The business case for nature
Carbon accounting in the new nature economy
No. This is not a vista from tree huggers, seaweed fanatics or olivine enthusiasts. This is how the World Economic Forum (WEF) imagines 2030. In their New Nature Economy Report Series, the WEF states that over half of our economy is threatened by nature loss. There is simply no future for business as usual. Is a win-win for nature, people and business even possible? According to the WEF, it is.
“A new nature economy could generate up to $10.1 trillion in annual business value and create 395 million jobs by 2030.” — World Economic Forum
At the core of this new economy are nature-based solutions. Solutions like agroforestry, seaweed and olivine, that have cascading benefits for our society, environment and economy. And as the cherry on top, natural solutions can provide 37% of the necessary climate solutions.
Yet, nature-based solutions receive only 3% of climate funding.
How can we bridge this gap so that natural solutions reach a meaningful scale in time?
Carbon accounting: three fundamental flaws
Quantifying and monetizing carbon removal — a.k.a. carbon accounting — is one of our best attempts to create a business case for nature. But while carbon removal demand is growing rapidly, carbon accounting mechanisms are failing. Tons of flawed, cheap credits are used for offsetting and greenwashing: only 7% of regular UN certified credits are actually additional — truly effective for the climate. Carbon accounting systems are too closed, complex and narrow to effectively support nature-based solutions.
1. Carbon accounting systems are closed
According to the WEF, the new nature economy and the Fourth Industrial Revolution go hand in hand, by blurring the lines between our physical, digital, and biological spheres. Soon, it’s possible for billions of people to have open access to real-time data of crop growth, soil nutrients, water levels and carbon removal. But as of now, carbon accounting takes place behind closed doors. Models, calculations and methods are proprietary, as the salary of third party certifiers depends on it.
2. Carbon accounting systems are too complex
Carbon accounting has become a business model in itself. Certification costs of ~$200.000 rule out all small (local) projects, whilst these can scale fast and distributively. And to keep temperatures below 2°C, we now need exponential action, which is by definition distributive.
3. Carbon accounting systems are too narrow in focus
Most nature-based solutions are multi-potent, meaning there are more benefits than carbon removal alone. However, these ‘additional’ benefits, like biodiversity and livelihood improvements, are currently not accounted for in the carbon credit price. And when carbon is the only key performance indicator, organisations start planting massive monocultures that do more harm than good.
Carbon accounting opportunities
ONCRA makes selling and buying certificates for natural carbon removal as open, simple and holistic as possible.
1. Carbon accounting should be open
To fully harness the symbiosis between nature and technology, carbon accounting requires effective data governance mechanisms that support the exchange of information and protect against misuse. Our frameworks, calculation sheets and models will all be open source and open access. The created carbon credits will be registered in a distributed ledger, independently governed and owned by all participants in a carbon commons.
2. Carbon accounting should be simple
Simplicity isn’t about dumbing down, it’s about prioritizing. That’s why we focus on finding carbon accounting bright spots — the best of what’s already out there — while discarding any unnecessary weight. In a community of practice we unite scientists, policy makers, accountants and entrepreneurs to develop a lightweight yet comprehensive carbon accounting methodology. By streamlining the accounting process, capital flows directly to nature-based solutions.
3. Carbon accounting should be holistic
Because of its visual simplicity, scientific grounding and holistic scope, we develop world’s first Doughnut-based accounting standard. By incorporating Doughnut Economics, we account for all social, environmental and economic risks and benefits. The additional benefits act as a multiplier in the carbon credit price, to reward true regeneration.
Changing complex systems is hard, agreed Donella Meadows, environmental scientist, educator, and renowned author of the books The Limits to Growth and Thinking in Systems. After years of system analyses she concluded:
We can’t control systems or figure them out. But we can dance with them!
We don’t pretend to have a silver-bullet solution for all our nature and climate problems. But we do believe that ONCRA can be the beat that swings us towards a regenerative future — the new nature economy. So let’s dance!
Visit oncra.org to join our community of practice.