Regen Economics

Save our Soil !

Value of soil

The World Economic Forum (WEF) at Davos 2024 asked how can we realise the value of soil. (Treating Soil as a Precious Resource WEF Annual Meeting Jan 2024).

"Our soils withdraw 70% of freshwater and grow 95% of the food we eat. They are a critical lever to transform how we produce food and tackle the trilemma of food access and affordability, nutrition and health as well as nature and climate. From capital stacks for watersheds linked to farming corridors to skills and capabilities in protecting and restoring soil health, how can breakthrough finance, knowledge models and community collaborations realise the value of soil?" How indeed.

Conventional

Climate Smart

The World Economic Forum had earlier spelled out the economic approach. “First, we need to quantify, monitor and account for organic carbon better, understand soil carbon dynamics, and increase global awareness of the need for more regenerative practices. These actions need to be coupled with financial incentives and capacity building for farmers to adopt ‘climate smart practices to ensure an equitable and successful transition.

‘climate smart practices'

The WEF explain ‘climate smart practices’ as those set to meet the dual challenge of ‘feeding a hungry population’ - nearly 9% of us, and ‘climate change’. Please note: whenever you see somebody adding ‘increased food production to feed the starving’, it means they do not know how world food markets work. They equate hunger with the need to produce more food. However, the real problem, for those who run the food and farm sector, is OVER production, not overpopulation. Quite simply if 9% of the population could afford to buy food, we would produce it. Hunger is about poverty not scarcity.

Global Alliance for Climate-Smart Agriculture

“The Global Alliance for Climate-Smart Agriculture (GACSA) addressed the pervasive problem that weed-clearing via soil tillage degrades the structures necessary for soil health and fertility, while also releasing GHG emissions. Multinational corporations were promoting their synthetic fertilizers and herbicides with GM herbicide-tolerant crops as a no-till remedy. Moreover, by storing carbon, the carbon sinks (areas which accumulate and store carbon) would make the land eligible for carbon credits, sell carbon offsets in the global North, and thus provide financial incentives in the global South." This was a neo-colonial version of technology transfer reminiscent of that of the previous colonisation in the 19th century. These new networks challenged farmers’ traditional skills, like learning how to minimise soil tillage through non-chemical forms of weed management. By 2021 an agroecology-based ‘climate-smart agriculture’ was being promoted by some such as the Rainforest Alliance. These rival solutions relate to the popular slogan, ‘System Change, not Climate Change’.

For more than a decade, high-profile proposals for ‘climate-smart agriculture’ have meant to incentivise carbon storage through financial instruments, especially tradable carbon credits. These proposals are causing concern for shifting local land-use management away from food producers, instead to elites who trade or control carbon credits. Round here in Lancashire, fields with sheep are being replaced with tree slums.

My article in Yorkshire Bylines. Will carbon counting our trees save the world?

Nature-based Solutions

In the last few years new words are being created to link ecology and economics. One such term is ‘nature-based’ solutions. It is certainly sensible to look to nature for solutions, as these process have been around a long time, so very successful. The issue is whether they can be turned into ‘fungible’ (not fungal!) assets - those which can be transferred.

Nevertheless, this is the first time that the world’s monetary organisations are taking the issue of food, soil and global warming seriously and together. We must welcome that.

Recent UN guidance notes that natural solutions have not only been proven safe, they also are already storing 200,000 times as much carbon each year as high-tech systems and are up to 100x cheaper. What are they going to do?

Monetising nature

Does monetising nature move our cause up the agenda given that money seems to talk so loudly? Can payment for ecosystem services (PES) help transition from extractive and intensive to regenerative? (Merrick 2021). While there is a lot of talk about PES, it lacks a unifying framework to analyse and evaluate. Can the complexities of nature be reduced to commodities - as that is what PES is.

