C ONCLUSIONES

Although many GHGs mitigation options in agriculture production systems have been realized to provide FS and adaption co-benefits, the adoption of SLM practices is still very low, especially in vulnerable regions (e.g. sub-Saharan Africa and Southeast Asia). McCarthy et al. (2011) and Lipper et al. (2011) categorized three main groups of barriers for adoption:

(i) Delayed return on investments: CSA practices can increase the output in the medium to long term thanks to soil and water improvement, but in the short run, yields often decrease (Giller et al, 2009 cited in McCarthy et al. (2011)). For smallholder operators, extended transition period and higher opportunity costs are experienced frequently, particularly where no credit and insurance markets existed (Antle and Diagana, 2003);

(ii) Collective action failure: CSA mitigation potentials often value “local public good” and require a minimum scale at particular sites to realize benefits. Collective action is critical in this case and in the case of failure, such abated benefits are not achievable.

(iii) Lack of tenure security: While mitigation benefits are often recognized and compensated in the long term, tenure uncertainty could be disincentive for investing on the land.

Adoption of CSA practices often implies high short-run costs. Lack of credit access is an additional critical challenge that leads smallholder farmers to value such initial costs much stronger than long run benefits. Additionally, small growers often practice risk aversion, meaning that they consider certain short-run investment costs to have much higher value than uncertain future benefits (Lipper et al., 2011). One possible pathway to overcome the problems and more importantly, to help farmers temporarily cover reduced yields in transition years, is to design payment for environmental services (PES) programs (Engel and Muller, 2016; Lipper et al., 2011).

PES is defined in the CSA context as a positive economic incentive where environmental services (ES) providers can voluntarily apply for a payment conditional on either on ES provision or on activity clearly linked to ES provision (Engel and Muller, 2016; Engel et al., 2008). The overall objective of a PES scheme is to enable translating at least part of social benefits from increased ES provision into a payment to ES providers. As a result, their total returns (private benefits) from socially serviced actions become higher than under conventional activities (purely income from yields) (Engel and Muller, 2016). CSA practitioners are considered as the ES providers in this case, since their adoption generating carbon sequestration and/or GHG reduction (public good) benefits the community at large. This is further supported by Engel et al. (2008) and Wunder (2013) when they saw PES is a popularly advisable means of addressing external effects.

CC mitigation is a global public good and adoption of CSA practices provides external benefits to mankind globally. Hence, PES is hypothetically potential and suitable vehicle to translate societal benefits generated from a change in land use technology into profits for adopters.

Three conditions have to be met to allow a suitable PES scheme in CSA (Engel and Muller, 2016; Wunder, 2013). The first one is that societal benefits exceed the costs of implementation.

CSA practices could satisfy this condition since these technologies provide CC mitigation and FS benefits to adopters simultaneously. However, it’s worth noticing that detailed data for profit calculations (costs and benefits) over time is limited in many CSA practice. The second condition is to secure land tenure for CSA practitioners. This could limit the scope of a PES scheme designed for regions where tenure insecurity is common (e.g. sub-Saharan Africa). The third condition requires a satisfactory level of institutional capacity which allows a PES scheme to function in an efficient and cost-effective manner. Once satisfying these conditions, PES needs to meet two additional conditions to be effective: First, the expected NPV of operating current CSA

practices should be fundamentally higher than that of the previous one. Second, any incentive for switching back at a later point in time should be absent (Engel and Muller, 2016).

Though societal benefits often outweigh the costs in CSA, a PES scheme only functions effectively when such benefits are translated into actual funding for the payments. ES beneficiaries are often called for but limited in contribution to funding, due to the nature of public good that ES providers offer (Wunder, 2005). Alternatively, carbon finance could come from the voluntary or compliance carbon market¹¹, from public source or public-private partnerships. In the first option, funding for agricultural activities is potential but marginal because land use related to forest projects are predominant, with more than 50% of credits in the voluntary carbon market. Agroforestry shares a small part, and agricultural projects still remain insignificant (Ecosystem Marketplace, 2015). One of the main reasons is that the estimation and monitoring emission reductions in agricultural activities are very complex and uncertain. Another key is the riskiness of investment in carbon credits from CSA practices, because farmers often require upfront payment to cover their initial investment costs, while carbon mitigation occurs with time lag and emissions removal is potentially reversible (Muller, 2012).

These challenges combined with low carbon price and high heterogeneity in agricultural production have limited the number of CSA investment examples in the literature. Within the framework of the Kyoto Protocol, the Clean Development Mechanism (CDM) provides a model for generating emissions reductions (ERs) in developing countries with technical and financial support from developed countries. However, the CDM only recognizes a limited number of agricultural production technologies (Engel and Muller, 2016; Lipper et al., 2011). Since the eligibility of agricultural activities in major compliance and voluntary markets remains a challenge, the public funding source is an alternative, and likely more promising.

Agriculture and agricultural GHG mitigation technologies have recently emerged in discussion for funding in various international financial mechanisms (e.g. Green Climate Fund, Fast Start Finance) (UNFCCC, 2017a) and national commitments under the Paris Agreement until-and-after 2020 (e.g. “nationally appropriate mitigation actions” (NAMAs), “intended nationally determined contributions” (INDCs) and “National Adaptation Programs of Action” (NAPAs) (UNFCCC, 2017b, c, d). Access to funding from public sources is very promising when CSA policy is concretely mainstreamed in national implementation plans for NAMAs, NAPAs, and INDCs. In addition, since many CSA practices can simultaneously deliver profitability and ecosystem

11 Carbon market: Institution where carbon offsets can be traded (Muller, 2012)

benefits (e.g. water quality improvements, erosion and flood prevention and biodiversity conservation) (Branca et al., 2009; Branca et al., 2011; Lipper et al., 2011), bundling those ES into a single PES scheme could help to attract sufficient funding from public-private partnerships (Engel and Muller, 2016).