It is widely known that climate change causes natural disasters and has a severe impact on agricultural production. What is not so well known is that it also provides opportunities for small farmers and foresters to make money, a food policy expert has said.

"It is interesting that people tend to look at the negative side of climate change," said Mark Rosegrant, a division director with the Washington DC-based International Food Policy Research Institute.

"But it also means opportunities for poor farmers to receive additional income through carbon trading."

Carbon trading, through the Clean Development Mechanism (CDM), is one of the ways that developed countries can meet their obligations to reduce greenhouse gas emissions under the Kyoto Protocol, by investing in greenhouse gas emission reduction projects in developing countries.

The approach allows farmers to access carbon mitigation and carbon trade processes, he said last week at an international conference held in Beijing.

Rosegrant suggested countries like China should set up a less complicated system that allow farmers to tap into the markets.

So far, the country has been in the carbon market from an industrial side, he said.

China now supplies more than one third of carbon credits to the global carbon market established under the CDM.

'Carbon credits'

Currently, however, there are few mechanisms in place to ensure "carbon credits" are used to benefit the poor, as ongoing CDM projects often focus on "end of pipe" solutions, by, for example, reducing greenhouse gas emissions caused by chemical industry processes.

Many do not lead to technology transfer or foster the development of clean energy in China.

"The government can encourage farmers to reduce carbon emissions through reforestation or sustainable land practices that reduce the loss of carbon from soil and agriculture," Rosegrant said.

China is an ideal country to experiment with risk insurance approaches based on weather index or climate change index, he said.

"These approaches would protect farmers from crop failures due to bad weather so that they could be protected from the worst effects of climate change," Rosegrant said.

(China Daily October 24, 2007)