CO2eco is delighted to be partnering with Future of the Amazon Foundation and the people of Arariboia to develop a pioneering reforestation project. We have developed a structured contract to fund the project and deliver long-term income to enable the community to protect and restore their rainforest and preserve their culture.
More news soon – but contact us if you want to know more.
The CO2eco team has been very patient while financial markets and global climate proto-regulation continue their existential battle between the forces of internalised capitalism and the drive for a just economic transition. At stake? Only the survival of the human race and much other life on Earth.
But this week came a major step forward when the climate market’s alphabet soup got a new poster child: the VCMI Claims Code of Practice. Within the techie detail there are really significant investment demand drivers and supply-side flexibilities which boost confidence in climate finance. A silver-gold-platinum incentive scheme for corporates. The linkage with Science-based Targets Initiative for near term target-setting. The marriage with the Integrity Council (ICVCM) project quality standards. The inclusion of avoidance as well as removals – and better still, acknowledgement of beyond value chain offsets.
And the promise of more to come, including an “on-ramp” for companies who haven’t yet worked through all the data and supply chain complexity.
CO2eco applauds the clarity and transparency of the Foundational Criteria and the developmental, incremental approach which recognises that perfection is the enemy of urgent and massive climate transition investment. It promotes investment right now. It avoids the bear-trap of building duplicating rule-sets by working with the grain of the Core Carbon Principles, GHG Protocol, SBTI and others.
There is more work to do, much of it acknowledged by VCMI. CO2eco would like to see GFANZ and its various member bodies in the financial sector throw their full support behind the Claims Code of Practice – this will galvanise contractual commitment to investment and start meaningful progress towards the $trillions AUM that will eventually be needed to turn the tide of climate and nature recovery. And to back up this commitment, we believe two issues need to be addressed.
Firstly, we want to see VCMI and ICVCM working with the accounting and legal professions and UNFCCC to quickly clarify carbon accounting rules. It’s not only the Article 6 international transfers (ITMOs) that need to rapidly be put to bed but also the rigour of corporate carbon accounting treatments – we need to see the matching principle applied to carbon as it does for financial assets & liabilities and income/expenditure. What does this matter? For science-based net zero claims and targets to mean anything, residual emissions in a given accounting period should only be offset with removals that match that vintage, otherwise all sorts of silly games can be played – as they are at the moment when current year emissions are offset with historic REDD+ purchases in the secondary market. If carbon is to become an authentic commodity – insurable, rateable, tradeable (spot/forward/derivative) – it needs to have credibility with mainstream financial reporting and auditing cycles. The matching principle in financial accounting must be applied to emissions and offsets.
Secondly, CO2eco wants to see corporate net zero claims being honestly and transparently supported by contractual commitment, whereby a forecast to deliver net zero must be supported by reporting of the proportion of the plan that has been legally committed to. Foundational Criteria 3 should require the percentage of future reductions and removals targets that have been contracted for (capex and opex). Only this level of commitment demonstrates that the transition plan is credible. And it has the benefit of driving early investment in mitigation projects.
The various organisations* on the carbon market field of play need to hold hands and work as a team to solve these loose ends as soon as humanly possible, because capital needs to flow in its $trillions to mitigate and adapt to the climate and nature crises.
*alphabet soup time…. team members include (but not limited to): VCMI, ICVCM, HLEG, SBTI, GRI, SASB, FRC & ISSB, GFANZ and all its constituents, CDP, ICROA and its members, IETA, TCFD, TNFD, and Article 6 negotiators in the run-up to COP28.
Rainforests are home to an astonishing array of plant and animal species, many of which are endangered or undiscovered, while playing a crucial role in maintaining the planet’s climate balance. But they are under threat: the tropics lost 4.1m hectares of primary rainforest in 2022 – the area of Switzerland – an increase of 10% on 2021. Monitoring forest health and the distribution and abundance of species is crucial for rainforest protection. AI and ML techniques have revolutionised species identification: by training algorithms on large datasets of species occurrences and environmental features, AI can accurately detect and classify different species in aerial and satellite images. This technology aids researchers in monitoring the population dynamics, migratory patterns, and overall health of key rainforest species. In this blog post, we explore the significant impact of AI and ML on the use of remote sensing data for assessing rainforest conditions.
Technology enabling the impact of AI and machine learning on the use of remote sensing data for assessing the condition/health of rainforests primarily includes:
In the depths of the forest, one cannot help but be taken aback by the overwhelming auditory experience that engulfs the senses. The essence of the forest lies in its vibrant soundscape, where nature communicates in its own unique way. Recognizing the potential of sound as a vital tool for environmental monitoring, Rainforest Connection, a non-profit tech startup based in San Francisco, ventures into West Sumatra. Collaborating with a local group, they aim to establish a network of Rainforest Connection Guardians, deployed atop towering trees, equipped with solar panels and high-powered microphones. These guardians diligently listen to the symphony of the forest, tirelessly identifying specific auditory cues that may indicate potential threats such as the menacing growl of chainsaws, the echoing blast of gunshots, or the rumble of logging trucks and motorcycles. While visual observation may be hindered by distant hilltops, auditory perception allows us to transcend such limitations.
