The Need for Speed: Standards as the Key to Carbon Market Acceleration

    October 13, 2022

    The energy and optimism were palpable at Indigo’s first Science and Policy Forum, which just concluded in Boston. With a focus on accelerating ag sustainability solutions to help the planet and the farmers who tend it, we brought together a diverse set of leaders for learning, experience sharing, and ideation. A few observations from the day stood out.

    Hosting a panel on the farmer’s experience with carbon programs, I was fortunate to have farmers from Indiana and Mississippi and a business leader from one of our strategic partners share their candid views and experiences. There are so many ways we can come together as an ecosystem to increase adoption of sustainable farming practices and programs, and the discussion revealed key areas in which we can all collaborate and problem solve. I appreciated the thoughtfulness of the discussion, and came away even more optimistic that we as an industry can solve the hard challenges in front of us.

    Another discussion led by my colleague P.V. Sundareshwar focused on market infrastructure, honing in on integrity, accessibility, and speed – topics that popped up throughout the day. As the discussion highlighted the apparent tradeoff between integrity (confidence that a program’s quantified outcomes are accurate and represent real environmental impact) and speed of adoption (participation by farmers and purchases by downstream customers), an old lesson came to mind...

    When seat belts were introduced in cars, they didn’t just make cars safer. They also allowed people to safely drive faster.

    This “risk reduction system” gave drivers the confidence and peace of mind to speed up more than they had before seat belts.

    Could this lesson apply to carbon farming and sustainability programs?

    The corporate demand for carbon credits and scope 3 emission reductions is projected to be massive, but the current purchases of these assets – while growing rapidly – are still modest compared to corporate net zero commitments.  (And while those commitments are “voluntary,” don’t be fooled. Companies are likely to be held accountable for their net zero commitments through a mix of regulatory requirements and investor expectations.)

    So what could accelerate adoption of carbon programs by farmers and purchasing of carbon credits by corporations? What “risk reduction system” might have the same impact here as seat belts had in automobiles?

    Perhaps integrity and speed aren’t opposing forces. Instead, credible market standards could be the risk reduction system that unlocks both speed and integrity in the voluntary carbon market.

    Credible market standards built on scientific rigor, transparency, and verification drive understanding, confidence, and ultimately value in the market. Think transparent and detailed protocols, quantification based on rigorous peer-reviewed science, third-party verification, and reputable carbon registries as the backbone of such standards.

    When these standards become widely understood and appreciated by stakeholders broadly, I believe we’ll see another inflection point in the voluntary carbon market.

    Carbon buyers sitting on the sidelines (or buying lower quality credits) will become large-scale participants, willing to pay higher prices for a higher quality product that provides peace of mind for those serious about their net zero commitments.  In turn, higher prices have the potential to draw orders of magnitude more farmers into carbon programs.

    So when you think about what Maverick and Goose might call the need for speed, ask what you can do to accelerate understanding and adoption of credible market standards. The future is within reach!