This article was co-authored with Fernanda Ferreira, Director, Agriculture Methane at the Clean Air Task Force.
Methane is a powerful greenhouse gas more than 80 times as potent as carbon dioxide over 20 years. Human-made methane drives a third of today’s warming, and global livestock production is its largest source. About 80 percent of all livestock methane comes from developing countries where livestock are key to livelihoods, food security, and nutrition, and where demographic change is expected to further increase demand for livestock products.
Reducing methane from livestock production requires two complementary approaches: sustainable efficiency increase, where livestock become more efficient, and scaling innovative methane-reducing technologies. Many technologies to support both already exist or are in development. The bottleneck is getting livestock farmers worldwide to adopt them at scale.
Several factors affect whether farmers adopt new technologies or practices. In many contexts, market inefficiencies can create or sustain barriers to adoption; market mechanisms that address those inefficiencies can therefore play an important role in overcoming barriers and scaling adoption. Market mechanisms can be defined as financial and policy tools that reshape incentives within the market system to drive technology adoption.
Spark Climate Solutions and Clean Air Task Force (CATF) convened funders, companies, researchers, and government representatives during New York Climate Week to explore how market mechanisms can drive technology adoption in the livestock sector and accelerate global methane reductions. Below are some key takeaways from those discussions.
Livestock methane emissions can be reduced through two complementary pathways:
The success of either pathway depends on farmers adopting new technologies and practices, each of which has different adoption barriers depending on geography, type of livestock system, and other variables.
Reducing emissions therefore requires understanding which mitigation pathway or combination of pathways should be prioritized in each country or region, and the barriers holding back progress. Producer adoption is complex and highly context-dependent, but the ADOPT framework (Kuehne et al., 2017) provides a useful model for understanding the factors influencing producers’ adoption decisions. It identifies two overarching drivers: how worthwhile it is for producers to adopt and how easy it is for them to learn about it.
Decision makers therefore first need to understand what is preventing adoption. When barriers are widespread or persist across many producers because financing, inputs, information, or skilled labor and services are systemically missing, they may reflect a broader market system weakness. In these cases, market mechanisms are fundamental to scale adoption. Ideally, many options should be considered and evaluated, and Spark and CATF are working on a “menu”, a broad set of market instruments (e.g., Advance Market Commitments, insurance and de-risking, fiscal incentives, emissions pricing, amongst others) that different actors can apply to different market weaknesses. Most of these mechanisms are underused in livestock production, and they can work at any point in the value chain. The key is to diagnose the market-system weakness or inefficiency behind the barrier before picking the mechanism that will best work in a specific context.
Reducing methane emissions from livestock benefits the whole society, but to ensure it happens, the benefits also appeal to the farmers who will lead on implementing relevant solutions. For example, Leah Rosenzweig of the University of Chicago’s Market Shaping Accelerator, shared that livestock methane costs society about $100 to $200 per cow per year; however, farmers who adopt innovations to reduce absolute emissions, such as feed additives, may capture almost none of it without intervention. Consequently, innovation is underfunded because private returns don’t reflect social value.
Market mechanisms to close this gap fall into two broad categories:
A healthy system needs both types of mechanisms, but in livestock production, nearly all funding is currently supporting push approaches. Pull mechanisms work best where success can be defined and measured, and they can work at any point in the value chain.
Speakers shared several examples of market mechanisms that have scaled technology adoption, in livestock and beyond.
A pneumococcal vaccine born of a successful Advance Market Commitment
Advance Market Commitment (AMC) is a promise to buy a minimum quantity of a specific innovation. In 2009, an AMC backed by $1.5 billion from Gavi, the Vaccine Alliance, along with five donor countries and the Gates Foundation, set out to scale up the pneumococcal vaccine. Because payments to vaccine developers were tied to adoption, developers had an incentive to scale and reach the final commercial price, which was capped at $3.50 per dose. The commitment also gave producers demand certainty. The vaccine scaled about five years faster than the rotavirus vaccine, which had no AMC, saving about 700,000 lives and reaching 150 million children.
