Rabobank turns to farmers to tackle climate change and boost biodiversity
Sustainable agriculture holds the key to reducing emissions and transforming the global food system, says Rabo Carbon Bank’s chief executive.
An innovative division set up by Rabobank to produce carbon offsets through regenerative agriculture has attracted strong demand from investors eager to address biodiversity loss as well as climate change.
The idea behind Rabo Carbon Bank, which launched in January, is to take advantage of growing appetite for carbon credits from investors and corporates with net zero commitments to help farmers move to more sustainable farming methods.
Barbara Baarsma, its chief executive, explains this dual remit: “We urgently need to combat climate change, but we also need to systematically change our food system, because we will need to feed twice as many people with half the emissions.
Our goal is to drive a transition to more sustainable agriculture
“Rabobank is one of the largest food and agri banks in the world, so we have a special responsibility and a special opportunity to combine the two by curbing climate change in the sector and also transforming our food system.”
Regenerative agriculture, popularized in last year’s Woody Harrelson documentary film 'Kiss the ground', involves reduced or no tillage, planting non-cash crops to improve soil quality and reduce erosion during fallow periods – known as cover crops – and regular crop rotation.
“Transitioning to regenerative farming not only improves soil health and offers extra revenues from soil-sequestered carbon credits, it also provides improved biodiversity, better water management, and more resilient and more nutritious food production. Plus, the soil is more productive,” says Baarsma, who is also professor of applied economics at the University of Amsterdam.
She notes that this means that carbon credits produced through regenerative agriculture not only satisfy buyers’ additionality requirements – farmers need the proceeds to finance the transition to new ways of working – but also provide what are known as co-benefits.
This makes them more valuable to purchasers under pressure to take a broader view on sustainability and means they should command a premium relative to more standard carbon credits.
At present, Rabo Carbon Bank is still putting together pilot projects and no price has been set for the offsets these will generate, although Baarsma confirms that they have all already been pre-sold.
“Demand for this kind of high-quality, nature-based carbon credits is huge,” she says.
To implement the initial projects, the bank has tapped Rabobank’s extensive agricultural client base in the Netherlands and the US.
“When it comes to finding farmers for our pilots, we have a lot of boots on the ground,” she says. “Our relationship managers know the farmers, they sit at their kitchen table, they know what their worries are and how they see their opportunities to help combat climate change.”
She adds that the response from the sector has been as positive as that from prospective carbon credit buyers.
“I was surprised by the enthusiasm of our farmers,” she says.
Regulation would be better, but self-regulation that helps to put trust and transparency in the market is a good start
Not everyone is as enthusiastic about soil-sequestered offsets. Critics point out that this method of taking carbon out of the atmosphere is even easier to reverse than with other nature-based solutions such as afforestation. Ploughing the land just once releases all the carbon that has been stored.
Baarsma acknowledges the risk but argues that it is outweighed by the benefits.
“Our goal is to drive a transition to more sustainable agriculture,” she says. “From that perspective, permanence is not essential. We also hope that the corporates that buy removal credits will in five to 10 years no longer need them because they will have been able to reduce their emissions.”
Rabo Carbon Bank’s regenerative agriculture pilots all involve large-scale farmers, due to the nature of the projects. Larger arable farms offer the greatest opportunities for emissions reduction and removal, while measuring soil sequestration for carbon credits is data-intensive and expensive.
For smallholder farms, the bank is also working on an initiative to produce offsets through agroforestry, where trees and shrubs are combined with crop and livestock farming systems to improve soil health and biodiversity, as well as reduce carbon emissions.
The project is being piloted with farmers in Africa, where Rabo Carbon Bank is working with partners on the ground such as environmental NGO The Solidaridad Network.
A good start
As this highlights, even agricultural nature-based carbon offset projects can vary widely – so it comes as little surprise to find that Baarsma is sceptical of attempts to commoditize voluntary carbon credits.
“It is probably a bit early to achieve standardization, because there are so many different types of projects and we don’t yet know what the most affordable or impactful techniques will be,” she says.
Nevertheless, she insists that she is “very positive” about the Taskforce on Scaling Voluntary Carbon Markets (TSVCM).
“Regulation would be better, but self-regulation that helps to put trust and transparency in the market is a good start,” says Baarsma.
Ideally, though, she would like to see the introduction of a global carbon tax.
“The voluntary market by itself will not suffice to combat climate change,” she says. “The problem is so huge that we need more.
“That is why I also don’t think in terms of competition, be it between banks, or between different techniques and different suppliers, or between regulated and voluntary market. I think we need everything.”