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Climate Change Economics: Carbon Capitalism, Regenerative Agriculture & Beyond.

Updated: Jan 13

This excerpt is taken from "Climate Change Economics: Carbon Capitalism, Regenerative Agriculture & Beyond" by James Scott

Man stands at the precipice and stares into the distance begging for a glimpse of his future; staring back is the virtually futile reality of anthropogenic climate change. The Paris Climate Agreement and the recent COP27 Climate Conference have set ambitious goals for the reduction of anthropogenic greenhouse gas (GHG) emissions with the goal of reaching net-zero emissions by 2050 and limiting the global increase in temperatures to 1.5oC. To reach these goals, immediate and coordinated action is required. While new technologies are being developed to help reach these goals using renewable energy, carbon sequestration from the atmosphere, etc., there are technologies and solutions that can be deployed immediately to reduce GHG emissions. The most effective solutions are market-based solutions that can be implemented without a large permanent public investment. However, these solutions will probably need public-private partnerships to accelerate their adoption to meet the GHG emissions reduction goals.

Around 25% of global GHG emissions are produced by agricultural production, directly or indirectly. Therefore, any plan to reduce GHG emissions to net zero must include reducing agricultural emissions. Regenerative agriculture represents a set of practices that can minimize GHG emissions from agricultural productions, potentially creating negative emissions. This means that widespread adoption of these practices could reduce the overall global agricultural GHG emissions to zero or even make global agricultural production an effective mechanism to reduce global GHG emissions. Another important aspect of the adoption of regenerative agriculture practices is that this is economically viable – the initial investment required to make a switch to regenerative agriculture will pay off through the increased economic value of the agricultural production of regenerative farms. Considering that most methods for the reduction of GHG emissions require direct investment into emissions reduction without any long-term economic benefit other than climate change mitigation, it is clear why regenerative agriculture can be a powerful tool for combating climate change.

There is a complementary market mechanism that can be used to accelerate the adoption of methods for the reduction of GHG emissions – carbon markets. This is a market framework where carbon savings and negative emissions can be traded by entities that employ carbon sequestration methods to allow other companies to compensate for their own emissions while providing a financial stimulus for carbon sequestration and GHG emissions reduction. This also drives innovation because the development of better GHG emissions reduction methods can bring immediate economic benefits. These carbon markets have already been shown to provide an effective market-based mechanism for emissions reduction, and the main issue has been to expand them geographically, increase the supply of carbon credits, and provide a uniform framework for their operation.

Here we will provide an overview of the issues and opportunities pertaining to the adoption of regenerative agriculture and the development of local and regional carbon markets.

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