How AgResults scaled innovation for small scale farmers in Africa using payments for results
Small markets do little to drive investment in vaccines built for a specific region, such as a foot-and-mouth disease (FMD) vaccine for East Africa. To change that, AgResults launched a vaccine challenge designed in close collaboration with vaccine producers. Backed by more than $17 million, the ongoing challenge pays manufacturers a prize for each dose they commercialize, with payments stepping down over the commercialization period. Three vaccine producers have joined so far and are working to produce affordable vaccines for the region.
AgResults also ran the Dairy Productivity Challenge in Tanzania from 2019 to 2024, awarding $5.4 million in prizes to rural stores that sold fodder and inputs bundled with advisory services to small farmers. The challenge benefited 24 companies, which sold more than 830,000 bundles and more than 6 metric tons of fodder and reached 84,000 farmers.
How public incentives can support technology adoption if paired with simple access to them
Belgium has achieved large-scale use of methane-reducing feed additives by paying farmers to adopt them. The success of this adoption can also be credited to the simplicity of the mechanism. If incentives are available, but farmers are overwhelmed by applications or bureaucracy, adoption may fall short.
Participants also agreed that livestock methane mitigation belongs in agriculture ministries as a core consideration in agricultural policy, along with efficiency, food security, and profitability, rather than primarily in environment ministries. Below are some critical considerations for this approach.
Partnership is key for policy success: Robust policies should be designed in partnership with all stakeholders, which includes the productive sector, farmers, and the broader agricultural community. Denmark, which has made partnership central to its approach on agriculture, has succeeded in integrating environmental and agricultural policies. Its 2024 Green Tripartite agreement among government, farmers, and nature groups pairs carbon tax mechanisms with land conversion planning, farmers’ compensation, and philanthropic funding to reduce emissions while also maintaining food production and the competitiveness of the livestock sector. Australia and New Zealand are investing in methane-reducing technologies suited to their own livestock systems, using public-private partnerships to advance pre-competitive development and scaling. In New Zealand, the AgriZeroNZ model matches every dollar of public investment with private dollars. Its new Early Adoption Accelerator builds on that model by co-funding projects to accelerate farmer uptake of proven emissions-reduction tools, with government funding covering up to 50% of project costs.
Align on the common ground priorities: Environment and agriculture ministries may have different priorities, so finding common ground is critical. Australia is scaling efficiency gains that can also reduce emissions by using regulated carbon markets that are built on robust methodology and will be supported by trustworthy monitoring, reporting, and verification requirements that are currently in development.
Design policies that enable the entire supply chain to act: Policies can promote action by processors, who work closely with farmers and have a deep understanding of the market. Policies that support processors in reducing scope 3 emissions are key. Danone, which sources milk from over 60,000 farmers globally, described how it is accelerating action globally by publicly disclosing its scope 3 methane emissions, and locally, through context-specific actions in Morocco, Brazil, and the European Union. In Brazil, a policy that facilitates Danone’s access to tax credits has supported Jornada Flora, a project that provides technical and economic advisory services to dairy farmers. The potential inclusion of livestock in the EU Carbon Removals and Carbon Farming Regulation is another example.
Farmers are the ones who must make the decisions that reduce emissions, so market mechanisms should be designed to deliver as much of the incentive as possible to them. Herd managementpractices and technologies that improve efficiency also matter, since innovative methane-reducing technologies are unlikely to be deployed in low-efficiency herds.
Projects described at the event demonstrate this, including AgResults’s Dairy Challenge in Tanzania and Danone’s Hlib Bladi in Morocco, and Jornada Flora in Brazil. Hlib Bladi has increased revenue by more than 50 percent for more than 6,500 farmers, including 2,400 women, and cut emissions by 20,000 metric tons of CO2efrom 2023 to 2025. Jornada Flora covers 51 percent of Danone Brazil’s milk supply and has made R$175M (about $35 M USD) through financing partnerships, resulting in a 42 percent reduction in methane emissions.
Value to the farmer must also be coupled with advisory services, particularly financial advice. Making more money available is not enough: reducing the bureaucratic burden on them and working through banks farmers have existing relationships with is also key.
Rapid adoption of technologies and practices by livestock farmers globally requires innovation in market mechanisms. New methane-reducing technologies that reduce absolute emissions and work in grazing systems are still needed, but they must be developed while also scaling what is currently available. Many collaborative projects and policies are already demonstrating how market mechanisms can speed up farmer adoption of technologies and unlock livestock emissions reductions.