Natural Capital

Natural capital refers to the stock of natural resources and ecosystems that provide valuable goods and services to humans, including forests, water bodies, minerals, soil, biodiversity. The term "natural capital" was coined in the field of environmental economics in the early 1990s and made popular by the economist Herman Daly and later gained broader recognition through the work of others, such as Dieter Helm in the UK. Helm wrote his book "Natural Capital: Valuing the Planet" in 2015 and has been widely recognised as a key work on the subject where he argues for the importance of recognising the economic value of natural capital and the need to integrate it into economic systems. He advocates for market-based approaches to environmental protection, such as carbon pricing and the use of natural capital accounting in economic indicators.

Can we put an economic value on nature?

According the UK government’s Defra “Ecosystems services from natural capital, which provide key inputs to food production, often go uncounted. In turn, the impact of agriculture on the environment is also often unaccounted for."

Defra also “estimated that soil degradation costs England and Wales £1.2 billion per year"

This raises the obvious question - what do they count?

I would estimate it nearer £1.2 trillion - a thousand times more as this is what it would take to rebuild all the aggregates destroyed.

Capital refers to anything that can provide value or benefit to its owners, such as money, assets, or intellectual property. Capital is often used for financial and business purposes, such as investing in stocks or growing a business. ‘Natural’ capital - as opposed to real concrete bricks and money - highlights the idea that natural resources are not merely a free and limitless supply, but rather assets that have value. Natural capital has to be counted it has to have an economic value. It highlights that that value can be depleted or degraded if not managed properly. It emphasizes the importance of recognizing and accounting for the economic value and ecological services provided by nature in decision-making processes, including both market and non-market values. By considering natural capital, economists and policymakers aim to incorporate the long-term sustainability and conservation of natural resources into economic systems, ensuring their wise and responsible management for the benefit of present and future generations. If you own vast amounts of capital, whether natural or concrete, are you going to leave that to the whims of ecology and economics?

This is being sold throughout the world as the answer to our problems. To me it seems, it is the very system of capital accumulation, only now with natural as well as concrete capital, which caused many of the impacts, that is now being heralded as the answer.
But, decide for yourself how these sorts of measures can help save our soil.

Exponential growth whether business or government works - at least in short term. Fortunes have been made on growth and government budgets get funded on growth. Any sniff of economic growth slowing let alone shrinking, and we get recessions and unemployment. The accumulation of capital demands it.

Net Zero

The most visible sign on natural capital thinking is in the creation of ‘carbon credits’.

The Paris Agreement in 2015 created an international program for countries to ‘trade’ emissions to meet their climate commitments. Article 6 Allows countries to voluntarily cooperate to achieve their emission reduction targets. 6.2 Creates a basis for trading emissions reductions across countries This was put forward as one of the ways to reach 'net zero' by 2050.' Net Zero means that the amount of emissions produced is equal to or less than the amount removed from the atmosphere. The UK became the first major economy to pass legislation to achieve this target in 2019.

Starmer announced a new target in 2024 for the UK to cut emissions by 81% compared with 1990 levels by 2035

Carbon Credits

‘Carbon credits’ are a new type of market-based instrument that allow companies, governments, and other organizations to address their greenhouse gas emissions (GHGs). Carbon credits represent a reduction of one tonne of CO₂ emissions. By purchasing these credits, you are participating in a market designed to offset emissions globally, providing an asset that you can sell for a higher price over time. You can buy these credits by funding projects that reduce or remove carbon dioxide or GHG emissions from the atmosphere.

Carbon credits are everywhere and are being applied to soil. In so doing, soil is attracting more attention than ever before. But they also go up in smoke.

What counts as a credit

So the world has to agree on what qualifies for a carbon credit. Most ‘offset’ programs focus on planting and preserving vast tracts of forests or wetlands. The easiest is to put a lump of forest where the carbon capture over the next - say - 30 years, can be predicted relatively accurately. Unless it burns down. This happened to many carbon credits that went up in smoke in California in the early 2020s. And, I’ve seen around here a lot of trees being felled, before being replanted.

A few have a higher-tech focus, aiming to lock up carbon dioxide in rock or store it underground. A UN group working on the issue has declared that engineering-based systems do not meet any of the objectives of the program—and might not even qualify for it. But nature-based programs have their issues, too, with some accused of being virtually worthless.

