Last week, we hosted the first of our Soil Carbon Removal Think Tank sessions – a series of webinars bringing together leading experts in the fields of soil carbon removal & the voluntary carbon market (VCM).
The purpose? Driving conversations forward on high-quality carbon credits from regenerative agriculture.
Agriculture currently contributes to 30% of GHG emissions globally. That being said, it’s one of the only sectors that can transform from a net emitter of CO2 to a net sequester.
Given the global transition to regenerative agriculture is a long-term endeavour, it requires significant financial investment. If employed responsibly, the VCM has tremendous potential in incentivising this shift while transforming one of the largest greenhouse gas emitting industries. The question then, is, can the voluntary carbon market finance the regenerative agriculture transition?
We invited Nellie de Goguel of the Economist, Mateusz Ciasnocha of European Carbon Farmers & Ivo Degn of Climate Farmers to discuss this precise question.
NATURE-BASED SOLUTIONS IN THE VCM
Even if we deployed all the big-tech carbon removal solutions at the speed and scale that’s required, we would still be left with ecosystem degradation, soil erosion & wider climate implications. This realisation paired with the growing demand for carbon credits has bolstered interest in nature-based solutions.
Drawing on her experience at Economist Impact, Nellie asserts companies are increasingly trying to calculate the best ways of achieving their net-zero goals. For some, there’s an observable shift from simply offsetting carbon emissions to actually investing in the environment.
The increasing importance of nature-based solutions itself attests to such changing dynamics, while the current drive towards regionality & high-quality further echoes the message.
According to Nellie, this shift reflects an increasing realisation of the co-benefits associated with nature-based solutions – their capacity to go beyond carbon & instead have a more tangible impact in society. As she summarises, “that’s where I really see the voluntary carbon market and regenerative agriculture coming together”.
THE VALUE OF REGENERATION IN SOCIETY AS A WHOLE
The environmental benefits of regenerative agriculture are enormous, but there are also quantifiable community and societal benefits. Regenerative systems leverage community voices a lot more than industrial systems.
Nellie tells us, “we see many companies getting stuck in the ‘carbon tunnel vision’ to achieve their net-zero strategies. Focusing their efforts on offsetting their emissions rather than approaching the situation from a holistic perspective to benefit the climate and achieve real benefit.”
Regenerative agriculture goes far beyond carbon capture. Carbon removal is only one of the ecosystem co-benefits regenerative farmers provide us with.
To achieve the above, we need a fundamental mindset shift from an extractive one to a regenerative one. To understand ourselves as conscious land and ecosystem stewards rather than owners of land unconsciously exploiting it, as Mauteusz puts it.
HOW CAN WE ESTABLISH TRUST AND TRANSPARENCY IN THE VCM?
As Nellie puts it, we can’t think of the VCM as a silver bullet solution. It’s crucial that the market mechanism works in conjunction with policy and existing governance structures, or else we will see it fail. Mateusz concurs a lot of work in this space is already happening, but improvements are needed to ensure both security & reward for land stewards.
To scale the promising role of regenerative agriculture in the VCM, we need to give farmers a seat at the table. As Nellie highlights, we need open dialogue between companies and land stewards – consultation, technical support & meaningful exchange to ensure it works to the advantage of all stakeholders involved.
To further bolster transparency, Ivo asserts clear communication in all its guises is the most powerful tool to establish trust in the market. This is especially true when it comes to quantifying, measuring and verifying carbon storage so as to avoid double counting & instead ensure integrity.
By unifying the voices of the research, policy & farming community, a transparent VCM characterised by high-quality agricultural carbon credits is within reach – we just need alignment to guarantee its prosperity.
PERMANENCE IN NATURE-BASED SOLUTIONS
As Ivo highlights, nature-based solutions are only successful if you take the human stakeholder into account. There are countless examples of reforestation projects having limited impact because they’ve neglected a crucial component – the social element.
According to Ivo, the same can be said for agriculture. If we want to ensure carbon stays in our soil for the long run, we need to make sure farmers have an interest in keeping it there.
“Regenerative agriculture is more profitable at the end of the day. The point isn’t just creating a 10-year contract to capture carbon, but rather creating a healthy and profitable farm in the long run.”
As Nellie adds, a just transition is unattainable without a simultaneous social transition.
WHAT SHOULD INVESTORS IN THIS SPACE BE DOING?
What, then, should companies looking to tap into this growing market be doing?
Nellie expresses the need for verification to ensure credits are of the highest quality. Organisations like Gold Standard and Vera are working tirelessly towards this, but as Nellie highlights, there’s an emerging body of smaller verifiers with sound methodologies doing an equally great job in driving the market forward.
More fundamentally, Mateusz believes any companies looking to purchase regenerative agriculture carbon credits should first and foremost visit the farm. Just as regenerative agriculture goes beyond carbon, the process too should go beyond buying carbon credits.
“We’re talking about systemic change here – it shouldn’t be limited to a financial relationship. We want the VCM to be one of the tools that work towards this system change.”
The bottom line: if we want to unlock the immense green potential of regenerative agriculture, we need enough farmers willing to shift their practices & enough investment to make sure it’s feasible. As put nicely by Nellie, “the carbon market system is a necessary financial mechanism for regenerative agriculture, especially if we want to scale it in the way we do”.
Over time, financial instruments can transform the societal dynamic & our very understanding of the agricultural sector – these practices shouldn’t be understood as regenerative, but rather simply the status quo.
It takes good data, technology and technical support to incentivise such a shift. Strong partnerships between land stewards & companies are vital to ensure it doesn’t go south but can instead flourish.