Carbon revenue in the profitability of agroforestry relative to monocultures

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http://hdl.handle.net/10138/311670

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Waldén , P , Ollikainen , M & Kahiluoto , H 2020 , ' Carbon revenue in the profitability of agroforestry relative to monocultures ' , Agroforestry Systems , vol. 94 , no. 1 , pp. 15-28 . https://doi.org/10.1007/s10457-019-00355-x

Title: Carbon revenue in the profitability of agroforestry relative to monocultures
Author: Waldén, Pirjetta; Ollikainen, Markku; Kahiluoto, Helena
Contributor: University of Helsinki, Department of Economics and Management
Date: 2020-02
Number of pages: 14
Belongs to series: Agroforestry Systems
ISSN: 1572-9680
URI: http://hdl.handle.net/10138/311670
Abstract: The impact of carbon revenue on the profitability of agroforestry systems in comparison to monocultures is unexplored in regard to Sub-Saharan Africa. This study creates a multivariate model to evaluate the impact of carbon revenue on the profitability of agroforestry relative to the dominant monocultures in Ethiopia by using stylized plots. Yields and carbon stock changes of eight agroforestry systems were modeled based on data from agroforestry plots in the Ethiopian Central Rift Valley. According to our model, agroforestry was, on average, four times more profitable than the main monoculture systems (wheat, barley, maize, teff, sorghum, sugarcane and lentil) even when carbon revenues were excluded, primarily due to the higher prices of fruit produce. Carbon revenues were estimated using a plausible carbon price ranging from US$8/tCO2e to $40/tCO2e and carbon sequestration rates of 0.59 to 17.2 Mg C ha−1 year−1. The possibility of receiving carbon revenue increased the profitability of agroforestry by 0.5% when using the lowest utilized carbon price and carbon sequestration rate, by 20% when using the carbon price of $20 and the average carbon sequestration rate, and by 70% when using the highest price and highest sequestration rate of carbon. On average, carbon revenue increased the profitability of agroforestry by 150% in comparison to monoculture farming. We conclude that carbon income may have significant potential to motivate smallholders to convert to agroforestry when there is a proper management system, a sufficiently high carbon price and effective institutional support to mitigate the transition and transaction costs.
Subject: 1172 Environmental sciences
4111 Agronomy
Cropping systems
Smallholder
Carbon sequestration
Carbon trading
Ethiopia
Modeling
CACAO THEOBROMA-CACAO
FARM INCOME
SEQUESTRATION
SYSTEMS
WEST
PRODUCTIVITY
ECONOMICS
NUTRIENT
QUALITY
BIOMASS
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