Africa: Report Faults World Bank’s Climate Project
By Staff Writer
A new report by the Institute for Agriculture and Trade Policy (IATP) says the World Bank’s Kenya Agricultural Carbon Project—showcased as a model for agricultural climate finance—brings few benefits to participating farmers, uncertain environmental and social impacts and questionable effectiveness as a climate change mitigation strategy.
According to Elusive Promises of the Kenya Agricultural Carbon Project, high transaction costs and other expenses will result in negligible carbon payments to farmers: at most a little over $1 per farmer per year for 20 years. The report urges decision-makers to reconsider the unstable carbon market–based funding framework and insist developed countries honour their commitments to provide adequate climate finance, enabling farmers to make the transition to sustainable agriculture.
While the slow pace of the United Nations Framework Convention on Climate Change (UNFCCC) talks and the weak global economy have delayed political and funding commitments, increasing climate variability and its devastating impact march onward. The current drought in Eastern Africa and the consequent threat of famine could be frightening signs of things to come. Agriculture and finance ministers throughout the continent are understandably eager to secure new sources of funding to help them address food security and build resilience to climate change.
The World Bank, carbon emissions traders, and rich country governments are taking advantage of this desperate situation to push carbon markets as the primary vehicle to finance mitigation of greenhouse gases and adaptation to climate change. Last November, the World Bank and the Kenyan government announced a new pilot project to develop an offset market for soil carbon sequestration. The World Bank, through its BioCarbon Fund, is showcasing the Kenya Agricultural Carbon Project as an “early action” to demonstrate a “triple win” for mitigation, adaptation and food security for small-scale producers, while delivering carbon finance through the sale of credits in the carbon market. It claims that, “The Kenya Agricultural Carbon Project is not only the first project that sells soil carbon credits in Africa, it is also paving the way for a new approach to carbon accounting methodologies.”
While the project will support improvements in agricultural practices that could benefit local farmers, the carbon market approach is a very shaky foundation for climate finance. Nearly half of the monetary benefits from the proposed offset credits would be absorbed by project developers as “transaction costs,” with miniscule returns to the farmers who would be implementing the project. While carbon markets are promoted as a way to “leverage” climate funding, to judge by this project, the rules being developed risk oversimplifying evolving science on climate mitigation and diverting resources from the urgent task of adaptation.
Pressure is building in the lead up to the next Conference of Parties (CoP) this November in Durban. At the Bonn UNFCCC intersessional negotiations in June 2011, the South African government announced its hope that an agreement to start an agricultural work programme at the CoP would be its signal achievement. At a side event during the meeting, the World Bank advocated an agricultural “MRV [Monitoring, Reporting and Verification] consultation” on mandatory greenhouse gas reductions in developing countries similar to the broader system of MRV consultations the United States had advocated in the CoP in Cancún. In August, the South African government held a conference to promote consensus about the World Bank and U.N. Food and Agriculture Organization coined “climate smart agriculture.” The Bank will finance and co-organize a September 13–14 conference of African agriculture ministers and other officials to build support for an African consensus to start a UNFCCC agriculture work programme. The October 1–7 UNFCCC intersessional meeting in Panama City will offer another opportunity to find consensus.
Everything could fall into place for a Durban decision, perhaps employing the WTO style “Green Room” negotiations process employed in Cancún orr not—given that the negotiating draft on agriculture is riddled with brackets indicating the lack of consensus on key issues such as trade protectionism.
It goes without saying that any farmer, no matter where, would only adopt these practices for the long term if the benefits merit farmers’ efforts in implementing the project. In this case, farmers will have to change how they work the land to include several practices that they have had little say in designing. It is critical to assess exactly how much government, donor and community resources are being used to get this project off the ground even before the credits are sold to the market and how much of this funding is specifically going towards setting up a carbon credit as opposed to direct investment in and for the community. Clearly, the carbon revenue earned from offset credit sales to the World Bank will not deliver substantial cash benefits for participating farmers. Hence the World Bank is emphasizing co-benefits such as increased maize yields through improved soil fertility, the use of hybrid seeds and increased livestock fodder.