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Streck c creating incentives and benefits july 2011
The document discusses the importance of climate-smart agriculture for smallholder farmers, focusing on sustainable practices that address food security, climate change, and resilience. It emphasizes the need to overcome financial, social, and technical barriers to implement climate-smart practices, while highlighting the role of climate finance in providing direct incentives and investment opportunities. The implementation of climate finance is described in three phases, aiming to scale up sustainable agricultural practices through private capital and supportive public finance.
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Streck c creating incentives and benefits july 2011
- 1. 1 Dr. CharlotteStreck 8 July 2011 1Incentives and Benefits for Climate Change Mitigation for Smallholder Farmers
- 2. 2 Agriculture isspecial… –Caters for basic needs –Agriculture is directly affected by climate change –Site and context specific –Source and sink of carbon –Adaptation and mitigation intrinsically linked –Complex links between trade, food security, and climate change –Close relation to emissions from forestry –Agriculture can generate multiple benefits for food security, adaptation, mitigation and development Climate Focus, July 8Charlotte Streck
- 3. 3 Introduction: Climate-SmartAgricultureFood Security DevelopmentAdaptation Mitigation Climate Smart Agriculture10-12% 18%* Agricultural Emissions Forestry Emissions* Includes land-use change
- 4. 4 Climate-smart agriculture:sustainable intensification and livelihoodsCropland ManagementGrazing land Management Restore organic soilsRestore degraded landsCoffee carbon -increasing yield -converting sun grown to shade coffee-soil and nutrient management Forest carbon -REDD+ -“releasing natural forests” for synthetic or organic fertilizer Smallholder agricultural carbon-increasing yield-sustainable land management-Soil and nutrient managementRangeland carbon-preventing desertification -land restoration by providing incentives to reduce overstocking -efficient feeding practices
- 5. 5 Smallholder Agriculture Highly diverse -> no uniform solution
- 6. 6Removing Barriers toImplementing CSA -CSA must provide net benefit to farmer -Farmer must be able to overcome barriers to implementation Financial Social/Institutional Technological Lack of assetsand savings Poorly functioning markets Lack of technical expertise Little access to credit No or limited market access Lack of baseline data Lack of infrastructureand equipment Limited marketing information or understanding Existing resource degradation Little access to insurance Weak tenure security
- 7. 7Overcoming Investment BarriersDirectFinancial Incentives •PES Schemes •Carbon Markets •CreditRisk-sharing Mechanisms •Insurance •Crop-based •Index-based Private Sector Investment •Public-Private Partnerships •Labeling & Certification
- 8. 8How can climatefinance help overcoming these barriers? -New $$$ -New actors -New partners -New financing paradigm Climate Focus, July 10Title, Presenter
- 9. 9Climate Focus, July8Charlotte Streck
- 10. 10 Climate Finance(Mitigation) Project based (CDM type) Project based (programmatic/landscape level) Landscape level / sectoral(market based, fund based) NAMA crediting path (fund/market based) NAMA support path (fund based)
- 11. 11Risks and Opportunitiesof Climate Finance CDM type PoA/ landscape Sectoral/ market NAMA (crediting) NAMA (support) Ultimate beneficiary Farmer –beneficiary Level of change Incentives on the project level Incentives for changes at the landscape level Policy change Incentives for the gov to adopt PoMs (can involve project incentives) Policy change Policy change Enabling activities Contractual partner Project owner Aggregator Govmnt Govmnt Govmnt Finance Ex post Directly to the farmer Ex post To be distributed by aggregator Ex post To be distributed by gov Ex post To be distributed by gov Ex ante To be distributed by gov MRV Project level Project level but standardized Sector (MRV, high tier) Sector (possibly lower tier) Policy level MRV
- 12. 12A basket ofapproaches NAMA support pathPoA/landscape level projectsDemon- strationactivitiesFund based finance (can be market linked) Market financeNAMA support finance: •Allows govs to access climate finance •Can support ag extension systems •Advance finance possible (farmer level subsidies) Market finance: •Demonstration activities •Voluntary market PoA/landscape level interventions
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- 14. 14Implementation Phases1stphase: Readiness •Activity: Strategy development, capacity building, training •Goal: Build knowledge and ownership in the government and among stakeholders •Finance: High proportion of public finance. 2ndphase: Demonstration •Activity: Project scaling and limited commercialization; consolidate project and financing institutions. •Goal: Prove and expand project, program and policy concepts; attract private capital to agricultural communities; build supply chains •Finance: Large but falling fraction of public finance. 3rdphase: Scaling up •Activity: Direct private capital into landscape-scale activities; integrate agpolicies in Low Carbon Development Strategies •Goal: Scaling up of CSA practices, full implementation •Finance: Most investment from private sources; Ongoing public finance for certain infrastructure and services.
- 15. 15Climate Finance &Smallholder SupportFinance •Context Specific •Tailored and targeted to where it can be most effective •e.g. ex-ante vs. ex-post paymentsInstitutions •Utilize existing structures in innovative arrangements •Improve coordination across institutions and financial sources •Need to identify coordinating body, recipients, & delivery mechanismMRV •UNFCCC National Inventories and Reporting •Growth of Life Cycle Analysis (LCA) •Role of NAMAs
- 16. 16 Example Climate-smartagricultural finance facility (CAFF) An initiative supported by the Rockefeller Foundation Presented by Charlotte Streck, ClimateFocus & Timm Tennigkeit, Eduard Merger UNIQUE forestry consultants
- 17. 17ConclusionIdentify priority actionsDevelopMRV systemsLeverage private fundsTime matters! Next Steps •Conduct interviews •Identify case studies •Distill lessons for climate finance
- 18. 18 -Thank you! Climate Focus, July 8Title, PresenterCharlotte Streck