Carbon Neutral

The catering firm Sodexo is the latest food corporate to back away from offset schemes in what has become a pivotal year -2023 - for the voluntary carbon market. Sodexo has dropped its target to become carbon neutral by 2025. The funds originally put aside for any carbon offsets required are being diverted into its decarbonisation projects. Nestle has also dropped plans on some of its brands to make them ‘carbon neutral'.

Green Slums

“If you live in Africa and you’ve heard of or experienced a “carbon farming” project, it has likely involved a land grab for a large-scale tree plantation. Across much of the global South, an increasing number of companies are taking over large areas of land to establish tree plantations and claim carbon credits that they can sell on international carbon markets. This is the case in Niger, where the US-based company African Agriculture Inc recently acquired two 50-year leases over a total of two million hectares to plant pine trees for carbon credits. A similar experience is unfolding in the Republic of Congo, where French energy giant Total is planting 40,000 hectares of acacia trees for carbon credits, depriving local communities of their farmland for the next 20 years."

There are similar moves in the UK, where UK companies wanting to buy carbon credits prefer ‘homegrown carbon credits’. 'Carbon farming” is often about tweaking entrenched practices to claim that carbon is being sequestered in the soil and to then sell carbon credits.

A farm on a National Trust estate in Malham Yorkshire has been told to reduce his herd of sheep from 1800 to 200, so they can plant trees to help reach their net zero pledge.

Counting Carbon

Measuring carbon sequestration has a lot of bean counters tied up in knots. In come the soil advisers, each recommending various ways to increase carbon but then finding it is difficult to assess improvements. How can you reward a conventional farmer for doing what an organic farmer has already done for the last 10 years? Why reward those who have done nothing in the past? Then there is the physical constraints. Of the three main soil types, sandy soils are never going to hold much carbon, and clay will take for ages, while loam probably doesn’t need as much. Counting soil carbon is getting very complex, and expensive.

Measuring Soil carbon

“Reliable measurement and monitoring of soil carbon is critical for the future of agriculture, particularly in the context of climate change and supply chain resilience. Two key concepts in this field are Statistical Significance and Minimum Detectable Difference (MDD)”.

Buying Biodiversity

Biodiversity Net Gain is the latest snappy initials. We have emphasised the importance of biodiversity being not an add-on but included in all. The Environment Act 2021 makes biodiversity net gain mandatory as of November 2023.It requires all planning permissions granted in England to deliver at least 10% BNG. So when there is a concrete development - say housing - the developers pay or deliver themselves improved biodiversity elsewhere - to ‘offset’ the biodiversity loss of the concrete development. To meet this requirement, you will need to measure biodiversity gains using a biodiversity metric.

It shows how to measure the BNG, but not how to measure the BN Loss? Does this calculation take into account the biome loss from the soil? Has anybody counted/modelled/AI-ed the number of small arthropods gone - 100,000s every square metre? All that diversity built up over 400million years - gone; suffocated by concrete and tarmac.

Nature Finance

Nature finance refers to the trading of ecosystem service credits together with the investment that are sometimes required to enable this trading to take place in the UK. It is intended that this is the vehicle link innovation enterprise and the aims of the government environment plans. Key to its success is the supply of sufficient quality and quantity of projects. Many will have to be bundled with others to be meaningful to buyers. The Environment Knowledge network EKN carried out a review of ‘pipeline’ projects - over 200 of them and found the four most popular revenues streams being pursued were biodiversity units (66%) carbon credits (61%) water management (42%) loss of nutrients (33%) and ecotourism (19%). I passed a ‘boutique glamping’ farm last week.

No evidence of credit boom soon

They further identified that “many landowners are wary of the untested sources of income that could be obtained through nature markets. The sale of ecosystem service credits typically requires landowners to make commitments lasting many decades. Any repayable finance or investment is also likely to require commitments of at least five years. In addition, the tax implications of financial transactions not defined as agriculture or forestry are currently uncertain.” They also found few “tenants participating in ecosystem service markets because their relationship between tenants and landlords is sometimes not cordial, and a lack of clarity on who has rights to ecosystem service credits that are generated”…. . Based on the findings of this Review, there is no evidence that ecosystem service credit sales will become a major part of farm or other rural business income in the next five years (from 2023)”.

