Rein van der Hoek, Peter Läderach, Lucía Gaitán, Lisette Phelan, Alexandra Köngeter, Martín Mena

Carbon insetting in the dual purpose cattle value chain in Nicaragua

International Conference of

Agricultural Economists (ICAE)

Milan, Italy, 9-14 August 2015

PIGS

AQUACULTURE

SMALL RUMINANTS

DAIRY CATTLEDUAL PURPOSE

CATTLE

CGIAR Reseach Program Livestock and Fish9 Target Value Chains

• Climate change• Low productivity, quality issues, and

low income• Low stocking rate, unsustainable land

use• Increasing demand high quality

animal products• Lack of incentive mechanisms for

farmers, related to production (quality), environment

Nicaragua – Dual purpose cattle

BY THE POOR• Sustainable intensification – increased productivity and natural resource

integrity• Higher income through higher quality products, ecosystem services and

enhanced value chains• Emphasis on female-led households

FOR THE POOR• Improved productivity, lower production costs, increased access to animal

source food (emphasis on poor women, children)• Improved product quality and food safety

Transformation of Dual Purpose Cattle Value Chain

“CARBON INSETTING” as a triple win : climate change mitigation, adaptation and livelihood benefits

Carbon insetting: • Integrating carbon credit purchases

into a company’s own supply chain• Paying farmers for sequestering

carbon at origin• Carbon credits by livestock farmers

marketed directly to buyers • Buyers reduce overall greenhouse

gas emissions • Farmers encounter a new source of

income: livelihoods, resilience

“CARBON INSETTING” as a triple win : climate change mitigation, adaptation and livelihood benefits

Background• Emissions Agriculture 14% (Livestock 7%), Land use change

17%• Forage-based systems can contribute to improved livelihoods

AND environment• Improved feeds, including sown forages, significantly reduce

GHG and enhance livelihoods

Activities• Prediction of climate impacts and adaptation needs• Assessment of greenhouse gas emissions, carbon stocks /

sequestration potential from livestock related practices• Socio-economic potential of carbon efficient livestock

practices• Feasibility of carbon insetting

“CARBON INSETTING” as a triple win : climate change mitigation, adaptation and livelihood benefits

GHG emissions• Well-managed forage-based mixed crop-livestock systems

increase animal feed quality and reduce methane and nitrous oxide emissions

• Land-use conversion is a main contributor

Carbon stocks• Soil organic carbon major contributor• Improved pasture systems significantly higher values • Tree presence in pastures• Secondary forest highest, vital for ecosystem services

“CARBON INSETTING” as a triple win : climate change mitigation, adaptation and livelihood benefits

Feasibility of carbon insetting schemes with private sector involvement

• ‘Triple-win’ benefits for the buyers and providers• Willingness to pay for ecosystem services

• If adopted, carbon insetting would add value by:o enhancing the quality and quantity of productso facilitating access to new marketso improving commercial relationshipso generating profits to be shared / reinvestedo increasing the resilience of the value chaino improving livelihood security and sustainability

“CARBON INSETTING” as a triple win : climate change mitigation, adaptation and livelihood benefits

• Different priorities and incentives• Large producers:

• Secure niche markets • „positive experiences“ & foster dialogue, networking

• Smallholders• Financial payment, in-kind payment (seeds) and technical

assistance• How to contribute to gender equality? (male dominance in

livestock sector)

Thank you