Pathways Toward Inclusive Livestock Carbon Markets in Africa Sept. 2025 Authors: Kopal Jain*, Deepika Dokka*, Todd Crane^ *GSD Global ^The International Livestock Research Institute (ILRI) Policy Brief Contents Contents Background and objective Market analysis Challenges Recommendations 2 3 4 5 Page 1 of 6 Background and objective Despite the rapid rise of carbon markets as a funding mechanism for low-emission development and the prominence of livestock in African economies and ecologies, livestock systems remain largely excluded from carbon finance mechanisms in Africa, accounting for only 2–5% of total carbon finance flows in Africa. This underrepresentation is driven by structural, financial, and policy challenges that undermine participation and scalability. African livestock systems are characterized by low-input, low-output practices. Smallholders engaged in mixed crop- dairy systems typically have very few animals, low-productivity and diversified livelihoods strategies. In many cases, they also have weak land tenure security. Pastoral systems are often shaped by communal land tenure, mobility, and high ecological variability. These systems present both challenges and opportunities for carbon mitigation. Improved feed, breeding, and manure management practices can deliver measurable methane reductions while enhancing productivity and resilience. However, existing carbon finance methodologies are poorly adapted to the realities of these systems, and most smallholders lack the financial incentives, technical support, and tenure security needed to engage in long-term projects. In recent years, we have seen a rapid increase of voluntary carbon markets in African livestock sectors, as well as an increasing amount of biophysical research on the potential for carbon sequestration and GHG emission avoidance. This policy brief outlines socio-economic and institutional barriers to scaling inclusive livestock-focused carbon finance across Africa. and makes practical research recommendations to address these barriers. Analysing interviews with stakeholders from over 30 organizations—including NGOs, development agencies, local farmer cooperatives, carbon project developers, and research institutes— as well as grey literature on carbon methodologies, the objective is to inform targeted policy and programmatic responses that can unlock carbon revenue streams for smallholder and pastoralist communities, while ensuring environmental integrity and equitable benefit-sharing. The brief outlines the current state of livestock carbon markets, identifies key challenges and offers practical recommendations to enable inclusive participation. Citation Jain, K., Dokka, D., Crane, Todd A. 2025. Carbon Markets in African Livestock Sectors: A Scoping Study and Research Agenda. Policy Brief. CGIAR.ILRI.Climate Action. Nairobi, Kenya. Link For further information and deeper analysis, please read the full report on which this brief is based: https://hdl.handle.net/10568/176650 CGIAR Pathways Toward Inclusive Livestock Carbon Markets in Africa Page 2 of 6 Market analysis Carbon credit markets are evolving rapidly, yet African livestock systems – both smallholder and pastoral systems – remain largely excluded. To understand how these systems can be integrated, it is critical to analyze three dimensions of the carbon market: pricing dynamics, the role of certification bodies, and the policy-regulatory environment. Carbon credit pricing: Demand, discounting, and volatility Livestock projects primarily generate methane avoidance credits through interventions like improved feeding, breeding, and manure management. These avoidance credits are often undervalued compared to removal credits (e.g., from afforestation or biochar), which physically extract CO2 from the atmosphere. In 2023–2024, avoidance credits traded at average prices ranging from $4 to $10 per tonne of CO2 whereas high-quality removal credits (particularly nature-based solutions) fetched $15 to $30 per tonne, with some going higher. Buyers—especially corporations pursuing net-zero targets—are increasingly prioritizing removal credits over avoidance credits to align with science-based targets and to avoid accusations of greenwashing. As a result, livestock-based credits are often subjected to pricing discounts, despite their strong co-benefits in food security and climate resilience. Another complication is price volatility. The voluntary carbon market (VCM) lacks unified price benchmarks, and credits from livestock projects in Africa often trade through brokers or aggregators who retain a significant portion of the final sale price. Without access to direct markets or advance purchase agreements (APAs), smallholder livestock projects struggle to predict revenue or scale operations. Certification bodies and methodological gaps Certification bodies—such as Verra (VCS), Gold Standard, Plan Vivo, Climate Action Reserve (CAR), and American Carbon Registry are the most recognized certification bodies operating in Africa. They determine which projects are eligible, how emissions reductions are calculated, and whether credits can be traded on the global market. However, their methodologies are often based on industrialized, data-rich contexts that do not necessarily transfer well to African systems. Stakeholders report that certification processes are opaque, slow, and expensive. Initial project validation and registration can cost between $50,000 to $150,000, with additional fees for third-party auditors, digital MRV platforms, and annual verification cycles. These costs create a “minimum viable scale”—often over 10,000 participating farmers—below which projects are financially unfeasible. Further, the lack of livestock-specific emission factors and regionally-grounded baselines for African ecologies complicates both verification and credibility. As a result, many developers avoid livestock projects entirely, and investors prefer sectors with proven methodologies and higher returns per hectare, such as reforestation. Policy and regulatory