As the Intergovernmental Panel on Climate Change (IPCC) reminded us in 2018: limiting global warming to +1.5°C by 2100 will require a rigorous decrease of our emissions but also the development of measures to increase carbon sequestration. Yet, it should be noted that only carbon sequestration potentials associated with the use of bioenergy with carbon capture and storage (BECCS) as well as planting new trees were considered in these models.
According to Climate Action Tracker, we are currently still on track for a rise in temperature of 2.7°C–3.1°C1. In this context, various recent publications highlight the crucial role of technological2 advances and nature-based solutions. Data suggests that, if implemented, nature-based solutions could help reduce temperature by 0.4°C in a global warming scenario of +1.5°C by the year 21003.
However, these nature-based solutions would not be able to contribute this much in the case of a +3°C trajectory. Indeed, the capacity of carbon sequestration in biomass would be altered by rise of temperatures that is too high. And, contrary to current models, the range of nature-based solutions is much broader than just the use of BECSS and afforestation (i.e. planting trees). Other nature-based solutions available fall into three categories: (1) conserving current carbon stocks (e.g., by stopping deforestation), (2) restoring degraded ecosystems, and (3) implementing new practices that store carbon. In this article I will focus on this third solution.
Increasing carbon sequestration
As an example, implementing new farming practices in the agricultural sector, such as cover crops or rehabilitating degraded soils, would make it possible to capture approximately 0.8GtCO2/year4 on a global scale (compared to ~42GtCO2 emitted in 2017)5. Furthermore, a national-scale diagnostic performed in France confirmed the existence of a maximum potential6 of 29 MtCO2/year – equivalent to 39% of French agricultural emissions in 2016 (excluding land use). To roll this out on a nationwide scale would involve implementing new measures such as extending the use of intermediate crops, agroforestry practices, adding temporary meadows and increasing the duration of their use.
Moreover, voluntary carbon markets are one of the main ways to promote carbon sequestration efforts. The word “markets” is used in the plural because exchanges between project leaders and buyers are done at different scales – either international or local. At the international level, carbon projects are backed by labels and recorded in a registry system to ensure the traceability of credits and transactions between sub-national actors (companies, private individuals…) located in different regions of the world.
Between 2018 and 2020, 401MtCO2 of carbon credits were issued on the international voluntary markets7. The average price observed for these carbon credits, across all categories, is 2.7€/tCO2 while projects involving carbon storage in the forest industry hold the top position with an average price of 7.5€/tCO2. These prices remain low, however critics often point out the limits of such investments in these projects. Particularly when they are used as an easy, low-cost way to demonstrate an ambitious climate strategy without taking significant CO2 reduction measures.
Mobilising carbon label certifications
One of the trends identified for voluntary carbon markets by 20308 is a rise in demand for local carbon projects – meaning initiatives developed in the buyer’s country – which resonate more with the expectations of companies. The price of carbon credits coming from these markets could vary between 40€/tCO2 and 75€/tCO29 which would be more in line with the identified costs for the development of carbon sequestration projects. This is particularly true for the French agricultural. Half of projects would generate costs estimated at ~49€/tCO2. These projections are in line with the dynamics observed in recent years which show a rise of carbon label certifications at the national level in Europe but also on other continents10.
Thus, the development of certification labels, like the Label Bas-Carbone in France, are a chance for companies to explore potential opportunities that already exist in their value chains. These mechanisms make it possible for companies to initiate projects while handling potential risks associated with these (non-permanence, additionality, uncertainty). In other words, it makes it possible to take action, while providing a framework to make the most of these efforts.
The advantages associated with an investment in such projects are numerous: better upstream management of the value chain, a reduction of emissions outside a company’s strict perimeter but still within its value chain, contribution to global carbon neutrality, strengthening ties with raw material producers and developing a territorial foothold. Upstream knowledge of a company’s value chain is also a preliminary step to face another challenge: increasing its resilience in the face of climate change, through adaptation measures.
We must remain realistic: the access to voluntary carbon markets to support the funding of carbon sequestration projects is not a miracle solution to align all companies on a track of 1.5 °C. Nonetheless, this frame gives companies the opportunity to strengthen their value chain and to handle the risks associated with such practices. This is part of a wider range of levers that companies have at their disposal to begin the transition towards a low-carbon model. We must capitalise on this!