18th Jun 2024 Gemini 1.5 Pro
Josh Knauer, co-founder of ReSeed, argues that legacy carbon markets have significant limitations. He emphasizes that these markets have largely failed to engage farmers, who are responsible for managing vast amounts of land and carbon.
Knauer points out that less than 1% of carbon credits originate from agriculture, with a mere 0.03% coming from sustainable or regenerative agricultural practices. This exclusion is particularly concerning because there are millions of smallholder farms globally, often struggling financially and vulnerable to land loss. This vulnerability threatens not only livelihoods but also leads to deforestation and carbon emissions.
It's an entire donut hole in the carbon world in that less than 1% of all carbon credits come from agriculture at all and 0.03% of carbon credits come from sustainable or regenerative agricultural transition practices. So if that isn't happening. And those are the people, you know, there are 600 million farms, smallholder farms in the world, 2 billion people, family members who live on those farms and work those farms, and almost all of them live at or below the poverty level in the country in which they are.
ReSeed addresses these limitations by introducing two new carbon credit classes: protection credits and sequestration credits. The protection credit acknowledges the vital role farmers play in preventing deforestation and maintaining existing carbon stocks. By providing economic incentives for farmers to remain on their land, ReSeed aims to prevent the negative environmental consequences associated with land conversion.
Sequestration credits, on the other hand, reward farmers for actively removing carbon from the atmosphere through regenerative agricultural practices. This approach encourages the adoption of sustainable farming methods that enhance soil health, increase biodiversity, and improve water retention.
Knauer acknowledges the challenges of establishing accurate baselines and counterfactuals in carbon markets. Traditional models often rely on long-term projections based on limited data, leading to inaccurate estimations of carbon sequestration or avoidance. ReSeed takes a different approach by focusing on measurable changes over shorter periods.
Their methodology incorporates the IPCC vulnerability index to assess the likelihood of farmers being forced off their land. By tracking socioeconomic factors alongside environmental data, ReSeed aims to demonstrate the tangible benefits of keeping farmers on their land and incentivize the adoption of regenerative practices.
Knauer emphasizes the importance of transparency and accountability in carbon markets, aspects often lacking in legacy systems. ReSeed tackles this by employing blockchain technology to create an auditable trail of data throughout the carbon credit lifecycle.
Our entire reputation, our entire business model, our ability to make money only exists if we have accountability in our system. So how do you do that? And these are recommendations that are widely accepted and that need to happen, and most people don't know how to do it. And this is where we've spent a lot of time thinking about this, which is have open and transparent data.
This approach allows for independent verification of carbon sequestration or avoidance claims, ensuring the integrity of ReSeed's credits.
Knauer envisions expanding ReSeed's model beyond carbon credits to encompass other environmental and social impact metrics. The data collected from farmers can be leveraged to develop certifications related to deforestation-free supply chains, biodiversity conservation, and improved livelihoods. This holistic approach aligns with the growing demand for businesses to demonstrate their commitment to sustainability and social responsibility.
By connecting farmers directly with markets that value these outcomes, ReSeed aims to create a more equitable and sustainable food system. Their model underscores the importance of recognizing the multifaceted value of smallholder farms and empowering farmers as key partners in the fight against climate change and biodiversity loss.
Airtable