The World Bank is strongly committed to supporting Moldova’s efforts to increase forest cover, address soil degradation and reduce greenhouse gas emissions, stated Qimiao Fan, WB Country Director for Ukraine, Belarus and Moldova. The statement is occasioned on the announcement made today by the United Nations Framework Convention on Climate Change (UNFCCC) on the issuance of the first carbon credits generated by the Moldova Soil Conservation Project, purchased by the World Bank’s BioCarbon Fund. The carbon credit is a virtual financial instrument overseen by the United Nations. Each year the UN distributes carbon credits among signatory nations of the Kyoto Protocol. These countries, in turn, distribute them among factories and power plants. One carbon credit corresponds to one tonne of carbon dioxide or equivalent gas. This means that a power plant, for example, is entitled to as many tonnes of CO2 emissions as many carbon credits it is allotted. Often the number of assigned carbon credits do not cover actual emissions. Then the company has to compensate by purchasing carbon credits on the market, for example, from companies that managed to reduce CO2 emissions by adopting modern technology and thus obtaining a surplus of credits. Also, credits can be sold by the renewable industry to the so-called polluting industry. The issuance for the Moldova Soil Conservation Project is the largest issuance of carbon credits from a reforestation project in the Emerging Europe and Central Asia countries. “The project is having an impact at the local level by improving land management practices and generating income from carbon sequestration which has already been reinvested in a second reforestation project, setting an excellent example for replication”, says Qimiao Fan. The World Bank Office in Moldova noted in a press release that, for decades, Moldova experienced creeping desertification due to the lack of investment in and restoration of degraded lands. Over 900,000 hectares of land are unfit for agricultural use, ravaged by soil erosion and landslides, at a significant cost in lost agriculture production. Since 2003, a World Bank-supported project has achieved restoration of over 20,300 hectares of these severely degraded lands by planting trees and improving the quality of the earth. The soil is increasing its storage of carbon dioxide as the project minimizes water and wind erosion, leading to improved soil fertility. In addition to increasing the country’s forest cover, replenishing the carbon stock of degraded lands and reducing greenhouse gas emissions, for which the project is earning carbon credits, the project is also a source of employment as well as of forest products and services. These include fuel wood as a result of pruning trees, medicinal plants, honey from beekeeping and the restoration of habitats for endangered species. With carbon finance, Moldsilva has access to a revenue stream that helps finance the reforestation of degraded lands, putting in motion a positive cycle that generates income for local communities.