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Could Carbon Trade Secure Livelihoods for Small Farmers?
AID blog
6 December 2008
Matt Podolin

Acknowledgements: FANRPAN acknowledges AID blog as the source of this article: http://aidemocracy.wordpress.com/


Hi all,
My name is Matt Podolin. I’m a senior at Wesleyan University, majoring in government, history, and economics. I have spent time in East Africa studying health and development and am excited to start sharing these ideas through the AID blog.

The UN Climate Change Conference kicked off in Poland on Dec 1st. This may seem like something for AID’s environment folks, but climate change can have a huge impact on development issues. The effects of climate change are felt quite severely by those who can least afford it: farmers with small plots of land for whom changes in the weather can have serious consequences.

However, there is potential good news at the intersection of global efforts to combat climate change and development. An article by Busani Bufana on allafrica.com discusses the potential to use carbon trading to support the income of African farmers. Carbon trading places caps on the amount of carbon that can be emitted, and those who want to pollute in excess of the caps are able to buy credits to offset their carbon emissions.

According to a report by the German Institute of Global and Area Studies, Africa contributes little to worldwide carbon emissions in terms of technical sources (cars, energy production, etc.), releasing less carbon then Germany. However, the continent is losing its forests to agriculture and other infrastructure projects at a rate of over one percent per year. To help stop the deforestation and to support the livelihood of those potentially affected by climate change, African farmers could be paid for generating carbon credits when they utilize environmentally friendly farming practices or help conserve local forests.

While this is good news from an environmental standpoint, it is also potentially a good thing for people-centered development. These farmers could receive a consistent yearly income for maintaining their forests and environmentally-friendly farming techniques. This income would not be dependent on changes in weather or factors such as crop disease, though the value of the protected forests would depend on the global market price for the carbon credits. According to the World Agroforestry Centre, “in most areas studied, the various ventures prompting deforestation rarely generated more than $5 for every ton of carbon they released and frequently returned far less than US $1. Meanwhile, European buyers are currently paying 23 euros—about US $35—for an offset tied to a one-ton reduction in carbon.”

Despite this potential, Africa is currently excluded from the EU Emission Trading Scheme, and agriculture and forestry protection are not being considered as sources of carbon reduction. Sindiso Ngwenya, Secretary General of the Common Market for Eastern and Southern Africa (COMESA), points out that “more than four billion people in developing countries around the world who live off agriculture are excluded from this trade and Africa should use this trade to invest in food security which is under threat.” Thus, this week’s conference in Poland is an ideal opportunity to push for greater involvement of small landowners in the global carbon cap and trade decision-making processes.

There are downsides to such a plan. It might be hard for small landowners to access the carbon trading market, and many need to use forests, which are often held in common, for firewood and other purposes. Changes in farming techniques can be expensive, modify crop yields, or impractical in implementation. Carbon credits could also lead to purchases of large tracts of land, with individual households and small-scale farmers being pushed off plots they have owned or farmed for generations. Any such program would also need to ensure that farmers are able to receive readily available information about the program, as well as adequate prices for their carbon credits. It is crucial that as wider programs for carbon credits are beind developed that those who actually live on the land are incorporated as part of the discussion and that new policies be grounded in their real life experiences. This participatory process can be difficult when decisions are made at international conferences in Poland, far away from the poor individuals and families they will affect.

Bafana further states that the global market for carbon credits has grown to 30 billion in 2007, a figure two and a half times the value of average annual aid to Africa. A program aimed at increasing income-generation for small landowners could bring a substantial amount of grassroots investment to the region. Eric Bettelheim, Executive Chairman of UK-based Sustainable Forestry Management, estimates that the “potential annual payment from African agriculture could be around $10 billion from the sale of 500,000 metric tonnes of carbon at $20 per metric tonne.”

While “trade not aid” is not a new concept in development, the carbon trading market is, and it may have the potential to align the interests of small farmers and environmentalists, securing a consistent livelihood for farmers while slowing global warming.

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