Advancements in ML machine learning coupled with the field of bioacoustics have unveiled a new era before us. Similar to how the microscope exposed a microscopic realm previously unseen, the utilisation of machine learning in sound analysis enables us to comprehend the intricate messages nature conveys, imperceptible to the human ear. By incorporating GPUs into purpose-built devices, we empower these instruments to conduct sophisticated machine learning algorithms on the fly, analysing incoming audio and making real-time decisions regarding data transmission to the cloud. Sound, being a temporal medium, demands an equal amount of time to listen as it does to record. As a result, the arduous task of auditory analysis is impractical for humans, yet machines excel in this domain. Leveraging existing cellular networks, the captured data is efficiently dispatched to the cloud, processed, and subsequently transmitted back to ground personnel.
It is crucial to recognize that safeguarding even a small expanse of a few square kilometres within the rainforest holds a disproportionately significant impact on mitigating climate change. The efforts of these vigilant guardians, patrolling and protecting these select areas, echo far beyond their immediate vicinity. In fact, the environmental benefits achieved are akin to removing thousands of cars from the road. Thus, the responsibility to develop and employ such technological advancements lies with those who understand the importance of preserving our planet’s heartbeat—the interconnectedness of nature through its symphony of sound. It is an untapped resource that, if harnessed effectively, holds the potential to safeguard our living planet for generations to come. https://rfcx.org/
One of the most significant contributions of AI and ML is their ability to process vast amounts of remote sensing data quickly and accurately. AI can identify and extract information from images, such as vegetation density, deforestation patterns, and changes in land cover. ML models can learn from labelled datasets, improving their accuracy and identifying complex patterns that may elude human observers.
Deforestation poses a significant threat to rainforest ecosystems. AI and ML have introduced powerful tools for early detection of deforestation and illegal logging activities. By analysing changes in land cover and identifying patterns of deforestation, AI algorithms can automatically flag areas for immediate attention.
AI and ML techniques are increasingly being employed in predictive modelling for rainforest conservation planning. By integrating remote sensing data with other environmental variables, such as climate data and topographic information, these models can project future changes in rainforest conditions. This helps scientists, project developers and policymakers make informed decisions on land-use planning, prioritising conservation efforts, and mitigating potential risks such as the impacts of climate change, investments and local land practices on rainforest health.
As technology continues to advance, we can expect further innovations in this field, paving the way for more accurate and efficient rainforest assessment and protection.
Deforestation Satellite Images
Brazilian researchers have utilised satellite images and artificial intelligence to demonstrate that the area requiring action against illegal deforestation in the Amazon could be 27.8% smaller than the current strategy implemented by the federal government. The existing plan, known as the Amazon Plan 2021/2022, focuses on 11 monitored municipalities, ignoring new deforestation frontiers outside these areas.
The researchers’ article, published in Conservation Letters, reveals that the high-priority areas with the highest deforestation rates in the Amazon amounted to 414,603 km2 this year, while the plan targeted an area of 574,724 km2 across the 11 municipalities. This indicates that monitoring efforts could be reduced by 160,000 km2, approximately the size of Suriname.
While the deforestation hotspots identified by the researchers accounted for 66% of the average annual deforestation rate, the 11 municipalities in the plan represented only 37% of the deforestation rate between 2019 and 2021.
The researchers emphasised that the current plan fails to cover new deforestation frontiers outside the targeted municipalities.
Guilherme Augusto Verola Mataveli, the corresponding author of the article and a researcher at INPE, stated, “Using this new approach, we concluded that prioritising areas with higher deforestation rates would be more effective than limiting the monitoring to certain municipalities. This is an important finding, given that the agencies responsible for law enforcement in this case, mainly IBAMA and ICMBio, have had their budgets and staffing steadily whittled down. Some of these deforestation hotspots are in the 11 municipalities, but others are in the vicinity and constitute new frontiers.”
The National Council for Legal Amazonia (CNAL), which oversees the Amazon Plan 2021/2022, responded by stating that the plan aimed to focus on areas where illegal environmental activities had the most significant impact on Brazil’s environmental management, while not neglecting other areas in Legal Amazonia.
The researchers highlighted the importance of INPE, which has been producing satellite-based science and technology for 60 years. They emphasised that the advances in data processing, such as the use of artificial intelligence in planning anti-deforestation measures, are crucial for mitigating environmental problems and establishing a sustainable national development plan.
To determine priority areas, the researchers used a machine learning algorithm called Random Forest, which predicted deforestation hotspots for the following year based on multivariate regressions. The method categorised grid cells across the Amazon into high, medium, or low priority classes. The researchers also stressed that their approach captured areas of increasing deforestation not covered by the current plan and did not rely on geopolitical boundaries like municipalities.
Mataveli warned that prioritising only the 11 municipalities would be insufficient for Brazil to achieve its international commitments, including the commitment to reduce illegal deforestation to zero by 2028. The article called for complementary actions to combat deforestation, including environmental education, identifying and holding accountable those involved in illegal deforestation, promoting projects that support the green economy and forest conservation, and regularising public and Indigenous land holdings.
