Sara Scherr - How can African Farmers Benefit from Carbon Markets? - Aug 2009


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How can African Farmers Benefit from Carbon Markets?

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  • Agricultural landscapes play a centrally important role in producing and conserving ecosystem services, because they are such a dominant role in land use. On the one hand are the ‘provisioning’ services—productiion of goods like food, fuel, fiber, etc. On the other side are ecosystem services providing clean air, fresh water, flood protection, pest and disease regulation, etc. These ecosystem services provide direct and indirect benefits for the economy and people’s livelihoods, and thus have an economic value.
  • The ecosystem services generated through conservation agriculture, like improved soil quality and generation, improved waterholding capacity, provide direct livelihood benefits for farmers. But CA, especially where practiced by large numbers of farmers accounting for large aggregate production areas, can also provide regional and global benefits, like watershed protection and protection of threatened species that depend on habitats in agricultural areas. PES provides a way to supplement liveliihoods with addition financial payments and thus improve the financial viailibty of CA investments and practices.
  • Sissel cautions that this is not an exhaustive list a
  • The 2 nd challenge is to fit PES projects in Conservation Agriculture to local conditions. Farmers need to be able to retain opportunities to modify land use over time, to invest in CA in those fields and farms that make most sense, to have aflow of funds that matches local capital requirements as well as those of buyers. Because of the need for aggregation, and th epotential economies of scale for PES, collective action is needed to agree upon strategies, sequencing, local input, pricing, etc. Typically, the price of ecosystem services will not cover these organizational costs.
  • The third challenge is to build and link the various institutions required across the full value chain of ecosystem services. The green octagons in this diagrma show the buyers and sellers. And most people are aware that Pes often involves ffinancing agents, and intermediaries. But there are many other actors, including planners, verifiers, certifiers, financiers, If the system is highly fragemented and inefficient, then the proportion of the total payment by buyers that will actually reach the farrmer may be very small indeed. There is no reason to believe that PES value chains will be any fairer to farmers than product markets, unless proactive efforts are made to invest in this value chain in ways that benefit the seller.
  • Watershed protection iis the most widely recognized ecosystem benefit of conservation agriculture, for CA’s role in improving rainfall infiltration, reducing erosion, improving soil cover, etc. So downstream water users facing high costs for water quality, control, hydroelectric dam facilities seeking to avoid costs of clearing sediment, etc. are becoming aware of benefits of CA and examining the costs/benefits of PES. The most exciting and potentially largest demand for CA could be for climate change mitigation. Scientists have recognized that soils are the 3 rd largest terrestrial store of carbon, and that there is huge capacity to store more carbon there, as well as to reduce carbon emissions caused by over-tillage ad loss of organic matter. Major decisions will be made in December in Copenhagen at the next climate change convention meettings, re terrestrial carbon, including for conservation agriculture. Imprortant to be advocating there (as is being done, for example, by African countries through COMESA, TerrAfrica, etc. Less discussion of biodiveresity conservation, although may be potential in situations where sedimentation from over-tillage results in freshwater or coastal/marine biodiversity loss.
  • If PES is to become a major incentive for scaling up Conservation Agriculture around the world, policy initiatives will be needed. The groups represented at this Congress can play a catalytical role in promotiing policy action to enable this tool to be used and to be useful to farmers. Recommendations are pretty self-explanatiory.
  • There are definitely opporunities to use PES to support CA, but this will probably be in only certain situations. The areas where CA is practiced need to be strategically located in the ecosystem, and represent a significant share of the problem. (often, for example, other activities like road-building might be a bigger local source of eroded soil, or deforestation a larger source of carbon emissions). Farmers need to have the land rights and legal rights to receive payments. Not developed for carbon in many countries; often not even for watershed services. Also need tenure security, or else other mechanisms. Payment amounts are not likely to be large per hectare, but can be important as supplemental income, and to smooth out income flows over the years, and particularly to help in the transition to use of CA, so long as buyers are reassured that practices will be continued over the long-term The biggest challenge for PES to smallholder farmers is the cost of setting up and managing the payment and monitoring arrangements. Only farmers hwo are already well-organized should seek out PES opportunities. INDEED, THERE ARE 3 MAIN CHALLENGES TO SCALING UP PES FOR CA.
  • Sara Scherr - How can African Farmers Benefit from Carbon Markets? - Aug 2009

