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The challenge:

Climate change threatens the livelihoods of rural African communities and impacts food security across the continent. Currently, smallholder farmer (SHF) interventions largely focus on adaptation, neglecting the huge role SHFs can play to combat climate change. Mitigation interventions often have insufficient focus on realising a viable business models. As a result, each individual mitigation intervention tends to have insufficient impact on climate and farmer income to drive sustained standalone application.

Our solution:

Various climate-smart interventions could increase their resilience and livelihoods – which means that SHFs can provide a meaningful contribution to tackling climate change globally. The emergence of a market for the payment for climate outcomes (in the form of a carbon market and over time, potentially also payment for resilience outcomes and biodiversity outcomes) provides an additional potential revenue stream that can further strengthen the business case of these interventions. However, while potential climate benefits are beginning to be recognised widely, initiatives to realise those tend not to be focused on realising a business model for scale.

To overcome this, CAP-A and a set of our strategic partners, will introduce a bundle of proven climate smart practices to SHFs using carbon revenue to reduce the upfront price for the SHF. We aim to confirm how vastly reduced upfront costs for SHF, enables uptake of climate-smart interventions at scale – and determine at which carbon price SHF uptake can achieve globally relevant scale.

Expected outcomes:

We focus on developing a viable business model for African SHFs to adopt a range of the regenerative agriculture practices for which the carbon impact is tracked and translated into revenue that can either go directly to farmers or towards subsidising the costs of new technologies or driving the adoption of new practices. This business model can be used for other climate-smart and regenerative interventions. At the same time, this effort seeks to determine whether a new product is needed in carbon markets to fund these interventions – and if so, codify this product and the associated (innovative) finance streams.