The researchers intend to include the priority areas identified in the study into the Terra Brasilis platform to make the information accessible to state and municipal governments for practical implementation.
Sources:
https://rfcx.org/
https://www.planet.com/markets/forestry/
https://agencia.fapesp.br
Overpromising and under delivery of carbon offsets have underpinned the 20 year-long debate: can the voluntary carbon market tangibly contribute to net zero? Seeking to establish a global benchmark, the Integrity Council for the Voluntary Carbon Market (IC-VCM) issued draft Core Carbon Principles [ref 1] for a public consultation run on its behalf by the British Standards Institute. The outcome is due to be published by Dec 2022.
The IC-VCM is an independent governance body stemming from the Taskforce on Scaling Voluntary Carbon Markets (TSVCM), initiated by the UN Special Envoy for Climate Action and Finance: Mark Carney. The IC-VCM formulated 10 key criteria to ensure that carbon offsets and carbon-crediting programs have a “tangible, science-based and verifiable impact.” An accompanying Assessment Framework expands on the key criteria, whereas the Assessment Procedure outlines the process for approving crediting programs.
Defining the Core Carbon Principles (CCPs)
“For identifying high-quality carbon credits” is the mantra of the framework, aiming to set a threshold for credits and crediting programs to meet. The CCPs are also informed by a litany of global frameworks and bodies: the Paris Agreement, IPCC, Cancun Safeguards, CORSIA, ICAO, Calyx Global and the Carbon Credit Quality Initiative. Ultimately, the IC-VCM wants CCPs to foster trust within the market, and in turn, accelerate liquidity, scalability, and transparent price signals – all for better price and risk management to promote investment in carbon removal and reduction projects.
Transparency is one of the defining ways in which the IC-VCM aims to promote quality, notably through carbon credit attribute standardisation. This ‘tagging’ system will identify four overarching, though not mutually exclusive, attributes:
So far, the Assessment Framework applies to carbon removal credits. However, ICVCM will be exploring how to best incorporate avoidance credits, such as REDD+, into the Assessment Framework.
The 10 CCP key criteria
“Greenhouse gas reductions or removals from the mitigation activity shall be additional, i.e., they would not have occurred in the absence of the incentive created by carbon credit revenues.”
“The carbon-crediting program shall provide comprehensive and transparent information on all credited mitigation activities. The information shall be publicly available in electronic format, and scrutiny of mitigation activities shall be accessible to non-specialised audiences”
“The GHG emissions reductions or removals from the mitigation activity shall not be double counted. i.e., they shall be counted once towards achieving mitigation targets or goals. Double counting covers double issuance, double claiming, and double use.”
Key Definitions:
Prior to consultation, the IC-VCM have not taken a position on whether a corresponding adjustment under Article 6 should be enacted when credits are internationally transferred.
“The GHG emissions reductions or removals from the mitigation activity shall be permanent, or if they have a risk of reversal, any reversals shall be fully compensated.”
(Source: Public Consultation Final Compendium, ICVCM)
Alternatively, approaches which claim permanently valid credits will be scrutinised from three angles:
“The carbon-crediting program shall have effective program governance to ensure transparency, accountability and the overall quality of carbon credits.”
“The carbon-crediting program shall operate or make use of a registry to uniquely identify, record and track mitigation activities and carbon credits issued to ensure credits can be identified securely and unambiguously”
“The carbon-crediting program shall have program-level requirements for robust independent third-party validation and verification of mitigation activities”
“The GHG emission reductions or removals from the mitigation activity shall be robustly quantified, based on conservative approaches, completeness and sound scientific methods.”
“The carbon-crediting program shall have clear guidance, tools and compliance procedures to ensure mitigation activities conform with or go beyond widely established best industry practices on social and environmental safeguards while delivering on net positive sustainable development impacts.”
“The mitigation activity shall avoid locking in levels of emissions, technologies or carbon-intensive practices that are incompatible with achieving net zero emissions by mid-century.”
Next steps
Following the outcome of consultation, it is expected that carbon crediting programmes can start to be assessed by the IC-VCM in Q1 2023, with the assessment process estimated to take between four to six months.
Reception
Concern has been raised over the feasibility of the requirements, with Verra – a globally renowned standard – criticising CCP’s stringency as “satisfy[ing] purists but do[ing] nothing to drive investment at the scale need.” Instead, Verra suggested that the “[CCPs] must build on current programmes and initiatives, rather than sweep[ing] aside past judgement or assume that the IC-VCM’s assessments are superior to those honed over many years by… third parties who have spent considerable time and resources.” [ref 2]
And yet, are existing global leaders in the voluntary market to be wholly trusted?