context: Fragmentation and gaps Carbon markets are still nascent in most African countries, with livestock rarely integrated into national carbon strategies or registries. Where policies exist, they overwhelmingly focus on forestry, energy, or industrial emissions. A few countries are beginning to develop enabling frameworks. For instance, Kenya’s 2023 Climate Change Amendment Act introduces national benefit-sharing frameworks and carbon project registration guidelines, but livestock-specific provisions remain absent. Zambia and Ghana are exploring national carbon registries, but have yet to resolve how to incorporate smallholder livestock systems. Ethiopia and Tanzania lack clear governance on carbon ownership in communal lands, creating legal uncertainty and deterring investment. Across the continent, carbon rights—particularly in communal or pastoralist areas—are poorly defined. This affects eligibility, revenue distribution, and dispute resolution. The absence of policy harmonization also means that developers face inconsistent rules across jurisdictions, adding legal risk and administrative burden. Another major concern is the lack of African voices in standard-setting. Most methodologies are developed by institutions in the Global North, with limited input from African governments, researchers, or livestock keeping communities. This perpetuates misalignment between certification requirements and on-the-ground realities. Finally, the emerging Article 6 market mechanisms under the Paris Agreement (especially 6.2 and 6.4) offer opportunities for livestock carbon to be traded between countries, but readiness remains low. Many African countries have not yet designated national authorities or defined strategies for carbon asset ownership and transfer, limiting their participation in both compliance and voluntary markets. CGIARPathways Toward Inclusive Livestock Carbon Markets in Africa Page 3 of 6 Challenges Land tenure and long-term commitments Insecure land tenure remains a foundational challenge. In some countries, even mixed crop-livestock smallholders do not necessarily have clear land tenure. Many pastoralist communities rely on communal or customary land, with limited formal registration. This complicates long-term contracting and weakens confidence in benefit-sharing. The nomadic nature of pastoral systems exacerbates difficulties in verification and stakeholder engagement, while low literacy levels hinder informed consent and comprehension of 20–40-year carbon agreements. Without formal land rights, communities cannot reliably claim credit benefits, raising the risk of conflict and exclusion. The absence of land certification and a lack of inclusive carbon policies for pastoralists further marginalize livestock systems from climate finance. Senegal’s Sustainable Grazing Project1 was aimed at reducing overgrazing and enhancing soil carbon storage. However, communal land ownership structures led to disputes over who had the right to benefit from carbon revenues. Without clear land tenure agreements, the project was unable to secure long-term commitments from local pastoralists, leading to its eventual collapse. High MRV costs and technical gaps MRV processes remain prohibitively expensive. Many tools are designed for industrialized systems and are ill-suited for African smallholders. Verification processes alone can constitute up to 50% of total MRV expenses, adding significant financial considerations for project developers. For example, one forestry company reportedly spent nearly USD 750,000 over three years to obtain program validation, without ultimately achieving accreditation. Such experiences highlight the prohibitive nature of the verification process. Implementing MRV over larger areas can reduce per-unit costs, making large-scale projects more financially viable. Stakeholders also suggested more flexible, tiered MRV models that begin with low-cost data collection and scale complexity over time. However, adapting these approaches to African livestock systems still requires region-specific data, peer-reviewed emission factors, and robust digital infrastructure. A lack of trained personnel and auditing capacity among local implementers also undermines credibility. Low, delayed and unstable payments Carbon revenues often take years to materialize. In the initial years, farmers may receive less than $100 annually, which is insufficient to offset labor costs or incentivize practice changes. This unpredictability erodes trust and participation. Many farmers remain skeptical of long-term contracts. Advocacy groups and farmers’ associations report fears of losing control over land or being bound to exploitative agreements. Government policy and regulatory challenges Many countries are at various stages of developing or enacting carbon market regulations. For instance, Tanzania has introduced multiple draft bills—including an amendment to its Climate Change Act and dedicated carbon market regulations— while Kenya, Ghana, Zimbabwe, Zambia, and South Africa have issued or are developing regulations that establish legal and institutional frameworks for carbon trading. In Kenya and Zambia, new policies are emerging, but enforcement and operational clarity remain weak. Ethiopia has no pastoralist-inclusive carbon policy, and Tanzania’s policy loopholes allow the bypassing of community consent. Policies are reported to be inconsistent, and view livestock emissions as cultural or informal sectors. Carbon market regulations—where they exist—tend to favor large-scale, forest-based projects. Climate activist groups noted a lack of regulatory clarity around carbon trading mechanisms across Africa. Existing frameworks are often tailored to large-scale agriculture or forestry projects and are ill-suited to the realities of smallholder livestock systems. Project developers noted that governments tend to have short-term priorities that align with electoral cycles. This myopic planning makes it difficult to implement long-term carbon finance programs which require commitments