Micro-carbon credit models are a promising solution for smallholder farmers in Africa

Micro Carbon Credits: A Promising Solution for Smallholder Farmers

Smallholder farmers are the backbone of the food supply in many countries, including Africa, where they contribute up to 70% of the food supply. However, smallholder farmers often face challenges in accessing and benefiting from carbon markets due to high upfront certification costs to create carbon credits and project monitoring costs, which require scale and access to financing and buyers. This challenge has led to the development of micro-carbon credit supply models that enable smallholders to earn income from carbon credit projects.

Micro-carbon credit models leverage various technologies and approaches to bring down costs and improve efficiency. For instance, the aggregation of farmers into larger carbon credit programs helps spread the costs of certification and project development. In addition, technology such as satellite imagery and remote-sensing tools can be used to monitor biomass growth by smallholder farmers and issue carbon credits accordingly. Moreover, local field forces can train and onboard farmers and track impact, while digital platforms and marketplaces can connect credits originated by smallholder farmers with international buyers.

These micro-carbon credit models have been particularly successful in agroforestry, conservation, and sustainable agriculture projects. Standards such as Verra, the Gold Standard, and Plan Vivo have developed methodologies to certify agroforestry projects, including a use case for smallholder agriculture and community forestry projects. Plan Vivo’s “PM001 Agriculture and Forestry Carbon Benefit Assessment” methodology, in particular, indicates a use case for smallholder agriculture and community forestry projects.

Although only a handful of agroforestry carbon credit generation organizations collaborate with smallholders in Africa, smallholder-based carbon credit projects represent a meaningful opportunity for Africa. These projects can help smallholder farmers earn additional income, improve their livelihoods, and contribute to climate change mitigation efforts.

Here are some examples of micro-carbon credit generation models:

1. Aggregation players: These are private for-profit companies that serve as a market platform that measures and aggregates the carbon offsets of small farmers that have planted a forest and sells them to buyers. The company intends to leverage technology for carbon measurement processes in the long run.
2. Conservation players: These are private for-profit companies that provide an online platform where small land-owners can apply to qualify their land for a forest carbon project. A free carbon inventory is carried out by the company’s forest technicians to determine the annual payment for the land-owner.
3. Climate-smart agriculture players: These are private for-profit companies that encourage small groups of farmers (6-12 farmers) to improve the local environment and farms by planting and maintaining trees on unused and/or degraded land. Carbon credits are dual-verified by third-party auditors (live online tracking) and sold to buyers. Small groups form clusters (200-400 farmers) and are led by participating farmers.
4. Restoration players: These are non-profit organizations that support smallholders to grow trees on unused/degraded farmland. The central team manages this process using VERRA SALM methodology and Gold Standards Cool Farm Tool to quantify GHGs and market potential per farm. Trained community-based extension agents monitor on-farm activity and onboard farmers (revenue sharing model to incentivize agents to onboard more farmers).
5. Technology players: These are private for-profit companies that use modelling to calculate carbon credits and validate them through satellite imagery and remote-sensing technology. They have a platform to connect growers directly with buyers.

Micro-carbon credit models are a promising solution for smallholder farmers in Africa and other regions. With the right support, they can help smallholders benefit from carbon markets and contribute to climate change mitigation efforts while improving their livelihoods. Governments, development organizations, and the private sector should invest in building the capacity of smallholders to participate in micro-carbon credit programs and create an enabling environment