Regenerative Ag programmes, especially those with carbon as a leading indicator like Soil Capital, have emerged as an effective land-based strategy for addressing climate change. These projects are gaining traction worldwide due to their potential to reduce emissions and increase resiliency on farms and in agrifood supply chains.
However, in order for programmes to be valuable — meaning they generate high-value outcomes (like certified carbon reductions and removals) — roles must be structured in a way that ensures programme integrity.
There are many components to a high-integrity programme. One component that is often overlooked is the potential for conflicts of interest — also referred to as independence (as in, independent contributors for each step in the process). From this perspective, a high-integrity programme is one in which there are no conflicts of interest between parties, and the primary incentive of all parties leads directly to the achievement of a climate goal. In the coming paragraphs, we’ll break down the role of independence in building integrity.
Agriculture-based programmes are designed to reduce emissions associated with food production and increase resiliency in food systems. Projects vary in scope, from large-scale government initiatives to smaller private sector efforts.
All of these projects share the same purpose: to mitigate or prevent climate change by reducing emissions of greenhouse gasses. Many projects share a similar method for this work: by incentivizing climate-smart farming practices through growers in a specific region or supply chain.
In addition to climate change mitigation, regenerative ag programmes help restore ecosystems, enhance water quality and bring economic benefits to rural and farming communities.
An effective programme is a collaboration between multiple managing parties beyond the farmers themselves, often including:
While programmes have great potential for improving our environment and economy, they must be properly managed in order to ensure their effectiveness. Climate-smart farming programmes that are well managed are considered ‘high-integrity’ programmes.
What makes a high-integrity programme? There are multiple features that are often talked about - for instance quantification methodology, approach to additionality, permanence, verification and co-benefits - but the structural components of a programme’s governance are more overlooked. On this topic, high-integrity means:
This last bullet point — separation between the development of a project and the quantification of its outcomes — is of paramount importance in establishing a high-integrity programme.
Strategic project development helps ensure clear programme processes and monitoring. With a strong project developer, all stakeholders involved understand their responsibilities, what metrics need to be met for success and what resources might be needed during implementation (e.g., funding).
Strong project development helps prevent double counting, compliance issues within programmes, inaccurate reporting or erroneous certified carbon reductions and removals issued by the programme.
Independent quantification ensures that the programme is, in fact, providing the climate mitigation outcomes expected by stakeholders. Quantification helps us assess the outcomes of carbon projects, such as ensuring that a project reduces emissions at the expected rate—as well as identify areas where improvements could be made.
However, quantification and project development must be independent of one another to ensure that there are no conflicts of interest between the two roles, and that each party (project developers and quantification providers) is incentivized only to work towards the greater project goal.
Let's look at how this can work in practice with the real example of our relationship with Regrow. At Soil Capital, we operate the longest running, certified carbon reward programme for farmers in Europe. Our role is to be a highly effective project developer. Agriculture Resilience platform provider Regrow offers the science and technology needed to accurately quantify the outcomes of the programme. Soil Capital and Regrow are distinctly different organisations, with independence in project development and quantification. Each party’s financial incentives are structured to ensure no conflict of interest, and the only shared incentive is to execute the programme as planned and effectively measure the outcomes of that programme. As such, Soil Capital and Regrow can collaborate to establish a high-integrity programme.
To illustrate this point, consider the inverse situation: in a programme where the project developer and the quantification party are connected — for instance, with the same entity owning or controlling both the project development and the detailed working of the quantification methods, or if multiple parties have exactly the same financial incentives. In this instance, the quantification party may be incentivized based on the volume of carbon assets generated. This incentive may lead the quantification party to overstate the outcomes, or the tons of carbon reduced or abated.
This situation — one in which parties are connected — isn’t hypothetical. In recent years, project developers have acquired quantification technologies within land-based climate sectors, making project development and quantification interconnected. As the sector grows and organisations attempt to ‘streamline’ processes, it becomes increasingly important to monitor independence among parties and ensure that streamlining doesn’t lead to negative impacts down the road.
Ultimately, it’s essential that we keep project development and quantification separate from one another — it ensures both parties are working toward the project goal, and only incentivized to reach that goal honestly and with robust, accurate science.
Programmes with clearly managed conflicts of interest are more trusted in the market. The outcomes of these programmes are considered to be valuable due to the structure of the programme and the checks and balances in place between project developers and quantification providers.
Valuable outcomes lead to a higher price for those outcomes and more profit in the marketplace. In turn, these profits offer more incentives for businesses to establish programmes, and for growers to become involved in programmes and adopt climate-smart farming practices.
To see the science and technology behind today’s leading carbon brands, explore Regrow. Learn more about the partnership here.
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