The Grantham Institute last year discovered that the world’s largest carbon offset programme, the Clean Development Mechanism, had approved 1,350 wind farms in India, of which 52% of the offsets would very likely have been built anyway. (3) Authors of the study then calculated that “the programme may have increased global carbon dioxide emissions by 6.1 billion tonnes, equivalent to running 20 one-gigawatt coal power plants for their entire 50-year lifespan. [ref 3]
Gold Standard, another world-leading carbon offset program, has by contrast welcomed IC-VCM’s proposals: “we increasingly see the importance of the IC-VCM to ensure high standards and provide a benchmark for quality across the market, and to shine a spotlight on entities issuing credits that do not meet this benchmark.” Where others have questioned whether the CCPs can be realistically assessed in the proposed timescale, Gold Standard has said “We do not have time for the trust of those willing to invest to be shaken by standards and methodologies that fall short of where we should be.” [ref 4]
CO2eco’s Closing Thoughts
Grey areas are still yet to be teased out from the IC-VCM’s proposals. For instance, will the CCPs systematically embed Corresponding Adjustments under Article 6? (nb at the time of writing we await outcomes from COP 27 which will hopefully clarify global carbon accounting mechanisms). What will be the implication for the market if they do not? Is the degree of scrutiny on carbon crediting programs justified – or could it damage investment and market liquidity?
Nevertheless, a global benchmark would support market confidence – especially when transparency and trust has been absent for so long. Where climate targets are being missed, driving carbon prices upwards with quality-assured credits is vital for unlocking supply and VCM growth.
In our view, ICVCM’s approach to permanence is critical to carbon credit integrity. After all, shouldn’t the chief aim of a carbon credit be long-term carbon capture?
The treatment of permanence fluctuates widely between current certification frameworks and ratings methodologies. Thus, establishing a reversal compensation method for a carbon credit, insurance mechanisms or reversal risk price-ins could be a major step towards standardising the market for long-term carbon removal.
With the CCPs’ publication imminent, this is a watershed moment for the future of the Voluntary Carbon Market.
Isabelle Deane
Carbon Market Analyst, CO2eco
References
Figure 2. ICVCM, Public Consultation Final Compendium. (2022)
The call to arms on the climate crisis gets louder and louder for consumers, companies and governments. An alphabet soup of action groupings and regulatory bodies has emerged, but are they themselves doing enough?
One of the most robust initiatives is the Task Force on Climate-Related Financial Disclosure (TCFD), established by G20 Finance Ministers and Central Bank Governors. Roll on seven years and it has become legally binding in the UK and New Zealand, with many other countries planning to follow suit. Though recent attention by governments is noteworthy, TCFD’s backing in the private sector is broader: the framework’s supporters have a market capitalisation of over $26.7 trillion, including 1,384 financial firms responsible for assets of $215.6 trillion.
“A more efficient allocation of capital”
One of TCFD’s refrains, seemingly unorthodox at first, epitomises how TCFD stands out. Where investment into emissions mitigation is the dominating language of net zero initiatives, TCFD draws out the cost of inaction. Specifically, what are the implications of climate change for a company? What risks loom in the transition to a lower carbon-economy? In getting companies to communicate these risks in financial filings, TCFD aims for pricing the risks and opportunities of climate change.
Source: TCFD Overview Booklet, Digital
The four core elements are backed by a further 11 recommended disclosures and upheld by 7 Principles for Effective Disclosure:
1. Present relevant information
2. Be specific and complete
3. Be clear, balanced and understandable
4. Be consistent over time
5. Be comparable among companies within a sector, industry or portfolio
6. Be reliable, verifiable and objective
7. Be provided on a timely basis
TCFD also incorporates scenario analysis into its framework to assess how transition and physical risk hypotheticals can enhance resilience strategies. A company can choose to assess publicly available scenarios, such as those published by the IPCC, or develop scenarios in-house – a hybrid option is sometimes adopted too.
Excellent in theory, but what of practice?
EY’s Global Climate Risk Disclosure Barometer 2021 examined the efficacy of climate-related disclosures from over 1,100 companies worldwide, reporting a mere 41% of organisations in the sample conducting scenario analysis. Moreover, a quality-coverage climate risk disclosure gap was reported. Where the average coverage of TCFD recommendations stood at 70%, the average quality lagged behind at 42%. Lower still, only 15% featured climate change in their financial statements.
As damning as these figures are, TCFD reported in their 2021 Status Report that disclosures had improved in quantity and quality. Acknowledging room for improvement, however, TCFD also released an annex and guidance document to close the quality-coverage gap. Seven new cross-industry climate-related metric categories were also developed to facilitate better collaboration.
With increasing uptake and increasing mandatory reporting, the TCFD certainly presents a tour de force in the sustainability arena. The end of 2021 saw the formation of the International Sustainability Standards Board, of which TCFD amongst others is to be used as a basis. A convergence of initiatives is promising, and the inclusion of TCFD is a sure sign of it being here to stay. However, perhaps TCFD’s real asset so far is in its broad support. With EY’s Global Climate Risk Disclosure finding that only 3% of companies produced a report of 100% quality, this begs the question – how long before rigorous auditing also enforces quality?
Isabelle Deane
Carbon Market Analyst
CO2eco develops innovative contracts to connect corporate clients with landowners which can accelerate investment in climate and nature. Our first deliverable in 2022 is The UK Nature Credit.
