Questions on Soil Carbon Markets: Learning from the Kenyan Experience
The Kenya Agricultural Carbon Project (KACP), developed by the Vi Agroforestry programme, receives mitigation funding from the World Bank’s BioCarbon Fund for soil carbon sequestration and above-ground sequestration in trees. Apart from providing farmers with a small sum of extra cash, the switch to climate-smart agricultural practices has had the additional benefits of increasing crop yields as well as improving farmer’s resilience to climate change. According to a recent World Bank commissioned study, the crop yield increases alone are worth US$ 200-400/ha/year. In KACP, Vi Agroforestry and the BioCarbon Fund has developed the Sustainable Agricultural Land Management (SALM) methodology. A model approach to measuring soil carbon sequestration is being used, which has been approved by the Verified Carbon Standard (VCS) agency. SALM is a public good, free for any organization to use. However, concerns have been raised, notably by the International Agricultural Trade Policy Institute (IATP), about the adequacy of a carbon market approach to financing a shift to sustainable agriculture. This event will also discuss these concerns.
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Questions on Soil Carbon Markets: Learning from the Kenyan Experience
- 1. Questions on Soil Carbon Markets: Learning from the Kenyan Experience Karen Hansen-Kuhn December 3, 2011
- 2. Markets need buyers and sellers Compliance markets • Kyoto/JI/CDM • EU EmissionsTrading Scheme • Alberta, Canada • California Carbon Exchange Voluntary Markets • Chicago Climate Exchange • Africa Climate Exchange • OTC Exchanges
- 3. Falling Carbon Prices Source: Environmental Finance, based on ICE data
- 4. Transaction Costs Kenya Agricultural Carbon Project • $2.48 million in carbon revenues over 20 years (assuming $4 per ton) • 60% discount rate • $1.04 million to establish and market fund • 60,000 farmers receive $22.83 over 20 years
- 5. Alternatives “the sustainability of finance from carbon trading is …structurally reliant on the failure to reduce emissions adequately in industrialized countries” – FERN et al. 20 • Annex 1 countries should honor commitments • FinancialTransactionsTax • IMF Special Drawing Rights