In his keynote address during World Environment Day, the European Union’s (UN) Secretary-General, Antonio Guterres admonished world leaders for their lack of urgency in tackling climate change and meeting Net Zero Goals (NZG’s). He said “the world is trying to tell us something and yet we don’t seem to be listening. We are not only in danger but are also endangering the planet. But we are also the solution.”
Time Frames to Reduce Emissions
Several countries have committed to the UN’s time frames to reduce carbon emissions to curb global warming. South African (SA) farmers should also begin to seriously adhere to stringent carbon emissions targets sets by the EU. As one of the EU’s vital agricultural produce markets, SA farmers would have to ensure they monitor their carbon footprint as this will be used as criteria for acceptance of their agricultural products in the EU.
Net Zero Goals Reached by 2050
Financial institutions are also under pressure to ensure they consider the emission footprints of their potential clients and how their operations impact the environment. SA has set its own deadline to reach NZG by 2050 and local farmers are expected to play their part by ensuring their practices are aligned to this. According to experts, financiers will have to make a distinction between Scopes 1-3 emissions to ensure potential clients meet carbon neutral status.
From an agricultural financing perspective, these would include:
- Emissions from energy use – specifically related to fossil fuels
- Change in land use
- Emissions from synthetic fertiliser use
- Methane emissions from livestock
- Emissions from waste management.
Green financing
Banks and other financiers have developed green financing to encourage reduction of emissions. Green financing could include, among others, offering better credit conditions for clean energy projects, the creation of innovative financial products that reward agricultural producers with good environmental practices and market expansion through the dissemination of information about the benefits of clean energy.
The UN developed the principles of responsible banking (PRB) in 2019 which saw more than 100 banks around the globe becoming signatories. In terms of these principles, signatory banks commit to align their strategy and practice with the vision as set out in the UN’s Sustainable Development Goals and the Paris Climate Agreement.
Measuring and reporting tools
Although emission measurements for electricity, fertiliser use and waste have not yet been developed, experts agree that agricultural producers would need to start reporting on these variables. To empower farmers to play their part in mitigating global warming, firstly they need to understand and measure their carbon footprint. This will provide a baseline from where they can work to reduce carbon emissions and receive cost benefits from service providers that can reward them for responsible and sustainable production. Products meant for the export market are most likely going to have to report their carbon footprint in company reports and on food labelling.
Precision Digital Technology
Even though reporting and auditing requirements are likely to present capacity and cost challenges to small and medium-scale enterprises agricultural producers, technology can make things easier for them. Precision digital technology (PDT), such as remote sensing, will allow financiers access to validate information of a specific producer’s carbon footprint.
Green Opportunities
From a farming perspective, two main elements of carbon are from tractive power and chemical-synthetic fertiliser use. Data obtained from PDG would be required to unlock ‘green opportunities’ available to the agriculture sector such as green finance, lower insurance rates and additional revenue streams such as the sale of carbon credits. Farmers can improve their chances of securing green financing by building up carbon footprint data and receive grants for climate mitigation or adaptation projects.
