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Smallholder Agroforestry Projects: Potential for carbon sequestration and poverty alleviation


Author Info

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


This paper provides an assessment of the potential for small-holder agro-forestry projects to be competitive in markets for carbon emission reduction credits, and explores the ways in which small-holder 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 agro-forestry 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 small-holders and suggests institutional reforms which will be necessary for reducing the transactions costs associated with small-holder participation in the market. The paper also includes a detailed annex with information on carbon sequestration projects involving small-holders which are already under implementation.

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Bibliographic Info

Paper provided by Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA) in its series Working Papers with number 03-06.

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Length: 81 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:fao:wpaper:0306

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Related research

Keywords: Agroforestry; Carbon cycle; Carbon dioxide; Case studies; Costs; Development projects; Environmental policies; Environmental protection; Indonesia; Latin america; Poverty; Project design; Small farms; Carbon Sequestration;

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Cited by:
  1. Oscar Cacho & Leslie Lipper, 2007. "Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders," Working Papers 2007.27, Fondazione Eni Enrico Mattei.
  2. Allwardt, Jennifer, 2011. "Carbon Credit Payment Options for Agroforestry Projects in Africa," Graduate Research Masters Degree Plan B Papers 118497, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  3. Sakuyama, Takumi, 2006. "Direct Payments for Environmental Services from Mountain Agriculture in Japan: Evaluating its Effectiveness and Drawing Lessons for Developing Countries," eJADE: electronic Journal of Agricultural and Development Economics, Food and Agriculture Organization, Agricultural and Development Economics Division, vol. 3(1).
  4. 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.
  5. 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.
  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.


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