Matthew Guinness is vice president, sustainability at Hummingbird Technologies, a farm management software platform based in London, UK.
The views expressed in this guest commentary are the author’s own and do not necessarily represent those of AFN.
The trade in voluntary carbon credits exceeded $1 billion in 2021, a 3x increase year-on-year and a significant milestone in demonstrating that it’s a functional market. With increasing recognition of the role of nature-based solutions in reaching ‘net zero,’ the voluntary carbon market has established itself as an important part of climate change mitigation and is expected to continue to expand rapidly in the next five to 10 years; McKinsey estimates that the market could be worth as much as $50 billion by 2030.
However, so far, agriculture’s contribution has not grown as fast as the wider market and remains a small fraction of the total despite its vast potential as a carbon sink.
Agriculture produces just 1% of carbon credits, data suggests
Harnessing the promise of agri-carbon markets and the scale of agriculture has its own particular challenges; the early history of agri-carbon markets has been characterized by unmet promises and false dawns. But these obstacles are surmountable with smart program design and innovative tech solutions, offering the industry a clear path to success and scale.
Foremost among the challenges that need to be tackled is reliable and cost-effective monitoring, reporting, and verification (MRV). This is hard to deliver – and even harder to scale. An EU report on carbon farming summarized the MRV challenge thus: “It is not feasible or cost-efficient to measure data on-site in the restoration area in real time for all indicators continuously, so schemes would have to rely partially on modelled data, spot checks, and reference data.”
Hummingbird and others in the space are combining multi-source remote-sensing capabilities with robust ground-truth data validation to push the boundaries of accuracy and ensure models can scale effectively. Meanwhile, many of the new generation of carbon programs — such as those offered by Agreena and Nori — are bringing an improved user experience for farmers and seamless integration of remote-sensing MRV to tackle the scalability challenge.
Balancing scalability with the necessarily detailed work of providing farmers with sufficient operational and educational support is a tightrope that carbon programs must walk. Some of the early pioneers in the space did not give farmers enough of this support to implement regenerative ag transitions, and even now there are programs that are overly prescriptive, inflexible, and top-down. Ensuring that farmers remain front and center of soil carbon schemes, and are properly empowered to deliver meaningful change, is absolutely vital to ensure their long-term success.
The lack of widely accepted standards is another challenge for the industry to overcome. However, the voluntary carbon market registries such as Verra and Gold Standard are starting to grasp the nettle of agriculture and establish standards for soil programs. In addition, ESMC is launching its US market program on May 17 which will bring some welcome transparency and visibility to their approach. Meanwhile Indigo, an early mover in the “new generation” of soil carbon schemes, launched its carbon initiative in 2019 and is now finalizing its first registry-listed project with the Climate Action Reserve. On the trading side, blockchain technology is being embraced by many players in the space, old and new – including Regen Network, Toucan, and Nori – to build transparency and liquidity into carbon exchanges.
Tying the various threads together, the future of the industry will combine:
- Intelligent and transparent standards;
- Farmer-centric programs with flexibility and scalability at their core;
- Blockchain-driven carbon exchanges; and
- Leading-edge, AI-driven MRV solutions which are integrated seamlessly into soil carbon schemes.
If the industry can meet this challenge there is a clear path to the large-scale harnessing of regenerative agriculture – and the building of a system that rewards farmers for billions of tons of carbon removals. The payoff will be a more prosperous, resilient, and sustainable farming system that works for farmers, protects the environment, and becomes a powerful tool in fighting climate change.