healthy soils and the climate connection...nrdc 4 // healthy soils and the climate connection 2 farm...
TRANSCRIPT
AUTHOR:Clint Wilder with Nicole Lederer
HEALTHY SOILS AND THE CLIMATE CONNECTION A Path to Economic Recovery on America’s Farms
© USDA N
RCS Montana
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TABLE OF CONTENTS
Introduction: An Opportunity On Four Fronts ........................................................................................................4
The Challenge .....................................................................................................................................................5
Opportunity No. 1: Farm Economics .....................................................................................................................5
SavingCostsAndBoostingProfitsThroughRegenerativeAgriculture ....................................................................................5
RewardingFarmersForCropRiskReduction............................................................................................................................8
BuildingMarketDemandForAgProductsThatRemoveCarbon ............................................................................................8
Innovators On The Frontlines: Locus Ag Helping Farmers Monetize Carbon Stored In Soil ...............................................10
Opportunity No. 2: Ag Tech ................................................................................................................................11
A21stCenturyJobCreator ..................................................................................................................................................... 11
Innovators On The Frontlines: FarmSpace Systems And Precision Carbon Measurement ................................................ 12
Opportunity No. 3: Valuing Carbon Removal And Ecosystem Services ..................................................................13
CarbonAsTheNextCashCrop ............................................................................................................................................... 13
CarbonMarketsAndMetrics ....................................................................................................................................................14
TheSoilCarbonAccountingChallenge ................................................................................................................................... 15
Innovators On The Frontlines: Nori, Blockchain, And Carbon Markets ................................................................................16
Opportunity No. 4: Bridging the Partisan Divide ..................................................................................................17
LeveragingTheHealthySoilsAndClimateConnection ..........................................................................................................17
A Win-Win-Win ..................................................................................................................................................19
ACKNOWLEDGEMENTS
This report was made possible thanks to contributions from:KeithAlverson,CornandSoybeanFarmerLaraBryant,DeputyDirectorofWaterandAgricultureattheNaturalResourcesDefenseCouncil(NRDC)Lt.Gen.(ret)JohnCastellaw,Co-founderandCEOofFarmspaceSystemsChristopheJospe,Co-founderofNoriDavidKolsrud,FarmerandEntrepreneurClaireO’Connor,DirectorofWaterandAgricultureattheNaturalResourcesDefenseCouncil(NRDC)KeithPaustian,ProfessorofSoilandCropSciencesatColoradoStateUniversityLorenPoncia,OwnerofStempleCreekRanchGaryWertish,PresidentatMinnesotaFarmersUnionPaulZorner,ChiefAgronomistatLocusAgriculturalSolutions
E2R:21-01-A©E22021
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INTRODUCTION: AN OPPORTUNITY ON FOUR FRONTS
Mostinitiativestofightclimatechangetodayfocusonreducingfossilfuelemissionsfromelectricitygeneration,transportation,andbuildings.Buttoavoidtheworstimpactsofclimatechangewemustalsosignificantlyreducetheatmosphericcarbonthathasalreadybeenemitted.Whileeffortsareunderwaytodevelopnewandhightechmechanismstoaccomplishthis,thereisanimmediatelyavailableandeconomicallyviablepathwayforatmosphericcarbonremoval—onethatprovidesacompellingnewvaluepropositionforfarmerstorevitalizetheirsoilsandgetpaidfordoingit.
Regenerativeagriculturemethodssuchascovercropping,croprotation,low-tillorno-tillpractices,andreducedrelianceonfossil-fuelbasedinputscanmitigateclimatechangebydrawingdownatmosphericCO2andsequesteringthatcarboninthesoil,whileimprovingmicrobialsoilhealth,andincreasingsoilfertility,cropyieldandresilience.Thesepracticesalsoproducemultipleadditionaleconomicandenvironmentalbenefits.
Formostofthepastdecade,agriculturehasbeenoneofthemostchallengingsectorsoftheU.S.economy.Americanfarmershavehadtoendureplummetingcropprices,trade-wartariffs,risingcostsforinputslikefertilizer,andincreasingcropandlivestocklossesfromextremeweathereventsandlesspredictablegrowingseasons—anestimated85%ofU.S.croplossesareduetoextremeweatherevents.1ThencameCOVID-19,disruptingsupplychains,upendingmarketssuchasrestaurants,schools,andinstitutionalfood,andfurtherdimmingfarmers’prospectswithalikelyextendedrecession.AccordingtotheFoodandAgriculturePolicyResearchInstituteattheUniversityofMissouri,netfarmincomecouldplungeby19%($20billion)in2020.2
Butclimate-smartagricultureandsoilcarbondrawdownareinthenascentstagesofusheringinapotentiallygame-changingchapterin21stcenturyagriculture.ThroughstrategicdirectionofFarmBillfundsandotherstateandfederalpolicies,partnershipswithprivatesectorcompaniesseekingtogocarbon-negative,andincreasedconsumerdemandforlow-carbonfood,fiberandfuel,regenerativecultivationpracticescandeliverfoursignificanteconomic,environmental,andpoliticalopportunitiesfortheU.S.farmeconomy.
©JohnBrecherforN
RDC
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FARM PROFITS AND ECONOMIC RECOVERY
Climate-smartagriculturalpracticesofferapathtoeconomicrecoveryandlong-termprofitabilityforhard-hitfarmersbydeliveringincreasedandmoreconsistentcropyields,reducedcostsforinputs(fertilizer,fuel,pesticides)andcropinsurance,andtheopportunitytoparticipateinmarketsforsoil-basedcarbonremoval.‘Reducedcarbon’or‘negativecarbon’cropoutputsandtheproductsderivedfromthemmayalsohaveincreasedmarketvalueasconsumerawarenessanddemandincreasesforproductswiththeseattributes.3Healthiersoilsalsomakefarmsandranchesmoreresilientinthefaceofincreasinglycommonextremeweatherevents.
AG TECH AND JOB CREATION
“Agtech”isoneofthefastest-growingtechnologysectors,withinvestorsfromacrossthefinancialsectorfundingstartupcompaniescreatinghighlyskilledjobsintechnologiessuchasmicrobialsoiladditives,advancedsensors,drones,monitoringsoftware,GPSmapping,genomics,AI,anddataanalytics.Thedemandforaccuratesoildatameasurementandanalysisisstrong,andcollegeprogramstotrainnewagtechprofessionalsaregrowingthroughouttheFarmBelt.Additionalinnovationistakingplaceinthecreationofagriculturalcarbontradingplatforms,establishingcarbonasanewfarmcommodity.
VALUING CARBON REMOVAL AND ECOSYSTEM SERVICES
Whilestoringcarbonfromtheatmosphereinagriculturalsoilscanbeakeyfactorinthebattleagainstclimatechange,thepracticesthatsequestercarbonalsodeliverawiderangeofotherenvironmentalbenefits—includingimprovedwaterqualityandconservation,improvedairquality,greaterbiodiversity,andreducedtoxicinputs.Marketsandotheropportunitiesthatmonetizethesepracticesareemerging,creatingnewrevenuestreamsforfarmersandranchersacrosstheU.S.
BRIDGING PARTISAN DIVIDES
Supportforpoliciestoincentivizeagriculturalcarbonsequestrationhasbridgedthehistoricallycontentiousdividebetweentheenvironmentalandagriculturalcommunitiesbecausethepracticesthatrestoreandenhancesoilcarbonproducebotheconomicbenefitsforfarmersandnaturalresourcebenefitstosociety.In2017,forinstance,anunprecedentedcoalitionofenvironmental,business,andfarmindustrygroupshelpedforgeandrecruitbipartisanCongressionalsupportfortheSoilHealthDemonstrationTrialinthe2018FarmBill,akeysoilhealthenhancementandsoilcarbonmeasurementprogram.Sincethen,numerouspoliciesbuildingonthatprovisionhavebeenproposedatthestateandfederallevelsbylawmakersonbothsidesofthepoliticalaisle,asdiversestakeholdersrecognizethebenefitsofvaluingagriculturalcarbonremoval.