Revenue Uncertainty

Revenue uncertainty was the most common barrier reported in relation to delivering nature-based projects (52% of projects). Given the uncertain price of carbon in voluntary markets, and the unknown revenues possible from other ecosystem service credits, projects and consultees often reported feeling paralysed by the number of choices available to them. Members of focus groups pointed out that whilst sale of an ecosystem service could generate revenue, it can also serve to turn a land asset into a perceived liability. Reasons for this included ongoing maintenance costs and contractual ties.

So there is a lot of talk and money flying around , but many are not getting involved till matters are clearer. There are all sorts of new untested relationships. Community banking and community enterprises are getting involved with farm clusters to connect to financial institutions - and various grants. The government - along with frontrunners like Esmee Fairburn Foundation - have begun to support ‘investment readiness’.

I was involved with the local River Trust in a government funded ‘Natural Environment Investment Ready Fund’ where we were trying to set up a farmer / wildlife/investor co-op. The Co-op model is well placed to deal with the complexity of issues, and handing group interests, and better than individual contracts with costly legal consequences when things go wrong.

If the state wants private money to come in, who are the likely candidates to invest? The most likely are Water companies who can fund land management that reduces water pollution to go beyond legal compliance. Regulation only stops the worst, whereas need to encourage the best. The water industry regulator, Ofwat, allocated £960m to 550 schemes from 2020-2025 approved by Flood Re. This is the UK government’s flood risk re-insurance vehicle, and communities who are too small to benefit from Environment Agency flood risk reduction may benefit.Many companies have legal requirements under carbon trading schemes or have made voluntary commitments to achieve net zero, which means they are interested in funding carbon sequestration.

Natural Capital Costs

A worldwide business coalition study found "that some business activities do not generate sufficient profit to cover their natural resource use and pollution costs. However, businesses and investors can take account of natural capital costs in decision making to manage risk and gain competitive advantage." Look at the role of ‘Farming’ in the top 5 regional industries worldwide and how much they cost in terms of Natural Capital. I suspect many will be surprised that three of the top five have something to do with ‘farming’. ‘While we listen to the idea that we should include natural capital into economics, to give better value to those organisations who reward it, let’s not forget that the big corporations burn £7.3 Trillion of natural capital to make a profit. Will they pay any sort of ‘proper price’ for it?

And yet it is these self same companies who receive government subsidies. “Subsidies for fossil fuels, agriculture, and fisheries are driving the degradation of these assets and harming people, the planet, and economies. This money -numbering in the trillions - could instead be used to finance much-needed climate action in countries across the world”. Says the World Bank

Counting the separate capital costs of ranching and farming when measuring impact of deforestation in S. America is difficult as they always put together . They are hard to separate, yet ranching is twice as good for soil as soy production in terms of small soil animals.

Regenerative

Pluralism

There are moves to look at other forms of economics to see how they may better provide for people and the planet. They go by then name pluralistic economic. “Pluralism is generally used to contrast with so called ‘mainstream’ economics teaching which generally only focuses on one school of economic thought called neo-classical economics. This has a number of key assumptions that are central to its approach such as economic agents seeking to maximise their individual happiness and markets tending towards equilibrium and generally leading to efficient outcomes. Pluralism in contrast recognises and teaches a range of different approaches to understanding the economy and its interaction with the wider social and environmental systems in an interactive, reflective and engaging manner.” These economics have a ‘reasonable breadth of perspectives’ and include ‘viewing economic systems as open systems with ecological systems.’

We certainly need to think more in terms of systems, than lumps or molecules. Stafford Beer here..

Circular

There are some common themes when judging these pluralistic economics, compared with ‘neo-liberal’ classical economics. You will find mention of ‘circular’ economies, more ‘local’, ’seasonal’, short chains and ‘sticky’.

