.

17 OBJECTIVES OF ASSIGNMENT Overall objective is to enhance the competitiveness of the African flower industry, particularly in Kenya. Specific objectives are to: 1. Establish the environmental and climate change baseline for the flower industry in Kenya i.e. a description of the existing environmental conditions; 2. Assess the impacts of projected changes in temperature and rainfall patterns on the flower cultivation areas of Kenya; 3. Identify key problems caused by likely future climate change; and 4. Give recommendations on best practices including technology responses to climate change.

18 BENEFITS OF SEA TO THE KENYAN FLORICULTURE INDUSTRY 1. SEA can ensure long term economic sustainability of the industry in the wake of emerging environmental shocks such as climate change with its negative impacts like water stress. 2. SEA helps warn decision makers at an early stage about unsustainable development options. Ultimately, this saves time and money as problematic options are disregarded at a point in time when only few resources have been spent on their development. 3. Individual project/farm EIAs may not able to deduce cumulative, synergistic and long term environmental effects, while SEA will.

19 BENEFITS OF SEA TO THE KENYAN FLORICULTURE INDUSTRY CONTD 4. Incorporating sustainable development considerations early in the decisionmaking process, there is a good chance that the subsequent design of individual projects will be more environmentally acceptable and that the project specific EIA process will be more focused and efficient, further reducing the cost of EIA undertaking. 5. SEA provides and ensures economic, social, and environmental benefits to current and future generations.

20 SEA PROCESS IN KENYA

21 SUSTAINABLE DEVELOPMENT SEA

22 FINDINGS Through extensive data collection methods, including literature review, data collection and analysis, trainings and workshops, the following key issues were addressed; 1. Identification of environmental challenges faced by the floriculture industry 2. Identification of opportunities in addressing environmental challenges 3. Best case practices (case study) 4. Recommendations

23 1. ENVIRONMENTAL CHALLENGES The floriculture industry in Kenya faces a number of environmental challenges, both of local and global nature. Locally, 1. Pollution of water bodies by other agricultural sectors leading to eutrophication that ultimately reduces the ability to utilise the available water resources, 2. General over consumption of water by the ever growing agricultural sector reduces availability of water,

24 1. ENVIRONMENTAL CHALLENGES CONTD 3. Increase in extreme weather events (droughts and floods) has led to destruction and loss of property, 4. Increased evaporation and soil erosion has led to nutrient loss in the soil that affects quality of flowers produced, and 5. Disposal of non environmental friendly products has proved to be costly.

25 2. OPPORTUNITIES IN ADDRESSING ENVIRONMENTAL CHALLENGES 1. Power generation e.g. hydro power during flood seasons, harnessing solar power, and generation of biogas from agricultural wastes. 2. Recycling water on the farm to ensure efficient water utilisation and savings on cost. 3. Water harvesting during heavy rains and floods can ensure sufficient supply of water. 4. Polythene wastes can be sold to recyclers for further processing and re packaging.

26 3. CASE STUDY: SEA of poverty reduction credit, Tanzania (budget support) In 2004, Tanzania developed its second poverty reduction strategy: the National Strategy for Growth and Reduction of Poverty (NSGRP). It followed an extensive consultative review that built on the outputs from the national poverty monitoring system, and involved a wide range of stakeholders down to the village level. The NSGRP was strongly outcome focused with increased attention to growth and governance. The second NSGRP set out to incorporate key cross cutting issues, including the environment, as integral to the strategy and not as an after thought.

27 3. CASE STUDY: SEA of poverty reduction credit, Tanzania (budget support) Tanzania has benefited from increasing levels of direct budget support with the World Bank s contribution through a poverty reduction strategy credit (PRSC). In 2004, Tanzania undertook an SEA of the second PRSC (PRSC 2) to assess the cumulative environmental and socio economic impacts of PPPs supported by the PRSC 2, and to suggest appropriate mitigation and monitoring as well as additional capacity strengthening measures.

28 4. RECOMMENDATIONS 1. Capacity needs assessment is the first step with support in technical training, awareness raising workshops, supporting the institutionalisation of the SEA process and its evaluation systems, and networking for sharing experiences. The National Industrial Training Authority (NITA), formerly Directorate of Industrial Training (DIT) charges Ksh 50 per head per month, with the flower industry population at approx 60,000 people, it would cost Ksh 36 million annually to train stakeholders on developments in the industry including environmental audit practices, taxes and levies e.t.c. A SEA wouldbeabletoreducethesecostsbyupto15%(ksh8.1 million annually), (Tanzania case study, ).

29 4. RECOMMENDATIONS 2. Carrying out a SEA for the floriculture industry in Kenya, this will help reduce the costs of individual EIAs in the flower industry. There is approx 100 acre increase in land under flowers annually, assuming an average farm size of 4acres, the industry will save Ksh 7.5 million annually that would complement findings of EIAs and ESIAs. 3. Lobbying government for policy formulation and implementation guidelines.

30 CONCLUSION Both SEA and ESIA are useful environmental assessment tools for planning development projects. SEA is a better tool for planning as it approaches environmental issues from a broad, anticipatory, integrated, and regional perspective, and thus ultimately prevents rather than mitigates negative impacts of development.

31 Thank you.

32 Consultants contacts: Rachel Wanyoike energy.com Nelly Bosibori