This indicator should be calculated as the sum of reduced CO2 emissions due to changes to on farm practices (e.g. reduced fertilizer use) as a result of the financed project. Changes in greenhouse gas emissions from improved agricultural practices can only be estimated based on assessment of the extent of these improvements. There is very little scope to involve remotely sensed data in such an indicator.

Key agricultural practices to consider are as follows:

Nutrient management: Good nutrient management can bring several important benefits such as: minimizing GHG emissions, reducing the incidence of diffuse water pollution, and helping farmers save money through optimizing productivity.
Land and soil management mitigation practices: These methods help preserve good soil structure and prevent erosion and compaction, both of which can lead to GHG emissions. Such practices include no tillage and usage of cover crop practices.
Plants with improved nitrogen use efficiency: Using such plants reduces the need for manufactured nitrogen use and potentially reduces soil maintenance costs. Additionally, this practice can potentially offer improved nutritional characteristics of fodder.
Livestock Breeding: Breeding practices can play an important role in herd productivity and efficiency, which are factors that directly influence GHG emissions. A recommended practice is to make use of improved genetic resources in livestock.
Livestock nutrition: livestock feeding regimes also play an important role in productivity and efficiency, which are factors that impact GHG emissions.

To calculate avoided emissions, impact managers should:

Step 1: Sum the reported area in the specified improved management practice for the identified year
Step 2: Pull the relevant emission or removal factor based on climate, soil type, and management practice from a lookup table (eg. IPCC Guidelines (2006)) or the EX-ACT tool
Step 3: Estimate emissions or removals by multiplying the area by the appropriate emission factor
Step 4: Sum across practices and climate categories as relevant
Step 5: Calculate the uncertainty of the final estimate

This approach is based on periodic reporting of management practices per area without intensive data collection. This approach can be closely linked to existing advisory and extension systems. The assessment should include georeferenced activity data using global available land use datasets and lookup tables. Lookup tables provide default emission and removal factors that can be applied on an ongoing basis to reported areas under specified agricultural practices, including grazing.

One example of existing international soil carbon lookup tables is the IPCC Guidelines (2006) and empirical models. Another is the FAO Ex-Ante Carbon Balance Tool (EX-ACT), which is a spreadsheet tool pre-populated with IPCC Tier 1 and 2 estimates for emissions and removals from changes in land-use and agricultural practices. A without-project scenario is required to understand the net impact of the financed project on emissions. This tool includes methods for estimating impacts on emissions of changes in area and management options for crop production, grassland management, livestock numbers, inputs and aquaculture.

Source: This methodology is adapted from the IFACC Impact Indicators Guidelines (2022).

Investor Guide to Environmental and Social Opportunities and Risks: Indonesia