Are Carbon Markets Giving a Clear Signal?

Last month the Regrow team attended Food, Ag, Ideas Week, hosted by Grow North MN. During the conference Julian Sanchez, Director of Emerging Technologies at John Deere, analyzed key trends and topics in AgTech Innovation. Sanchez reviewed the lasting power of new innovations, identifying some as providing a “clear signal” and others as being “noisy” in the industry. 

Which technologies, Sanchez asked himself, are ripe for acceleration in agriculture? Which are being muddled or muffled by industry chatter, or by misunderstood intentions and applications? 

Carbon markets were positioned somewhere in the middle of Sanchez’s spectrum of ag technologies, between ‘clear’ and ‘noisy.’ According to him, though carbon credits are a useful way to incentivize regenerative and sustainable farming practices, scalability could potentially limit its growth in the industry.‍

‍Concerning Scalability‍

“Carbon is still in its nascency in terms of scalability…. there’s been quite a bit of noise over the last year about carbon markets — how they’re going to grow, and whether they’re going to take off.”

Our experts at Regrow agree with this notion. Carbon markets provide a significant opportunity for transforming agriculture, and for increasing adoption of climate-smart farming practices. However, these markets are limited in their ability to scale effectively. 

Validating new farming practices — the practices that help farmers sequester carbon and establish credits — require time and manual labor. Validation includes efforts like extensive soil sampling and observing farmers’ fields for practice changes.

At Regrow, we’re using remote sensing and the DNDC model to account for issues in carbon market scalability. These technologies and scientific models will reduce the need for manual practice verification, which allows markets to be applicable to more farmers and more acres.‍

‍Clarifying the Signal‍

The sources of noise in carbon markets are applicable to other markets in sustainable agriculture. The emergence and stabilization of carbon markets opens the door for ecosystem markets, which will allow farmers to earn profits for water quality, soil health, and other key metrics in climate action. 

As with carbon markets, scalability will be essential in enabling these markets. With growth in carbon markets comes assurance for future markets.

As Julian Sanchez noted,

“it’s worth continuing to unpack this signal. Part of the ‘noise’ in the industry is driven by the fact that it’s still evolving. It’s up to us in agriculture to define how that will play out.”

We look forward to unpacking this signal, both for carbon markets and for ecosystem markets as a whole, and working with the industry to propel the technology in a way that makes resilient agriculture ubiquitous globally.

Learn more about the development and future of ecosystems markets in our eBook: Carbon Farming & Ecosystem Markets 101.