The Science Based Targets Initiative (SBTi) emerged in 2015 with the world’s first science-based certification. A coalition between CDP, UN Global Compact, World Resource Institute and WWF, the certification provides guidance for companies and financial institutions on how to best reduce their greenhouse gas emissions in order to meet global net-zero.
However, does ambition meet success?
In their latest annual Progress Report, SBTi details their most impactful year yet. With a doubling of companies committing to scienced-based targets from the year before, the reach of the SBTi has amassed from 20% of global market capitalisation to 35% in 2021 – equal to $38 trillion. Exponential growth has marched on undeterred by the combined disturbances of Covid-19 and Ukraine too; a further 500 companies have set targets within the first quarter of 2022.
Targets, of course, are futile without action – but science-based targets have not fallen at this hurdle. Instead, SBTi have witnessed a delivery of the biggest emissions reduction to date: a 29% reduction between 2015 and 2020. Moreover, SBTi companies surpassed the pandemic-induced global emissions decrease in 2020 (see figure 1 below) and are slashing scope 1 and 2 emissions by 8.8% yearly. The efficacy of SBTi has undoubtedly catapulted it from ‘start-up’ to global standard setter.
Source: SBTi Progress Report 2021 – Gross Scope 1 and 2 emissions and annual change rates of companies with approved targets compared to global emissions (2015-2020)
So, what exactly does SBTi target setting look like?
For corporates, the SBTi Corporate Standard provides a Paris-aligned methodology for reducing greenhouse gas emissions across scopes 1, 2 and 3. These scopes refer to emissions produced by a company’s owned or operated assets, energy use, and further emissions (such as suppliers, distributors and product use) respectively. All three scopes are then subject to near-term (5-10 years) and long-term target setting. Keeping the long-term target accountable, the near-term targets are implemented and re-calculated every 5-10 years.
Alongside decarbonisation in the near and long-term, what is referred to as ‘Beyond Value Chain Mitigation’ is strongly encouraged as an additional measure. This process involves making investments which contribute to societal net-zero, as opposed to mitigating the impact of a company’s scopes 1, 2 and 3. Endorsed examples include REDD+ carbon credits, carbon sink degradation avoidance projects and investments into carbon removal technology.
This then leaves corporates with the final task: neutralising emissions at net-zero. Where the long-term targets stipulate a 95% reduction of scope 1 and 2 emissions and 90% of scope 3, remaining carbon emissions must be removed and stored. To complete this step, SBTi allows purchasing high-quality carbon credits outside of the company’s scopes.
Source: SBTi Corporate Net-Zero Standard – Key Elements of the Net-Zero Standard
Undeniably, different sectors will produce more emissions than others – and SBTi recognises this. In fact, sector-specific guidance has been issued for corporates who identify within the following emission intensive industries:
– Apparel and footwear, buildings, cement, chemicals, financial institutions, FLAG (see below), Fossil Fuel Sale/ Transmission/ Distribution, Information & Communication Technology Providers, Iron and Steel, Oil & Gas, Power Generation, Transport Services (Aviation/ Shipping/ Trucks/ Cars), Transport (Original Equipment Manufacturers/ Automakers)
However, upcoming guidance for FLAG (Forest, Land and Agriculture) later this year will be instrumental to companies outside the FLAG sector as well. Where companies have more than 20% of their emissions and/or revenues from FLAG-related activities, a tool will be made available to ensure appropriate and accountable target-setting.
FLAG sector-specific guidance, on the other hand, will address a hotly contested area of ‘insetting’ – where a company’s scope 3 overlaps or borders another company’s supply chain, and subsequently mitigations by a company are either wholly or partially made. Carbon removals for scopes 1 and 2 will also be permitted, unlike non-sector specific corporate guidance.
Understanding the parameters of a company’s scopes and the role of carbon removals is not just complex for FLAG, but also for Financial Institutions. Due to the variety of asset classes, sectors, geographies and companies overseen by financial institutions, a separate Net-Zero Standard for Financial Institutions will be launched early next year. Consultations on this standard have already pointed to areas of interest, especially how carbon removals can be financed through credible carbon credits.
So, what can we take from SBTi target setting so far?
Although some sector-specific standards await confirmation, there are plenty of key takeaways from science-based target setting. Firstly, with neutralising residual emissions being SBTi’s final step to net-zero, it is essential that nature-based carbon removal projects secure funding now. This is so that projects, such as afforestation, have been planted and grown to the point where they can sequester the amount of carbon needed to neutralise emissions by 2050. For the FLAG sector, deploying carbon removals is ever more pressing for reducing scopes 1 and 2 emissions. However, the rush for carbon removals in FLAG will be mitigated by the upcoming guidance on insetting, providing a more collaborative environment between FLAG parties and carbon credits.
Inevitably, takeaways are not without questions. For instance, when is the right time for an SBTi company to start integrating carbon removals as depicted in figure 2? What are the rules on matching vintages with emissions? Could emissions avoidance credits also be implemented by Financial Institutions to finance the technology required for decarbonisation?
Although some areas remain unclear, SBTi’s proliferating influence is transparent. With over 2,200 SBTi companies, two-thirds of which intending to cut emissions at a higher rate than required, a climate science-led private sector can make limiting global warming to 1.5 degrees less of a smoky pipe dream and more a green reality.