spanning 15 to 30 years. These short horizons discourage both private investment and donor engagement. CGIAR Pathways Toward Inclusive Livestock Carbon Markets in Africa Page 4 of 6 1 Lives and Livelihoods Fund, Sahel Sustainable Pastoralism Development Program, Senegal Community distrust Community distrust is a recurring theme. Carbon finance is seen to be complex, opaque, and long-term, which often creates hesitation among farmers who fear losing control over their resources. Farmers also perceive these programs to be exploitative with hidden commitments, leading to suspicion that large corporations benefit disproportionately. Benefit-sharing mechanisms are rarely transparent, and profit distributions often favor intermediaries over farmers. Stakeholders note that poor communication and top-down project designs alienate local communities. Grassroots organizations shared instances where developers negotiated directly with local leaders without broader consultation, creating perceptions of elite capture, exclusion and exploitation. Recommendations With carbon markets as an emerging economic force, there are many questions that remained unanswered in terms of how to make them work for smallholder farmers and pastoralists. These suggestions outline a research and action agenda for supporting access to carbon finance for livestock producers by reducing financial and technical barriers, improving regulatory clarity, and promoting proven models. Pursing these recommendations, and more research on them, should provide key stakeholders with information and opportunities to help them with supporting research, and facilitate knowledge-sharing platforms to drive implementation. 1. Develop livestock-specific carbon finance models Current carbon markets and certification methodologies disproportionately favor forestry and energy projects. This could be addressed research on the development and strengthening of livestock-focused carbon credit methodologies with major certification bodies (Verra, Gold Standard, Plan Vivo). These should include methane reduction from improved feed, rotational grazing, manure management, and soil carbon sequestration. Research can also support enabling smallholder participation, which will require effective aggregation models, where cooperatives or community-based projects pool emissions reductions to meet scale requirements. This would reduce certification and MRV (Monitoring, Reporting & Verification) costs, enhancing viability for small producers. Additionally, governments can consider implementing carbon price floors to address price volatility and offer stability for livestock carbon projects. 2. Propose strategies to lower barriers to entry for smallholder farmers High MRV costs and long payment delays remain major obstacles for equitable smallholder inclusion in carbon projects. Investments in AI-driven MRV technologies, such as remote sensing and machine learning, could streamline data collection and cut costs. Research supporting the development of pre-financing or early payment models would also help ensure that farmers receive benefit upfront rather than waiting 12–18 months for payments to begin. This will help cover upfront investments and improve long-term engagement.Training is another crucial gap, which could be addressed through capacity- building programs through national agricultural extension networks, enabling extension officers to educate farmers on carbon finance mechanisms and project participation. In addition, the development of mobile-based digital tools that allow farmers to register, upload data, track earnings, and reduce paperwork, would make the process more accessible. 3. Scale proven livestock carbon finance models Feed and breeding improvements offer high-impact, low-cost solutions. Testing locally-available methane-reducing feed options, such as urea-treated straw, molasses-urea blocks, legumes, or seaweed-based supplements. On the breeding front, programs can support indigenous and crossbred cattle that are more efficient and climate-resilient. These efforts should be coupled with national programs for livestock and fodder crop genetic improvement and technical training for veterinarians and breeders. Biodigesters should also be explicitly included in national carbon finance programs. This would enable farmers using biogas systems for waste-to-energy conversion to receive carbon credits and financial incentives. Partnerships with governments and private entities can facilitate widespread biodigester adoption through subsidies and training. Where they are ecologically appropriate, silvopastoral systems that integrate trees into pastureland can be a useful mechanism for improving soil carbon sequestration, biodiversity, and productivity, particularly in degraded and semi-arid areas. CGIARPathways Toward Inclusive Livestock Carbon Markets in Africa Page 5 of 6 4. Explore untapped countries for livestock carbon finance Several high-potential African nations—such as Chad, Niger, Mali, Mozambique, Angola, Madagascar, and Uganda—remain excluded from livestock carbon markets due to policy, security, or infrastructure challenges. Collecting baseline data and assessing the feasibility of livestock and rangeland restoration projects in these regions is an essential first step. Engagement with policymakers can contribute to development of inclusive carbon credit frameworks that recognize livestock-based emissions reductions and attend to socially-inclusive benefit sharing. As such, these countries represent opportunities to try out innovative carbon business models that more effectively address social inclusion objectives. Attracting capital will also be made easier public-private partnerships and risk-sharing mechanisms that de-risk private investment. Derisking projects should provide additional benefits to farmers, such as improved access to markets, finance (e.g., loans and insurance), and inputs, making carbon finance more appealing and equitable. CGIAR Pathways Toward Inclusive Livestock Carbon Markets in Africa Page 6 of 6