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THE CHALLENGE OF A DEPRESSED FARM ECONOMY BATTERED BY CLIMATE CHANGE
EvenbeforetheCOVID-19pandemic,theAmericanagriculturesectorwasarguablysufferingfromtheworsteconomicconditionssincetheFarmCrisisofthe1980s.Americanfarmershavebeencaughtinafierceconfluenceofglobaleconomic,political,andenvironmentalpressures,tothepointwherebreakingevenisconsideredasuccessfulcropyear.
FARM DEBT IN THE U.S. EXCEEDS $420 BILLION, AN ALL-TIME HIGH
IntheMidwest,Chapter12farmbankruptciesincreasedby12%intheyearendingJune2019,andby50%intheNorthwestinthesameperiod.MorethanhalfofU.S.farmershavebeenintheredeveryyearsince2013.4 Not surprisingly,thisbleakeconomiclandscapehascausedwould-beproducerstoseekotherlinesofwork,oftenendingmulti-generationalfarmsdatingtothe1800s.Between2011and2018,morethan100,000U.S.farmsceasedoperations.5
More than half of U.S. farmers have been in the red every year since 2013.
Forfarmersinsomeareas,themostdevastatingeconomicimpactinrecentyearshascomefromthefrequencyandseverityofextremeweathereventsandincreasinglyunpredictablegrowingseasons.In2019,thewettestyearonrecordintheU.S.,farmersinpartsof12statescouldn’tplantcropswiththeirfieldsunderwaterfromrecordspringrains.Cropscouldnotbeseededonanastounding19.4millionacres,themostpreventedplantacressincetheUSDA’sFarmServiceAgencybegantrackingsuchdatain2007.6
And2019wasnotaone-off.InMissouri,forexample,24ofthelast39yearshavehadabove-averagerainfall.Muchofitfallsintheearlyspringplantingseason,delayingorevenpreventingplantingaltogether.7TheFourthNationalClimateAssessmentin2018predictedthat“yieldsfrommajorU.S.cropsareexpectedtodeclineasaconsequenceofincreasesintemperaturesandpossiblychangesinwateravailability,soilerosion,anddiseaseandpestoutbreaks.”8
Atthesametime,theagriculturesectorcontinuestobeasignificantcontributortogreenhousegasesandotherdetrimentalenvironmentalimpacts.FarmingandranchingaccountforroughlyonethirdofGHGemissionsglobally,andmorethan9%intheU.S—nearlyasmuchasallresidentialandcommercialbuildings(11.6%).9 Thosenumbersdon’tevenincludeag-relatedlife-cycleemissionsfromtheproductionofsyntheticfertilizers,pesticides,andotherfossilfuel-intensiveprocesses.10
Poorsoilandlivestockmanagementpracticesresultinnutrientandmanurerunoff,impairingriparianecosystemsandfishpopulations,spurringalgalbloomsandtheassociatedhypoxicoceandeadzones,andcontaminatingdrinkingwatersourcesacrossruralregions.
Policiesandimplementationineachofthefouropportunitiesmappedoutinthisreport,webelieve,willproducepositiveoutcomesinfarmsectoreconomicrecovery,climatechangemitigation,andenvironmentalimprovement.
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FIGURE 1: U.S. FARM SECTOR TOTAL DEBT, 2013-202011
Source:U.S.DepartmentofAgriculture,EconomicResearchService
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OPPORTUNITY NO. 1
FARM ECONOMICS: SAVING COSTS AND BOOSTING PROFITS THROUGH REGENERATIVE AGRICULTURE
Regenerativeagricultureandsoilhealthconservationarebroadterms,butgenerallyrefertofarmingtechniquesthatdrawfromindigenousandtraditionalcultivationpracticesandfocusonbuildingthehealthofthesoil.Assoilhealthincreases,farmscanbothsequesteradditionalcarbonandreducetheirrelianceonfossilfuel-derivedinputs.Enhancedsoilhealthmakesthesoilmorefertileandproductive,supportingcropsthataremoreresilienttopests,invasiveplants,erosionandrunoff,extremeweatherevents,andotherstresses.Manykeyregenerativepracticespredatethe20thcenturypost-warexpansionoflarge-scaleagriculture,buttheyarenowbeingdeployedonfarmsthatrangeinsizefromafewtothousandsofacres,supportingawidevarietyofproductionsystems,includingrowcropssuchascorn,soybeans,wheat,andcotton,livestockoperations,andspecialtycropfarms.TheNationalAcademyofSciencesestimatesthatdeploymentofcarbonremovalpracticesonagriculturallandcouldsequester250millionmetrictonsofcarbondioxide-equivalentgreenhousegases,whichiscomparabletoremovingtheannualemissionsof64coal-firedpowerplants.12
Thepreponderanceofdatafromfarmsadoptingthesetechniquesshowsconsistentlypositiveeconomicbenefits.NotablecasestudiesconductedacrosstheU.S.bytheNationalAssociationofConservationDistricts(2017)13andAmericanFarmlandTrust(2019)14haveyieldedimpressivefinancialresults.IntheNACDstudy,fourcornandsoybeanfarmersintheUpperMississippiRiverBasinsawtheseaveragegains,mainlyfromusingno-tillandcovercropping:
// Increasedcropyieldrevenuebyupto$76peracre
// Reductionoffertilizercostsofupto$50peracre
// Reducedoutlaysforerosionrepairbyupto$16peracre
IntheAFTstudy,sixfieldcropfarmersandtwoalmondgrowersinfourstatesaveraged$41peracreinincreasednetincome.Averagesavingsincluded$36peracreforfertilizerand$35peracreformachineryuse,fuel,andlaborfromreducedtillage.
Another2018studybythenonprofitEcdysisFoundationinSouthDakotareportedadramatic78%increaseinnetincomeon20farmsthatadoptedregenerativetechniques.15
“Agriculture is often overlooked as a solution to climate change. Policies that recognize the value of carbon sequestration from certain cultivation practices are a huge step in the right direction. With the right policies in place, helping the environment can also be very financially rewarding to
farmers. Agriculture’s next cash crop is carbon farming.” –DavidKolsrud,SouthDakotafarmerandentrepreneur
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FIGURE 2: KEY REGENERATIVE PRACTICES
Practice Description Benefits
Covercrops Plantsusedforthespecificpurposeofimprovingsoilhealth.Oftenplantedintheoff-seasonforannualcropsorinbetweenrowsofpermanentcrops.Canbeamixofspeciesincludingrye,buckwheat,radishes,peas,andmanyothers.
Carbonremoval;erosionprotection;cropresilience;waterquality
Diversecroppingsystems
Rotatingmultiplecrops,andpotentiallyalsoincludingperennialsandgrazinganimals,ratherthanplantingjustthesameoneortwocropsyearafteryear.Indigenouscultureshaveplantedcropsinthiswayforgenerations,mostfamouslythe“threesisters”growingofmaize,squash,andbeanstogether.
Waterquality;carbonremoval;reducedsyntheticinputs;weed,pestanddiseaseprevention
Avoiding syntheticinputs
Usingnaturalfertilizersandweedandpestcontrolmethods,ratherthanrelyingonfossilfuel-derivedchemicals
Reducedemissions;waterquality;biodiversity
Low-and No-Till
Reducingoreliminatingmechanicaldisturbanceofthesoil(e.g.,plowing)
Reducedemissions;carbonstorage
IntensiveRotationalGrazing
Movinglivestockbetweenpasturesonaregularbasistoallowfeedcropstoregrowandsoilstorecover.AnIndigenouspractice,thismimicsthewayherdanimalsmovethroughgrasslands.
Forageresilience;biodiversity;potentialcarbonremovalinsomecases
Composting Turningwaste(frommanureorfood)intoaproductthatcanimprovesoilhealth
Resilience;carbonremoval;emissionsreductions
Riparianbuffers
Plantingtrees,shrubs,orotherperennialvegetationalongstreamsandrivers
Carbonremoval;resilience;waterquality;downstreamfloodcontrol;wildlifehabitat
KeithAlversonisasixth-generationcornandsoybeangrowerinChester,SouthDakota,andformerboardmemberofthe36,000-memberNationalCornGrowersAssociation.Astaunchadvocateforclimateaction,AlversonwasthechairofNCGA’sClimateTaskForceformedin2017.His2,500-acrefamilyfarmhasbeenusingregenerativetechniquesbyexperimentingwithcovercropsinrecentyearsandusinglow-tillandcarbon-richcroprotationsfordecades.Oneofthemanybenefitsheextollsissoilwaterretention.Withachangingclimatecausingmoreintenserainevents(fourtofiveinchesperdeluge)everyyear,Alversonsaysthatevery1%increaseinsoilorganicmatter—thussoilcarboncontent—hasadded1.4acre-inches(approximately38,000gallons)ofwater-holdingcapacity.Thathelpsinbothwetanddrytimes.