Isabelle Deane
Carbon Market Analyst
Despite covering just 3 percent of the world’s land, peatlands store twice as much carbon as all the world’s forests, (UNEP) demonstrating just how vital Peatland restoration is in our efforts to reach net-zero. Restoration, however, isn’t simply an effort to capture more carbon. Peatland degradation caused by drainage for agricultural, horticultural and energy production is estimated to release around 1.3 gigatons of CO2 into the earth’s atmosphere yearly (that’s 1.5 times the amount produced by air travel).
Inaction for our peatlands subsequently presents a double-edged sword. What about the shield?
Current initiatives and policies are in place to bolster peatland restoration. The Global Peatlands Initiative, lead by UN Environment, was established in 2016 to facilitate an international effort to improve conservation, restoration and sustainable management of peatlands. In the UK, a Peatland Strategy aims to conserve 95 percent of the least damaged peatlands and restore 80 percent of the remaining damaged peatlands under restoration management by 2040.
The above considerations look at peatlands with an environmental and governance lens. We have discussed peatlands as an environmental issue and identified the beginnings of governance solutions. Surely, that’s all there is to it?
The answer to that question is a resounding no.
A core element of the ‘S’ criteria is engagement with the local community. Contextualising peatlands with rural communities in Ireland brings an entirely different narrative; not a clearcut solution but one that is complicated by turf cutting.
Turf cutting, also known as turbary rights, is “a right to cut and carry away turf from the bogland and includes the right of preparing and storing on the bog-land any turf cut therefrom.” All the more, it is a huge part of Irish cultural identity. In a recent interview with turf cutters from County Kildare, one man said, “I’ll not stop cutting turf here no matter what law they pass. It’s our tradition. We’re doing no harm here.” He then explains that his mother’s dying wish was that he continued the tradition that has spanned centuries.
Home to Irish folklore, including the púca and the grógach, bogland stores a wealth of national history, as well as tradition. Bogs have been dried and cut for fuel ever since the 17th century. In the midst of World War Two, however, peat sods were regarded as ‘Indigenous Fuel in a time of Need’ when coal imports fell drastically. Efforts to cut peat sods then rose exponentially.
Postcard: Maggie Land Blanck
The sense of sovereignty which emerged from peatland continues today. In the face of oil and gas prices following Ukraine, one County Kildare turf cutter exclaimed, “I never felt so happy to have a shed full of turf. I don’t care what Putin does with his gas, we’re independent.”
However, the role of peat as a fuel has come to a very divided national debate. A symbolic divide between Government and local communities culminated when Ireland’s infringement of the EU’s Habitats Directive and the Environmental Impact Assessment Directive brought Irish peatlands to the attention of the European Commission in 2002 and 2011. Ireland’s 2015 Peatland Strategy subsequently identified “a breakdown of communication and a breakdown of trust between the relevant parties which may be difficult to restore.” Nevertheless, the Strategy outlined its mission to balance the protection of traditional rights through fair compensation with the protection of the environment.
So, what is the situation looking like now?
Photograph: Patrick Bolger, The Guardian
Household name and semi-state company created by the 1946 Turf Development Act, Bord na Móna, will be closing its remaining harvest bog sites in 2025. Recognised by the UNEP, Bord na Móna also plans to restore more than 50,000 hectares of Irish peatlands. A couple from County Kildare stand by contrast, as pictured above, amongst peat briquettes at Mouds Bog – a special area of conservation. Where commercial production of peat has been reduced, the oversight of the ‘S’ from ‘E’ and ‘G’ efforts has caused a substantial delay in wider environmental efforts. As Rory Carroll reports on Eamon Ryan’s, Minister for the Environment, view on the peat debate: the ‘war on peat should have been a skirmish’ on the way to bigger battles over farming, transport and renewable energy.
An irrefutable lesson from this case study is that during the war on climate change, you should never underestimate the importance of local communities. The ‘Think Globally, Act Locally’ ethos echoed in the Sustainable Development Goals has already communicated this sentiment to world leaders. However, where ESG investing is now mainstream, and corporates are pledging net-zero – what of the private sector?
Issy Deane
Carbon Market Analyst
CO2eco develops innovative contracts to connect corporate clients with landowners which can accelerate investment in climate and nature. Our first deliverable in 2022 is The UK Nature Credit.
Monitoring, reporting and verification (MRV) of carbon captured by trees, crops, soils, hedgerows and other ‘nature assets’ requires effective technology. This is usually by earth observation from satellites where algorithms are used to convert the images obtained to leaf area index and biomass enabling authoritative information on the state of the nature asset and estimates on the amount of carbon captured.
Although traditional ground measurements are expensive in labour, they are currently the standard MRV method and are always needed to correlate satellite data. For satellite observation a variety of areas can be used, but the larger the area monitored, the cheaper the cost. The use of artificial intelligence (AI) and machine learning (ML) is facilitating processing that in near-real time, accurately, and cost effectively to a consistent standard.