Circular redesign is more than sustainable sourcing.” Circular redesign for food production, which is based on three principles of eliminating waste and pollution, circulating nutrients and products at their highest value, and regenerating nature, takes many factors such as foods’ appearance, taste, price, and nutrition into consideration”[90]

We easily produce enough decent food to feed everybody healthily -biologically speaking. But when it comes to economic, it is the appetite for 'growth' that drives capital. The problems are not biological but economic. We do not have to be ‘more productive’, as wasteful, or use more chemicals to feed the world. We have to circulate our money better by making it sticky - by eating more local food, share profits for long term investment, and have open access to land so we can treat our soil much better.

Sticky Money

Any regenerative economics needs to take in that the money made from growing any crop from the soil should be re-invested as close to that land as possible, to provide future investment into that soil. Smaller farms are preferable, but they will need better support, perhaps through local hubs to provide shorter chains to the consumer, without leaking money halfway round the world for transporting, checking, and taxing the food - and making a lot of money out of it on various markets..

This aims to put more money back locally - a more circular economy, so that locally generated money ‘sticks’ in the community. I have been involved with various aspects of this in three of my local Northern town. Todmorden Incredible Edibles where I am a trustee on Incredible Farm, worked out that this ‘sticky’ economy circulates money 8-9 in the local community. Nearby is the city of Preston which prides itself on inward investment and Accrington which gained levelling up funds to make their market more entertainment and start a food hub to link town and country. Sustain studied the area to find the barriers to developing short food chains. There are many initiatives like this, the job is to connect them all without taking too much control.

Many places cross the world are dependent on selling abroad. How do they get more money to ‘stick’ in their local economy, when they want more coming in? Can coffee producers create coffee cultures in their own countries?

Using same principles as Regen Ag, that turns soil into healthy system, can we do the same for economics? Could the principles of how this happens be applied to human economy? Regenerative Economics is moving out of the purely materialist paradigm to one which more aligns with patterns of life, where you manifest potential which you cannot see in advance. Just like your seeds. This is a problem for an economist making a spreadsheet. They are used to the Newtonian thinking - mechanistic universe. The more holistic approach of regenerative economic is where intrinsic measures of health count in the equation..

Thanks to 1hr talk by John Fullerton for much of this.

Principles of Regen Econ

Shift from reductionist to holistic thinking - different way of understanding how world works. Smuts spells this out in Holism & Evolution (critical analysis of - Jorgenfelt & Partington 2019). He conversed with Einstein who said: "my idea of relativism and yours of holism will determine future course of civilisation'

We have spent years trying to understand the world by breaking it down into components. And there is nothing wrong with that, except we should not confuse the method with the world itself. The whole is much more that the sum of its parts.

Holism

New definition of holism "takes into consideration the element of evolution through a mainly intrinsic process, with an emphasis on individual abilities of self-maintenance and resilience towards the impact of psychosocial stressors". Jorgenfelt & Partington 2019)

2. In right relationship. The entire universe is interconnected and interdependent. There is mutual exchanges, yet exchanges in our economy arise out of transactions that are competitive 'dog eat dog' - it is even called 'just business'. We need to explore mutual benefit.

Mutual exchanges

We have seen over hundreds of millions of that he soil is totally interconnected. From the fungi with roots, bacteria and springtails around 400 mya, the white rot fungi on dead wood with early beetles around 300mya through the leaves, worms and bacteria 200 million years later to the herbivores, grass and their roots with insect larvae less than 100mya.
We would not be here were it not for mutual exchange - millions of times over..

3. Empowered Participation. This is not just 'inclusive' capitalism, but a living system science - ie not just being nice to people, but one where all parts of the system participate for the system to work

Labour

Producing better food and looking after the land would require much more skilled labour. And that of course costs. Since capital has been exploiting labour for a couple of centuries this is unlikely to change

We can have all the ideas, principles and practices to work out what we need. But nothing will get done unless somebody does it. From the creation of practices to their implementation, somebody has to do it. We should reward well those that do.

