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Smallholder Agroforestry Projects: Potential for carbon sequestration and poverty alleviation

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Author Info
Oscar J. Cacho
Graham R. Marshall
Mary Milne

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Abstract

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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Publisher 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;

Find related papers by JEL classification:
O13 - Economic Development, 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, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Richard Posner & Eric Rasmusen, 1999. "Creating and Enforcing Norms, With Special Reference to Sanctions," Law and Economics 9907004, EconWPA. [Downloadable!]
    Other versions:
  2. Joyotee Smith, 2002. "Afforestation and reforestation in the clean development mechanism of the Kyoto Protocol: implications for forests and forest people," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 2(3), pages 322-343, January. [Downloadable!] (restricted)
  3. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September. [Downloadable!] (restricted)
  4. De Jong, Ben H. J. & Tipper, Richard & Montoya-Gomez, Guillermo, 2000. "An economic analysis of the potential for carbon sequestration by forests: evidence from southern Mexico," Ecological Economics, Elsevier, vol. 33(2), pages 313-327, May. [Downloadable!] (restricted)
  5. Toman, Michael & Kerr, Suzi & Sedjo, Roger & Birdsey, Richard & Kauppi, Pekka & Noble, Ian & Brown, Sandra & Krankina, Olga & Moura-Costa, Pedro, 2001. "Can Carbon Sinks be Operational? An RFF Workshop Summary," Discussion Papers dp-01-26, Resources For the Future. [Downloadable!]
  6. Nee, Victor, 1998. "Norms and Networks in Economic and Organizational Performance," American Economic Review, American Economic Association, vol. 88(2), pages 85-89, May. [Downloadable!] (restricted)
  7. Otsuka, Keijiro & Place, Frank, 2001. "Land tenure and natural resource management," Food policy statements 34, International Food Policy Research Institute (IFPRI). [Downloadable!]
  8. Demsetz, Harold, 1969. "Information and Efficiency: Another Viewpoint," Journal of Law & Economics, University of Chicago Press, vol. 12(1), pages 1-22, April.
  9. Fehr, Ernst & Gachter, Simon, 1998. "Reciprocity and economics: The economic implications of Homo Reciprocans1," European Economic Review, Elsevier, vol. 42(3-5), pages 845-859, May. [Downloadable!] (restricted)
  10. Lecocq, Franck & Chomitz, Kenneth, 2001. "Optimal use of carbon sequestration in a global climate change strategy : is there a wooden bridge to a clean energy future ?," Policy Research Working Paper Series 2635, The World Bank. [Downloadable!]
  11. Sedjo, Roger, 2001. "Forest Carbon Sequestration: Some Issues for Forest Investments," Discussion Papers dp-01-34, Resources For the Future. [Downloadable!]
  12. Dahlman, Carl J, 1979. "The Problem of Externality," Journal of Law & Economics, University of Chicago Press, vol. 22(1), pages 141-62, April.
  13. Posner, Richard A, 1997. "Social Norms and the Law: An Economic Approach," American Economic Review, American Economic Association, vol. 87(2), pages 365-69, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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). [Downloadable!]
  2. 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. [Downloadable!] (restricted)
  3. Oscar Cacho & Leslie Lipper, 2007. "Abatement and Transaction Costs of Carbon-Sink Projects Involving Smallholders," Working Papers 2007.27, Fondazione Eni Enrico Mattei. [Downloadable!]
  4. 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. [Downloadable!]
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