As a standard, satellites with resolutions of about 22 metres were used but now a variety of high-resolution satellites can be used down to 0.3 metre, which gives greater accuracy in assessment and can identify individual trees. It also increases cost significantly and has less frequent data collections and limited historical archives. Conversely the Sentinel constellation with a resolution of 10m provided by the European Space Agency is free and has data back to 2016 so there is the ability to back test data. The fact that you can go back 5-6 years allows for historic activity to be measured and monitored to understand the impact of decisions and investments made to date. Planet Labs Planetscope data at c 3-5M is a good in- between option. Data choice and their costs is an important factor to consider as MRV projects will take decades to monitor the carbon capture life cycle as it takes about 30 years for a tree to grow and mature.
In the example below using Planetscope at a resolution of 3-5 metres supplied by Earth-i
The real cost however includes processing of data to give information, and it is usually more cost effective to buy this as ‘analysis ready data’ rather than imagery alone. Generally, the cost of such information has been decreasing while quality and frequency increases.
This is illustrated by the image below, again by Planetscope at 3-5 metres resolution supplied by Earth-i, showing the power of identifying landscape and vegetation change using satellite imagery.
For carbon and nature accounting, information needs to be provided in such a way that national and international agencies find acceptable. In the UK, Forestry Commission sets the guidelines and the Woodland Carbon Code, part of the International Carbon Reduction Offset Alliance, is recognised by them as a certification standard, but they do not usually use satellite data. On the ground inspections will not be sustainable at the scale required of a country or even county level. The UK is a relatively small country at 250000 square km and the 78th largest in the world. Internationally the UN, through FAO, is a key agency and countries usually align to those, sometimes supported by the World Bank. They will need to show leadership if the recommendations of COP26 are to be implemented.
Generally, agencies are keen that MRV is fitted into the context of Land Use and Land Use Change and Forestry (LULUCF) as part of assessment of Global Landscapes. One of the challenges is that trees are often planted to achieve maximum biomass production and therefore achieve maximum carbon credits, but this may not be the best outcome for the environment. For example, the extensive planting of non-native Sitka spruce in Scotland in the post-World War II period resulted in land degradation and habitat destruction. Clear felling also generated concerns of the visual landscape quality. There is a balance that needs to be found between promoting biodiversity and maximizing carbon sequestration
Continuous cover forestry with broadleaves and evergreen trees makes sense for both nature and climate. MRV should therefore include assessment of environmental impacts and one of the favoured procedures for this is Life Cycle Assessment (LCA) in which all the aspects of land use for agriculture and forestry can be estimated to demonstrate the value to nature and climate of the land management being used. Assessment of biodiversity change of key indicator species is often a good guide to environmental quality. Measurement of soil carbon, which can be assessed from satellites, is important in determining soil health.
In terms of carbon trading, it is likely that assessment agencies will demand an increased vigilance in MRV of land management and it is important that companies involved in trading have access to the technological capability to satisfy such demands as the carbon market develops while balancing the demands of supporting biodiversity. The challenge is to realise the opportunities while keeping unit costs as low as possible – in general, this is best achieved through ground measurement being replaced by remote sensing, enabled by technology and scale. We say that 80% accuracy now via remote sensing is better than 100% accuracy in two years and too late for optimal decision making. Also, accuracy will improve over time with more data points, targeted ground truth validation, and increasing accuracy and variety of future remote sensing satellites and AI methodologies.
In my work as a land agent, I deal with a variety of landowners and farmers across the UK. Much of this covers day to day land management matters, but inevitably the conversations move to what the future holds for the rural economy.
Agriculture as a sector is unique in so far as being both a major emitter and potential carbon sink.
Agricultural greenhouse gas (GHG) emissions represent 10% of the national total but are very different from other sectors of the economy as the majority are methane (CH4) and nitrous oxide (N2O) rather than carbon dioxide (CO2) from fossil fuel combustion.
Reducing GHGs in agriculture is therefore more difficult than cutting CO2 emissions because they result from complex and imperfectly understood natural soil and animal microbial processes.
The NFU has set the ambitious goal of reaching net zero GHG across the whole of agriculture in England and Wales by 2040. There is no single answer but is likely to be achieved through a combination of:
The net zero challenge for agriculture also needs to be viewed in the context of a reorientation of rural support from area payments to ‘public money for public goods’ embodied in the new environmental land management scheme (ELMS). This transition will take place over a 7-year period, with the inflection point likely to be in 2024-25 when area payments will have halved and ELMS is due to be fully introduced.
DEFRA announced last year that there will be three schemes available under ELMS. The Sustainable Farming Incentive, Nature and Landscape Recovery. Much of the detail of this is to follow but the consensus in the industry is that they will be much more onerous and costly to follow than the out-going area-based payments and the receipts less rewarding. In a recent edition of ‘Farmers Weekly’ it was claimed if arable growers managed to get 30-40% of the old payments from the new schemes, they will be doing well.
