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Smallholder agroforestry projects: Potential for carbon sequestration and poverty alleviation

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  • Cacho, Oscar J.
  • Marshall, Graham R.
  • Milne, Mary

Abstract

This paper provides an assessment of the potential for smallholder agroforestry projects to be competitive in markets for carbon emission reduction credits, and explores the ways in which smallholder participation in such markets may be facilitated. The paper begins with an overview of the issue of global warming and the role of carbon sinks in mitigating climate change. Then an economic model of the carbon emission reduction (CER) market is presented, which includes the impact of transactions costs. An in-depth survey of the economic literature on transactions costs and their implications in the design of markets for CER follows. An assessment of the emission abatement and transaction costs likely to be associated with smallholder agroforestry projects is presented, based on case study information from Latin America and Indonesia. The paper concludes with policy recommendations on how to design carbon sequestration projects to benefit smallholders and suggests institutional reforms that will be necessary for reducing the transactions costs associated with smallholder participation in the market. The paper also includes a detailed annex with information on carbon sequestration projects involving smallholders that are already under implementation.

Suggested Citation

  • Cacho, Oscar J. & Marshall, Graham R. & Milne, Mary, 2003. "Smallholder agroforestry projects: Potential for carbon sequestration and poverty alleviation," ESA Working Papers 289093, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    • Handle: RePEc:ags:faoaes:289093
    DOI: 10.22004/ag.econ.289093
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    Cited by:

    1. Badstue, Lone B., 2004. "Identifying the factors that influence small-scale farmers' transaction costs in relation to seed acquisition," ESA Working Papers 23800, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    2. Lone B. Badstue, 2004. "Identifying the Factors that Influence Small-Scale Farmers' Transaction Costs in Relation to Seed Acquisition," Working Papers 04-16, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    3. Fortmann, Lea & Cordero-Salas, Paula & Sohngen, Brent & Brian, Roe, 2016. "Incentive Contracts for Environmental Services and their Potential in REDD," International Review of Environmental and Resource Economics, now publishers, vol. 9(3-4), pages 363-409, September.
    4. Kerr, Suzi & Lipper, Leslie & Pfaff, Alexander S.P. & Cavatassi, Romina & Davis, Benjamin & Hendy, Joanna & Sanchez, Arturo, 2004. "Will Buying Tropical Forest Carbon Benefit The Poor? Evidence from Costa Rica," ESA Working Papers 23807, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    5. Leslie Lipper & Prabhu Pingali & Monika Zurek, 2006. "Less-Favoured Areas: Looking Beyond Agriculture Towards Ecosystem Services," Working Papers 06-08, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    6. I. Jürgens & B. Schlamadinger & P. Gomez, 2006. "Bioenergy and the CDM in the Emerging Market for Carbon Credits," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 11(5), pages 1051-1081, September.
    7. Bettles, Joseph & Battisti, David S. & Cook-Patton, Susan C. & Kroeger, Timm & Spector, June T. & Wolff, Nicholas H. & Masuda, Yuta J., 2021. "Agroforestry and non-state actors: A review," Forest Policy and Economics, Elsevier, vol. 130(C).
    8. Lee, Jean, 2017. "Farmer participation in a climate-smart future: Evidence from the Kenya Agricultural Carbon Project," Land Use Policy, Elsevier, vol. 68(C), pages 72-79.
    9. Cacho, Oscar J., 2008. "Carbon markets, transaction costs and bioenergy," 2008 Conference (52nd), February 5-8, 2008, Canberra, Australia 6007, Australian Agricultural and Resource Economics Society.
    10. Takumi Sakuyama, 2006. "Direct Payments for Environmental Services from Mountain Agriculture in Japan: Evaluating its Effectiveness and Drawing Lessons for Developing Countries," The Electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization of the United Nations, vol. 3(1), pages 27-57.
    11. Oscar Cacho & Leslie Lipper, 2006. "Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders," Working Papers 06-13, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    12. Cacho, Oscar J. & Lipper, Leslie, 2007. "Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders," Climate Change Modelling and Policy Working Papers 9324, Fondazione Eni Enrico Mattei (FEEM).
    13. Rojas Lara, Teresa, 2012. "Payments for Environmental Services: A Peruvian Case Study," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126807, International Association of Agricultural Economists.
    14. Asai, Masayasu & Moraine, Marc & Ryschawy, Julie & de Wit, Jan & Hoshide, Aaron K. & Martin, Guillaume, 2018. "Critical factors for crop-livestock integration beyond the farm level: A cross-analysis of worldwide case studies," Land Use Policy, Elsevier, vol. 73(C), pages 184-194.
    15. Cacho, Oscar J. & Lipper, Leslie & Moss, Jonathan, 2013. "Transaction costs of carbon offset projects: A comparative study," Ecological Economics, Elsevier, vol. 88(C), pages 232-243.
    16. Allwardt, Jennifer, 2011. "Carbon Credit Payment Options for Agroforestry Projects in Africa," Graduate Research Master's Degree Plan B Papers 118497, Michigan State University, Department of Agricultural, Food, and Resource Economics.

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    More about this item

    Keywords

    Agricultural and Food Policy; Food Security and Poverty;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q24 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Land
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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