NAMA – Coffee of Costa Rica

Luis Zamora Q. National Coffee Manager Ministry of Agriculture and Livestock, Costa Rica

COSTA RICA OCTUBRE 2014

NAMA

Nationally appropriate mitigation action in the Costa Rican coffee sector

Pathway towards

a low-carbon coffee sector

MINAT Ministerio de Ambiente,

Energía y Telecomunicaciones

Keeping coffee growers and maintaining farming families in business through increasing eco-competitiveness of

national coffee producers

Payments for environmental services for agroforestry systems in the coffee sector NAMA Highlights

Coffee sector serving as a “NAMA laboratory” for other sectors and other Latin American coffee-growing countries

First NAMA in the coffee sector and one of the few NAMA´s in Agriculture

Increased adoption of mitigation and adaptation measures along the supply and value chain

Donor support may target: institution development, capacity building, evidence building, knowledge sharing and capital investments.

Coffee Sector Structure

NAMA affects 50,000 farming families and involves an area of approximately 93,000 hectares.

Coffee Sector 2002 2012

Number of Farmers 70 143 52 787

Number of Mills 93 184

Number of Exporters 56 93

Number of Roasters 34 57

Source: ICAFE.

Payments for environmental services for agroforestry systems in the coffee sector Background

Our coffee sector is fertile ground for developing new approaches to a green economy: easily rolling out NAMA management models and scaling up

At the heart of Country´s identity

There are already existing framework

policies in place

Solid institutional, organizational and

collaborative setting

Stakeholder involvement across

sectors

Strong relationship (agencies, coffee

growers and millers)

Payments for environmental services for agroforestry systems in the coffee sector Support Requested

20.000.000 USD (equivalent to 40 USD/family/year) from 2014 to 2023.

Institution development

Evidence building:

establishing a smart MRV-

system;

Capital development: investments in (NAMA-type

technologies).

Capacity building

11.500.000 USD (equivalent to 23 USD/family/year) from 2014 to 2023.

Coffee growers and mills (risk)

National Development

Banking System

Public extension system &

Agriculture and Livestock Ministry awards

Coffee-shading and

reafforestation and PES-

qualifying

International funding National funding

Coffee NAMA (Framework Convention)

BID FOMIN (FUNDECOOPERACION)

NAMA FACILITY NAMA SUPPORT

PROJECT (GIZ)

OTHERS

Costa Rican NAMA Coffee

MINAE

ICAFE

FUNDECOOPERACION

MAG

Coffee NAMA

5 components Technical

approval by BID FOMIN

FOMIN Equivalent Funding

in cash Equivalent Funding

in Kind Total

$ 1.274.438 $ 348.250 $ 617.400 $ 2.240.088

Payments for environmental services for agroforestry systems in the coffee sector

*The slide only presents the main barriers identified at the moment.

Policy barriers:

*Low regulatory incentives to capital

investment and process innovation.

Financial barriers:

*Low and late return of

investment

*Cash flow problems of coffee

growers and millers.

Market barriers:

Insufficient access to market niches

Weak market incentives for GHG

– efficient fertilizers.

Current barriers

Payments for environmental services for agroforestry systems in the coffee sector Financial Mechanism

How we will manage this?

Fuente: GIZ, B. Krause (2013)

Bi- and

multilateral,

public, private

donors

National and international

carbon markets

Mills

Farms

Intergovernmental Panel

MAG

Steering Committee NAMA-Café

Galvanices interests, advices tecnically, facilitates coordination,

etc.

National NAMA

Coffee Fund

through a special

vehicle

Render future environmental benefits

Atends farmers and millers

Guaranties functionality Contri-butions

Places environmental benefits

Transferes direct financing

Advices political agenda and changes in institutional settings

Special fee

Ejecuting agency

Funds activities

Private

Investors

Delivers services

Contri-butions

Secretariat

Advisory board &

Stakeholders

ICAFE MINAET

Payments for environmental services for agroforestry systems in the coffee sector

Reduction potential: approx.

30.000 Ton of CO2/year.

Carbon sink potential: approx.

90.000 Ton of CO2/year.

120,000 Ton CO2e/year until

2024 at full implementation.

The expected reductions over 20

years will be 1,850,000 Ton CO2e

Expected outcomes

We envision the NAMA that combines mitigation measures with climate adaptation practices

Co-benefits:

*Eco-competitiveness coffee

growing (cost savings,

diversification, keep market

access and environmental impact

reduced)

*Resilience of 50.000 farming

families.

Energy and Transportation;

46%

Wastes ; 11%

Industry ; 6%

Agriculture and livestock; 37%

40%

25%

11%

5% 8%

11%

Livestock Coffee Sugar cane Rice Banana Other

A road map for the NAMA in the Costa Rican coffee sector

2012 2013 2014 2016 2018 2020 2021 2022 2023

Carbon Neutral Coffee NAMA Concept &

Financial Pitch

Pilots

NAMA - Framework ready

NAMA Implementation

Expansion

C-Neutral CR

NAMA-Full Implementation C-Neutral

Roaster/exporter

Cop 18

Payments for environmental services for agroforestry systems in the coffee sector Key NAMA Elements

Coffee Farms Coffee Mills

Wastewater treatment

Reductions in methane emissions by the pulp.

Fertilizer

Agroforestry systems

Payments for environmental services for agroforestry systems in the coffee sector Coffee Farms

• Reductions in nitrous oxide emissions, by adoption of efficient practices and

new technology of fertilizer application.

• Increased fixation and augmented carbon inventories by the spread of

coffee agroforestry systems (intensified shading).

• Promotion of affirmative climate change adaptation measures such as: soil

conservation practices, introduction of coffee varieties adapted to climate

change, increasing forest cover, risk management, etc., thus leveraging the

synergies between adaptation and mitigation, being two sides of the same

coin.

Payments for environmental services for agroforestry systems in the coffee sector Coffee Mills

• Reductions in methane emissions by improved water management

systems and by introducing technologies for wastewater treatment.

• Reductions in methane emissions through changing treatment plus

savings in energy use by recycling pulp.

Coffee Mill

Insurance and tax

Waste treatment

Materials

Fire Wood

External services andtransport

Electricity

Labor

Payments for environmental services for agroforestry systems in the coffee sector Impact on Cost Structure through Mitigation

Actions

0%

50%

100%

Farm

Other Materials

Fertlizing

Other costs

Labor

Harvest

Costs at farm level Costs at mills

We envision the NAMA as a business model not only for the coffee sector, but for the agricultural sector as a whole

Coffee Mils – Carbon Neutrality

Five Coffee Mills were chosen to obtain the C Neutrality

Five Coffee Mils were chosen to measure their Carbon Footprint.

Advice and support for implementation of the guidelines.

Program concludes in early 2015

Contact information

Luis Zamora Quirós, National Coffee Manager Agriculture and Livestock Ministry of Costa Rica (MAG) Email: lzamora@mag.go.cr

With the support of:

Thank you

Thank you