In many ways area-based subsidies have had the effect of preventing innovation and progress. Whilst there has been a long-term trend of fewer people working in agriculture and a steady growth in farm sizes, many farm business have remained fundamentally unchanged for decades, albeit with diminishing profitability, supported by commodity and latterly area-based subsidies. Subsidies currently represent 60% of profits across all farm types, but in many instances are the entire profit. Jeremy Clarkson’s ‘Diddly Squat’ farm showed that, despite his best efforts, before subsidy it only broke even.
Presently 4 in 10 of UK farmers are over the age of 65, with an average age of 55. In contrast to previous generations, family farm businesses are only capable of supporting those actively engaged in farming and parents have encouraged their children to be well educated and find employment away from the farm.
Agriculture’s lack of profitability, its image compared to other sectors, and the high cost of land have meant that there have been relatively few new entrants in the industry.
The combination of all these factors is likely to give rise to the biggest change in farm policy since EU accession in the 1970s or perhaps since the last war. These are likely to be on a landscape scale with major changes in farm structure and land use.
One opportunity to supplement farm incomes is “carbon farming”, and the best current example is forestry. The forestry market has seen a succession of record-breaking years with average values more than double what they were three years ago. ‘The Scotsman’ recently reported that sites with natural capital potential are attracting huge interest from environmental buyers and fetching as much as 40 percent over the asking price and commented that carbon markets, which convert and monetise ecosystem services into carbon credits, are also providing incentives.
Carbon prices are predicted to rise significantly in the medium to long term and as such there will be a corresponding opportunity for the farming industry to capitalise on this through new ‘carbon farming’ income streams and capital funding. Improved soils, fewer inputs, more trees and hedgerows will also bring other benefits such as biodiversity, water management and more sustainable and diverse rural economies.
Farming is a traditional industry moulded by the annual arable and livestock production cycles. There is, however, a real urgency for farm businesses and landowners to adapt and match the pace of change if they are to survive and prosper in the long term. As part of the solution there is very much a need for long-term financial mechanisms to attract farmers and landowners to deliver GHG reductions that match the pace of changes in farm policy and subsidies. Historically, the farming industry has proved to be remarkably resilient, and it is with cautious optimism that it can look to the future.
Neil Holiday
Imagine a not-too-distant future where humans have become a wholly urban species. Eleven billion of us crammed into mega-cities, divorced from a rewilded rural environment.
Science fiction? Perhaps it’s not that far-fetched given the pace of change — our insatiable appetite for growth, our reliance on technology and our need to find solutions to ever-decreasing natural resources.
Indeed, I think this scenario could be only a few short decades away. Think back 30 years to the early 1990s… pre-internet, pre-globalisation, pre-pandemic. And during that time, urbanisation in China witnessed the largest migration in human history.
And now imagine 30 years forward, but with an exponential pace of change. The growth of the global population between now and 2050 will necessitate the construction of cities the size of New York every month*. Yes, every month — that’s a lot of concrete and steel.
Perhaps in this scenario we have solved the climate crisis and, in order to feed eleven billion urban dwellers, all our food is synthetic. Our carbohydrates, proteins, fats, micro-nutrients and minerals are produced in factories — perhaps with some fresh fruit and veg from urban indoor farms. No more farmland, no more farmers. No need to fish the oceans. We will only venture out into the new non-urban “wilderness” to mine raw materials and for our own enjoyment.
Many believe that technology will provide the solutions to planetary limits to growth. Bill Gates and others argue persuasively that technical fixes to our social and environmental challenges are within our grasp.
But unless and until we achieve this utopian sustainable future, we have to work out how to feed that growing population while our stocks of natural resources are running dry. As a species, we are living beyond our means in spectacular style — and this trend is accelerating. The excellent and terrifying Seaspiracy — essential viewing on Netflix — quotes academic study that the oceans will be totally fished-out by 2048. Other scientists, quoted in the also excellent Kiss The Ground, forecast that soils in several parts of the world have fewer than 60 harvests left, many a lot less. Destruction of habitat is also destroying pollinators. And of course, we are polluting the air with greenhouse gasses. We are stoking the fires of our own extinction.
Will tech will save us? Which side are you on? Take a test — an elephant is charging you… do you; a) run like hell and put as much distance as possible between you and it to ensure your safety, or b) get out your laptop to calculate how fast and far you will have to run?
a) is what science and economics calls the precautionary principle, and it seems pretty sensible to me. Of course, we must also invest hard on the technical fixes — but let’s also make some “no regrets” changes, and quickly.
The changes I’m thinking of include those specifically related to agriculture and food: enforceable international agreements to protect and recover rainforests and fish stocks, and implement taxes to reduce global demand for high-emissions and ecosystem-damaging foodstuffs such as beef. Courageous leadership by politicians is needed to reduce our consumption of poorly farmed products. The corporate supply chain needs to inject massive investment in regenerative agriculture and fisheries — it’s in their business interests to manage these risks. In fact all of the above is good business, being far more cost effective and profitable than acting later — or too late.
And let’s look at ourselves too — change only happens if people demand it. People only demand it if they believe it, and they only believe it if they see it. So change starts at home, with you and me.
Resources referenced in the text:
Bill Gates: “How to Avoid a Climate Disaster” (2021)