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Carbon Credit Payment Options for Agroforestry Projects in Africa

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  • Allwardt, Jennifer

Abstract

The potential of using carbon offset credits from agroforestry projects for farmers in developing areas has become more prevalent in both Clean Development Mechanism and voluntary carbon markets. Since the implementation of the Kyoto Protocol, many international development organizations have been interested in using the Clean Development Mechanism (CDM) to help both mitigate CO2 emissions through agroforestry projects offsets and as a poverty reduction tool. Few organizations that have begun talking with farmers about planting trees for carbon offset credits have been able to tell the farmers how much money they would receive from their new tree growth or the costs they will incur in doing so. For this study, a whole farm budget toolkit was designed to help fill this gap and to help evaluate payment methods for carbon offset credits in agroforestry projects. This toolkit is intended to be used by development assistance organizations and farmers starting carbon credit programs. It gives a rough estimate of payments based on a farmer’s or group’s unique situation. For testing purposes, previous agroforestry projects were entered into the toolkit to evaluate the benefits accruing to farmers using data on carbon credit payment methods for two previous agroforestry projects in Africa. The toolkit was also field tested in Kenya with individual farmers and a farmers’ group.

Suggested Citation

  • 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.
  • Handle: RePEc:ags:midagr:118497
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    File URL: http://purl.umn.edu/118497
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    References listed on IDEAS

    as
    1. Torres, Arturo Balderas & Marchant, Rob & Lovett, Jon C. & Smart, James C.R. & Tipper, Richard, 2010. "Analysis of the carbon sequestration costs of afforestation and reforestation agroforestry practices and the use of cost curves to evaluate their potential for implementation of climate change mitigat," Ecological Economics, Elsevier, vol. 69(3), pages 469-477, January.
    2. John M. Antle & Bocar Diagana, 2003. "Creating Incentives for the Adoption of Sustainable Agricultural Practices in Developing Countries: The Role of Soil Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1178-1184.
    3. Olschewski, Roland & Benitez, Pablo C., 2005. "Secondary forests as temporary carbon sinks? The economic impact of accounting methods on reforestation projects in the tropics," Ecological Economics, Elsevier, vol. 55(3), pages 380-394, November.
    4. Oscar J. Cacho & Robyn L. Hean & Russell M. Wise, 2003. "Carbon-accounting methods and reforestation incentives," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 47(2), pages 153-179, June.
    5. Neumayer, Eric, 1999. "Global warming: discounting is not the issue, but substitutability is," Energy Policy, Elsevier, vol. 27(1), pages 33-43, January.
    6. Oh, Tick Hui & Chua, Shing Chyi, 2010. "Energy efficiency and carbon trading potential in Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(7), pages 2095-2103, September.
    7. Oscar J. Cacho & Graham R. Marshall & Mary Milne, 2003. "Smallholder Agroforestry Projects: Potential for carbon sequestration and poverty alleviation," Working Papers 03-06, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    agroforestry; budget toolkit; carbon credits; Clean Development Mechanism; payment methods; smallholder farmers; Agricultural Finance; Community/Rural/Urban Development; International Development; Land Economics/Use; O13; O22; R30; Q54;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O22 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Project Analysis
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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