For technology developers, durable demand for their innovations is everything. A durable market requires a durable customer; durable demand is what makes adoption a sound business decision for that customer. Policies and other projects can support technology developers, but it’s critical to have clarity about who is going to pay once an incentive or a project ends.
For supply chain actors such as processors, well-designed policies should support emissions disclosures and targets across supply chain partnerships and on-the-ground action. With their reach and understanding of the entire chain, processors can help deliver emissions reductions while also meeting business goals.
For farmers, the closer payments sit to them, the faster adoption occurs, and the faster mitigation happens as a result. Frameworks that are easier to understand and report within, simpler access to finance and incentives, and technical support can drive change in their systems. Context is also key: In some regions with low livestock efficiency, emission can be reduced without new technologies but adoption the ones already available. Intensive, high-input, high-output systems, by contrast, are ripe for adoption of innovation.
A well-designed market mechanism, paired with rigorous implementation, is key to reducing methane emissions from livestock. It is true that more funding is needed to support agriculture methane emissions mitigation and sustainable livestock production, but importantly, using finance to strengthen a well-understood market weakness is the best way to ensure emissions reductions will continue after the end of a project, and durable climate action will be taken by farmers.
1 FAOSTAT. https://www.fao.org/faostat/en/#data
This article was co-authored with Fernanda Ferreira, Director, Agriculture Methane at the Clean Air Task Force.
Methane is a powerful greenhouse gas more than 80 times as potent as carbon dioxide over 20 years. Human-made methane drives a third of today’s warming, and global livestock production is its largest source. About 80 percent of all livestock methane comes from developing countries where livestock are key to livelihoods, food security, and nutrition, and where demographic change is expected to further increase demand for livestock products.
Reducing methane from livestock production requires two complementary approaches: sustainable efficiency increase, where livestock become more efficient, and scaling innovative methane-reducing technologies. Many technologies to support both already exist or are in development. The bottleneck is getting livestock farmers worldwide to adopt them at scale.
Several factors affect whether farmers adopt new technologies or practices. In many contexts, market inefficiencies can create or sustain barriers to adoption; market mechanisms that address those inefficiencies can therefore play an important role in overcoming barriers and scaling adoption. Market mechanisms can be defined as financial and policy tools that reshape incentives within the market system to drive technology adoption.
Spark Climate Solutions and Clean Air Task Force (CATF) convened funders, companies, researchers, and government representatives during New York Climate Week to explore how market mechanisms can drive technology adoption in the livestock sector and accelerate global methane reductions. Below are some key takeaways from those discussions.
Livestock methane emissions can be reduced through two complementary pathways:
The success of either pathway depends on farmers adopting new technologies and practices, each of which has different adoption barriers depending on geography, type of livestock system, and other variables.
Reducing emissions therefore requires understanding which mitigation pathway or combination of pathways should be prioritized in each country or region, and the barriers holding back progress. Producer adoption is complex and highly context-dependent, but the ADOPT framework (Kuehne et al., 2017) provides a useful model for understanding the factors influencing producers’ adoption decisions. It identifies two overarching drivers: how worthwhile it is for producers to adopt and how easy it is for them to learn about it.
Decision makers therefore first need to understand what is preventing adoption. When barriers are widespread or persist across many producers because financing, inputs, information, or skilled labor and services are systemically missing, they may reflect a broader market system weakness. In these cases, market mechanisms are fundamental to scale adoption. Ideally, many options should be considered and evaluated, and Spark and CATF are working on a “menu”, a broad set of market instruments (e.g., Advance Market Commitments, insurance and de-risking, fiscal incentives, emissions pricing, amongst others) that different actors can apply to different market weaknesses. Most of these mechanisms are underused in livestock production, and they can work at any point in the value chain. The key is to diagnose the market-system weakness or inefficiency behind the barrier before picking the mechanism that will best work in a specific context.
