The science behind soil carbon is still uncertain. There are safer climate investments for now.
Companies are designing strategies that will drive immediate and meaningful progress on their climate and net zero commitments. The pressure points – from investors, employees and customers – on companies to take accountability for their climate impacts is mounting, putting business leaders under pressure to find immediate ways to slash their emissions.
Many are turning to natural climate solutions, such as carbon credits that are generated from agricultural soil carbon sequestration, as a way to cut emissions that lie deep in supply chains. Given fast moving ambition, there is urgency to clear up confusion around the voluntary market for cropland soil carbon sequestration credits before companies start looking to this as a solution.
Carbon markets are an appealing opportunity to generate funding in support of practice adoption at the farm scale. But the reality is, there’s a great deal of uncertainty associated with soil carbon credits and gaps in the science around the estimated amounts of soil carbon that can be stored in the soil. And, not all credits are created equal, which can create issues if soil carbon credits are purchased to compensate for emissions elsewhere. Together, this creates risk for companies that are considering purchasing these credits.
When food and agriculture companies invest in building healthy soils with their grower communities it leads to myriad co-benefits in their supply chains. However, before companies move forward with using soil carbon credits, more large-scale investments in research to fully capture the value of agricultural soil organic carbon-based credits is vital.
A new report by Environmental Defense Fund assesses the current state of cropland soil carbon sequestration and the areas of broad scientific agreement and disagreement to help companies determine whether investments can deliver the intended climate mitigation benefits. The report highlights three key messages as companies consider investment in soil carbon crediting:
- Measuring soil carbon sequestration and net greenhouse gases is really challenging, but it’s critical for understanding the impact that credits have on long term climate ambition. We need accurate and scalable approaches that are consistent across different crediting platforms before we can ensure they are the right fit for a company’s climate goals.
- The estimated total amount of soil carbon we can store in the soil has been very poorly quantified. This depends on how much carbon a soil can hold on to (as different soils have different capacities to store carbon) and the fact that all farmers across every farm acre in the world are not going to adopt practices to sequester carbon. A clear understanding of how much soil carbon can actually be sequestered will help companies tailor their climate strategies to focus in the right regions and on the best practices, rather than assuming every practice delivers the same climate benefit.
- There is a risk that the voluntary carbon market will prioritize the highest number of credits with the lowest overhead costs, which might edge credits with the highest standards and quality out of the market and result in unreliable credits that do not deliver actual climate benefits. The differences in the methodologies behind credit generation mean that credits derived from different protocols may not be equivalent, creating challenges for the application of these credits to nationally determined contributions or emission offsets.
Solutions exist beyond credits to slash scope 3 emissions
Most companies recognize that they need to look beyond their operational footprints and account for their entire supply chain, or Scope 3, emissions to achieve net zero. Supply chain emissions are on average more than 11.4x greater than a company’s direct emissions — so this work is crucial.
The Deloitte Economics Institute modeled the cost of insufficient action on climate for 11 industries, including agriculture, and highlighted a potential 10 billion USD loss in GDP from 2021-2070 to agriculture due to insufficient climate action. It is clear that there is a financial imperative to act now on climate, and practices that typically result in soil carbon accruals can be beneficial in many other ways, from water quality and quantity impacts to climate resilience at large.
Companies looking to reduce Scope 3 emissions can take these four steps now:
- Improve nitrogen management within your supply chain. Farm practice changes can directly decrease the release of nitrous oxide, a powerful greenhouse gas, 300 times more potent than CO2. Avoided emissions are a permanent climate solution, more efficient and less risky in reducing atmospheric GHG (Greenhouse Gas) than carbon sequestration.
- Scale manure management technologies and practices within your supply chain. Innovative finance opportunities are making it easier for companies, particularly in the dairy sector, to reduce methane emissions, which to date has been a huge challenge.
- Double down on deforestation commitments. The tropics lost 11.1 million hectares of tree cover in 2021, including 3.75 million hectares of loss within tropical primary rainforests, despite the 2020 commitments to zero net deforestation. It is imperative that food and ag companies be empowered to participate in and invest in jurisdictional approaches to deforestation.
- Support greater adoption of CSA practices with an emphasis on their co-benefits. Build resources for farmers to transition their land to regionally appropriate climate smart agriculture practices that result in better soil health. It is generally accepted that climate smart agriculture practices that increase the amount of carbon inputs into the soil by boosting overall plant productivity, retaining residues and/or keeping plants in the ground can result in co-benefits and are vital to building climate resilience in the face of climate change. By preventing losses of existing soil carbon, reducing soil disturbance (with less tillage, for example) can also result in greater overall soil carbon stocks than conventional management.