Mitigation options and finance for transition to low-emissions dairy in Kenya

Abstract

This paper presents potential of low-emission dairy production, investment options, and financial mechanisms in Kenya’s dairy sub-sector to better support its necessary transition and enhance contribution to national greenhouse gas (GHG) emission reduction goals. Key GHG mitigation options for the livestock sector in Kenya are improved feed with fodder and hay production (1.57 MtCO2e y-1), manure management using biogas plants (0.09 MtCO2e y-1), breed improvement production (1.2 MtCO2e y-1), dairy processing plants retrofit (0.14 MtCO2e y-1), and reduction of milk loss and waste (2.9 MtCO2e y-1). The cost of GHG emissions abatement using these options ranges from -US$63/tCO2 (improved feed) to US$80/tCO2 (dairy processing plants retrofit). Economic benefits of these mitigation options include increase in milk production, energy-saving from biogas and dairy plant retrofit, and reduction in milk loss and waste in milk cooling centers. The business case assessments show that all mitigation options are economically viable with a high internal rate of return (IRR) and less than one year to a few years payback period. This assessment shows that a transition to a low-emission dairy sector is possible with economic and environmental gains. More importantly, this transition would support a range of other national policy goals, including improving livelihoods with high food and nutrition security, economic growth, and achieving GHG mitigation targets. In this regard, this synthesis paper is intended to serve as a reference that national and sub-national governments, development organizations, and the private sector can consult as they move forward to invest in mitigation options in the dairy sector.