Reducing methane emissions from livestock benefits the whole society, but to ensure it happens, the benefits also appeal to the farmers who will lead on implementing relevant solutions. For example, Leah Rosenzweig of the University of Chicago’s Market Shaping Accelerator, shared that livestock methane costs society about $100 to $200 per cow per year; however, farmers who adopt innovations to reduce absolute emissions, such as feed additives, may capture almost none of it without intervention. Consequently, innovation is underfunded because private returns don’t reflect social value.
Market mechanisms to close this gap fall into two broad categories:
A healthy system needs both types of mechanisms, but in livestock production, nearly all funding is currently supporting push approaches. Pull mechanisms work best where success can be defined and measured, and they can work at any point in the value chain.
Speakers shared several examples of market mechanisms that have scaled technology adoption, in livestock and beyond.
A pneumococcal vaccine born of a successful Advance Market Commitment
Advance Market Commitment (AMC) is a promise to buy a minimum quantity of a specific innovation. In 2009, an AMC backed by $1.5 billion from Gavi, the Vaccine Alliance, along with five donor countries and the Gates Foundation, set out to scale up the pneumococcal vaccine. Because payments to vaccine developers were tied to adoption, developers had an incentive to scale and reach the final commercial price, which was capped at $3.50 per dose. The commitment also gave producers demand certainty. The vaccine scaled about five years faster than the rotavirus vaccine, which had no AMC, saving about 700,000 lives and reaching 150 million children.
How AgResults scaled innovation for small scale farmers in Africa using payments for results
Small markets do little to drive investment in vaccines built for a specific region, such as a foot-and-mouth disease (FMD) vaccine for East Africa. To change that, AgResults launched a vaccine challenge designed in close collaboration with vaccine producers. Backed by more than $17 million, the ongoing challenge pays manufacturers a prize for each dose they commercialize, with payments stepping down over the commercialization period. Three vaccine producers have joined so far and are working to produce affordable vaccines for the region.
AgResults also ran the Dairy Productivity Challenge in Tanzania from 2019 to 2024, awarding $5.4 million in prizes to rural stores that sold fodder and inputs bundled with advisory services to small farmers. The challenge benefited 24 companies, which sold more than 830,000 bundles and more than 6 metric tons of fodder and reached 84,000 farmers.
How public incentives can support technology adoption if paired with simple access to them
Belgium has achieved large-scale use of methane-reducing feed additives by paying farmers to adopt them. The success of this adoption can also be credited to the simplicity of the mechanism. If incentives are available, but farmers are overwhelmed by applications or bureaucracy, adoption may fall short.
Participants also agreed that livestock methane mitigation belongs in agriculture ministries as a core consideration in agricultural policy, along with efficiency, food security, and profitability, rather than primarily in environment ministries. Below are some critical considerations for this approach.
Partnership is key for policy success: Robust policies should be designed in partnership with all stakeholders, which includes the productive sector, farmers, and the broader agricultural community. Denmark, which has made partnership central to its approach on agriculture, has succeeded in integrating environmental and agricultural policies. Its 2024 Green Tripartite agreement among government, farmers, and nature groups pairs carbon tax mechanisms with land conversion planning, farmers’ compensation, and philanthropic funding to reduce emissions while also maintaining food production and the competitiveness of the livestock sector. Australia and New Zealand are investing in methane-reducing technologies suited to their own livestock systems, using public-private partnerships to advance pre-competitive development and scaling. In New Zealand, the AgriZeroNZ model matches every dollar of public investment with private dollars. Its new Early Adoption Accelerator builds on that model by co-funding projects to accelerate farmer uptake of proven emissions-reduction tools, with government funding covering up to 50% of project costs.
Align on the common ground priorities: Environment and agriculture ministries may have different priorities, so finding common ground is critical. Australia is scaling efficiency gains that can also reduce emissions by using regulated carbon markets that are built on robust methodology and will be supported by trustworthy monitoring, reporting, and verification requirements that are currently in development.
Design policies that enable the entire supply chain to act: Policies can promote action by processors, who work closely with farmers and have a deep understanding of the market. Policies that support processors in reducing scope 3 emissions are key. Danone, which sources milk from over 60,000 farmers globally, described how it is accelerating action globally by publicly disclosing its scope 3 methane emissions, and locally, through context-specific actions in Morocco, Brazil, and the European Union. In Brazil, a policy that facilitates Danone’s access to tax credits has supported Jornada Flora, a project that provides technical and economic advisory services to dairy farmers. The potential inclusion of livestock in the EU Carbon Removals and Carbon Farming Regulation is another example.