“Wecangetthroughtwodrysummerweeksalotbetter,”hesays.“It’smadethecroppingseasonmuchmoreresilient.”ThehealthiersoilshaveincreasedAlverson’syieldpotentialby14bushelsperacre—anincreaseofabout7%overhisaverageproduction—givinghimthepossibilitytoearn$45moreperacreatcurrentcornprices.Applyingthis7%increaseinyieldpotentialacrossthe84millionacresofcornexpectedtobeharvestedin202016suggeststhatapossible$3.8billioninadditionalrevenuecouldflowtothefarmeconomyfromcornproductionalonethroughtheadoptionoftheseregenerativepractices.
“We can get through two dry summer weeks a lot better. It’s made the cropping season much more resilient.”
–KeithAlverson,SouthDakotacornandsoybeanfarmer
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REWARDING FARMERS FOR CROP RISK REDUCTION
Federalcropinsuranceisthelargestfederalfarmsubsidy,andanimportantconsiderationforfarmersastheymaketheirproductiondecisionseachyear.Federalcropinsurancecoversmorethan90%ofU.S.cropland,costingtaxpayersupto$10billioneachyear.
Despitethefactthatregenerativefarmingreducestheriskofcroploss,therearecurrentlynoincentivesbuiltintotheFederalCropInsuranceProgramtoencouragefarmerstoadoptregenerativepractices.Thispresentsamissedopportunityforenhancedclimateresilienceandmitigation.17Butnowfarmersintwostates,IowaandIllinois,canreceivea$5peracrebreakonfederalcropinsurancepremiumsiftheyplantcovercrops,thankstoapartnershipbetweenthefederalRiskManagementAgency(whichadministersfederalcropinsurance)andthestates’departmentsofagriculture.Theseprogramshaveproventobepopularandcost-effective,withtheIllinoisprogramreachingitsmaximumenrollmentinthefirsttwoweeksthatsignupswereavailable.Wisconsinisnowconsideringasimilarmeasure.Expansionofsuchincentivestofarmersinmorestatesandatthefederallevelpresentsakeyopportunitytomonetizethevalueofhealthiersoils.
BUILDING MARKET DEMAND FOR AG PRODUCTS THAT REMOVE CARBON
Theeconomicpromiseofregenerativefarminghasgainedtheattentionofsomeofthefoodindustry’slargestplayers,mostnotablyGeneralMills.The$17billioncompanyisaimingtosourceitscommoditycropsfromonemillionregenerativelyfarmedacres—aboutaquarterofthelandfromwhichitsourcesproductsinNorthAmerica—by2030.In2019,theMinneapolis-basedcompanylaunchedtwomajorpilotprogramstohelptraingrowersinregenerativeandcarbonremovaltechniques.Participantsinclude45oatsfarmerscomprising170,000acresinNorthDakota,Minnesota,Manitoba,andSaskatchewan,and39wheatgrowerson85,000acresinKansasandNebraska.18
Byhelpingitsgrowersincreaseyields,cutcosts,andsequestercarbon,thecompanyisalsoadvancingitscorporatesustainabilitygoals.GeneralMillswasthefirstlargefoodcompanytosetGHGemissionstargetsforitsentiresupplychain,19andmorethanhalfofthatcarbonfootprintcomesfromagricultureactivities,accordingtoJeffHanratty,thecompany’sappliedsustainabilitymanager.GeneralMillshascommittedtoreducesupply-chainemissionsby28%(from2010levels)by2025.
Otherlargefood/agcompaniesthathavelaunchedregenerativeinitiativeswiththeirsuppliersincludeBunge,Danone,LandO’Lakes,Anheuser-Busch,Cargill,andBayer.InApril2020,CargilllaunchedtheSoil&WaterOutcomesFundinpartnershipwiththeIowaSoybeanAssociation.Thefundwillpayparticipatingfarmersforcarbonsequestration(anestimated$35-$40pertonofCO2)andreducedwaterrunoff;CargillwillbuyabulkofthecarboncreditstooffsetGHGemissionsfromitsoperations.20InJuly2020,BayerannouncedtheBayerCarbonInitiative;itwillpaysome1,200rowcropfarmersintheU.S.andBrazilforcarbonremovalusingthecompany’sClimateFieldViewdigitalfarmingplatform.21Theseactionsindicatethatagribusinessisshowinginterestinsoilcarbonsequestration,buttransparencyandverificationarecriticaltoensuringthatresultingcarbonremovalisnotoffsetbyincreasedfossil-basedinputs.
90% $10BofU.S.CroplandisCoveredbyFederalCropInsurance
Costing U.S. Taxpayers$10BillionEveryYear
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Foodcompaniessuchastheseforeseegrowthindemandfromenvironmentally-mindedconsumersforproductsmadewithregenerativelyfarmedingredients,followingthepathcarvedbyorganicfoods.WholeFoodsMarketratedregenerativeagricultureasitsNo.1foodtrendof2020,22andsomebrandssuchasNature’sPathOrganicFoodsandGeneralMills’EPICProvisionsalreadyhaveregenerative-certifiedproductsonthemarket.
Thereisalsoinnovationintheprivatesectormarketplaceforcarbon-negativeagriculture.OneexampleistheZeroFoodPrintprogram,createdbyaward-winningrestaurateursAnthonyMyintandKarenLiebowitz,whichallowsconsumerstooptintoa1%surchargeonmealsatparticipatingrestaurantsoradollarpermonthsurchargeontheirhomewastehaulingbills.Basedonsuccessfulrenewableenergypolicymodels,thisprogramallowscitizensto“improvethegridoffarming”bydirectlyfundingproducerstoincreaseregenerativepracticesandcarbonremoval.23
“Thisapproachisavailabletoeverysingledinerandeverycityandregionalproviderofwasteremovalservices,”saysMyint,“sinceitisoptionalandisnotconstrainedbybudgets,anddoesnotrelyonregulatory/carbonmarkets.Currently,over100citiesandstatesareontrackfor100%renewableenergy,andthosesameregionscouldestablishrenewablefoodeconomies.”
Despitethepromisethatregenerativepracticeshold,inertiapersistsasmanyfarmers’appetitefortakingariskonanewpracticeinuncertaintimesislow.However,innovativepublicpolicyinitiativesandgrowingprivatesectorengagementinthisspaceareincreasinglypersuasiveindicatorsoftheemergenceofcarbonremovalasanewagriculturalcommodity—onethatoffersanewrevenuestreamandeconomicrecoveryopportunityforfarmers,whilecreatingnewag-relatedjobsintheprocess.
FIGURE 3: SOME OF THE MAJOR FOOD COMPANIES THAT HAVE RECENTLY LAUNCHED REGENERATIVE INITIATIVES IN THE U.S.
©iStock
Anheuser-Busch
Bayer
Bunge
Cargill
Danone
General Mills
Land O’Lakes
Nature’s Path
Whole Foods
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INNOVATORSONTHEFRONTLINES: LOCUS AG HELPING FARMERS MONETIZE CARBON STORED IN SOIL
Soilsandhumandigestivesystemshavesomethingincommon:probioticmicrobesthatimprovethehealthofboth.LocusAgriculturalSolutions,aSolon,Ohio-basedinnovator,createsproductsthatsignificantlyimprovesoilhealth,cropproductivity,andsoilcarbonsequestrationcapabilitiesforafast-growingnumberofAmericanfarmers.
RhizolizerDuo,thecompany’sflagshipproduct,isanorganicmixturecontainingfungalandbacterialmicrobesthatamplifysoil’snaturalmicrobialprocesses.Thatleadstobiggerandstrongerrootsystems,increasedplantnutrientuptake,andnotableincreasesinthedepositionofsoilcarbon.
