Carbonshed Project was a pioneering initiative of the Laguna Lake Development Authority on Clean Development Mechanism (CDM) activities under the Kyoto Protocol, to reduce the greenhouse gas (GHG) emissions and to improve environmental quality in the Laguna de Bay Watershed. This was implemented from 2004-2008 through a grant of USD 358,450.00 from the Japan Climate Change Initiatives that the World Bank administers. The project’s main activity was the development of a set of small-scale environmental interventions in Laguna de Bay watershed using the LISCOP Projects as a focus.

The Carbonshed Project’s aims to:

  • Build the capacity of the LLDA as an intermediary to enable small-scale environmental projects to result in verified emissions reductions.
  • Pilot the implementation of interventions that reduce carbon emissions and address priority environmental issues such as waste management and erosion reduction
  • Prepare a set of environmental projects from which emission reduction credits could be purchased by the World Bank’s Community Development Carbon Fund (CDCF) and Bio-carbon Fund (BioCF).

Potential types of CDM-eligible sub-projects include:

  • Solid waste management particularly composting
  • Wastewater treatment including the use of biogas, and
  • Reforestation and afforestation to reduce soil erosion



A Carbon Finance Team (CFT) was organized in LLDA to lead in the implementation of the Carbonshed Project and to carry out the different tasks geared towards the attainment of the project objectives. Through the technical supervision and guidance of Dr. John Morton, Task Team Leader of the World Bank for the Carbonshed project and the Carbon Finance Unit of the World Bank based in Washington D.C. , the CFT training and capacity building started off with a “learning by doing” approach.

This project was implemented in parallel with LISCOP, thus the marketing of this project was done through the LEAP process. Information about Carbonshed were presented consisting of the following:

  • Global warming
  • Climate change
  • The Kyoto Protocol and the Clean Development Mechanism
  • The Carbonshed Project and its benefits
  • Implementing Mechanisms

CFTmembers were mentored on the CDM process and procedures and the required documents for registration for CDM-Eligible sub-projects to UNFCCCC-CDM-EB.

The Daruma Technologies, Inc., consulting firm, was hired in March 2007which is to provide trainings to the CFT and the project proponents on the preparation of the Project Design Document (PDD) for each of the categories of CDM projects (Methane Avoidance, Methane Recovery and Carbon Sequestration). Similarly, training on the monitoring of CDM projects for the purpose of carbon credits in accordance with the strict compliance to the methodologies approved by the UNFCCC was also provided to the team and the Project Monitoring Team of the project proponents.

The CFT team was also provided with training on the inventory of greenhouse gas emission in the Laguna de Bay watershed. Exposure trips outside the watershed were done to observe on-going projects that reduce the amount of GHG in the atmosphere.

BioCF Training on Reforestation and Afforestation in the World Bank Headquarters in Washington DC in 2005 and 2008 was attended by the Head of the Carbon Finance Team and the Group Leader through the funding support from the World Bank.



Sub-projects under LISCOP were considered as CDM-eligible however underwent the process in accordance with CDM requirements. Most of the sub-projects are Material Recovery Facility (MRF) with Composting while two are Methane Recovery projects. Thus, initial estimates of the emission reductions formed part of the financial viability assessment and the equipments that needed to be purchased to ensure that the emission reductions are attained and monitored.

With the project closing in July 2008, two bundles of sub-projects under Methane Avoidance category were processed for implementation.

Bundle 1:
Bundle 2:
Cavite: General Mariano Alvarez Laguna: Siniloan, Nagcarlan
Laguna: Kalayaan, Liliw, Sta. Cruz Pila, Pangil, Pakil, Mabitac
Rizal: Tanay, Teresa, Morong Silang, Sta. Rosa City

Under the Methane Recovery category, Sta. Cruz and Nagcarlan from the province of Laguna came out with wastewater treatment facilities.

With the private sector participation, proposals from this sector were evaluated. These were:

  1. Communal digester for a cluster of small piggery farms by the RiverCouncil of Pagsanjan-Lumban but did not mature due to limited funding sources.
  2. Wastewater treatment facility by two commercial piggery farm owners
  3. Reforestation of the Caliraya watershed by the National Power Corporation (NPC) and Caliraya-Botocan-Kalayaan (CBK) Power Co. Ltd.
  4. San Pablo Water District wherein series of meetings and site inspections were done by LLDA

Only the third proposal matured into a Memorandum of Agreement (MOA) among NPC, CBK and LLDA that was signed on July 10, 2006 encompassing the reforestation of 140 hectares of denuded areas in the Caliraya watershed. The technical evaluation of the project site, reforestation planning and implementation and preparation of the plantation management plan were done jointly by these three institutions.

On reforestation and afforestation, Tanay, Rizal, Siniloan, Laguna at Mt. Makiling (Laguna side and Batangas side) were inspected and evaluated by the CFT.