Farmers are the ones who must make the decisions that reduce emissions, so market mechanisms should be designed to deliver as much of the incentive as possible to them. Herd managementpractices and technologies that improve efficiency also matter, since innovative methane-reducing technologies are unlikely to be deployed in low-efficiency herds.
Projects described at the event demonstrate this, including AgResults’s Dairy Challenge in Tanzania and Danone’s Hlib Bladi in Morocco, and Jornada Flora in Brazil. Hlib Bladi has increased revenue by more than 50 percent for more than 6,500 farmers, including 2,400 women, and cut emissions by 20,000 metric tons of CO2efrom 2023 to 2025. Jornada Flora covers 51 percent of Danone Brazil’s milk supply and has made R$175M (about $35 M USD) through financing partnerships, resulting in a 42 percent reduction in methane emissions.
Value to the farmer must also be coupled with advisory services, particularly financial advice. Making more money available is not enough: reducing the bureaucratic burden on them and working through banks farmers have existing relationships with is also key.
Rapid adoption of technologies and practices by livestock farmers globally requires innovation in market mechanisms. New methane-reducing technologies that reduce absolute emissions and work in grazing systems are still needed, but they must be developed while also scaling what is currently available. Many collaborative projects and policies are already demonstrating how market mechanisms can speed up farmer adoption of technologies and unlock livestock emissions reductions.
For technology developers, durable demand for their innovations is everything. A durable market requires a durable customer; durable demand is what makes adoption a sound business decision for that customer. Policies and other projects can support technology developers, but it’s critical to have clarity about who is going to pay once an incentive or a project ends.
For supply chain actors such as processors, well-designed policies should support emissions disclosures and targets across supply chain partnerships and on-the-ground action. With their reach and understanding of the entire chain, processors can help deliver emissions reductions while also meeting business goals.
For farmers, the closer payments sit to them, the faster adoption occurs, and the faster mitigation happens as a result. Frameworks that are easier to understand and report within, simpler access to finance and incentives, and technical support can drive change in their systems. Context is also key: In some regions with low livestock efficiency, emission can be reduced without new technologies but adoption the ones already available. Intensive, high-input, high-output systems, by contrast, are ripe for adoption of innovation.
A well-designed market mechanism, paired with rigorous implementation, is key to reducing methane emissions from livestock. It is true that more funding is needed to support agriculture methane emissions mitigation and sustainable livestock production, but importantly, using finance to strengthen a well-understood market weakness is the best way to ensure emissions reductions will continue after the end of a project, and durable climate action will be taken by farmers.
1 FAOSTAT. https://www.fao.org/faostat/en/#data
This article was co-authored with Fernanda Ferreira, Director, Agriculture Methane at the Clean Air Task Force.
Methane is a powerful greenhouse gas more than 80 times as potent as carbon dioxide over 20 years. Human-made methane drives a third of today’s warming, and global livestock production is its largest source. About 80 percent of all livestock methane comes from developing countries where livestock are key to livelihoods, food security, and nutrition, and where demographic change is expected to further increase demand for livestock products.
Reducing methane from livestock production requires two complementary approaches: sustainable efficiency increase, where livestock become more efficient, and scaling innovative methane-reducing technologies. Many technologies to support both already exist or are in development. The bottleneck is getting livestock farmers worldwide to adopt them at scale.
Several factors affect whether farmers adopt new technologies or practices. In many contexts, market inefficiencies can create or sustain barriers to adoption; market mechanisms that address those inefficiencies can therefore play an important role in overcoming barriers and scaling adoption. Market mechanisms can be defined as financial and policy tools that reshape incentives within the market system to drive technology adoption.
Spark Climate Solutions and Clean Air Task Force (CATF) convened funders, companies, researchers, and government representatives during New York Climate Week to explore how market mechanisms can drive technology adoption in the livestock sector and accelerate global methane reductions. Below are some key takeaways from those discussions.
Livestock methane emissions can be reduced through two complementary pathways:
The success of either pathway depends on farmers adopting new technologies and practices, each of which has different adoption barriers depending on geography, type of livestock system, and other variables.
