This is the transcript of Episode 8: Nori (Mini) of the How to Make a Difference podcast. Go to the episode page to listen to this episode and for the show notes. Furthermore, we encourage you to read our blog post on carbon offsetting.
Elisabeth Ignasiak: Hey everyone
Chinmai Gupta: Hey everyone:
Elisabeth Ignasiak: In our Episode 6 we talked about carbon offsetting, why it’s complicated and why you should do it anyways. If you haven’t listened to it yet, make sure to back and check it out. In that episode, we also promised to give you some concrete examples of where you can buy trustworthy offsets. Here comes number 2: Nori.
Chinmai Gupta: Nori is building a voluntary marketplace, based on blockchain technology, so that carbon removal suppliers can connect directly with buyers. The first type of project Nori is focussing on is agricultural projects that can store carbon dioxide in soils. Soils have a huge potential to store carbon. While industrial farming practises can lead to soil degradation, Nori helps farmers to finance more regenerative farming practices that are better for the environment, restore soil health and most importantly store CO2.
Elisabeth Ignasiak: And we have a special treat for you: We were able to speak with Aldyen Donnelly, Co-Founder and Director of Carbon Economics at Nori.
Elisabeth Ignasiak: Welcome, Aldyen. We’re super excited to have you on our show. Can you tell us a little bit about yourself and what you do.
Aldyen Donnelly: I am one of the co-founders of a US head officed company called Nori, and in Nori our, we are building, what we call a dedicated carbon removal and retention marketplace. And I, as an individual have been active in carbon markets carbon markets since the 1990s.
Chinmai Gupta: Could you talk to us about how carbon capture relates to agricultural practices and also why such Nori decided to make this their first project?
Aldyen Donnelly: The science community generally agrees that over the last 300 years through industrialised food production and forest product processes, we have depleted the carbon retained in the top 30 centimeters of the soil around the world by 50%. The feeling is that we can keep those lands in commercial productions and rebuild that carbon stock back up by the adoption of what we’re calling regenerative practices.
Elisabeth Ignasiak: Yeah, that would be really good.
Aldyen Donnelly: So if we gave ourselves a 100 years to achieve that potential, that is the potential to draw down and sequester anywhere from 10 to 25 (if you look at the full range) billion tons of CO2-equivalents, a year.
Elisabeth Ignasiak: Which is half of the global emissions almost.
Aldyen Donnelly: And the other thing is: it’s one of the only investments you can make that I call a twofer. You’re mitigating the risk of climate change, you’re also building a more resilient, soil basis so you’re, you’re improving that capacity of that soil to produce food and fiber in the event that climate change occurs.
Elisabeth Ignasiak: Which it already has, right? I mean, we can all feel the effects already.
Chinmai Gupta: Yeah. You mentioned regenerative practices. Could you give us a few examples of what that means?
Aldyen Donnelly: So that could be going from intensive to minimum tillage, introducing more crop rotations, or adjusting your crop rotations to get a better balance of crop to crop nitrogen fixing phosphorus fixing, which also draws down and stores incremental carbon, changing your residue management processes. Although there’s a lot of practices that individually, increase the cells capacity to retain carbon while you’re remaining in commercial production.
Chinmai Gupta: Can I jump in and quickly ask you – so you talk about carbon drawdown and retention. So how do you quantify the amount of carbon drawdown?
Aldyen Donnelly: That is complicated and can be controversial. So our first carbon quantification tool for our first methodology, which is current carbon drawdown and retention, through the adoption of regenerative practices in crop lands. We rely on output from a tool called comet farm, which is a publicly owned asset informed by a network of sites, they call them experimental sites or reference sites where there is the most robust and repeated regular soil sampling and testing, that is done.
Elisabeth Ignasiak: I’m picturing knowledge that there’s people going to fields taking some soil measuring soil carbon before and after. And then the difference is how much carbon has been absorbed.
Aldyen Donnelly: Yes, the sites are tested at least once every five years. And what happens in this sampling is very comprehensive. Both density estimates, water infiltration rates, water retention rates, soil carbon. They also sample plants and test plant nutrient values to see what correlations might be happening there in relation to the soil so these are very comprehensive soil sampling and testing events. We extrapolate the results from those events to truly comparable field sets.
Elisabeth Ignasiak: And when we’re talking comparable fields, I’m assuming we mean similar weather conditions, similar soil conditions?
Aldyen Donnelly: Similar elevations, similar slopes. The other things that are important is similar land use histories and an ability for us to look at the potential impacts over time of a range of practice changes.