“Microbesworkwithcropstodrivecarbonsequestrationwhichinturncreateshealthiersoil,andourproductamplifiesthosenaturalprocesses,”saysPaulZorner,LocusAG’soriginalCEOandnowchiefagronomist.FarmersuseRhizolizerDuotoenhancethegrowthandyieldofcorn,soybeans,wheat,almonds,potatoes,cotton,citrustrees,andmultipleothercrops.Theproductwasusedonabout60,000acresofU.S.croplandin2020,andZornerexpectsusagetogrowtoabout350,00acresthisyear.
RhizolizerDuo,namedasametaphorforanatural‘rhizospherefertilizer’,essentiallyincreasessoilmicrobialactivity—boostingcropyieldsandreducinginorganicfertilizerneeds.Itsusershaveseenon-farmincomeincreasefrom30to50%fromacombinationofincreasedyieldandlowerfertilizerinputs,andthecompanyestimatesthaton-farmincomecanpotentiallybedoublediftheirsequesteredcarbonismonetized.
LocusAGisfocusedonhelpingfarmersamplifyandmonetizetheCO2extractedfromtheatmosphereanddepositedintheirsoils.InJanuary2020,thecompanypartneredwithagriculturalcarbonmarketplaceoperatorNoriandinJanuary2021addedanadditionalpartnershipwithBluesource—thelargestcarbonandenvironmentalmarketplacedeveloperintheU.S.LocusAG’sCarbonNOWprogram,launchedin2020,iscurrentlyprovidinggrowerswith$15foreachtonofCO2equivalentstoredintheirsoilsfromrecentlyimplementedregenerativepractices.
UndertheCarbonNOWprogram,LocusAGrecentlybecamethefirstcompanytofullyqualifyandhelponeofitsgrowersmarketasignificantnumberofsoilcarboncreditsassociatedwiththeircurrentregenerativepractices—20,000metrictonsforamarketvalueofjustover$340,000.“It’sexciting,”saysZorner.“Theindustryhasbeentalkingaboutdoingthisforever,andnowit’sactuallyhappening.”
Thecompanyhaswonnumerousnationalandglobalawards,includingthe2019BestNewProductintheGlobalCropScienceAwardsandthe2020NRELOutstandingVentureAward.LocusAGisalsooneofthefewagriculturalproductcompanieswithBCorpcertificationforsustainableandsociallyresponsiblepractices.
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OPPORTUNITY NO. 2
AG TECH: A 21st CENTURY JOB CREATOR
Precisionagtechnologiesthatmeasuresoilcompositionandcrophealthonanincreasingnumberofdatapointsusingever-moreprecisecoordinates—downtotheindividualplantinsomecases—havemadegreatstridesinrecentyears.Thisisonekeynicheintheburgeoningsectorofagtech,whichencompassestechnologieslikeadvancedsensors,drones,internet-enabledmonitoringtools,robotics,GPSmapping,genomics,AI,machinelearning,anddataanalytics.
It’sahotsector—agtechstartupsgarnered$7.6billioninfundingin2019,amorethanfourfoldincreasesince2012,accordingtotheannualindustryinvestmentreportfromleadingventurecapitalfirmAgFunder.24Thenumberofdiscreteinvestmentdealsincreasedfivefoldinthesameperiod,from200in2012to1,039in2019.Therewere1,336differentinvestorsinthesector,includingventurecapital,privateequity,Fortune500corporations,impactinvestmentfunds,andsovereignwealthfunds.Twosub-sectorsthatdominatedearly-stageseedfundingin2019,accordingtoAgFunder,wereAgBiotechnology(on-farminputsforcrop&animalagincludinggenetics,soilcompositionknownasmicrobiome,livestockhealthandbreeding)andFarmRobotics(on-farmmachinery,automation,drones,andprecisionmeasurementequipment.)
Thesenewaginnovationcompanies—suchasthethreeprofiledinthisreport—areboostingemploymentnumberstoaideconomicrecoveryintheagsectorwhileattractingyounger,tech-savvyworkersintoagriculture.U.S.farmers,ranchers,andotheragriculturalmanagersare56.4yearsold,onaverage,while60%oftech-sectoragriculturalengineersareunder34.25
Agtechalsorepresentsastrongemploymentopportunityformilitaryveterans.FortypercentofthosewhoserveintheU.S.militarycomefromthesmallsegment(19%)ofAmericanswholiveinrural/agriculturalcounties,accordingtoretiredMarineCorps.Lt.Gen.JohnCastellaw,co-founderandCEOofFarmspaceSystems,whichisequippingunmannedaerialvehiclestocollect“precisionag”soilhealthdata(seeprofileonpage12).“Theyneedgoodjobstocomehometo,”saysCastellaw,“andhelpingthemfindjobsinprecisionagjustmakessense.”TheUSDA’sEnhancingAgriculturalOpportunitiesforMilitaryVeterans(AgVets)programawardsgrantstonon-profitsacrosstheU.S.thattrainveteransforagcareers.26 Onegrantee,Tennessee-basedVeteransEmployedinTechnologyandServiceinAgriculture,focusesonag-relatedtechnicalskillsincomputers,remotesensing,datamanagement,GIS/GPS,andmechanics.
Inrecentyears,two-yearcollegesthroughouttheFarmBelthavelauncheddozensofagtechprograms,offeringdegreesinsubjectslikeagriculturalgeospatialtechnology(KirkwoodCommunityCollegeinCedarRapids,Iowa)andprecisionagronomymanagement(ChippewaTechnicalCollegeinEauClaire,Wisconsin).27In2016,SouthDakotaStateUniversitybecamethefirstuniversityintheU.S.toofferabachelor’sdegreeinprecisionagriculture.InCalifornia,thenewCenterforRegenerativeAgricultureandResilientSystemsatCalStateUniversity-ChicorunsaMaster’sprograminregenerativeag.2012 2013 2014 2015 2016 2017 2018 2019
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FIGURE 4: ANNUAL INVESTMENTS IN UPSTREAM AG STARTUPS, 2012–201928 Investmentinstartupsoperatingupstream, closertothefarmerandbeforetheretailer, grew124%from2016to2019.
“[U.S. military veterans] need good jobs to come home to and helping them find in precision ag jobs just makes sense.”
–Lt.Gen.JohnCastellaw(Ret),co-founderandCEOofFarmspaceSystems
Source: AgFunderAgri-FoodTechInvestingReport,2019
12 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
Manystateandlocaleconomicdevelopmenteffortsareseekingtoleveragethisnewlyqualifiedworkforcetoattractestablishedagtechplayersandnewinnovativestartups.NorthCarolinahasmadeagtechaneconomicdevelopmentpriority,andit’snowakeypartofthestate’soverallagindustry,whichemploys728,000peopleandaccountsfor17%ofstateGDP.Thestateishometomorethan165agtechcompanies.29
InIndiana,thestate’sEconomicDevelopmentCorporationandAgriNovusIndiana,itsinitiativeforpromotingandacceleratingthegrowthofagtech,areworkingtogethertoattractcompaniesinwhatittermsagbioscience—theconfluenceofproductionagriculture,lifesciences,advancedmanufacturing,logistics,andtech.Indianaisalreadyhometo75,000suchjobswithagoalforthatnumbertogrowexponentially.“Wethinkalotaboutnext-generationtalent,”saidBethBechdol,AgriNovuspresidentandCEO,attheAgbioscienceInnovationSummitinNovember2019.30
IndianawasabletoattractSolinftec,aBrazil-baseddigitalaganddatasciencecompany,toopenafacilityatPurdueUniversity’sResearchParkin2018.Ayearlater,thecompany’sglobalheadquartersfollowed,bringingwithit90jobsin2020andplanstocreatemorethan300jobsby2023.TheResearchParkalsohousesasecondlocationforCambridge,Mass.-basedseedtechcompanyInari.31
Startupaccelerators,afixtureinindustrysectorslikecleantechandbiotech,arespringingupforagtechinstatesacrosstheU.S.withsubstantialfarmingeconomies.OneisrunbytheDairyFarmersofAmericaatitsKansasCityheadquarters,whereyoungruralagtechentrepreneursparticipateina90-daytrainingandmentorshipprogram.32
Jobgrowthinthissectorisclearlyenhancedbyincreasedmarketcreationforcarbon-negativeagproducts,contributingtoeconomicrecoveryinruralAmerica.