Reducing emissions therefore requires understanding which mitigation pathway or combination of pathways should be prioritized in each country or region, and the barriers holding back progress. Producer adoption is complex and highly context-dependent, but the ADOPT framework (Kuehne et al., 2017) provides a useful model for understanding the factors influencing producers’ adoption decisions. It identifies two overarching drivers: how worthwhile it is for producers to adopt and how easy it is for them to learn about it.
Decision makers therefore first need to understand what is preventing adoption. When barriers are widespread or persist across many producers because financing, inputs, information, or skilled labor and services are systemically missing, they may reflect a broader market system weakness. In these cases, market mechanisms are fundamental to scale adoption. Ideally, many options should be considered and evaluated, and Spark and CATF are working on a “menu”, a broad set of market instruments (e.g., Advance Market Commitments, insurance and de-risking, fiscal incentives, emissions pricing, amongst others) that different actors can apply to different market weaknesses. Most of these mechanisms are underused in livestock production, and they can work at any point in the value chain. The key is to diagnose the market-system weakness or inefficiency behind the barrier before picking the mechanism that will best work in a specific context.
Reducing methane emissions from livestock benefits the whole society, but to ensure it happens, the benefits also appeal to the farmers who will lead on implementing relevant solutions. For example, Leah Rosenzweig of the University of Chicago’s Market Shaping Accelerator, shared that livestock methane costs society about $100 to $200 per cow per year; however, farmers who adopt innovations to reduce absolute emissions, such as feed additives, may capture almost none of it without intervention. Consequently, innovation is underfunded because private returns don’t reflect social value.
Market mechanisms to close this gap fall into two broad categories:
A healthy system needs both types of mechanisms, but in livestock production, nearly all funding is currently supporting push approaches. Pull mechanisms work best where success can be defined and measured, and they can work at any point in the value chain.
Speakers shared several examples of market mechanisms that have scaled technology adoption, in livestock and beyond.
A pneumococcal vaccine born of a successful Advance Market Commitment
Advance Market Commitment (AMC) is a promise to buy a minimum quantity of a specific innovation. In 2009, an AMC backed by $1.5 billion from Gavi, the Vaccine Alliance, along with five donor countries and the Gates Foundation, set out to scale up the pneumococcal vaccine. Because payments to vaccine developers were tied to adoption, developers had an incentive to scale and reach the final commercial price, which was capped at $3.50 per dose. The commitment also gave producers demand certainty. The vaccine scaled about five years faster than the rotavirus vaccine, which had no AMC, saving about 700,000 lives and reaching 150 million children.
How AgResults scaled innovation for small scale farmers in Africa using payments for results
Small markets do little to drive investment in vaccines built for a specific region, such as a foot-and-mouth disease (FMD) vaccine for East Africa. To change that, AgResults launched a vaccine challenge designed in close collaboration with vaccine producers. Backed by more than $17 million, the ongoing challenge pays manufacturers a prize for each dose they commercialize, with payments stepping down over the commercialization period. Three vaccine producers have joined so far and are working to produce affordable vaccines for the region.
AgResults also ran the Dairy Productivity Challenge in Tanzania from 2019 to 2024, awarding $5.4 million in prizes to rural stores that sold fodder and inputs bundled with advisory services to small farmers. The challenge benefited 24 companies, which sold more than 830,000 bundles and more than 6 metric tons of fodder and reached 84,000 farmers.
How public incentives can support technology adoption if paired with simple access to them
Belgium has achieved large-scale use of methane-reducing feed additives by paying farmers to adopt them. The success of this adoption can also be credited to the simplicity of the mechanism. If incentives are available, but farmers are overwhelmed by applications or bureaucracy, adoption may fall short.
Participants also agreed that livestock methane mitigation belongs in agriculture ministries as a core consideration in agricultural policy, along with efficiency, food security, and profitability, rather than primarily in environment ministries. Below are some critical considerations for this approach.
