Learning Event No 2, Session 1 from Agriculture and Rural Development Day (ARDD) 2011

What are the ﬁnancing possibilities for CSA in Africa and what role might there be for carbon ﬁnance? Seth Shames EcoAgriculture Partners December 3, 2011 Agriculture and Rural Development Day Durban, South Africa

Overview 1) The climate-‐smart agriculture finance disconnect 2) Status of Climate and Agricultural Finance 3) Constraints of the current finance structure 4) Options for Sustainable Agriculture in a Changing Climate (SACC) project in western Kenya 5) Steps towards finance integration

The CSA ﬁnance disconnect ●  Funds for agricultural, food security, mitigation and adaptation generally come from diﬀerent sources though these goals are inextricably linked in agricultural systems ●  SACC project designed for voluntary carbon market ●  Project’s primary objective is livelihood development and resilience to climate change for farmers ●  Given the current low price of carbon, relatively low-‐sequestration potential, costs of project implementation and the length of time required for credit development, carbon revenues are far less than the full costs of the project

Status of climate ﬁnance for agriculture ● Green Climate Fund ● Multilateral funds ● Carbon markets: regulated and voluntary ● NAMAs ● Company supply chains standards ● Philanthropic

Status of agricultural ﬁnance •  US $210 billion/year needs annually to maintain and expand capital stock across the ag value chain •  Most, especially for smallholders, will be provided by domestic sources (public and private) •  US$ 33 billion/year in public ag investment in developing countries •  US$ 7.2 billion/year in ODA •  Private ﬁnancial sector investment in farmland and agricultural infrastructure: US$10 to 25 billion •  FDI for the entire agriculture value chain: US$40 billion/year

Constraints of the current finance structure ● Modest scale of climate finance relative to overall agricultural finance ● Separation of adaptation and mitigation funding ● Lost synergies across landscapes ● Limitations of carbon offset credit markets for farmers and community land users ● Sectoral silos in national public investment (the case of Kenya)

SACC finance options ● Patient private capital with public or philanthropic support ● NAMAs ● Agriculture/ food security/adaptation financing ● SLM project with global benefits (GEF)

Steps towards climate and agriculture finance integration ●  Use climate funds strategically to influence the trajectory of agricultural investments ●  Structure climate finance to support agricultural institutions that can deliver production, livelihood and ecosystem benefits. ●  Open financing windows specifically for multi-‐objective climate-‐smart agriculture and agricultural landscape projects and programs ●  Develop efficient monitoring systems to capture the multiple impacts of climate-‐smart agriculture

Thank you Seth Shames EcoAgriculture Partners sshames@ecoagriculture.org www.ecoagriculture.og

Learning Event No 2, Session 1 from Agriculture and Rural Development Day (ARDD) 2011

by CCAFS | CGIAR program - Climate Change, Agriculture and Food Security

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Learning Event No 2, Session 1 from Agriculture and Rural Development Day (ARDD) 2011 Presentation Transcript