INNOVATORSONTHEFRONTLINES: FARMSPACE SYSTEMS AND PRECISION CARBON MEASUREMENT
IfyouheardaboutastartupcompanythatusesAIandimage-processingsoftwaretoanalyzedatagatheredbyremotesensor-equippeddrones,youmightpictureateamofSiliconValleytechentrepreneurs.Youprobablywouldn’tthinkofaretiredU.S.MarineCorpslieutenantgeneralworkingoutofthetownofAlamo(population2,500)inwesternTennessee.
Butthat’swhereyou’llfindLt.Gen.John“Glad”Castellaw,USMC(Ret)andhiscompany,FarmspaceSystems.Farmspaceisontheleadingedgeofsoilhealthdatacollectionandanalysis,atechnichepoisedforgrowthtomeetdemandformoreaccurate(andcheaper)dataasthemarketforsoilcarbonsequestrationincreases.Farmspacehasaddedunmannedaerialvehicles(UAVs)tothearsenalofexistingprecision-agdatacollectiontoolssuchassatellites,airplanes,andon-groundsampling.
Castellawserved36yearsintheMarineCorps,buthegrewupinafamilythathasbeenfarminginAmericafor300years,soitmakessensethathereturnedtothefamilyfarmafterhisretirement.Heseesgoodsymmetrybetweenmilitarytechnicaltrainingandprecisionagriculture.HiscompanywasfoundedbyveteransandFarmspace,througheducation,outreach,andparticipationinVETSA(VeteransEmployedinServiceandTechnologyinAgriculture),promotesfarmcareersfor
veterans.Castellawoftenpointsoutthat40%ofthosewhoserveintheU.S.militarycomefromthesmallsegment(19%)ofAmericanswholiveinrural/agriculturalcounties.“Weneedveteranstocomebacktoruralareaswiththeirleadershipexperienceandtechnicalskills.Andprecisionagriculturecanprovidethosegoodpayingjobstheydeserve.Whenthishappensweallwin.”
Castellaw’smilitaryexperience,coupledwithhisworkinclimatesecurityasacivilian,providesadeephands-onunderstandingofclimatechangeasamajornationalsecuritythreat.Heseesfarmersusingregenerativeagriculturalpracticesplayingamajorroleinsequesteringcarboninthenextdecades,helpingtoslowandreverseclimatechangeandopeningnewrevenuesourcesforthemselvesintheprocess.FarmspaceSystemsispoisedtoplayamajorrole.
13 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
OPPORTUNITY NO. 3
VALUING CARBON REMOVAL AND ECOSYSTEM SERVICES: CARBON AS THE NEXT CASH CROP
Inthecontextofthevastcostsofclimatechangethatweareonlybeginningtoattempttocalculate,mitigatingclimateimpactsbyremovingcarbonfromtheatmosphereisaserviceorproductwithenormousinherentvalue.Therearemultiplepathwaystomonetizethatproductthroughpublicandprivatemarkets,stateandfederalpolicies,andconsumerdemand.
Transitioningtothepracticesthatyieldhealthiersoilscandrawdownpotentiallygame-changingamountsofcarbonfromtheatmosphere.A2017studyinthescientificjournalNature33reportedthatglobalregenerativepracticescouldstoreuptoanadditional1.85gigatonsofCO2peryear—roughlytheamountemittedannuallybytheglobaltransportationsector.Asaneconomicopportunity,becomingcarbon-negativecanopenthedoorforfarmerstothemarketplaceofcarboncredits,wherecarbonproducerspurchasecreditstooffsettheirlevelsofCO2emissionsortoachievecarbon-negativitybyoffsettingtheirlegacyemissions.Higherandmorepredictablefarmprofitscanalsoberealizedthroughthevaluationofecosystemservices—throughwaterqualitymarkets,forexample—aswellastaxcredits,andlowerloan,rent,andinsuranceratesinrecognitionofclimateandcropriskmitigationandotherenvironmentalservices.
“Among countries of the world, the United States showed the highest total annual potential in soil organic carbon.”
–Nature,November2017
Whensoilhealthisrestored,theamountofcarbonitcancontainincreases.Thusthesameregenerativefarmingandranchingtechniquesthatimprovesoilhealthandcropproductionalsopositivelyimpactthegreenhouse-gascalculus.Healthierrootsystems,forexample,drawmoreCO2outoftheatmosphereandkeepmorecarbonintheground.Thesepracticesalsogreatlyreducenitrogenandpesticiderunoffinwaterways,lessenparticulateairpollution,andpreservegreaterbiodiversity.
Earningcreditsforthecompositionofthesoilitselfisanewandpotentiallybigrevenuesourceforfarmers—whichinturnwouldhelptorevitalizetheirlocaleconomies.Amarketthatfinanciallyrewardsland-basedcarbonremovalalsounlocksnewopportunitiesinwealthandjobcreationforentrepreneurialinnovators,investors,scientificresearchers,anddataanalysts.Butthehurdlestocreatingviablemarkets,appropriatepolicies,andespeciallyreliablemetricsarenottrivialandstillchallengingforgrowerstounderstandanddeployfrombothtechnicalandaccountingperspectives.
Thebuyingandsellingofrenewableenergycredits(RECs)andcarbonoffsetslikereforestationprojectshavebeenastapleofthecleaneconomyformorethantwodecades,withCalifornia’scap-and-trademarket,launchedin2013,asaprimeexample.TheemissionstradingsystemhashelpedCaliforniaachieveambitiousdecarbonizationgoals,thoughithasgeneratedsignificantcriticismfromcommunitiesdirectlyaffectedbyenvironmentalimpactsoffossil-intensiveindustries.Butcreatingcreditsforatmosphericcarbonremovalthroughland-basedsystemsisanentirelynewvaluepropositionontwoparameters.First,currentRECcreditsarebasedonreducing or avoiding greenhouse gas emissions(byreplacingcoal-firedpowerwithrenewablegeneration,forexample),ratherthanremoving CO2 from the atmospherebyabsorbingandsequesteringitasplantsinhealthysoilsdo.
Thesecondkeydistinctionbetweenvaluingemissionsreductionsversusatmosphericcarbonremovalisthemethodologyfordatacollectionandverification.Obtainingaffordableandaccuratemetricsforhowmuchatmosphericcarbonisremovedandsequesteredintheagsectorismorechallengingthanmeasuringreducedsmokestackemissions.Thescienceandtechnologyforsoilcarbondetectionisstillevolving,takingintoaccountthemanyvariablesthatoccurinnaturalsystems.Verifiablemeasurementofagriculturalcarbonremoval,however,isnecessaryformanagingandmonetizingthisnewagriculturalcommodityandthekeytoestablishingrobustmarkets.
14 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
Butchallengeequalsopportunity,andthereisprogressonboththemarketplaceandmeasurementfronts.Entrepreneurs,NGOs,andcorporateplayersareworkingwithfarmerstocreatesoilcarbonmarketplaces,whilefuelingthebusinessopportunityforbetter,faster,cheaper,andmorestandardizeddatacollectionandanalysis.
CARBON MARKETS AND METRICS
Threeoftheleadingsoilcarbonmarketplacesindevelopmentare:
TheEcosystem Services Market Consortium (ESMC),foundedin2017,isapartnershipoffarmers’tradeassociations,largefoodandagribusinesscompanies,andNGOsworkingonwaystomonetizeenvironmentally-soundandclimate-positivefarmingandranchingoperations.FundersincludeGeneralMills,theUnitedSoybeanBoard,TheNatureConservancy,andtheUSDA’sNaturalResourcesConservationService.Theconsortiumplanstolaunchamarketplacein2022forbothcarboncreditsandotherecosystemservicessuchaswaterretentionandreducedfertilizerandpesticiderunoff.
MarketdemandforU.S.carbonandecosystemservicescreditscouldbeashighas$13.9billion,accordingtoanESMC-commissionedstudyin2019.34Akeygoalfortheconsortiumistohelpdevelopaccurateandstandardizedmeasurementprotocolsforsoilhealth,includingcarbonstorage,waterretention,microbialactivity,andnutrientcontent.Inonepilotprogram,ESMCandpartnersGeneralMillsandtheKansasDepartmentofHealthandEnvironmentareworkingwithSouthernGreatPlainsrowcropfarmersonsuchmeasurements.35
ThestartupcompanyNori(seeprofileonpage16)hasdevelopedablockchain-enabledmarketplaceforcarbonspecificallyearnedbytheagriculturesector.TheNoriMarketplacewillpayfarmersanestimated$15pertonofCO2thattheirfieldsdrawfromtheatmosphere.Approximately150operations,farmingmorethan500,000acresspanningtheMidwest,PacificNorthwest,andCalifornia,haveappliedtotakepartinNori’spilotprogram.
