Policymakers are increasingly looking to carbon sequestration in their fight to slow climate change. A growing body of research from the Intergovernmental Panel on Climate Change and the United Nations Environment Programme recognizes that sustainable agriculture and carbon soil sequestration are critical to reducing atmospheric carbon dioxide, slowing global warming and combating climate change.
Carbon sequestration is becoming an important area of developing sustainability across a range of industries. Soil carbon sequestration (SCS) relies on soil processes to transfer atmospheric carbon dioxide to the soil through plants, plant residues, and other organic solids. In recent years there has been momentum toward monetizing SCS and its associated farming practices.
A new report, “Messaging and Reality are Misaligned for Soil Carbon Sequestration,” released by Lux Research, profiles recent initiatives in SCS, the challenges in this emerging industry, and the impact and opportunity of sequestration programs.
Joshua Haslun, Report Analyst
Lead Research Analyst Joshua Haslun recently provided Environment Journal with some in-depth perspectives on the subject of soil carbon sequestration:
The soil carbon sequestration (SCS) market is still in its infancy in North America. Which industries have the most potential for achieving a return on investment and making an impact?
Considerable effort will be required to engage with growers to develop SCS programs. Therefore, those with strong digital capabilities (remote sensing, system orchestration, etc.) will be most capable. ROI will come in one of two forms: revenue from transaction fees from selling carbon assets or long-term partnerships established through transparent demonstration of value associated with improved practices.
Despite the significant hype behind SCS, and standards such as the Verified Carbon Standard (VCS), why are accredited carbon asset trading platforms still so scarce?
The supply of well-validated long-term carbon assets remains small. Land-use practices make up a very small component and with small supply and limited certainty comes reduced demand in the short-term. That said, the voluntary carbon market industry is growing, which supports continued development.
Obstacles standing in the way of greater SCS progress were covered in the report, including costs associated with initial implementation and an onerous verification system. How are these challenges being addressed?
Early initiatives are carrying out pilot programs that have limited cost and risk to growers. By supporting some with the costs and aiding in data management, the leading developers have the opportunity to focus on demonstrating to users the technology’s capabilities to fulfill grower and carbon buyer needs. I think the most important piece is that transparency is advancing and this is the key to increased engagement.
The report provides a look at Indigo Agriculture and its carbon program and Nori, an open source market infrastructure that enable carbon removal projects to measure and monetize activity. However, the report ultimately concludes that their programs currently fall short of providing a reliable system to sequester atmospheric carbon dioxide at levels capable of global impact or to provide a reliable revenue stream to growers. What key advice would you provide to them and to developers who would like to address the uncertainties and challenges of successfully sequestering carbon?
I think carbon sequestration is an excellent outcome and good proxy to use as an indication of the benefits from improved management practices, but certain claims for it as a climate solution are overly optimistic. Instead I believe the SCS market is an excellent example of outcome-based business models and I would be doing my best to identify and validate any additional correlations between key grower metrics like yield or input application and these programs. Reducing costs to growers remains important but identifying ways for companies to remain profitable is also key and many are considering outcome-based models.
What is the size of the real impact that an effective SCS market can make in terms of addressing carbon targets for climate change action?
I think the answer to this is very unclear and I would not put a number on it. It depends largely on the management practices selected and the length of time the practices are carried out among numerous other factors. These initiatives will likely be key sources of information that allow the world to understand the soils potential to act as a carbon sink across a regional and grower variability.
What are the next steps that need to be taken in order to make carbon sequestration initiatives more successful in Canada?
Pilots that reduce investment on the participants are key. It is often difficult to change practices and many practices associated with carbon sequestration take additional effort. Not to mention that the results are unlikely to be known for up to five years. Risk must be mitigated for grower participation.
What are some developments we can expect in the carbon market?
Continue to monitor the growth of voluntary carbon markets as well as the buyers of credits. This will give an indication of the shared notion of validity and likely move from green investors to more typical purchasers of carbon credits. That is a good inflection point to monitor for.
To read the complete report, click here.
For further information about the Verified Carbon Standard, click here.
Featured image credit: Francesco Gallorotti @gallorotti.