‘Carbon insetting’ – how companies can fight climate change while strengthening their value chain

New study reveals how Taking Root’s reforestation program can create measurable social benefits for smallholder farmers

In Photo: Farmers in Nicaragua are transforming from traditional crops to systems more adapted to climate change. Photo by J.L. Urrea (CCAFS)

Nicaragua’s worst drought in recent history has led many organizations in the dairy and meat industry to consider their vulnerability to climate change. Action and investment at the organizational level is needed to manage the risk to both value, and supply chains.

A new study by Phelan (2015) examines benefits of ‘carbon insetting’ as a new way for organizations to invest in mitigating the impacts of climate change and promote sustainable agriculture.

What is carbon insetting?

Carbon insetting is an innovative payment for ecosystem services (PES) mechanism: it promotes sustainable agricultural practices facilitated by an organizational investment. It is similar to carbon offsetting except the activity leading to a carbon footprint reduction takes place within the context of a value chain.

In Photo: A group of smallholder farmers gather to exchange ideas and learn about adapting to climate change. This exchange is part of the capacity building facilitated by Taking Root.

Not only does the investing organization quantifiably reduce their carbon footprint, but the investment carries significant and measurable social benefits to the smallholder farmers within their value chain.

nursery_producer_RigobertoVallejos_in_losChapetones_2014_rt_m — In Photo: Smallholder farmer Rigoberto looks over his nursery of young trees. He will plant them on under-utilized parts of his land to sequester carbon and produce carbon credits.

How does it work?

Smallholder farmers practicing reforestation, or agroforestry, can generate carbon credits leading to carbon sequestration and a reduction in GHG emissions. These farmers receive payments for their work in agroforestry allowing them to continue to provide raw materials along with measurable environmental impacts to investing organizations.

Carbon insetting is an investment smallholder farmers capacity to combat climate change, increasing the resilience of their livelihood strategy and the sustainability of the value chain.

Agroforestry-based projects have long been regarded as being of ‘real value’ for smallholder farmers; and in the north of Nicaragua, Taking Root, in particular, has demonstrated the extent to which ‘social reforestation’ can be used as ‘to restore ecosystems, improve livelihoods, and tackle climate change’. Phelan’s research illustrates the opportunity for organizations to strengthen their value chains and become environmental leaders in their industry by investing in carbon insetting.

See Phelan’s research: Adding Value to Smallholder Forage-Based Dual-Purpose Cattle Value Chains in Nicaragua, in the context of Carbon Insetting

Lisette Phelan is a visiting researcher based in Vietnam. The study was supervised by the University of Hohenheim, Germany and undertaken between Mar – Nov 2014 in Nicaragua, in conjunction with the International Center for Tropical Agriculture (CIAT).

Taking Root

Taking Root’s purpose is to accelerate the restoration of the world’s forests. We enable smallholder farmers to grow trees and earn money from the carbon they remove from the atmosphere. Our technology and support make it simple for our reforestation partners to create transparent and robust forest carbon removals. From registering farmers and recruiting land, to monitoring trees grown and the carbon stored over time, we provide the tools at every step of the way to help our partners successfully manage and scale their carbon projects. Recognized for its best practices by the UN, EU and World Economic Forum, Taking Root is connecting thousands of farmers to the carbon market, improving their livelihoods by restoring forests around the world.