Indigo Ag’scorebusinessissellingseedcoatingsandotherproductsthatincreasecropyieldsandimprovesoilhealth,andtheyarenowdevelopingacarboncreditsmarketplacecalledIndigoCarbon.Thecompanyhasraised$1.2billionincapitalfromhigh-profileinvestorsthatincludepotentialcarboncreditsbuyersFedExandGreatWesternBank.Whiledevelopingitsmarketplace,IndigoAghaslaunchedanational“CarbonCup”contest,withfarmersandranchersfrom15statescompetingtoachievethehighestsoilcarboncontentin2020.36
Smaller-scalecarbonexchangeeffortsalreadyunderwayincludetheMontanaGrasslandsCarbonInitiative,37inwhichcarbonoffsetproviderNativeEnergywillissuecarboncreditstothestate’scattleranchers,andTexas-basedstartupnonprofitSoilValueExchange,38whichwillalsofocusonranchers.
Forcornandotherfeedstockgrowerssellingtoethanolrefiners,anotherpossiblerevenuesourcefromhealthiersoilsisthepotentialtoearnadditionalcreditsfortheproductionoffeedstockforlowcarbonfuels.CaliforniaandOregonhaveenactedaLowCarbonFuelStandardtoreducetransportationemissions,withseveralotherstatesconsideringdoingso,particularlyintheMidwestwheremuchofthefeedstockforlowcarbonfuelsisproduced.Whilethecarbonaccountingtoqualifyaslowcarbonethanolhasfocusedonreducingthelifecycleemissionsassociatedwithitsproduction,farmerscouldpotentiallyearnadditionalvaluebydemonstratingnegativeemissionsfromcarbonsequestrationintheirsoils.
Forcorporationsthathavecommittedtobecomecarbon-neutralorevencarbon-negative,theideaofpayingforcarbonremoval—i.e.goingastepbeyondtraditionalcarbonoffsets—isstartingtogaintraction.Microsoft,mostnotably,launchedtheClimateInnovationFundinJanuary2020toinvest$1billionoverthenextfouryearsincarbonremovalcompanies,technologies,andprojects.OnlinepaymentcompanyStripehasinvested$1millioninfourcarbonremovalprojectstodate.NearlyonequarterofFortuneGlobal500companies39havecommittedtobecarbon-neutralby2030,whileMicrosofthaspledgedtobecarbon-negativebythesameyear.Since2016,thenumberofFortuneGlobal500companiesthathavemadeapubliccommitmentthattheyare,orwillbeby2030,carbonneutral,using100%renewablepower,ormeetingascience-basedemissionreductiontarget(SBT)haveincreased500%(seeFigure5).
©LaurenH
affordE2
15 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
FIGURE 5: 30% OF FORTUNE GLOBAL 500 COMPANIES HAVE MADE A PUBLIC COMMITMENT THAT THEY ARE OR WILL BE BY 2030 CARBON NEUTRAL, MEETING AN RE100, SBT OR NET ZERO TARGET40
Theselarge-scalecorporateefforts,alongwithhundredsofpublicsectorcarbonneutralitycommitmentsaroundtheworld,createanearlyincalculabledemandforcarbonreduction.ManyR&Dinitiativesareseekingtocreatetechnologiesthatdrawcarbonfromtheatmosphere,butregenerativefarmingpracticesthatexisttodaywillreadilyfinddemandfortheircarbonremovalresults.
THE SOIL CARBON ACCOUNTING CHALLENGE
Measuringsoilcarbonsequestrationisacomplexundertaking,morechallengingthanquantifyingthetonsofCO2infossil-fuelemissionsdisplacedbycleanenergygenerationorlow-carbontransportationfuels.Butaccuratemeasuresofthe“beforeandafter”resultsofregenerativepracticesarecriticaltocertifyingsoil’sefficacyasacarbonsink.Somestandardmeasurementtoolsareavailable,buttheneed(andeconomicopportunity)forR&Dinsoilcarbonmeasurementisperhapsthebiggestchallengetoscalingupagriculturalcarbonmarkets.ImprovingandapplyingeffectivemetricsisacriticalpieceoftheUSDA’sfirstroundofSoilHealthDemonstrationTrialprojectslaunchedin2019.41
Acommonlyusedcarbonquantificationtool—theUSDA’sstandardmeasurementproductsince2017—isCOMET-Planner,developedbyColoradoStateUniversityandtheUSDA’sNaturalResourcesConservationService.TheCOMETteamisalsoworkingwithkeystate-levelCO2reductionefforts,suchasCalifornia’sHealthySoilsInitiativeandtheU.S.ClimateAllianceof17bipartisangovernors.
FarmerswhouseCOMET-Plannerenterdatasuchaslocation,soilcharacteristics,landuse,tillagepractices,andnutrientinputsintotheonlinetool.Usingsophisticatedmodelingalgorithmsthatextrapolatefromweatherdata,soilmaps,andlandmanagementusehistory,COMET-Plannerestimatessoilcarbonlevels.Thetoolcanbeappliedtocroplands,livestockoperations,orchards,vineyards,andagroforestry.
“Thisisnotblackmagicthatwedon’tunderstand,”saysKeithPaustian,professorofsoilandcropsciencesatColoradoStateUniversityandthemaindeveloperofCOMET-Planner.“Bettersoilmanagementpaysforitselfinthelongrun,andyou’reholdingmorecarbonintheground.Thisisthewayitmakessensetofarm.”
“Better soil management pays for itself in the long run, and you’re holding more carbon in the ground. This is the way it makes sense to farm.”
–KeithPaustian,professorofsoilandcropsciencesatColoradoStateUniversity
30%
25%
20%
15%
10%
5%
0
Year action was taken/commitment announced
% o
f For
tune
Glo
bal 5
00 (1
com
pany
= 0
.2%
)
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
5X ■ SBT■ RE100■ RE100 & SBT■ Carbon neutral & SBT & RE100 & net zero■ Carbon neutral & net zero■ Carbon neutral & RE100 & net zero■ Carbon neutral & SBT & RE100■ Carbon neutral & RE100■ Carbon neutral & SBT■ Carbon neutral
Source:NaturalCapitalPartners,2020
16 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
INNOVATORSONTHEFRONTLINES: NORI, BLOCKCHAIN, AND CARBON MARKETS
AsU.S.farmersincreasinglyadoptgrowingmethodsthatdrawcarbonfromtheatmosphere,theobviousquestionishowwilltheygetpaidfordoingso—intheabsenceofanationwidepriceoncarbon?
Seattle-basedstartupNoribelievesithasananswer.Norihasdevelopedablockchain-enabledmarketplaceforcarboncreditsspecificallyearnedbytheagriculturesector.CurrentlytheNoriMarketplacehashadthreeprojectsverifiedandlisted;theseprojectshavepaidanestimated$15permetrictonofincrementalCO2(dubbedaNoriCarbonRemovalTonorNRT)thattheirfieldsdrawfromtheatmosphere.ThepriceforeachNRTissetbythefarmer.Thesecreditswillmainlybepurchasedbyindividualconsumers,corporations,andotherorganizationssuchasuniversitiesthatbuycarbonoffsetstohelpreachsustainabilitygoalssuchasnet-zerocarbonemissions.
Carbonoffsetmarketsdatetothemid-2000s,butthecreditsaremainlyearnedbyrenewableenergygenerationorreforestationprojectsaroundtheworld.Noriisamongthecompaniesattheforefrontofbringingthismodeltoregenerativefarmers,creatingapotentiallysubstantialrevenuesourceforsoils-basedcarbonremoval.“Wecallitclimate-smartagriculture—thinkingofcarbonremovallikeacrop,”saysChristopheJospe,aNorico-founder.
