Too many corporate carbon offset schemes rely on measuring soil organic carbon — which is highly variable, hard to measure and easy to lose. Here is a four-step framework for companies looking to create tangible impacts on the ground (pun intended).
The agricultural sector urgently needs to close an 11-gigaton greenhouse gas emissions gap to limit global warming to below 2°C, whilst feeding three billion more people by 2050. Financing this transition won’t come cheap; but there are high hopes that carbon markets will help to mobilise much needed finance to drive this.
However, while hopes are high, this has not happened. One major reason is that measuring soil organic carbon (SOC) is the predominant approach used by corporations; but due to the nature of soil, SOC is highly variable, hard to measure and easy to lose.
To drive action at scale, new approaches must be introduced — while also ensuring that the carbon-farming ‘gold rush’ we are witnessing won’t lead to temptations to cut corners or invest in solutions that fail to deliver.
The good news is that there are other ways to unlock climate finance — at SustainCERT, we are trying and testing and want to scale them.
The What, Why and How of Product-Level Impact Measurement and Carbon Labeling
Join us at SB'23 San Diego as Allbirds, Logitech, Oatly and the Cradle to Cradle Product Innovation Institute share insights on their journeys toward product-level impact measurement and reporting — including the methodologies and processes they have put behind their carbon labels to ensure high quality, accuracy and verifiability.
I want to offer project developers and companies looking to make a difference a four-step framework that includes guidance on SOC, as well as highlighting new solutions which provide an alternative to offsets:
1. Choose a well-recognised carbon offset standard
Many new entrants selling carbon offsets are using quantification approaches that simply weren’t designed to measure carbon at the level of detail required for offsets. Their argument is that issuing offsets from agriculture is too hard under legacy standards; and their proposed solution is to cut corners to democratise carbon markets.
We cannot let this happen. Working in this way will lead to questionable projects and expose companies to potential accusations of greenwashing. My advice for companies seeking to buy carbon offsets is to always choose an established standard that’s verified by an independent third party. The combination of a credible standard and an independent verification body will allow you to make sure all the relevant risks were properly mitigated — including, for example, the risk that carbon is re-released into the atmosphere or that the same offset is used twice.
2. Go beyond soil organic carbon
Issuing offsets from SOC intervention is the ‘highest-hanging fruit,’ which means it comes with challenges; there is no easy solution available to measure SOC changes over short periods of time and over relatively small locations.
This sequestration of carbon in the soil is slow and volatile, making it hard to ensure that a given plot has sequestered a material amount of carbon over a limited period of time (say, a year). Furthermore, the impacts claimed by soil carbon sequestration can be reversed at any time without you even knowing it, making this approach ill-suited for compensation claims.
Before jumping into SOC head-on, I therefore highly encourage you to look at other interventions that are less complex to monitor and can yield significant mitigation outcomes. There are many alternatives that unlock reductions that are, by nature, permanent — such as reducing enteric methane emissions from dairy and meat production, reducing fertiliser use, investing in the roll-out of renewable energy on farms, or even partnering with the growing number of innovators who can create new products from greenhouse gas emissions.
3. If you go for SOC, do it at scale to increase accuracy
We need a race to the top, not a race to the bottom — which means investing in projects that are producing real offsets, not hot air!
One simple way to achieve this is to design large-scale projects. To drive real impact at scale, we need to incentivize greater data accuracy that can be achieved through large-scale monitoring and technology-enabled verification. Large-scale, direct measurement reduces the level of uncertainty of the data collected; and models generally work better at scale.
4. Choose scope 3 units as an alternative to offsets
There is significant untapped potential to drive finance towards climate-smart agriculture through the issuance of Scope 3 units, rather than offsets. Scope 3 units represent the carbon intensity of the agri-commodity and are used by corporations to report on their scope 3 emissions and the progress they are making towards their science-based targets. There are three simple reasons why you may want to consider scope 3 units, rather than offsets:
A scope 3 unit can reward past and existing good practices. Offsets, by definition, should be limited to new practices that could not happen otherwise (so-called “additionality”). Scope 3 units go beyond this, allowing for early adopters to gain the recognition they deserve for moving forward ahead of their peers.
A scope 3 unit allows you to measure changes in emissions during a calendar year. This means that you don’t have to ensure permanence over 100 years, as is required with high-quality offsets. Instead, you need to commit to measuring changes in the SOC content year-on-year and be accountable for any reversals that may occur.
A scope 3 unit creates shared responsibility and benefits for all players in the value chain. That’s because scope 3 emissions and reductions are accounted for by all players up and down the value chain. Hence, with the issuance of scope 3 units, it is possible to create incentives for all players to co-invest and claim the same mitigation outcomes.
Carbon markets are there to offset emissions; you need to make sure these assets meet verified criteria — otherwise you expose yourself to greenwashing.
The beauty of Scope 3 units is that they can channel finance to low-carbon interventions, whilst providing much-needed flexibility to incentivise action at scale without cutting corners.
This approach works — we have just launched a partnership that confirms verified Scope 3 units can drive finance at scale towards low-carbon interventions in agriculture value chains.
Ultimately, we will need all tools in the toolbox to reach net zero — including offsets, scope 3 units and much more; and it will be critical going forward to make sure we use the right tool for the right purpose.