Why Prize Competitions Are a Viable Model for Scaling Climate-Smart Technologies

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January 6, 2020

by Justin Kosoris

This blog post was originally published on the USAID Climatelinks blog.

“No pilots fail, but no pilots scale.”

Dr. Bruce Campbell, director of the CGIAR Research Program on Climate Change, Agriculture, and Food Security, lamented this on the first morning of the 5th Global Science Conference on Climate-Smart Agriculture (CSA). This was a common refrain at the conference: Many technologies and practices are effective on a small scale but have limited widespread uptake.

How can we overcome this struggle and scale crucial climate-smart technologies and practices? As we showed at the CSA conference, AgResults’ prize competition model that leverages private sector innovation and investment offers a solution. By engaging the private sector to scale up climate-smart technologies, we can mitigate emissions and prepare smallholder farmers for a changing climate. AgResults’ work in Vietnam shows how a prize competition creates a potential roadmap for scale using three steps: 1) short-term incentives, 2) potential for replicability, and 3) carbon market creation.

Short-term incentives. The Vietnam prize competition’s objective of reducing GHG emissions is leading to near-term economic benefits beyond the prizes. GHG emissions are not easily measured or monetized, but the competition is incentivizing behavior changes that could have tangible economic impacts for farmers and competitors: For smallholder farmers, practices that reduce on-farm GHG emissions may increase yields and reduce input and labor costs. For companies, incorporating these technologies into their business models boosts the likelihood that the Vietnamese government will recognize production practices that could create a possible market share for a “clean” rice product. These incentives bridge the gap between current practices and hard-to-quantify emission reductions. They could motivate participating companies and the government to expand climate-smart rice farming practices through the target region of Thai Binh Province in the Red River Delta. Scaling nationally, though, hinges on replicating this approach in Vietnam’s largest rice-producing area, the Mekong River Delta.

Potential for replicability. The project’s robust verification system makes it an appealing candidate for potential replication and expansion. Building on the project’s GHG verification system or using another approach such as the Sustainable Rice Platform, a relatively small prize fund in the Mekong Delta could spark a scale-up similar to we are seeing in the Red River Delta. The political will exists: Already the Vietnamese government supports scaling up climate-smart farming practices to help the country meet its Paris Agreement goal of agriculture-led GHG emissions reductions. However, without a market that monetizes carbon reductions, immediate economic benefits from improved practices may not be enough to overcome upscaling costs.

Creation of a carbon market. Although our project does not explicitly focus on creating a carbon market, its proven model for verifying reductions provides the technical clout to support an eventual carbon credit market for rice farming in Vietnam. The project uses similar verification methods to California’s carbon credit market for rice farming, although Vietnam’s thousands of small fields — a far cry from sprawling California farms — bring unique monitoring challenges. Yet armed with political will and the ability to track and verify data, a dedicated coalition of public and private stakeholders could pilot a carbon market for Vietnam. The additional income from selling carbon credits, on top of efficiency gains from reduced input costs and increased yields, could propel scale-up beyond the reach of any prize competition.

By combining short-term incentives with a replicable design, AgResults’ prize competition in Vietnam has laid out a potential roadmap for scaling climate-smart technologies. We were honored to contribute to the conversations at the CSA conference, and we welcome the chance to think through how similar initiatives could incentivize further private sector action through prize competitions.

Type of Post: Blog

January 6, 2020

by Justin Kosoris

This blog post was originally published on the USAID Climatelinks blog.

“No pilots fail, but no pilots scale.”

Dr. Bruce Campbell, director of the CGIAR Research Program on Climate Change, Agriculture, and Food Security, lamented this on the first morning of the 5th Global Science Conference on Climate-Smart Agriculture (CSA). This was a common refrain at the conference: Many technologies and practices are effective on a small scale but have limited widespread uptake.

How can we overcome this struggle and scale crucial climate-smart technologies and practices? As we showed at the CSA conference, AgResults’ prize competition model that leverages private sector innovation and investment offers a solution. By engaging the private sector to scale up climate-smart technologies, we can mitigate emissions and prepare smallholder farmers for a changing climate. AgResults’ work in Vietnam shows how a prize competition creates a potential roadmap for scale using three steps: 1) short-term incentives, 2) potential for replicability, and 3) carbon market creation.

Short-term incentives. The Vietnam prize competition’s objective of reducing GHG emissions is leading to near-term economic benefits beyond the prizes. GHG emissions are not easily measured or monetized, but the competition is incentivizing behavior changes that could have tangible economic impacts for farmers and competitors: For smallholder farmers, practices that reduce on-farm GHG emissions may increase yields and reduce input and labor costs. For companies, incorporating these technologies into their business models boosts the likelihood that the Vietnamese government will recognize production practices that could create a possible market share for a “clean” rice product. These incentives bridge the gap between current practices and hard-to-quantify emission reductions. They could motivate participating companies and the government to expand climate-smart rice farming practices through the target region of Thai Binh Province in the Red River Delta. Scaling nationally, though, hinges on replicating this approach in Vietnam’s largest rice-producing area, the Mekong River Delta.

Potential for replicability. The project’s robust verification system makes it an appealing candidate for potential replication and expansion. Building on the project’s GHG verification system or using another approach such as the Sustainable Rice Platform, a relatively small prize fund in the Mekong Delta could spark a scale-up similar to we are seeing in the Red River Delta. The political will exists: Already the Vietnamese government supports scaling up climate-smart farming practices to help the country meet its Paris Agreement goal of agriculture-led GHG emissions reductions. However, without a market that monetizes carbon reductions, immediate economic benefits from improved practices may not be enough to overcome upscaling costs.

Creation of a carbon market. Although our project does not explicitly focus on creating a carbon market, its proven model for verifying reductions provides the technical clout to support an eventual carbon credit market for rice farming in Vietnam. The project uses similar verification methods to California’s carbon credit market for rice farming, although Vietnam’s thousands of small fields — a far cry from sprawling California farms — bring unique monitoring challenges. Yet armed with political will and the ability to track and verify data, a dedicated coalition of public and private stakeholders could pilot a carbon market for Vietnam. The additional income from selling carbon credits, on top of efficiency gains from reduced input costs and increased yields, could propel scale-up beyond the reach of any prize competition.

By combining short-term incentives with a replicable design, AgResults’ prize competition in Vietnam has laid out a potential roadmap for scaling climate-smart technologies. We were honored to contribute to the conversations at the CSA conference, and we welcome the chance to think through how similar initiatives could incentivize further private sector action through prize competitions.