    1. 1. How can African Farmers Benefit from Carbon Markets? Sara J. Scherr, Ecoagriculture Partners World Agroforestry Congress Nairobi, Kenya, August 26, 2009
    2. 2. Emissions offset potential in working landscapes in Africa <ul><li>Improved agronomic practices : croplands could reduce GHG emission 52-91 mln tons CO 2 eq (5-9% of annual fossil fuel emissions in Africa) </li></ul><ul><li>Agroforestry : Cocoa AF in Cameroon stores 565 t/ha; semi-arid AF with 50 trees/ha stores 110-147 tons CO 2 eq in soil alone </li></ul><ul><li>Improved pasture management can store 110 kg/ha/yr in drylands to 810 kg in humid lands </li></ul><ul><li>Farmer-managed natural regeneration: in Niger sequestered 100 million tons of CO 2 eq </li></ul>
    3. 3. PES for climate change integrates production, ecosystem, livelihoods Conservation Ecosystem process & function Wild biodiversity ECOSYSTEM SERVICES Locally beneficial services Globally & regionally beneficial services Sustainable Agriculture Livelihood support PAYMENT FOR ECOSYSTEM SERVICES
    4. 4. Global market for carbon in land use, land use change and forestry Source: Milder et al. 2009. Ecology and Society . Forthcoming. Types of PES Market size in million $/yr Global (developing countries) Buyers Sellers Data Source Public Sector $15 (15) National governments; multi-lateral organizations stewards World Bank 2007 Private, under regulation <$10 (<10) Regulated industry, governments, carbon funds, brokers, investors Private landowners, project developers UNFCCC 2009 Private voluntary $ 157 (~100) Corporations, NGOs, universities, individuals C offset retailers and project developers, conservation NGOs, governments C offset retailers and project developers, conservation NGOs, governments Eco-certification Agricultural products 42,000 (unknown) Individual consumers, retailers, food processing industries stewards World Bank 2007
    5. 5. African carbon projects, by country (2008) Source: The East and Southern Africa Katoomba Group. 2008. Payments for Ecosystem Services in East and Southern Africa: Assessing Prospects and Pathways Forward. Kenya South Africa Tanzania Uganda 3 4 11 9
    6. 6. Challenges 1: Can we measure agricultural landscape carbon? <ul><li>Open debate on sequestration levels of terrestrial carbon interventions </li></ul><ul><li>Open debate on permanence of terrestrial carbon interventions </li></ul><ul><li>Precise measurement systems are currently expensive </li></ul>
    7. 7. Challenge 2: Community planning Too hard? too costly? too risky?
    8. 8. Challenge 3: Will value chains generate sufficient incentives for African producers?
    9. 9. Challenge 4: Can we mobilize agricultural carbon at a large enough scale to make a difference for poverty and for the climate? <ul><li>Agriculture perceived to have weak institutions </li></ul><ul><li>Climate action has focused on small projects </li></ul><ul><li>Smallholders assumed to = small scale </li></ul><ul><li>Perception of low economies of scale due to site-specificity/diversity of solutions </li></ul><ul><li>Current focus on achieving high impacts per hectare, rather than high total impacts </li></ul>
    10. 10. Measure agricultural carbon cheaply and effectively <ul><li>New agricultural landscape scale MRV tools being developed (e.g. Carbon Benefits Project, Cornell Climate Initiative) </li></ul><ul><li>Leading edge projects being implemented (e.g. WB Biocarbon Fund projects in Kenya) </li></ul><ul><li>Methodologies being developed for Voluntary Markets </li></ul>
    11. 11. Mobilize communities for climate planning and investment <ul><li>Initiate climate action with organized & tenure-secure communities </li></ul><ul><li>Build capacity of farmer and local/landscape organizations (numerous landscape initiatives) </li></ul><ul><li>Small grant facilities for local analysis, planning, assistance, mapping (e.g., Google Earth) </li></ul><ul><li>Ensure community representatives are ‘at the table’ to set PES rules (including Copenhagen) </li></ul>
    12. 12. Build efficient value chains for climate payments to farmers <ul><li>Institutionalize intermediary & bundling services, accountable to farmer clients (e.g., build on farmer coop models) </li></ul><ul><li>Establish livelihood-focused Carbon Funds </li></ul><ul><li>Utilize landscape-scale planning and monitoring tools (e.g. ) </li></ul><ul><li>“ Bundle” agricultural products with climate regulation services </li></ul><ul><li>Incorporate into outgrower schemes </li></ul>
    13. 13. Build on existing models for operating at scale <ul><li>Large-scale government programs for restoring degraded lands and forests (e.g., South Africa, Nigeria) </li></ul><ul><li>Large-scale development projects on sustainable land management (e.g., IFAD, Sahel) </li></ul><ul><li>National platforms for coordinating action on SLM (e.g., TerrAfrica) </li></ul><ul><li>Territorial management initiatives </li></ul><ul><li>NGO, farmer, agribusiness networks (e.g., IFAP, EAFF, dairy networks) </li></ul>
    14. 14. Build support for full inclusion of African agriculture in climate talks negaction <ul><li>Building a rigorous case for the potential to scale </li></ul><ul><li>Document existing programs that can be scaled </li></ul><ul><li>Document landscape-wide GHG emissions/storage in diverse landscapes </li></ul><ul><li>Calculate impacts of landscape-wide action </li></ul><ul><li>Devise concrete strategies for action at scale </li></ul><ul><li>Pilot country plans where major co-benefits identified for ‘re-carbonizing’ or protecting standing carbon in landscapes </li></ul><ul><li>Integrate climate action in major agricultural investment programs of donors & development banks </li></ul><ul><li>Mobilize voluntary carbon market to pilot and document diverse strategies </li></ul>
    15. 15. Thank you…