There is a lot of controversy surrounding carbon markets as well as funding for loss and damages and for good reason. Traditional climate finance is likely doing more harm than good.
Systems which align economic value with planetary regeneration can be a transformative force to fund and nourish planetary regeneration.
COP27 has the opportunity to leverage article 6 for the proliferation of viable regenerative economies around the world with a new set of ethical standards.
If the regenerative revolution is not community owned and governed, we are not going to make it.
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One of the most important outcomes of COP26 was the approval of Article 6 of the Paris Agreement, which outlines terms for the creation of an international climate mitigation exchange. What that means is:
Carbon markets are a quickly expanding sector of the global economy appraised at nearly 2 Billion USD. If you are not paying attention to them as an emerging financial mechanism, for better or for worse… you should be.
While introducing important economic mechanisms to incentivize global drawdown, Article 6 fails to create viable economic development for communities and peoples practicing planetary stewardship and regeneration.
Without a structural shift in resource flow to regenerators aided by credit markets, the long term benefits of carbon markets and climate finance is superficial and largely a matter of accounting.
This is a missed opportunity to bring new integrity to the field of regenerative finance by realigning economic and ecological prosperity in transformative ways. For COP27, the stories and the technologies we create around regenerative finance need to evolve.
We at the Regen Foundation see many grave problems embedded in the traditional climate finance (Trad Cli Fi) space. We see the conspicuous shortcoming of article 6 to be:
Only a very small percentage of credits sold could accurately be called regenerative through applied ecosystem restoration and management. The vast majority are based on avoided carbon emissions, or other technical solutions. We have a multibillion dollar industry to exchange carbon negative actions, where only a very small percentage are the result of tangible planetary stewardship. No wonder many are cynical.
A strong overemphasis on carbon as the sole metric of ecosystemic health. Carbon naturally cycles, and healthy soils may cycle carbon at a faster rate than depleted soil ecologies. Any single measure which becomes a target ceases to be a good measure.
A centralized model of creation and issuance of credits which lacks appropriate transparency and accountability.
Emphasis is overwhelmingly on big projects, and economies at scale. Many smallholders already practicing regenerative techniques are not able to be seen by the current system, and thus participate in value creation.
There is not clear enough differentiation and quality assurance between credits produced via community / nature based approaches (actual trees, ecosystem services, Natural Carbon Tons NCT etc), and avoidance-based approaches (renewables instead of fossils, BCT etc)
Most poignantly, the system is not designed to create long term viable economic prosperity for those working in regeneration, and localized carbon drawdown… but it could. Local communities and viable bioregionally based economies are not given voice nor ownership in the production and sale of carbon credits.
That’s a lot, but broadly speaking, we see the above issues as manifesting through 2 dominant forms.
The first concerns the integrity of the science and data used to substantiate claims of regeneration in the form of credits. We have limited to simply inaccurate metrics of planetary wellbeing which are easily gamified. Quality assurance for the limited parameters of regeneration we do have lack public transparency and accountability.
The second concerns the political process of deciding who decides what frameworks are best and where. Can there be due process for diverse stakeholders to weigh in, not least of which land stewards themselves? How can there be feedback through a transparent political process to ensure the aims of planetary protection are being upheld? If the systems we build are not (at least in part) owned by the communities they serve, the harms of the past will be repeated.
The scientific and political basis of an international exchange which actually verifiably achieves its goal of planetary regeneration is wildly underdeveloped. Article 6 has successfully created an exchange but not one we could call regenerative.
COP27 is an opportunity to revisit the terms of article 6 in order to evolve the scientific and political terms of climate finance which incentivize planetary regeneration and viable economic development.
In order to prevent the worst case scenario of the climate crisis, we must reimagine climate finance to be:
Driven by tangible efforts to heal the biosphere, and not overwhelmingly by maneuvers of carbon accounting and emissions avoidance.
Freed from carbon tunnel vision. We need rich and multidimensional parameters of ecological health and regeneration. Not carbon credits but eco credits. Ecocredits are much more holistic representations of planetary prosperity which may include biodiversity, erosion mitigation, aquifer restoration, as well as social dimensions. At what point do the co-benefits associated with GHG drawdown begin to define the integrity of the credit?
A decentralized process of creation, approval, and issuance of ecocredits. Transparency and accountability make it clear to the farmer / land steward, purchaser, as well as the intermediary product developer on who gets a share of the pie, how much and for what. Decentralized credit “registries” are the future for the creation of voluntary credit markets which build upon existing infrastructures and technologies of monitoring and verification.
Designed for minimal burden and overhead for planetary stewards. Credit creation must be viable for small holder farmers, and lower capacity organizations who are doing essential regenerative work but cannot compete with factory farms.
Defined by clear quality assurance with quantified uncertainty of impact according to the methodology by which the credit was produced.
Co-created with communities. The infrastructure which supports our transition to a regenerative definition of value must be community owned and governed in service to bioregional economic development. In order to not perpetuate neocolonial extraction in the form of natural assets, the communities and projects which create value through regeneration must have a decisive level of input and ownership in the system.
We believe web 3 has the potential to fundamentally transform the accountability, ownership models, and governance of regenerative finance.
Blockchains and Decentralized Autonomous Organizations (DAO’s), should not be defined by the lack of imagination for planetary good held by their early adopters. We think the transparency, consensus, and potential for distributed ownership and governance of blockchains make them extremely helpful tools to support the larger effort of making climate / development finance serve those communities doing the work of healing our planet.
Imagine a world where there was an option to make a living off the land that was not predicated on the extraction and harvesting of the land’s value. Right now, that doesn’t exist.
The future of the economy is a marriage of economic and ecological prosperity. The Regen Network is at the vanguard of rebuilding the essential infrastructure for ethical ecosystem service markets, and the Regen Foundation is at the vanguard of developing tools, and protocols to ensure communities hold essential stake in this system. If our mechanisms of regenerative finance are not (at least in part) owned and governed by the people on the front lines of the climate crisis, then we are just going to repeat the same harms of the past.
Without community ownership we are not going to make it.
If you feel this work resonates, and speaks to your theory of change, then join us in building the foundation for communities to own and govern the new regenerative economy,
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