IICA and partners from the private sector, academia and civil society organizations join forces to promote carbon financing for sustainable agriculture in Latin America and the Caribbean
San José, 13 December 2023 (IICA) The Inter-American Institute for Cooperation on Agriculture (IICA), the Voluntary Carbon Market Integrity Initiative (VCMI), the Argentine Association of No-till Farmers (AAPRESID), the Group of Producing Countries from the Southern Cone (GPS), the Department of Forestry at Michigan State University (MSU), Gold Standard, Rabobank's ACORN and Climate Focus will join forces in 2024 to support the access of the agricultural sector in Latin America and the Caribbean to financing of voluntary and compliance carbon markets.
This announcement represents a major step forward in promoting sustainable agricultural practices and combating climate change in the region.
Currently, financing is well below the level required to implement adaptation and mitigation measures in LAC's agricultural sector, which has immense potential to attract investments in climate action and resilience through carbon markets. This is a significant obstacle for a region where agriculture plays a key role in economic development and livelihoods.
To close this gap, it is urgent to provide support to ministries of agriculture, farmers' organizations and other entities in the region to explore broader financing options, increase incentives and build capacities.
Within the framework of this new strategic alliance, the partners have expressed their intention to collaborate in achieving the following objectives:
• Expand access to private financing for LAC's agricultural sector to accelerate climate action, including international carbon markets.
• Strengthen capacities to contribute to inclusive access for actors in the agricultural sector and establish institutional agreements that promote the establishment of high-integrity carbon markets.
Manuel Otero, Director General of IICA, commented: “We are delighted that such strong partners are joining us in response to the call of the Ministers of Agriculture of the Americas to help build capacities in the region in order to access climate finance. This is essential for agriculture to adopt even stronger climate measures. Through this alliance, small- and medium-sized producers in the region will have tools and receive assistance to access climate financing, and Latin American countries will be closer to fulfilling their international commitments on environmental matters, which in turn will send a message to the world that agriculture in this region is moving firmly towards sustainability.”
Marcelo Torres, President of AAPRESID, stated that in his organization “we are very interested in supporting initiatives that help our farmers access carbon markets. This would be a major step towards recognizing the enormous effort they make every day to reduce their emissions and maximize carbon sequestration in their soils, through practices such as no-till farming, living and diversified agriculture, among others. An effort that until now had not been recognized.”
For his part, the CEO of VCMI Mark Kember stated: “The agricultural sector across the LAC region has the potential to attract significant private investment through innovative climate finance mechanisms, such as the voluntary carbon market; however, technical support is needed so that local governments, farmers and farm owners can participate and access its benefits. This was VCMI’s original motivation for supporting this project, so we are pleased that it will now become a broader alliance to help operationalize and scale up the opportunities identified.”
The announcement represents a milestone in the organizations' efforts to address climate change and accelerate the application of sustainable practices in agriculture. By leveraging their combined expertise and resources, these organizations will join forces to deliver new opportunities for sustainable agriculture, with a strong emphasis on high-integrity carbon credits. These credits are a tool capable of generating highly resilient, productive and diversified agroecosystems and facilitating greater climate ambition related to the achievement and improvement of Nationally Determined Contributions in the region, in keeping with the Paris Agreement.
Carbon finance can be mobilized to help farmers accelerate the transition towards more resilient, carbon-rich, productive and diversified systems. Additionally, IICA, VCMI and Climate Focus have published an “access strategy” to carbon market opportunities in livestock production and cocoa and coffee agroforestry systems, designed to support a green transition in some of the most prominent agricultural subsectors of the region.
This publication posits that efforts must be developed with a solid scientific basis, in an inclusive and transparent manner, through the application of adequate social and environmental safeguards, to effectively bring this financing to farmers and local farm owners that need it most.
The alliance is the first response to a high-level political mandate derived from the Inter-American Board of Agriculture, composed of the Ministers of Agriculture of the Americas, who met in October in San José, Costa Rica, at a meeting organized by IICA. This initiative resulted from a six-month collaboration between the Institute, the VCMI and Climate Focus, and is aimed at supporting the design and development of policy summaries and “access strategies” to specific markets in the sector.
“The Agricultural Carbon Partnership is a big step towards delivering tangible natural climate solutions and improving food security. We are very pleased to see agriculture and forestry, that is, agroforestry, coming together through this alliance,” said Richard Kobe, professor and chair of the MSU Department of Forestry.
Jelmer van de Mortel, President and founder of ACORN, said: “Supporting smallholders in their climate transition, by linking them to the voluntary carbon market, is our priority in the LAC region. Together with our partners, we can promote the application of climate-smart agricultural practices, such as agroforestry, to fight climate change, food insecurity and soil degradation. We require all hands on deck and welcome the Agricultural Carbon Partnership as a step in the right direction.”
Marcelo Regúnaga, General Coordinator of GPS, pointed out that “the agri-food sector of the Americas has enormous potential to simultaneously provide solutions to two of the greatest global challenges of our time: climate change and food security. Financing is key to strengthening these capacities on the scale and timeframe the world requires. At GPS we believe that the platform is a great initiative to promote the fulfillment of this objective.”
The alliance will include activities such as the design of climate-integrity methodologies, raising awareness about the opportunities offered by the voluntary carbon market across agricultural supply chains; capacity building work with practical tools and knowledge to guide farmers through developing carbon projects and implementing best practices to ensure integrity; and support policymakers in creating an enabling environment for financing or high-value carbon investments.
Charlotte Streck of Climate Focus said: “We are proud to be a member of this alliance, which has great potential to obtain the much-needed financing to transform Latin America's agri-food sector. Global efforts have failed to sufficiently leverage the sector to address climate change, improve resilience and meet the Sustainable Development Goals. Currently only 4.3% of global climate finance goes to the agri-food sector. We need much more funding to take meaningful action on a large scale at the international and regional levels. Carbon markets can contribute significantly to mobilizing funds for this much-needed transition towards a sustainable agricultural sector. This alliance will drive this change forward.”
Other organizations interested in advancing this issue are urged to consider joining the Agricultural Carbon Alliance in Latin America and the Caribbean. You can write to agcpartnership@iica.int for more information about how to express your interest in becoming a partner.
More information:
Institutional Communication Division.
comunicacion.institucional@iica.int