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1 
Dr. Charlotte Streck 
8 July 2011 
1Incentives and Benefits for Climate Change Mitigation for Smallholder Farmers
2 
Agriculture is special… 
–Caters for basic needs 
–Agriculture is directly affected by climate change 
–Site and contex...
3 
Introduction: Climate-Smart AgricultureFood Security 
DevelopmentAdaptation 
Mitigation 
Climate Smart Agriculture10-12...
4 
Climate-smart agriculture: sustainable intensification and livelihoodsCropland ManagementGrazing land Management 
Resto...
5 
Smallholder Agriculture 
Highly diverse -> no uniform solution
6Removing Barriers to Implementing CSA 
-CSA must provide net benefit to farmer 
-Farmer must be able to overcome barriers...
7Overcoming Investment BarriersDirect Financial Incentives 
•PES Schemes 
•Carbon Markets 
•CreditRisk-sharing Mechanisms ...
8How can climate finance help overcoming these barriers? 
-New $$$ 
-New actors 
-New partners 
-New financing paradigm 
C...
9Climate Focus, July 8Charlotte Streck
10 
Climate Finance (Mitigation) Project based (CDM type) Project based (programmatic/landscape level) 
Landscape level / ...
11Risks and Opportunities of Climate Finance 
CDM type 
PoA/ 
landscape 
Sectoral/ market 
NAMA (crediting) 
NAMA 
(suppor...
12A basket of approaches 
NAMA support pathPoA/landscape level projectsDemon- strationactivitiesFund based finance (can be...
13International Climate Finance Options
14Implementation Phases1stphase: Readiness 
•Activity: Strategy development, capacity building, training 
•Goal: Build kno...
15Climate Finance & Smallholder SupportFinance 
•Context Specific 
•Tailored and targeted to where it can be most effectiv...
16 
Example 
Climate-smart agricultural finance 
facility (CAFF) 
An initiative supported by the Rockefeller Foundation 
P...
17ConclusionIdentify priority actionsDevelop MRV systemsLeverage private fundsTime matters! Next Steps 
•Conduct interview...
18 
-Thank you! 
Climate Focus, July 8Title, PresenterCharlotte Streck
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Streck c creating incentives and benefits july 2011

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Presentation for Smallholder Mitigation: Mitigation Options and Incentive Mechanisms - Expert Workshop
7 - 8 July 2011


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Streck c creating incentives and benefits july 2011

  1. 1. 1 Dr. Charlotte Streck 8 July 2011 1Incentives and Benefits for Climate Change Mitigation for Smallholder Farmers
  2. 2. 2 Agriculture is special… –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. 3 Introduction: Climate-Smart AgricultureFood Security DevelopmentAdaptation Mitigation Climate Smart Agriculture10-12% 18%* Agricultural Emissions Forestry Emissions* Includes land-use change
  4. 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. 5 Smallholder Agriculture Highly diverse -> no uniform solution
  6. 6. 6Removing Barriers to Implementing 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. 7. 7Overcoming Investment BarriersDirect Financial Incentives •PES Schemes •Carbon Markets •CreditRisk-sharing Mechanisms •Insurance •Crop-based •Index-based Private Sector Investment •Public-Private Partnerships •Labeling & Certification
  8. 8. 8How can climate finance help overcoming these barriers? -New $$$ -New actors -New partners -New financing paradigm Climate Focus, July 10Title, Presenter
  9. 9. 9Climate Focus, July 8Charlotte Streck
  10. 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. 11. 11Risks and Opportunities of 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. 12. 12A basket of approaches 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
  13. 13. 13International Climate Finance Options
  14. 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. 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. 16 Example Climate-smart agricultural finance facility (CAFF) An initiative supported by the Rockefeller Foundation Presented by Charlotte Streck, ClimateFocus & Timm Tennigkeit, Eduard Merger UNIQUE forestry consultants
  17. 17. 17ConclusionIdentify priority actionsDevelop MRV systemsLeverage private fundsTime matters! Next Steps •Conduct interviews •Identify case studies •Distill lessons for climate finance
  18. 18. 18 -Thank you! Climate Focus, July 8Title, PresenterCharlotte Streck

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