Approximately150operations,farmingmorethan500,000acresspanningtheMidwest,PacificNorthwest,andCalifornia,haveappliedtotakepartinNori’spilotprogram.ApplicantsuseaUSDA-backedsoilcarbondatacollectiontoolcalledCOMET-PlannertoestimatetheirCO2sequestrationlevels.Forsuccessfulapplicants,NoriisadministeringamoredetailedquantificationprocesstoverifytheirCO2andrelatedpaymentamounts.
Onthecarboncreditspurchasingside,someofNori’stargetedsectors—airlines,cruiselines,andeventproducers—havebeenamongtheindustrieshardesthitbytheCOVID-19pandemic.Butitstrajectorycontinuestomoveahead.Noriisworkingwithmultiplepartnersonboththesupplyanddemandside.“Rightnow,it’sactuallyablessingtobeinourpilotphaseandnothavemillionsofcreditsoutthere,”saysJospe.“We’rejustgoingtokeephunkering,building,andscaling.”
FARMERS SUBMIT DATA
Farmers implementing regenerative farming methods submit land
management and operation data to Nori’s platform.
CARBON REMOVALS QUANTIFIED
Carbon quantification tool (CQT) 3rd party
partner uses project input data to estimate CO2e removal and sends the
data output to Nori.
PROJECT DATA VERIFIED
Farmers hire an independent 3rd party to audit their data that was submitted to Nori and used by CQT to estimate the amount
of CO2e removal within the project.
CARBON REMOVALS ISSUED
Upon receipt of verification assurances, Nori issues Nori Carbon Removal Tonnes (NRTs)
based on the CQT results. One NRT represents one
ton of CO2e removed and stored.
NRTs PURCHASED AND RETIRED
Farmers sell their NRTs through Nori’s
marketplace to individuals and organizations. Nori charges a
transaction fee.
1 2 3 4 5
17 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
OPPORTUNITY NO. 4
BRIDGING THE PARTISAN DIVIDE BY LEVERAGING THE HEALTHY SOILS AND CLIMATE CONNECTION
Inthemidstofaninterwovensetofexpandingglobalemergencies—economicdevastation,apandemic,andanacceleratingclimatecrisis—farmersnowhaveanopportunitytoprovidegreaterprosperityandsecurityforthemselvesandforthecountry.Inthecontextofenormousanticipatedlossesfromclimatechange,agricultureispoisedforarenaissancethatcanbolsterfarmprofitsandperformancebyshiftingtocultivationpracticesthatlowerriskandinputcostsbysequesteringcarbonfromtheatmosphere.It’stimetosupportthetransitiontoregenerativeagriculturalpracticesthatcanhelpstrugglingfarmcommunitieswhilealsohelpingtoreducethecostsofclimatechangetotherestoftheeconomy.Byrebalancingourcurrentinvestmentsintheagriculturesector(approximately$20billionannuallythroughfederalFarmBillprograms),wecanpromotethistransitionwhileprotectingfarmers,growingeconomicopportunitiesandjobsinruralAmerica,andencouragingprivatesectorinnovationandjobcreation.
Commodity Programs($64.6B)
Conservation Programs($59.7B) [Soil Health Programs ($820 million)]
Crop Insurance Subsidies($77.9B)
Other($6.7B)
FIGURE 6: PROJECTED 10-YEAR FARM BILL SPENDING (IN BILLIONS)
STRATEGIC POLICY LEVERS TO ADVANCE REGENERATIVE AGRICULTURE
ThepreponderanceoflegislativeactivityonhealthysoilsandcarbonremovalinCongressshowsthatthisisaninitiativethatcancreatevalueforallstakeholdersandbridgethepartisandivideonclimatepolicy.
Forward-thinkingstateandfederalpolicymeasures,ifenacted,couldgreatlyadvancetheknowledge,innovation,andimplementationofregenerativefarmingpracticesforhealthiersoilsandcarbonremoval.
Amongthemare:
// Reform Federal Crop Insurance.OneofthelargestannualpublicexpendituresontheagriculturalsectoristheFederalCropInsuranceProgram,whichcoversaround90%ofU.S.croplandandcosts$7to$10billionannually.Despitebeingthelargestcomponentofthefarm“safetynet,”FederalCropInsuranceisnotcurrentlystructuredtoencouragefarmerstoadoptpracticesthatmitigateoneofthebiggestriskstoagriculture:climatechange.Cropinsuranceshouldberevisedtoprovideatrueriskmanagementtoolthathelpsfarmersreduceemissionsandsurviveinachangingclimate,incentivizingcovercropstoimproveresilienceandsequestercarbon.Thisisalreadyhappeningatthestatelevel,asseveralMidwesternstateshaveadoptedorareconsideringinvestingincovercropincentivesthataredeliveredthroughFederalCropInsurance.Thesetypesofprogramscouldbeenactedinanystate,andinvestmentfromthefederallevel(asrecommendedbytherecentHouseSelectCommitteeontheClimateCrisis)couldspurgreateradoption.
OF U.S. CROPLAND IS COVEREDBY FEDERAL CROP INSURANCE 90%
18 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
// Leverage public dollars to finance transitions to regenerative practices.Anycostssavingsfromsubsidyreformshouldbereinvestedbackintotheagriculturalcommunity,helpingtospurastrongresponsetoclimatechange.TheexistingCommodityCreditCorporation42providesapotentialframeworkforthisinvestment.Examplesincludelow-orno-interestloanstosupporttransitiontoregenerativeagriculture,andfinancinghigh-impactprojectssuchascompostinfrastructure,processingfacilitiesforgrainandlivestock,andhigh-costpracticessuchasagroforestry.Additionally,theCCCcouldbeusedtobolsteremergingcarbonmarkets,includingbysettingapricefloorforcarbon,capitalizingthecostofmeasurementandaccounting,andpotentiallyofferingabonusforcarbonsequestrationthatalsosecuressignificantco-benefits,suchaswaterqualityorbiodiversityprotection.43
// Increase funding and expand the scope of the Soil Health Demonstration Trial in the 2018 Farm Bill.Sinceitspassage,severalbillshavebeenintroducedintheSenateandHousethatbuildonandamplifythisbreakthroughprogram.ItincentivizesfarmersacrosstheU.S.throughgrantstoadoptregenerativepracticesandtracktheirresults,creatingavaluableknowledgebaseforfutureuseandinnovation.Withmajornewfunding,theprogramcanexpandtocovernewgeographicareasandawiderrangeoffarmsizesandcroppingsystems,speedthedevelopmentofsoilcarbondetectionandtrackingtechnologies,andqualifyfarmerstoparticipateincarbonmarkets.
// Increase investment in carbon removal projectsintheUSDA’sEnvironmentalQualityIncentivesProgram(EQIP).AlthoughEQIPawardsgrantsforawiderangeofregenerativepractices44thatincludecomposting,covercropping,anderosioncontrol,itseffectivenesscouldbeimprovedbyprioritizing“bundles”ofpracticesthattogetherleadtogreatercarbonsequestration.
// Invest in a rural restoration economy.Robuststateandfederalrestorationpolicies,modeledontheCivilianConservationCorpsestablishedaftertheGreatDepression,couldcreateawaveofgoodnewjobsinruralcommunities.Existingstateandfederalprogramsandpartnerships,suchasAmeriCorps,provideaframeworkforsuchaneffort;pendingfederallegislation,includingthebipartisanCORPSAct,woulddramaticallyincreaseinvestmentinpublicworksprojects.Effortstobolsterthesepublicworksprogramsshouldincludejobsimplementingregenerativeagriculturepractices.
// Increase accessibility to carbon credit marketplaces.Thenascentfieldofcarboncreditmarketplacescanbecomplexanddauntingforfarmersexploringthiseconomicopportunity.Therearenowbothfederalandstateinitiativestoenhanceandstandardizecarbonaccountingmethodstoqualifyproducerstoparticipateinbothprivateandpubliccarbonmarkets.Additionalfocusonpolicyinthisarenaisneededtoamplifyandmonetizeagriculturalcarbonremovalservicesandreducefossilemissions.Policiesshouldbedesignedtoensurefarmersofallsizescaneffectivelyparticipate,andcareshouldbetakentoavoidexacerbatingpollutioninvulnerablecommunities.
