Abstract
Asia’s grasslands provide livelihoods for some of the region’s poorest people. Widespread grassland degradation reduces the resilience and returns to herding livelihoods. Reversing degradation and conserving grasslands could not only improve herders’ situation, but also make a huge contribution to mitigating climate change by sequestering carbon in soils. However, the means for reaching each of these objectives are not necessarily the same. To realize this potentially huge dual livelihood/climate change mitigation outcome from improved grassland management, it is necessary to have detailed understanding of the processes involved in securing better livelihoods and sequestering carbon. Based on household surveys on the Tibetan Plateau and modeling results, this study estimates economic and market costs of grassland carbon sequestration, and analyzes the implications of household and carbon project cash flows for the design of financing options. Five scenarios are modeled involving cultivation of grass on severely degraded grassland (all scenarios) and reduced grazing intensity on less degraded land, which requires destocking by 29, 38, 47, 56, and 65% in each scenario). Modeling results suggest that economic benefits for herders are positive at low levels of destocking, and negative at high levels of destocking, but initial investments and opportunity costs are significant barriers to adoption for households in all destocking scenarios. Existing rural finance products are not suitable for herders to finance the necessary investments. Market costs–the cost at which transactions between herders and carbon project developers are feasible–depend on the scale of project implementation but are high compared to recent carbon market prices. Large initial investments increase project developers’ financing costs and risk, so co-financing of initial investments by government would be necessary. Therefore, public policies to support grassland carbon sequestration should consider the potential roles of a range of financial instruments.
Highlights
The Paris Agreement aims to limit the rise in global average temperatures to below 2°C by 2100 and increase adaptation to adverse effects of climate change in a manner that does not threaten food production (UNFCCC 2015)
A modeling approach was used to estimate the economic costs of adopting carbon sequestering management practices in the Tibetan Plateau, and the market costs of grassland carbon sequestration if projects are developed in the context of China’s cap and trade mechanism
Compared to top-down modeling estimates Smith et al (2007) suggesting that most economic potential in grasslands is feasible at costs above US$50/tCO2, our study estimated the economic costs of carbon sequestration at between US$ −6.52 and US$3.78 per tCO2
Summary
The Paris Agreement aims to limit the rise in global average temperatures to below 2°C by 2100 and increase adaptation to adverse effects of climate change in a manner that does not threaten food production (UNFCCC 2015). Soil carbon sequestration in agricultural lands has been identified as having a crucial role in meeting the Paris Agreement’s objectives, since feasible measures to mitigate non-CO2 agricultural emissions are insufficient to achieve the 2°C limit, and soil carbon sequestration is a co-benefit of many naturebased adaptation measures (Wollenberg et al, 2016; Bossio et al, 2020). The means and priorities for grassland management are not necessarily the same when pursuing each of these two objectives. To realize this potentially huge dual livelihood/climate change mitigation outcome from improved grassland management, it is necessary to have detailed understanding of the processes involved in securing better livelihoods and sequestering carbon
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