Photo: K Traumann, CCAFS

With increasing interest in the capacity of agroforestry systems to remove carbon dioxide from the atmosphere, farmers might look to planting trees in order to earn money from carbon credits. But would it be worth their while?

“Planting trees for carbon alone really isn’t viable for smallholder farmers in developing countries, but the associated benefits can be extremely lucrative,” says Henry Neufeldt, head of climate change research at the World Agroforestry Centre and co-author of an article in the scientific journal, Current Opinion in Environmental Sustainability which identifies opportunities and challenges for biocarbon projects in agroforestry.

Take for example the N’hambita Community Carbon Project in Mozambique where carbon payments over 100 years are estimated to range from US $209 to $1,047 per hectare (with carbon priced at US $6.72 per tonne CO₂). Over the same period, the sale of tree cash crops is estimated at between $31,728 and $97,125.

Similarly, with the Sustainable Agriculture in a Changing Climate (SACC) project in Kenya, farmers’ income from fuel wood, poles and timber is estimated to reach US$3,850 over the project’s 25 year lifespan, compared to an estimated US$77 in carbon revenue over the same period.

Such small financial rewards for carbon would hardly motivate farmers, but Neufeldt and co-author Kristi Foster believe that if farmers received payments through biocarbon projects - particularly if they were made up-front - this could provide the cash they need to make longer term investments in more sustainable and productive practices. Such practices can help improve farmers’ livelihoods, increase their incomes and their capacity to deal with climate shocks while at the same time contributing to the mitigation of climate change.

“Biocarbon projects can effectively enable climate-smart agricultural development,” explains Neufeldt. “If done right, these projects ensure greater food security, reduce poverty and increase resilience to climate change, all paid for by investors seeking global mitigation goods.”

The benefits trees can provide to farmers include greater agricultural productivity through improved soil fertility and increased water and nutrient availability, income diversification from tree products, better family health and nutrition, and a ready supply of fuel, firewood and building materials.

To-date, most biocarbon projects have concentrated on forested land or tree plantations, however they do have high potential to connect smallholder farmers with climate finance. The handful of biocarbon projects that involve agroforestry, and which were analysed for Neufeldt and Foster’s article, are mostly in East Africa. Under these projects, local land users receive payments through international carbon markets in exchange for carbon sequestered on their land.

“The devil is in the detail,” says Neufeldt, as biocarbon projects often have rigid monitoring, reporting and verification (MRV) systems and require trees to be planted in ways that make it hard for farmers to comply.

“The rules for engaging in biocarbon projects need to be made much more flexible and transaction costs for MRV need to be lowered, for instance by focusing on activity-based MRV systems that reward farmers if they invest in management practices that are known to produce mitigation co-benefits while providing farmers with greater income rather than focusing on the mitigation side of the equation,” says Neufeldt.

Unlike existing forests or plantations, it takes time and labour to establish and grow agroforestry systems. There are also high costs in establishing biocarbon projects which can be a deterrent to investment in smallholder projects, cut into the revenue smallholders receive and make the projects below or only marginally profitable. Neufeldt and Foster stress the need for up-front, external funding (such as from the private sector) to cover the high costs of contract negotiation, project implementation, extension services and training, the MRV of sequestered carbon and the distribution of carbon revenue to farmers.

“There are some ways to cut these costs, such as collective rather than individual contracts, developing inexpensive monitoring systems and partnering with intermediary organizations, other institutions and projects,” explains Neufeldt.

“Working with strong, well-established groups, such as agricultural cooperatives and farmer associations who understand local conditions, also helps to overcome ‘trust’ issues which can hinder projects.”

Another major challenge with biocarbon projects is ensuringsecure land tenure and tree use rights. The article outlines how without these, there is a risk local communities will lose access to land to more powerful interests and carbon benefits may not be equitably distributed.

The article emphasizes how trade-offs between the need to sequester carbon and the need to provide pro-poor development have to be minimized in biocarbon projects. It is also necessary to give farmers flexibility in choosing trees (native or non-native) that can provide for their individual needs, such as for timber, fruit and/or income-generating potential.

Download the full article:

Foster K and Neufeldt H (2014) Biocarbon projects in agroforestry: lessons from the past for future development.Current Opinion in Environmental Sustainability 6: 148-154.

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This article appears in a special issue of the journal Current Opinion in Environmental Sustainability on the theme ‘Sustainability challenges.’ The full special issue is available Open Access at http://www.sciencedirect.com/science/journal/18773435/6/supp/C