  1. Memorandum of Agreement (cMOA) – This is signed by the proponent and LLDA prior to proceeding with the technical assessment and inclusion of the proponent’s sub-project to the CDM-eligible bundle.
  2. Emission Reduction Purchase Agreement (ERPA) – This was entered into by the LLDA, in behalf of the project proponents and the World Bank, in behalf of the buyers of Carbon credits, namely the Community Development Carbon Fund and the BioCarbon Fund. This ERPA was signed on June 30, 2006. The price of one unit of CER expressed in tons CO2-e, wherein the LLDA will sell to the buyers as specified and spelled out certain penalties in case of default.
  3. Sub-Emission Reduction Purchase Agreement (sub-ERPA) – This binds the project proponent to the LLDA to deliver a specified amount of emission reduction. In case of failure to deliver the required ERs, corresponding sanctions were stipulated in this sub-ERPA.

The Feasibility Study for each of the sub-projects was done under LISCOP. The diagram serves as a reference in understanding the accomplishments presented herein.


The PDD is a technical document containing all the necessary information regarding the CDM-eligible subprojects ranging from their operation, implementation and determination of carbon emission reduction based on the approved methodology o f the CDM-EB. The PDD is required for the following purposes:

  • The Designated National Authority (DNA) as basis for the issuance of the Letter of Approval required for validation and registration.
  • The Validator licensed by UNFCCC-CDM-EB to validate projects undergoing the registration as CDM-eligible.
  • The CDM-EB certifies that the projects meet the requirements of CDM. Part of the registration process is the posting of PDD in the UNFCCC website for critiquing of international stakeholders.

The following PDDs were prepared:

  1. Bundle 1- Laguna de Bay Community Waste Management Project: Avoidance of Methane Production from Biomass Decay through composting 1”
  2. Bundle 2 – Laguna de Bay Community Waste Management Project: Avoidance of Methane Production from Biomass Decay through composting 1”
  3. Bundle 1- Laguna de bay Community Waste Management Project: methane Recovery in Wastewater Treatment 1”. The PDD was revised to include the two private sector proponents
  4. Bundle 1 – Laguna de Bay Watershed rehabilitation Project 1( Tanay and Caliraya sites)
  5. Bundle 1- Laguna de Bay Watershed Rehabilitation Project 1 (San Pablo, Siniloan and Makiling sites)

The Methane Recovery PDD showed that the total emission reductions (ERs) were very low. The registration of this bundle of sub-projects was temporarily put on hold until substantial ERs are attained. Otherwise, the transaction cost could be greater than the Carbon credit.


In September 2006, the firm TUV Industries Service GmbH, licensed by the UNFCCC to audit and validate if projects are CDM- eligible. Experts are based in Germany while their local counterparts are based in their Manila office who conducted the pre-validation and validation activities and meetings were held in between. The results of evaluation were communicated to the CFT and TTL for corrective actions while electronic discussion required a lot of technical input from the CFT until such requirements were satisfied. In addition, the validator took charge of submitting the PDDs and the result of their evaluation to the UNFCCC-CDM-EB.

On reforestation, it did not meet the land eligibility criteria, thus the PDDs were not submitted for registration. But still, the reforestation and afforestation were still carried out in the Caliraya watershed because of the considerable environmental benefits in carbon dioxide sequestration and erosion mitigation. This activity was supported by the MOA between LLDA, CBK and NPC.

As a requirement for the validation and registration to the CDM-EB, letters of approval were given by the Designated National Authority (DENR) for the two bundles of Methane Avoidance projects.

On March 16, 2008, the first bundle of the Laguna de Bay Community Waste Management Project: Avoidance of Methane Production from Biomass Decay through Composting -1 has been registered with the UNFCCC-CDM-EB as a CDM project and was certified to produce Carbon credits.


These documents were produced from the services of the Daruma Technologies, Inc. to the LLDA-CFT.

  • CDM Toolkit
  • Appraisal Manual for CDM Projects
  • CDM Methodological Procedures
  • Website Layout

One of the significant output is the Greenhouse Gas Inventory in the Laguna de bay Watershed, which shows the different sources of greenhouse gas emissions. This will serve as a baseline from which other interventions will be assessed. The spreadsheet to determine the GHG emission and the GIS-based maps were also provided.

Estimated ERs over Crediting Period: BUNDLE 1 MRF SUB-PROJECTS

(7 Sub-Projects – General Mariano Alvarez, Cavite; Kalayaan, Laguna; Liliw, Laguna; Morong, Rizal;Sta Cruz, Laguna, Tanay, Rizal and Teresa, Laguna )

Years Annual estimation of emission reductions in tones of CO2-e
2009 2,047
2010 3,659
2011 5,047
2012 6,288
2013 7,426
2014 8,473
2015 9,463
TOTAL 42,403

Source: Laguna de Bay Community Waste Management Project, LLDA Bundle 1

Estimated ERs over Crediting Period : BUNDLE 2 : MRF SUB-PROJECTS

(11 Sub-Projects – Lucban, Quezon, Pakil; Laguna, Pangil; Laguna, Pila; Laguna, Mabitac; Laguna, Sta. Rosa, Laguna; Nagcarlan, Laguna; Siniloan, Laguna; Angono, Laguna; Victoria, Laguna; Antipolo, Rizal )

Years Annual estimation of emission reductions in tones of CO2-e
2011 43,131
2012 48,319
2013 55,468
2014 64,223
2015 68,499
2016 72,869
2017 77,414
TOTAL 429,923

Source: Laguna de Bay Community Waste Management Project, LLDA Bundle 1