The signatories of the Paris Climate Accord hope to limit average global temperature increases to between 1.5 to 2.0 C. degree by 2050 in the race to achieve net-zero carbon dioxide emissions. But if recent temperatures are any indication, we’re not off to a good start. The seven warmest years on record occurred from 2015 through 2021, according to the National Oceanic and Atmospheric Administration’s National Centers for Environmental Information.
Fortunately, there are multiple ways to eventually achieve net zero emissions through decarbonization. Three proven ways include eliminating the use of carbon-emitting fossil fuels, reducing their use when elimination isn’t immediately possible and removing carbon from the atmosphere with the help of carbon offset credits.
These are a few of the answers that are necessary if the world is to reach net-zero emissions by 2050.
What is Decarbonization?
Simply put, decarbonization is the reduction and eventual elimination of processes that produce and release carbon into the atmosphere, as well as the removal of atmospheric carbon. Each component is essential to a future of net-zero emissions, but we’ll focus first on removal.
While scientists continue to work on ways to remove carbon from the atmosphere, they already know that the simple act of planting more trees may help slow global warming. Changing how we farm can also help, as practices that include reduced or no-tillage and green fertilizer can increase the amount of carbon the soil can store – its carbon capture.
One company in the vanguard of this area is Nori, which is building a blockchain-based marketplace for carbon removal. Here’s how it works. In phase 1, a company works with U.S. farmers that adopt regeneration practices, which increase their carbon capture potential. Nori then verifies the related carbon credit and then converts the credit into what it calls Nori carbon removal tonnes, or NRTs. One NRT equals one metric tonne of carbon dioxide that is sequestered in the soil for at least 10 years. After the NRT is independently verified, Nori generates from it a non-fungible token (NFT) on the blockchain. Once bought, the NFT is permanently retired. This step is crucial in making sure the same credit is not passed around from one buyer to the next.
Firms face strict requirements to prove they create a carbon offset. They must use regenerative practices that can include reduced tillage and synthetic fertilizer use, cover cropping and rotational grazing. They also must have 30 years of historical data. This includes forward-looking data to 2030and proof they engaged in new regenerative practices after 2011. The difference between old and new practices is how carbon credits, which last 10 years as an NRT, are created. Farmers set their own prices for NRTs on Nori, but can sell 85% of their NRTs on other marketplaces.
The financial dynamic of this process can be unpredictable, but suppliers are protected. Because the NFT is a cryptocurrency, it is subject to the same volatility as other cryptocurrencies. Farmers (or landowners leasing to farmers) with long-term plans can hedge against future price volatility by buying carbon at a potentially lower cost today. NORI’s use of blockchain to retire each NFT and independent verifiers to ensure buyers are getting what’s promised makes this company stand out among competitors.
A Decarbonization Opportunity for Agriculture
Because so much carbon is released by agriculture, this industry can be at the forefront of combating climate change over the next three decades, generating huge benefits for the environment and potential gains as an alternative investment for investors. The latter potential cannot be underestimated.
According to McKinsey, its Net Zero 2050 scenario would require spending on physical assets of about $275 trillion between 2021 and 2050, or 7.5 percent of GDP, in the areas the organization analyzed. Because agriculture has so much need to reduce carbon dioxide released into the air and so much potential to address this challenge, in January 2022 Agrifood Conversations spoke with several of the movers and shakers helping to move the world closer to net-zero emissions.
In addition to Nori, they included:
- EarthOptics, which helps farmers use sustainable soil management practices, won the AGCO Innovation Challenge against more than 100 international agtech start-ups around the world vying for the award.
- Soil Carbon Co., which promotes microbial soil sequestration to help capture carbon and increase soil resilience.
- Vence, an autonomous livestock control and virtual fencing company using artificial intelligence to optimize rotational and strip grazing to maximize yield.
Don’t miss our February 2022 presenters, when we will be focusing on Crop Protection. Register for the series now.