Project: Quantifying the environmental impact of horticulture production under a protected agriculture production system
State of development: Current
Stage of development: Final negotiations
Stage notes: Scale Up
Type of instrument — Impact Bond: No; Outcomes Fund: No; Social Impact Incentives (SIINC): No; Social Impact Guarantee: No; Payment-by-results (no pre-financing): No; Technical Assistance and Market-building program: Yes; Other: 
Rationale for using outcome-based finance: The proposed project is highly innovative, being the first of its kind in Latin America to measure the environmental impact of protected agriculture using an experimental design in the field. To date, there do not exist academic studies measuring the global warming potential of protected agriculture systems compared to conventional open field agriculture. Once the automized measurement system has been developed and tested in blueberry production, it can then be scaled to other crops or countries. 
Key challenges to launch: Due to limited funding availability, the ongoing pilot project does not go beyond a first prototype to measure the GWP of protected agriculture. Therefore, it is currently not possible to extend the analysis to new crops. Furthermore, due to limited funding, the ongoing project is currently only able to measure terrestrial ecotoxicity and terrestrial acidification using proxies, while an experimental verification of the data is lacking. Receiving additional funding from the Accelerator will allow to increase the robustness of the analysis and ensure replicability of the study. 
Social/developmental challenge: Currently, the market does not effectively account for greenhouse gas emissions of agriculture production. The externalities of reducing (or increasing) emissions are currently not reflected in the pricing. Developing a replicable and automized measurement system to measure and compare GHG emissions of protected agriculture compared to conventional production systems allows producers using these sustainable production techniques to have data to ensure that this is reflected in pricing. Furthermore, it can enable producers to issue carbon credits.
Expected intervention model: "The project aims to quantify the positive environmental impact of horticulture production using a protected agriculture production system compared to open-field production. Agriculture is one of the major drivers of global greenhouse gas emissions, which in turn contribute to the rising global temperatures. Improved agricultural practices have the potential to reduce these emissions, sequester atmospheric carbon and promote a more sustainable use of resources, while at the same increasing the resilience of agricultural production systems, which are key to the economic development of countries such as Mexico. Protected agriculture is an important facilitator in positioning Mexico as an exporting nation for horticulture, with over 47,000 hectares of area planted growing yearly by 2,700 hectares. 

The project aims to develop a replicable and automized measurement system that allows quantifying the reduction of key indicators, including greenhouse gas emissions, fertilizer and pesticide use, water consumption and soil eutrophication. Upon successful completion of the project, the measurement system can be replicated and scaled to different crops and countries. Furthermore, the project will publish results that will advance the academic frontier on measuring the impact of this production technique and raise awareness on the climate change mitigation and adaptation potential of protected agriculture."
Policy sectors — Employment and private sector development: No; Education: No; Social protection: No; Criminal justice: No; Health: No; Agriculture: Yes; Environment and climate change: Yes; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: No; Early Childhood Education: No; Other: No
Primary SDG goal: 12,13,17
Country income classification of beneficiaries — Low-income: No; Lower-middle-income: No; Upper-middle-income: Yes; High-income: No
Notes: Data for this pipeline project was last updated in August 2023
Delivery location: Mexico