Presented at the COP28 Food & Agriculture Pavilion on Dec 4, 2023, by Lini Wollenberg (Alliance of Bioversity & CIAT, & Gund Institute at University of Vermont). Watch the recording: https://www.youtube.com/live/EnCPz3OaCPM?feature=shared This COP28 event presented the first global stocktake of carbon payments and the voluntary carbon market (VCM) in agriculture. It showcased how VCMs can help low- and middle-income countries fund food system transformations for security, resilience, and reduced emissions. Panelists shared their diverse experiences and strategies, fostering dialogue on financing large-scale transformative solutions at the national level. The event aimed to better understand the agriculture sector's involvement in the voluntary carbon market and generate insights into what more can be done to support scaling the VCM, especially for the benefit of smallholder farmers. The discussion may also inform negotiations around the linkages between the VCM and emerging Article 6 implementation. This work was undertaken by Alliance of Bioversity & CIAT & University of Vermont scientists in collaboration with Unique Land Use and support from FAO.

1. Lini Wollenberg
Ciniro Costa Jr
Timm Tennigkeit
Kyle M. Dittmer
Sadie Shelton
5 December 2023
Harnessing Voluntary CarbonMarkets
for Agricultural Finance & Transitions
A GLOBAL
STOCKTAKE

2. Agriculture is rapidly
becoming more
prominent in the
voluntary carbon market
• Demand for carbon removalsin the land use sector exceeds
supply.
• Agriculturalcredits also deliver on SDGs and can earn a
premium
• In 2022 sustainableagriculture projects had the largest
increase in carbon credit issuances compared to other
sectors.
What is the state and future
role of agriculture in the VCM

3. Scope of agriculture and food system in VCM
CH4 and N2O emissions:flooded rice,
livestock, N fertilizers
Carbon removal: agroforestry (A/R), grassland management,
croplandsoil carbon sequestration
• Manure mgmt and methane
digesters
• Agriculturalresidues for energy
• Compost
• Dairy waste
• Biocharproductionand use
Not included in this study: agriculturally-
driven deforestation, cookstoves,landfill
• Food loss and waste
• Dietary shifts
• Fertilizer production
• Irrigation mgmt
• On-farm energy use
• Transportation
CO2: Energy CO2: Waste and energy
CO2, CH4, N20: Food systems

4. Big Facts: Agriculture and food systems in the VCM
~3/4 of projects are in middle-income countries.
Only 5 projects are in low-income countries
(Uganda, Mozambique, Mali and DRC)

5. 751 agrifood projects in major VCM registries*
Mostly in the pipeline
Registered and completed
projects (181)
Projects in the
pipeline (503)
Inactive projects (67)
67%
9%
24%
Agriculture 50
Agroforestry 16
Grassland 1
Agriculture 450
Agroforestry 35
Grassland 18
Agriculture 153
Agroforestry 25
Grassland 3
*VCS-Verra, Gold Standard,CAR and ACR, as of May 2023
Inactive projects are:
• On hold
• Rejected
• Cancelled
Berkeley VROD v8 Agriculture

6. 0 50 100 150 200 250 300
Rice Emission Reductions
Manure Methane Digester
Sustainable Agriculture
Agroforestry
Sustainable Grassland Management
Solid Waste Separation
Feed Additives
Improved Irrigation Management
Bundled Compost Production and Soil Application
Nitrogen Management
Number of Projects
Agrifood Projects by type
Pipeline Registered and Completed
89
243
229
60
21
90% of projects are from only four sources
Rice (36%), manure methane digesters (33%), sustainableagriculture (13%) & agroforestry (9%)
Berkeley VROD v8 Agriculture. 603 projects. Does not include cancelled, rejected or on hold projects.
An additional
37 rice
projects are on
hold due to
methodology

7. Nitrogen
Managemen
t
Feed
Additives
Rice
Emission
Reductions
Solid Waste
Separation
Improved
Irrigation
Managemen
t
Sustainable
Agriculture
Agroforestry
Sustainable
Grassland
Managemen
t
Manure
Methane
Digester
Registered Projects 4 3 2 10 11 6 25 3 117
Total Credits Issued 75 309 597 305,343 396,504 437,502 2,614,926 5,051,689 10,867,608
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
0
20
40
60
80
100
120
140
SUM
OF
TOTAL
CREDITS
ISSUED
COUNT
OF
REGISTERED
AND
COMPLETED
PROJECTS
Few projects have issued significant credits, except
biodigester, grassland and agroforestry projects
Total issuances of 19.7 million tons CO2e (1996 to 2022)
Berkeley VROD v8 Agriculture. 603 projects. Does not include cancelled, rejected or on hold projects.

8. 12.5
1.2
VCM credits have been issued in 41 countries
Global VCM agriculture, agroforestry and grassland issuances of credits by
country from 1996 to 2022 (MtCO2e)
1.5
0.6
0.6
0.4
0.4
1.0
<0.1
<0.1
*Excludes projects with the statuses 'on hold' (25 projects; 4.6 MtCO2e)
and 'N/A' (19 projects; 1.8 MtCO2e), which total issuances at 6.4 MtCO2e.
0.9
0.4
<0.1
<0.1
<0.1
• Most credits are from
middle-incomecountries
(esp. China)
• Only five registered or
completed projects in low-
income countries: Uganda,
Mozambique,Mali,DRC
<0.1

9. • Specializedstandards (Plan Vivo, ACORN, Social Carbon)
• Smallholder support features:
• Benefit targets of 60-80% (Plan Vivo, Acorn, Boomitra)
• Community-led planning, accelerator hub for finance (Plan Vivo)
• Agricultural advisories (Western Kenya)
• SDG benefits confer a price premium, especially for smaller
projects (C prices of up to $80/tCO2e). Better SDG accounting
needed.
• Real benefits to farmers:Cumulative payments can provide
farmers a safety net and support long-term investmentin health,
education and other assets (Plan Vivo)
Is the VCM be well-suited to
smallholder farmers?
Photo credit: https://onetreeplanted.org/blogs/stories/sustainable-agroforestry-rwanda

10. State of the VCM 2023
Small, but significant VCM increases options for farmer finance
and meeting corporate net zero targets
Only 1% of VCM credits and 5% of VCM projects, but fast-growing and “next frontier of
credits.” VCM is an importantfinance mechanismfor farmers
Early-stage market characteristics
• Increasing viability,but also complexityand uncertainty
• Does not yet have developedpolicy, financialand information infrastructure
Trends
• Emerging large-scale monitoring methods
• Interest in soil carbon and grasslands at
gigaton scales
• Premiums for removals and SDG benefits
• Corporate Scope 3 emissions reductions
needs
• Government policy related to VCM (Art 6,
domestic VCM, taxes, compliancequotas,
authorization,CA)

11. Corporate
demand &
targets
International
and national
policy
Farmer
incentivesand
SDG impacts
Price,
volume and
qualityof
credits
Robust, large-
scale low-cost
MRV
Project finance and
enabling
conditions
Panel: What will determine success of
agriculture and food systems in the VCM?