The 2023 Annual Report spotlights the groundbreaking emission reductions payments made over the past year to Costa Rica, Côte d’Ivoire, Ghana, Indonesia, and the Lao PDR. Combined with Mozambique’s emission reductions payments to date, Carbon Fund results-based payments now total $53.2 million, with that number expected to increase to at least $300 million in the coming year.
FCPF 2023 Annual Report
By: Jean-Dominique Bescond, World Bank Senior Natural Resources Management Specialist; and Cristina Ruiz, World Bank Climate Change Unit Private Sector Consultant
Global commitments to mitigate climate change continue asking both consumers and producers to implement better practices and comply with international regulations.
As an example, a new EU regulation aims to ban the entry of products that have contributed to deforestation. The regulation imposes on importers and traders' new information gathering and risk prevention requirements to strengthen the traceability of products. This regulation is having a huge impact on several commodities in producing countries, not the least of which is the cocoa sector.
The case of cocoa is an interesting one. In the past few decades, the continued and increasing demand for chocolate has contributed to significant forest loss and land degradation in cocoa producing countries around the world. This has created an urgent need in the cocoa sector to establish more sustainable production practices, improve returns to farmers, and reduce environmental degradation.
The World Bank, through its Forest Carbon Partnership Facility (FCPF), is helping the global cocoa sector transition to a low-carbon, deforestation-free value chain. To this end, the FCPF is supporting countries to adopt an economically viable and climate resilient growth trajectory for the cocoa agroforestry supply chain by enhancing the knowledge of key stakeholders and their ability to apply it.
For the past two years, the FCPF has engaged with key stakeholders from the global cocoa value chain, as well as with stakeholders from the biggest producing countries in West Africa and Latin America, as part of its Cocoa & Forest: Knowledge Exchange Program. This program recently launched a trilingual Global Implementation Guide for Cocoa Agroforestry (in English, French, Spanish) to help cocoa-producing countries to transition to sustainable production practices.
The guide is based on a detailed assessment of existing agroforestry models being implemented globally, focusing on their financial viability and the technical capacity needed for implementation. The guide also assesses the tension between environmental and economic costs and benefits for different cocoa sector value chain actors, including the private sector.
The World Bank launched the cocoa guide at a unique cross-regional event in November 2022, in Abidjan, Cote d’Ivoire, that brought together cocoa producers from Latin America and the Caribbean and West Africa. At the event, discussions highlighted the economic, social and environmental benefits of agroforestry models, and facilitated knowledge sharing on success stories and best practices.
At the same event, the World Bank launched its newly funded Forest Investment Program (FIP2). With US$148 million in funding over seven years, FIP2 aims to conserve and increase forest stocks, and improve access to sources of income from sustainable forest management. Agroforestry will be a central tool to achieve FIP2’s targets.
As part of the cocoa guide and FIP2 launch event, some participants visited innovative agroforestry sites in Azaguié and Adzopé. In these two areas, agroforestry farmers demonstrated to participants the profitability of agroforestry at scale. The visits gave participants a unique opportunity to exchange directly with cocoa farmers about the benefits of agroforestry models.
Interesting conversations and technical exchanges took place, under the shades of agroforestry plantations, showcasing how even with different contexts and priorities, we can all work toward the transition to a low-carbon and deforestation-free global cocoa value chain.
The launch event and related farm visits showed the importance of face-to-face discussions and technical conversations in the field. There were clear recommendations to continue building a community-of-practice across cocoa producing countries, as well as increasing the adoption of agroforestry practices within participating countries.
The World Bank wrapped up the event with a series of organizational, technical and socio-economic recommendations, including:
- Continuing to build a community-of-practice on sustainable cocoa, as a place to exchange and connect existing initiatives;
- Creating working groups on specific thematic areas, with designated lead people in each group to continue the conversations and exchange knowledge and related resources;
- Looking for opportunities within countries to deepen producers’ engagement in agroforestry.
The workshop showcased how there is an increasing commitment from both the government and the private sector to implementing sustainable practices in the cocoa value chain. It is expected that the guide, as well as the examples of Agroforestry models presented in the same, can support future commitments resulting in a more green and sustainable value chain. Lastly, the workshop demonstrates how convergence points across different countries and types of actors can be found and agreements can be reached.