Farmers Seek New Income From Fairtrade Carbon Credits

Jan 18th, 2013 | By | Category: Advocacy, Agriculture, Biodiversity, Capacity Development, Carbon, Development and Climate Change, Financing, Forest, Green House Gas Emissions, Information and Communication, International Agencies, Land, Lessons, Livelihood, News, Opinion, REDD+, Resilience, Technologies, UNFCCC
A coffee producer and member of the Fair Trade Alliance Kerala (FTAK) shows off his crop in the southwest Indian state of Kerala. PHOTO/Fairtrade International/Razaq Kottakkal

A coffee producer and member of the Fair Trade Alliance Kerala (FTAK) shows off his crop in the southwest Indian state of Kerala. PHOTO/Fairtrade International/Razaq Kottakkal

Alertnet: Palestinian olive growers make a living from trees that are, in some cases, 2,000 to 3,000 years old – proof that these farmers have been working in harmony with the environment for centuries, according to Nasser Abufarha, a representative of Fairtrade producers in the Middle East.

Now the time may finally have come for them to be rewarded for their role in conserving local ecosystems, through a fledgling scheme to develop “Fairtrade” carbon credits.

Fairtrade is an internationally recognised labelling system that offers small producers of crops such as coffee, bananas, cotton and cocoa better terms of trade, including a minimum price for their goods, and a bonus that goes into a communal fund for workers and their families.

At the U.N. climate summit in Doha late last year, Fairtrade International and The Gold Standard Foundation announced an agreement to incorporate Fairtrade principles into low-carbon development projects certified by Gold Standard. The first credits are expected by the end of 2013.

The aim is to tap into Fairtrade’s network of 1,000 certified producer organisations in developing countries, enabling thousands more smallholders to access the carbon market and receive much-needed finance to mitigate and adapt to climate change, the organisations said.

“Obviously our ancestors have been doing something good for the environment for these (olive) trees to continue to feed us to this day. So if, through this cooperation, these sound environmental practices can gain some credit…that is added value to the farmers,” Abufarha from Jenin told AlertNet at the climate talks in the desert state of Qatar.

Palestinian farmers need extra income to help them deploy new environmental management methods to counter the impacts of climate change, shift to organic production or convert their tractors to run on used vegetable oil, he added.

A new project called Green Track Palestine collects discarded falafel oil from push carts and restaurants in the Palestinian Territories and uses it to help participating farmers to power their tractors. But converting an engine to run on the renewable fuel costs around $2,500 – money the scheme is currently trying to raise from public sponsorship.

Cash for such innovative activities and many others that help tackle climate change – including tree planting, cutting fertiliser use and improving soil management – could be raised on a larger and more reliable scale through Fairtrade carbon finance, supporters say.

In general, carbon credits each represent a tonne of carbon dioxide, or equivalent for other greenhouse gases, which is not emitted. They are awarded to projects that reduce developing countries’ emissions, such as wind farms and solar power, and can be purchased by governments, companies and individuals to offset emissions, sometimes to meet mandatory targets.

Under the planned Fairtrade scheme, tradable credits would be issued by projects that produce verified emissions reductions, support sustainable development and provide additional benefits for the farmers and communities involved.


Andreas Kratz, director of strategy and standards at Bonn-based Fairtrade International, said most smallholder farmers have contributed very little to climate change, yet their livelihoods are increasingly threatened by rising temperatures and weather extremes. On top of this, their efforts to protect the environment and curb emissions go largely unrecognised.

“We have been asked by our producers for a number of years whether we have a solution, whether we have something to offer to (them), and it was on that basis that we said… let’s figure out whether we can create something that is fair and right,” Kratz told journalists in Doha.

Tomy Mathew, who represents the Asia-Pacific network of Fairtrade producers, said farmers in an alliance he works with in the Indian state of Kerala are struggling financially to pursue new goals to protect biodiversity, improve food security and achieve gender equality. Meanwhile, they already carry out green practices, such as conserving water and forests, which could be compensated with the new carbon credits, he said.

“These are services which cry for recognition in the climate discourse, and which I think this partnership is bound to bring forward,” he explained. “…This will definitely lead to an additional source of income for producers, for producer communities.”

Adrian Rimmer, CEO of The Gold Standard Foundation, said the organisations now need to work out the shape of a Fairtrade approach to carbon finance, and how it will meet Fairtrade standards on pricing and returning income to producers. They have yet to decide if there will be a separate Fairtrade carbon credit, or whether existing Gold Standard credits that qualify will be awarded a Fairtrade stamp, he added.

The new scheme will probably not be limited to projects run by Fairtrade producers, though they are likely to be the main beneficiaries, he added.


The Gold Standard is also collaborating with the Forest Stewardship Council (FSC) to incorporate the council’s social and environmental safeguards and resource management requirements into credits. These will enable FSC-certified forest operations to seek carbon finance and could earn Fairtrade status too.

All three organisations emphasised that a key aim is to establish carbon credits that adhere to the best international practices and offer buyers a trustworthy product.

Consolidating and streamlining the three certification standards should also reduce transaction costs and broaden access to carbon finance, they said.

Stefan Salvador, head of the FSC’s new quality assurance unit, warned that the proliferation of definitions and guidelines for sustainability risks diluting their value.

“Right now, we have a diversification of standards. We are all really interested in bringing these schemes closer together – we want to consolidate,” he said. “If the right partners come together, we can really have a much higher impact than each of us on our own.”

Rimmer said the Gold Standard – which issues carbon credits for over 850 projects in some 50 countries, representing more than 65 million tonnes of emission reductions and half a billion dollars of investment in low-carbon development – had decided to expand into agriculture and forestry by teaming up with credible, established partners in those fields.

Businesses, individuals and others pay five to 10 times more for Gold Standard credits than other offsets traded on compliance markets to meet official carbon constraints, and they want to know the premium is worth something, he added.

“We’ve got a situation (now) where people are marketing their credits as fair, and really have no definition of what is fair,” he said. “What we want is transparency to end buyers, so they can understand what is being bought.”




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