Partnership is key for policy success: Robust policies should be designed in partnership with all stakeholders, which includes the productive sector, farmers, and the broader agricultural community. Denmark, which has made partnership central to its approach on agriculture, has succeeded in integrating environmental and agricultural policies. Its 2024 Green Tripartite agreement among government, farmers, and nature groups pairs carbon tax mechanisms with land conversion planning, farmers’ compensation, and philanthropic funding to reduce emissions while also maintaining food production and the competitiveness of the livestock sector. Australia and New Zealand are investing in methane-reducing technologies suited to their own livestock systems, using public-private partnerships to advance pre-competitive development and scaling. In New Zealand, the AgriZeroNZ model matches every dollar of public investment with private dollars. Its new Early Adoption Accelerator builds on that model by co-funding projects to accelerate farmer uptake of proven emissions-reduction tools, with government funding covering up to 50% of project costs.
Align on the common ground priorities: Environment and agriculture ministries may have different priorities, so finding common ground is critical. Australia is scaling efficiency gains that can also reduce emissions by using regulated carbon markets that are built on robust methodology and will be supported by trustworthy monitoring, reporting, and verification requirements that are currently in development.
Design policies that enable the entire supply chain to act: Policies can promote action by processors, who work closely with farmers and have a deep understanding of the market. Policies that support processors in reducing scope 3 emissions are key. Danone, which sources milk from over 60,000 farmers globally, described how it is accelerating action globally by publicly disclosing its scope 3 methane emissions, and locally, through context-specific actions in Morocco, Brazil, and the European Union. In Brazil, a policy that facilitates Danone’s access to tax credits has supported Jornada Flora, a project that provides technical and economic advisory services to dairy farmers. The potential inclusion of livestock in the EU Carbon Removals and Carbon Farming Regulation is another example.
Farmers are the ones who must make the decisions that reduce emissions, so market mechanisms should be designed to deliver as much of the incentive as possible to them. Herd managementpractices and technologies that improve efficiency also matter, since innovative methane-reducing technologies are unlikely to be deployed in low-efficiency herds.
Projects described at the event demonstrate this, including AgResults’s Dairy Challenge in Tanzania and Danone’s Hlib Bladi in Morocco, and Jornada Flora in Brazil. Hlib Bladi has increased revenue by more than 50 percent for more than 6,500 farmers, including 2,400 women, and cut emissions by 20,000 metric tons of CO2efrom 2023 to 2025. Jornada Flora covers 51 percent of Danone Brazil’s milk supply and has made R$175M (about $35 M USD) through financing partnerships, resulting in a 42 percent reduction in methane emissions.
Value to the farmer must also be coupled with advisory services, particularly financial advice. Making more money available is not enough: reducing the bureaucratic burden on them and working through banks farmers have existing relationships with is also key.
Rapid adoption of technologies and practices by livestock farmers globally requires innovation in market mechanisms. New methane-reducing technologies that reduce absolute emissions and work in grazing systems are still needed, but they must be developed while also scaling what is currently available. Many collaborative projects and policies are already demonstrating how market mechanisms can speed up farmer adoption of technologies and unlock livestock emissions reductions.
For technology developers, durable demand for their innovations is everything. A durable market requires a durable customer; durable demand is what makes adoption a sound business decision for that customer. Policies and other projects can support technology developers, but it’s critical to have clarity about who is going to pay once an incentive or a project ends.
For supply chain actors such as processors, well-designed policies should support emissions disclosures and targets across supply chain partnerships and on-the-ground action. With their reach and understanding of the entire chain, processors can help deliver emissions reductions while also meeting business goals.
For farmers, the closer payments sit to them, the faster adoption occurs, and the faster mitigation happens as a result. Frameworks that are easier to understand and report within, simpler access to finance and incentives, and technical support can drive change in their systems. Context is also key: In some regions with low livestock efficiency, emission can be reduced without new technologies but adoption the ones already available. Intensive, high-input, high-output systems, by contrast, are ripe for adoption of innovation.
A well-designed market mechanism, paired with rigorous implementation, is key to reducing methane emissions from livestock. It is true that more funding is needed to support agriculture methane emissions mitigation and sustainable livestock production, but importantly, using finance to strengthen a well-understood market weakness is the best way to ensure emissions reductions will continue after the end of a project, and durable climate action will be taken by farmers.
1 FAOSTAT. https://www.fao.org/faostat/en/#data
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