Addressing the global challenges of climate change, food security, and poverty alleviation requires enhancing the adaptive capacity and mitigation potential of agricultural landscapes across the tropics. However, adaptation and mitigation activities tend to be approached separately due to a variety of technical, political, financial, and socioeconomic constraints. Here, we demonstrate that many tropical agricultural systems can provide both mitigation and adaptation benefits if they are designed and managed appropriately and if the larger landscape context is considered. Many of the activities needed for adaptation and mitigation in tropical agricultural landscapes are the same needed for sustainable agriculture more generally, but thinking at the landscape scale opens a new dimension for achieving synergies. Intentional integration of adaptation and mitigation activities in agricultural landscapes offers significant benefits that go beyond the scope of climate change to food security, biodiversity conservation, and poverty alleviation. However, achieving these objectives will require transformative changes in current policies, institutional arrangements, and funding mechanisms to foster broad-scale adoption of climate-smart approaches in agricultural landscapes.

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Up to 25 percent of all anthropogenic greenhouse gas emissions are caused by deforestation, and Indonesia is the third largest greenhouse gas emitter worldwide due to land use change and deforestation. On the island of Sulawesi in the vicinity of the Lore Lindu National Park (LLNP), many smallholders contribute to conversion processes at the forest margin as a result of their agricultural practices. Specifically the area dedicated to cacao plantations has increased from zero (1979) to nearly 18,000 hectares (2001). Some of these plots have been established inside the 220,000 hectares of the LLNP. An intensification process is observed with a consequent reduction of the shade tree density.This study assesses which impact carbon sequestration payments for forest management systems have on the prevailing land-use systems. Additionally, the level of incentives is determined which motivates farmers to desist from further deforestation and land use intensification activities. Household behaviour and Carbon finance options for smallholders' agroforestry in Indonesia 109 resource allocation is analysed with a comparative static linear programming model. As these models are used as a tool for policy analysis, the output can indicate the adjustments in resource allocation and land use shifts when introducing compensation payments.The data were collected in a household survey in six villages around the LLNP. Four household categories are identified according to their dominant agroforestry systems. These range from low intensity management with a high degree of shading to highly intensified systems with no shade cover.At the plot level, the payments required for inducing the adoption of more sustainable land use practices are the highest for the full shade cacao agroforestry system, but with low carbon prices of €5 tCO 2 e -1 these constitute 5 percent of the cacao gross margin. Focusing on the household level, however, an increase up to 18 percent of the total gross margin can be realised. Furthermore, for differentiated carbon prices up to €32 tCO 2 e -1 the majority of the households have an incentive to adopt the more sustainable shade intensive agroforestry system. Additionally, the results show that the deforestation activities of most households could be stopped with current carbon prices.Keywords: Avoided deforestation, cacao, carbon sequestration, economic incentives, linear programming, Lore Lindu National Park, payments for environmental services Acknowledgements: We would like to thank Prof. Stephan v. CramonTaubadel and three anonymous reviewers who provided constructive feedback and comments on an earlier draft of this paper.

No abstract

Up to 25 percent of all anthropogenic greenhouse gas emissions are caused by deforestation, and Indonesia is the third largest greenhouse gas emitter worldwide due to land use change and deforestation. On the island of Sulawesi in the vicinity of the Lore Lindu National Park (LLNP), many smallholders contribute to conversion processes at the forest margin as a result of their agricultural practices. Specifically the area dedicated to cacao plantations has increased from zero (1979) to nearly 18,000 hectares (2001). Some of these plots have been established inside the 220,000 hectares of the LLNP. An intensification process is observed with a consequent reduction of the shade tree density.This study assesses which impact carbon sequestration payments for forest management systems have on the prevailing land-use systems. Additionally, the level of incentives is determined which motivates farmers to desist from further deforestation and land use intensification activities. Household behaviour and Carbon finance options for smallholders' agroforestry in Indonesia 109 resource allocation is analysed with a comparative static linear programming model. As these models are used as a tool for policy analysis, the output can indicate the adjustments in resource allocation and land use shifts when introducing compensation payments.The data were collected in a household survey in six villages around the LLNP. Four household categories are identified according to their dominant agroforestry systems. These range from low intensity management with a high degree of shading to highly intensified systems with no shade cover.At the plot level, the payments required for inducing the adoption of more sustainable land use practices are the highest for the full shade cacao agroforestry system, but with low carbon prices of €5 tCO 2 e -1 these constitute 5 percent of the cacao gross margin. Focusing on the household level, however, an increase up to 18 percent of the total gross margin can be realised. Furthermore, for differentiated carbon prices up to €32 tCO 2 e -1 the majority of the households have an incentive to adopt the more sustainable shade intensive agroforestry system. Additionally, the results show that the deforestation activities of most households could be stopped with current carbon prices.Keywords: Avoided deforestation, cacao, carbon sequestration, economic incentives, linear programming, Lore Lindu National Park, payments for environmental services Acknowledgements: We would like to thank Prof. Stephan v. CramonTaubadel and three anonymous reviewers who provided constructive feedback and comments on an earlier draft of this paper.