I learning at Ag College about how science could help, and in ag economics I learned all about the markets. But for all those years I never heard about labour. Yet if markets and science are to work, somebody needs to put the seeds in the ground, tend them, harvest them, pass them on, transport the produce and make, prepare present for your delectation. Markets and science cannot function without labour. Whatever we want done to the soil we have either to do it ourselves or pay somebody to do it. And that does not come if you are paying the cheapest price for it.

My labours

I was proud to represent the farmworkers’ union, particularly on the H&S exec for over 30 years. I’d joined the National Union of Agricultural and Allied Workers, the direct descendents of the farmworkers union set up by Joseph Arch in Warwickshire. That got amalgamated into the Transport & General Workers Union. I represented TGWU farmworkers on the Health & Safety Executive for many years, particularly on the Chemical in Agriculture Committee then the national body, when I helped create vocational H&S qualifications to try and reduce the freadful rate of fatalities on farms. This merged with another union to form Unite, where I was on the National Committee for Rural Agricultural And Allied Workers for around 5 years, during the abolition of the Agricultural Wages Board set up a hundred years before to protect farmworkers and their ‘tied homes- tied because if they lost their job they would loose their home too. During this time I was their adviser on pesticides, and then creating vocational qualification in health & safety to try to deal with the appalling rates of deaths in the sector - at a rate twice any other..

Labour & Soil

"The depletion of soil fertility was a significant ecological concern during the period of 1830-1870. The central figures involved in the crisis were German chemist Justus von Liebig and Karl Marx. Their views contributed to the need to devise an ecologically sound relationship of people to soil...

This period saw the growth of "guano imperialism" as nations scoured the globe for natural fertilizers; the emergence of modem soil science; the gradual introduction of synthetic fertilizers; and the formation of radical proposal for the development of a sustainable agriculture, aimed ultimately at the elimination of the antagonism between town and country. (Foster & Magdoff 1998)

Karl Marx wrote in his ‘Das Capital’ that the source of all our wealth is labour..AND soil. "The soil (and this, economically speaking, includes water) in the virgin state in which it supplies man with necessaries or the means of subsistence ready to hand, exists independently of him, and is the universal subject of human labour. " He could see the bird dung wars to realise that the ground must be replenished. He corresponded with german scientist Liep#big about fertiliser But he also realised that wealth - basically what we value most, can only come from a limited number of places

Marx summed up the message that, “all progress in capitalist agriculture is a progress in the art, not only of robbing the worker, but of robbing the soil; all progress in increasing the fertility of the soil for a given time is a progress toward ruining the more long-lasting sources of that fertility” and that, “Capitalist production, therefore, only develops the techniques and the degree of combination of the social process of production by simultaneously undermining the original sources of all wealth—the soil and the worker.”

It is labour which makes it all work and that includes….the growers, grazers, soil samplers, measuring equipment, testers. So when we are pondering what to do, we have to take into account that somebody has to do the necessary work, and it will involve keeping soil as healthy as possible.

There is a massive divide in labour on the land. At one end, it is an idyllic pastime to potter on the land Many people volunteer to do land work, as it is also immensely satisfying - like the Egyptian tomb workers dreamed of, that we saw 3300ya. Many of us derive great pleasure in our gardens. But to tens of thousands of people working the land is notoriously dull and dangerous. Perhaps we don’t have to do as much but most land workers do not get any choice, At present much labour in the food and farm system is as cheap as possible - often the most underpaid in most workforces. Witness we give tips to waiters - why? And from the ‘Grapes of Wrath’ to the slaves and now lowly paid workers on plantations, it is the same. Workers are undervalued. It has been estimated that half the people who go hungry in the world today work in the food chain.

Many work in conditions the rest of us would rather avoid. The migrant workers in Eastern Britain, who have left since Brexit, have not been replaced by hordes of British workers happy to get up at 5pm in all weathers and do backbreaking work all day. And many small farmers live on a pittance. Much good work on the land is often done voluntarily.

We have to address how to pay decent wages and provide conditions for people working the land healthily - both for themselves and soil

Page updated

Google Sites

Report abuse