// Scale up certification.Existingfederalstandardsfororganicagriculturerequiremanyregenerativepractices,includingreducedchemicaluse,covercropping,croprotation,anduseofcompost,withthird-partyverification.However,thevalueofcarbonremovalresultingfromthesepracticesisnotapparenttoconsumersatthepointofsale,andisnottypicallyassociatedwithanorganiclabel.TheNationalOrganicProgramshouldbestrengthenedtoincludemorespecificsoilhealthrequirements,inparallelwitheffortstoenhanceconsumerawarenessandpreferenceforcarbon-negativeproducts.Additionalthird-partystandardsarealsobeingdeveloped,includingRegenerativeOrganicCertified(ROC)andLandtoMarketEcologicalOutcomeVerification(EOV),whichwouldexpandconsumeroptionsforclimatebeneficialfoodproducts.Newstandarddesignshouldtakecaretoensuremeaningfulverificationandavoidanceofduplicationinthefoodlabelsmarketplace.
// Develop markets for low carbon ag products.Inadditiontoclimate-beneficialfood,anotherexamplecouldbefeedstockfortransportationfuelthatearnscreditsunderaLowCarbonFuelStandard,basedonboththereductioninenergyinputsandthesequestrationofcarboninthesoilduringfeedstockproduction.Thefeedstockfarmerwouldbeeligibleforhighersalesvaluesduetotheirverifiedcontributiontothefuel’shighcreditgeneration.
19 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
A WIN-WIN-WIN
ArobustandequitableeconomicrecoveryinAmericamustincludeourfarmersandruralcommunities.Developingmarketsandincentivesforagriculturalcarbonremovalisastrategicpathwaytoachievemultiplebenefitsforagriculturalproducers,fortheclimate,andforahostofotherenvironmentalpriorities.
Policysupportfrommeasuressuchasthesewillhelpmovetheemergingsectorofland-basedcarbonremovalfrominnovationandinvestmenttowidespreadmainstreamadoption.Intheneartermthiswillleadtoimprovedprofitabilityinthehard-hitfarmingsector,driveruraljobcreationinthegrowingagtechfield,andprovideaplatformformuchneededbipartisancollaborationonagricultureandenvironmentalperformance.
Atscale,agriculturalcarbonremovalwillsignificantlymitigatethedestructiveimpactsofclimatechange.
Americaneconomicrecoverycannotmoveforwardwithoutourfarmers.Thecombinedforcesofstrategicfederalandstatepolicieswithprivatesectorprogramsfrombusinessesinandoutsideoftheagriculturesectorwillspeedthistransition,helpingAmericabuildbackitseconomyandweatherthechallengesahead.It’sawinacrosstheboard—forfarmers,fortheeconomy,andfortheenvironment.
©MattOdom
/The New
York Times/Redux
20 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
About E2
E2(EnvironmentalEntrepreneurs) isanational,nonpartisangroupofbusinessleaders,investors,andprofessionalsfromeverysectoroftheeconomywhoadvocateforsmartpoliciesthataregoodfortheeconomyandgoodfortheenvironment.E2membershavefoundedorfundedmorethan2,500companies,createdmorethan600,000jobs,andmanagemorethan$100billioninventureandprivateequitycapital.
ForadditionalinsightintoE2’sotherreports,visite2.org/reports.
ENDNOTES
1 https://agfax.com/2019/01/25/farming-weather-is-leading-cause-of-u-s-crop-loss-how-do-you-assess-the-risk/
2 https://www.fapri.missouri.edu/wp-content/uploads/2020/04/FAPRI-Report-02-20.pdf
3 https://www-forbes-com.cdn.ampproject.org/c/s/www.forbes.com/sites/briankateman/2020/07/20/carbon-labels-are-finally-coming-to-the-food-and-beverage-industry/amp/
4 https://time.com/5736789/small-american-farmers-debt-crisis-extinction/
5 https://time.com/5736789/small-american-farmers-debt-crisis-extinction/
6 https://www.fsa.usda.gov/news-room/news-releases/2019/report-farmers-prevented-from-planting-crops-on-more-than-19-million-acres
7 https://www.ksmu.org/post/missouri-ag-and-climate-change-farms-may-eventually-have-switch-soybeans-corn-cotton-stream/0
8 https://nca2018.globalchange.gov
9 https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions
10 https://www.sciencedaily.com/releases/2019/06/190606183254.htm
11 https://www.ers.usda.gov/topics/farm-economy/farm-sector-income-finances/assets-debt-and-wealth/
12 https://www.nap.edu/catalog/25259/negative-emissions-technologies-and-reliable-sequestration-a-research-agenda
13 https://www.nacdnet.org/soil-health-research/
14 https://farmland.org/soil-health-case-studies-findings/
15 https://www.researchgate.net/publication/323400640_Regenerative_agriculture_Merging_farming_and_natural_resource_conservation_profitably
16 https://www.nass.usda.gov/Publications/Todays_Reports/reports/acrg0620.pdf
17 https://www.nrdc.org/resources/covering-crops-how-federal-crop-insurance-program-reforms-can-reduce-costs-empower-farmers
18 https://civileats.com/2019/10/29/big-food-is-betting-on-regenerative-agriculture-to-thwart-climate-change/
19 https://www.agweb.com/article/general-mills-sets-ambitious-goal-for-greenhouse-gas-cuts--NAA-associated-press
20 https://agfundernews.com/cargill-funds-project-with-iowa-soybean-association-to-pay-farmers-for-carbon-sequestration-and-water-quality.html
21 https://www.reuters.com/article/us-bayer-farming-climate-change/bayer-launches-carbon-capture-program-for-u-s-and-brazil-farmers-idUSKCN24M2CE
22 https://www.wholefoodsmarket.com/tips-and-ideas/top-food-trends
23 https://www.zerofoodprint.org
24 https://research.agfunder.com/2019/AgFunder-Agrifood-Tech-Investing-Report-2019.pdf
25 https://www.precisionag.com/digital-farming/how-technology-is-transforming-the-farming-workforce-and-why-it-matters-during-a-global-pandemic/
26 https://nifa.usda.gov/program/enhancing-agricultural-opportunities-military-veterans-agvets
27 https://www.precisionag.com/market-watch/top-20-two-year-colleges-for-precision-agriculture/-Tinsel/61696/1
28 https://research.agfunder.com/2019/AgFunder-Agrifood-Tech-Investing-Report-2019.pdf
29 https://www.ncbiotech.org/sites/default/files/inline-files/20-104_ASD%28NCAgtechecongrowthflyer%29FINAL.pdf
30 https://www.forbes.com/sites/iedcagtechplus/2020/02/12/secrets-to-success-how-next-gen-agtech-startups-are-building-a-more-sustainable-future/-77fb4fb4537f
21 // HEALTHY SOILS AND THE CLIMATE CONNECTION E2
31 https://www.forbes.com/sites/iedcagtechplus/2020/02/12/secrets-to-success-how-next-gen-agtech-startups-are-building-a-more-sustainable-future/-77fb4fb4537f
32 https://www.dairyfoods.com/articles/93819-dairy-farmers-of-america-seeking-startup-applicants-for-its-2020-accelerator-program
33 https://www.nature.com/articles/s41598-017-15794-8
34 https://soilhealthinstitute.org/esmc-press-release/4fe927c57885.html
35 https://ecosystemservicesmarket.org/2020/01/28/general-mills-kansas-department-of-health-and-environment-and-ecosystem-services-market-consortium-launch-farm-based-ecosystem-services-pilot/
36 https://www.indigoag.com/blog/celebrating-the-winner-of-the-carbon-cup?fbclid=IwAR3uNf2txP8Y9rFGrRcTvTopAU3NddNZMCSz9jeF372HlHacThhH2pT8__Y
37 https://www.mtpr.org/post/montana-ranchers-round-carbon-new-offset-program
38 https://www.soil-value-exchange.com
39 https://assets.naturalcapitalpartners.com/downloads/Deeds_Not_Words_-_The_Growth_Of_Climate_Action_In_The_Corporate_World.pdf
40 https://www.naturalcapitalpartners.com/news-resources/response-required
41 https://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/programs/financial/cig/?cid=nrcseprd1512816
42 https://www.usda.gov/ccc
43 https://nicholasinstitute.duke.edu/sites/default/files/publications/Rural-Investment-Building-a-Natural-Climate-Solutions-Policy-Agenda.pdf
44 https://www.nrcs.usda.gov/wps/portal/nrcs/main/ma/programs/financial/eqip/