Soil carbon markets unlikely to benefit small farmers in Africa
There is increasing interest in turning Africa's soil carbon into a commodity for trading in the carbon market. To address both the need for more finance for agriculture and the climate crisis, some agencies are promoting the selling of carbon offset credits based on the carbon that can be stored in soil. The idea is that farmers would utilise agricultural practices, such as incorporating compost and manures in their fields, to maximise the carbon stored (“sequestered”) in soil.
The logic is that if the stored soil carbon can be measured and valued, it can then be sold and traded on the market. Credits would be bought by companies or individuals to offset their own greenhouse gas emissions. Alternatively, credits would be bought by investors who would trade the credits, speculating on whether the price of carbon credits would increase or decrease.
Civil society has been concerned by these moves, because the push for soil carbon markets is unlikely to benefit African farmers and is instead a dangerous diversion from the urgent adaptation needs of African agriculture. It also diverts focus away from changing unsustainable production methods and consumption patterns in developed countries, and instead would exploit Africa's soil carbon to meet developed countries' emission reduction obligations.
A new Action Aid report Fiddling with soil carbon markets while Africa burns…! lays out why soil carbon markets will not work. We paste below excerpts from the report, highlighting the summaries of the six key arguments as well as the conclusions and recommendations. The full report is available at http://www.actionaid.org/publications/fiddling-soil-carbon-while-africa-burns
Another report, by the Institute for Agriculutre and Trade Policy (IATP) focuses specifically on the Kenya Agricultural Carbon Project, which is financed by the World Bank’s BioCarbon Fund. It questions the carbon market approach, as it is a very shaky foundation for climate finance. Nearly half of the monetary benefits from the proposed offset credits would be absorbed by project developers as “transaction costs,” with miniscule returns to the farmers who would be implementing the project. While carbon markets are promoted as a way to “leverage” climate funding, to judge by this project, the rules being developed risk oversimplifying evolving science on climate mitigation and diverting resources from the urgent task of adaptation. The IATP report is available at http://www.iatp.org/files/2011_09_09_KenyaAgCarbonProject_SS.pdf
With best wishes,
Fiddling with soil carbon markets while Africa burns…! (September 2011)
By Doreen Stabinsky, Professor, College of the Atlantic, USA with inputs from Celso Marcatto, Ilana Solomon, Harjeet Singh and Soren Ambrose of ActionAid
1. There is no soil carbon market
The first rule of a market is that they need sellers and buyers. A soil carbon market requires international rules that give incentives to polluters and investors to buy carbon credits. However, there is a strong possibility that world governments will allow key provisions of the Kyoto Protocol to lapse after 2012, undermining its market mechanisms. Moreover developed countries‘ extremely weak emission reduction commitments will mean that there is little global demand for carbon credits.
2. Voluntary soil carbon credits will not provide significant or secure finance
In the absence of a compliance market outlet for soil carbon credits in the near future, the World Bank and other market proponents currently put their faith in the potential of voluntary markets to generate significant revenues for agricultural development. However while there may be considerable technical potential for soils to sequester carbon, there is not parallel potential to sell soil carbon credits on voluntary markets. Scientific uncertainty about the quantification and verification of soil carbon, as well as the non-permanence of sequestered carbon, put both the value of the associated credits and the mitigation potential of soil carbon markets in doubt.
3. If there are revenues from the market, they will not reach smallholder farmers
To measure, report and verify soil carbon will require substantial resources for remote sensing technologies, field measurements, and development of modelling approaches to understand soil carbon fluxes. Smallholder farmers will not carry out this work. Instead, project developers and technicians will need to invest significant resources in these tasks. Given the small amount of money that soil carbon would likely attract from a private market for all the reasons outlined in the previous section, it is likely that the most of the revenue will go to the technicians, not farmers.
4. Investing resources in establishing a soil carbon market diverts attention from the central question of how to generate public finance that can be used in part to address food security threats posed by climate change
The World Bank and other soil market proponents argue that regardless of how much money goes to individual farmers through carbon trading, there are huge sums of money that could be mobilised for agricultural extension and development through the carbon market. However, the creation of a soil carbon market should not be the driver of the adaptation agenda. Indeed, increasing levels of soil carbon must be seen merely as a co-benefit of policies and practices designed to increase the food security and resilience of agricultural production systems in the face of climate change. Food security and systems resilience must be the guiding objectives of adaptation efforts.
5. Smallholder farmers should not be asked to bear the mitigation burden of developed countries and their citizens
Soil carbon sequestration does not reduce global emissions. Instead, it merely relocates emissions until the gases sooner or later return to the atmosphere. Soil carbon compliance offsets meanwhile aid developed countries to postpone their own emission reductions. Unless there are real emission reductions by developed countries, smallholder agriculture will suffer profoundly, and we will be no closer to averting a global climate catastrophe.
6. A soil carbon market is a distraction used by developed countries to evade their obligations to deliver on climate finance
The climate challenge is immense. Estimates of the cost of adaptation alone in the coming decades are up to US$100 billion a year. These costs must be borne by those most responsible for the climate problem. However developed countries are looking to the private sector, to the carbon marketplace, to help them avoid the difficult question of where to find the money. It seems that this question is easily answered when wars must be funded or banks bailed out, but not when the fate of humanity is at risk.
Conclusions and recommendations: What is really needed?
There are serious challenges ahead for continued food production under the conditions of changing climates across the world, and in particular for the smallholder sector in developing countries. Ensuring continued food security in a changing climate will require attention to the full range of production and institutional adaptations necessary to increase the resilience of food and livelihood systems. Why invest so many resources into MRV and creation of new institutions that deliver US$0.29 per year to smallholders that follow their rules? These are significant opportunity costs borne on the backs of smallholder farmers who need a more expansive vision from policymakers and global financial institutions.
Substantial, stable, predictable, new and additional public finance is essential to fund adaptation and food security efforts. Resources should be directed towards agroecological approaches that increase soil health and crop productivity, while at the same time increasing the water-holding capacity of soils and the overall diversity of cropping systems. Investment is needed in traditional water-harvesting and retention technologies, such as the Zaï pits used in the Sahel, and their diffusion. Farmer-led crop variety development and seed production systems that link farmers with researchers to rapidly develop and disseminate new varieties need support. Both agroforestry and urban agriculture systems can play key roles in future food security under climate change and must be developed and supported. The bottom line for directing climate finance is that adaptation and food security must be the central objectives of agricultural policies in a warming world.
A number of viable and innovative new mechanisms have been proposed as sources of stable, public climate finance to help countries confront climate change. Special drawing rights, a financial transaction tax, redirection of fossil fuel subsidies, a tax on international aviation tickets, and a tax on fuel used for shipping goods internationally together could generate more than US$100 billion in public finance annually. Political will is, of course, needed to overcome the domestic hurdles faced by these proposals in many developed countries. Equity issues must also be dealt with for those mechanisms, such as a fuel tax, that might unfairly burden developing countries.
Finally, developed countries must immediately and rapidly reduce their emissions of greenhouse gases domestically. Only immediate and real reductions in emissions can prevent further humanitarian catastrophes such as the current drought and famine situation in the Horn of Africa. Every year that emissions continue at their current rate puts the lives and livelihoods of millions of the world’s poor are increasingly at risk. Developed countries not only have the historical responsibility to address the impacts of their emissions on the world’s poor, they also have the means to do so. One of the first steps that must be taken, in December in Durban, is to agree on an ambitious, legally binding second commitment period for the Kyoto Protocol.