Payment Complementarity and Land-Use Intensification in Agricultural Carbon Markets

Carbon programs often assume that uniform cash transfers are sufficient to change land use, yet the design of benefits may be the controlling factor. We test payment complementarity—the coordinated use of cash and community benefits—in the International Small Group and Tree Planting Program across Kenya, Tanzania, Uganda, and India. Using administrative and survey data from 8432 participants, we classify realized mechanisms into cash-only, alternative-only, and mixed categories, and examine their associations with conservation adoption and land-use intensity. Mixed arrangements are associated with 73% higher conservation farming adoption (68.4% vs. 36.6% under cash-only) and greater tree density (281 vs. 215 and 115 trees/ha for cash-only and alternative-only, respectively). Formal tests reject simple averaging, consistent with super-additive effects. Adoption of mixed mechanisms clusters in districts that exceed an organizational participation threshold (approximately 38.9%), suggesting peer exposure and social learning. Gender-disaggregated patterns indicate that women receiving alternatives (predominantly in mixed regimes) manage nearly three times as many trees as their cash-only peers and are the only subgroup surpassing the USD 2/day poverty threshold. Each alternative arrangement benefits an average of 167 community members; accounting for spillovers implies an approximate 191-times village-level multiplier. Mixed designs require greater administrative effort but deliver larger community returns. We report associations, not causal effects, and employ controls, fixed effects, matching, and stability checks to probe our selection. Policy implications are immediately clear: outcome-based standards that permit mixed payments, credit spillovers, and paired flexibility with safeguards (transparent negotiation, verified delivery, documented consent) can multiply the land-use impact of climate finance. The results are associative rather than causal and generalize primarily to contexts with similar institutional prerequisites, including established organizational capacity and program rules permitting benefit negotiation.