learning event no 2, session 1 from agriculture and rural development day (ardd) 2011
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Seth Shames, EcoAgriculture Partners. Learning Event number 2, Session 1 in Room A. What are the financing possibilities for CSA in Africa and what role might there be for carbon finance.TRANSCRIPT
What are the financing possibilities for CSA in Africa and what role might there be for carbon finance?
Seth Shames EcoAgriculture Partners December 3, 2011 Agriculture and Rural Development Day Durban, South Africa
Overview
1) The climate-‐smart agriculture finance disconnect
2) Status of Climate and Agricultural Finance
3) Constraints of the current finance structure
4) Options for Sustainable Agriculture in a Changing Climate (SACC) project in western Kenya
5) Steps towards finance integration
The CSA finance disconnect ● Funds for agricultural, food security, mitigation and adaptation generally come
from different sources though these goals are inextricably linked in agricultural systems
● SACC project designed for voluntary carbon market
● Project’s primary objective is livelihood development and resilience to climate change for farmers
● Given the current low price of carbon, relatively low-‐sequestration potential, costs of project implementation and the length of time required for credit development, carbon revenues are far less than the full costs of the project
Status of climate finance for agriculture
● Green Climate Fund ● Multilateral funds ● Carbon markets: regulated and voluntary ● NAMAs ● Company supply chains standards ● Philanthropic
Status of agricultural finance
• US $210 billion/year needs annually to maintain and expand capital stock across the ag value chain
• Most, especially for smallholders, will be provided by domestic sources (public and private)
• US$ 33 billion/year in public ag investment in developing countries
• US$ 7.2 billion/year in ODA • Private financial sector investment in farmland and agricultural
infrastructure: US$10 to 25 billion • FDI for the entire agriculture value chain: US$40 billion/year
Constraints of the current finance structure
● Modest scale of climate finance relative to overall agricultural finance ● Separation of adaptation and mitigation funding ● Lost synergies across landscapes ● Limitations of carbon offset credit markets for farmers and community land users ● Sectoral silos in national public investment (the case of Kenya)
SACC finance options
● Patient private capital with public or philanthropic support
● NAMAs ● Agriculture/ food security/adaptation financing ● SLM project with global benefits (GEF)
Steps towards climate and agriculture finance integration ● Use climate funds strategically to influence the trajectory of
agricultural investments
● Structure climate finance to support agricultural institutions that can deliver production, livelihood and ecosystem benefits.
● Open financing windows specifically for multi-‐objective climate-‐smart agriculture and agricultural landscape projects and programs
● Develop efficient monitoring systems to capture the multiple impacts of climate-‐smart agriculture
Thank you
Seth Shames EcoAgriculture Partners [email protected] www.ecoagriculture.og