Chinmai Gupta: From what I have understood, soil properties are measured extensively in sample fields. Then, equipped with that knowledge you can create a scientific model for comparable fields and know how much carbon has been sequestered by a particular farm.
Aldyen Donnelly: Yes
Elisabeth Ignasiak: And I’m assuming then these farmers can sell the corresponding carbon credits on your marketplace? Can we talk about the market place you’re building? Who are the buyers? Who are the sellers?
Aldyen Donnelly: We’re trying to build something that looks and feels quite like a retail marketplace, where projects get registered in our marketplace. Their carbon removal and retention claims are verified by a third party. The other side are entities that have an interest in offsetting their operating emissions or reducing emissions in their supply chain to comply with science based target initiatives. So big food and energy are our prime target targets. Most of our sales to date are to those to the small individual buyer.
Chinmai Gupta: How much does a carbon credit cost on the Nori marketplace?
Aldyen Donnelly: On average, the buyers in our marketplace have paid $17.50 a ton. The only fee we take is 15% transaction fee and we don’t get paid unless your credit sells.
Elisabeth Ignasiak: I want to switch gears a little bit. We mentioned in our email that we talked to Anya Kollmuss before. And she mentioned a lot of the problems that carbon offsetting has. So she mentioned that double counting is a frequent issue, she mentioned that additionality is not always guaranteed and that permanence is quite unclear. So we were wondering, how does Nori avoid these kind of problems that conventional offsetting projects struggle with.
Aldyen Donnelly: I’ll start with double counting. In order to trace and make sure that there’s a permanent record. The point of origin and point of retirement of every credit we are building our market on the blockchain so there’s that permanent public record.
Chinmai Gupta: For our listeners: A blockchain is a chain of records called blocks that are connected using cryptography. A blockchain is inherently resistant to modification of its data, because once the data in a particular block is recorded, it cannot be changed retroactively without changing all following blocks as well.
Aldyen Donnelly: To this day, every allowance, or credit, that is sold, even in regulated markets is credited twice everywhere in the world. But in the Nori marketplace on the blockchain, every certificate that we sell, every NRT – in Nori we call them NRT: Nori carbon Removal Tons – we’re going to maintain a record that among other things has two pieces of information in it. What’s the location of where the credit originated. And what’s the location where it was retired. The market we’ve built – we don’t have to change anything when double counting becomes illegal. So, we’re not telling you what the rule is we’re telling you there’s going to be one. And our market is is already set up to comply with it.
Chinmai Gupta: What I’m hearing is double counting is something you’ve sort of learned to live with since that is the reality of the world at the moment and governments.
Elisabeth Ignasiak: And at the same time you’re being really smart in how you’re building your marketplace. So we’ve understood double counting. Can you talk about additionality, and how Nori can make sure that their credits are additional?
Aldyen Donnelly: Additionality and permanence actually are blended in our analysis. So, we when we’re talking about drawing CO2 out of the atmosphere and giving credit, we agree that the principle should be that only permanent carbon storage gets credited we agree with that, in principle. Where permanence is typically kind of defined as the carbon will be retained in that stock for at least 100 years. So we built this market on the perception that I can buy a credit today for 15 bucks a landowner is going to incur 100 year and his successors are going to incur 100 years of monitoring and verification costs, out of my 15 bucks, which kind of started to not add up too much.
Elisabeth Ignasiak: Yeah, I never thought about it that way.
Aldyen Donnelly: Yeah, so we sat there and said wait a second, if you really really want permanence, you better think of these natural systems as just warehouses and you gotta pay recurring rents. So in Nori, one Nori NRT is one incremental tonne drawn out of the atmosphere and the commitment of the land owner to make best efforts to retain the greater carbon stock for at least 10 years. We’re trying to communicate that if want 100 years of permanence, you better buy 10 of them. And if you want him not to release the carbon at the end of that 10 year term,
he’s got to be able to go to the market, introduce a new verification report, and get another payment.
We don’t know who’s going to be the owner of that obligation in 50 years, so we’re saying don’t create an expectation that we don’t know how to keep on paper today. Some people don’t like it but some people think maybe what we’re saying makes sense.
And then linking it to additionality. We were struggling with the concept of additionality because it basically says, in order for you to get paid to sequester carbon, you have to prove that you can’t make a profit sequestering carbon unless I pay in the credit market. I’m thinking why don’t we want to mobilise innovation that leads to highly profitable carbon sequestration activities?
So let’s forget that additionality test. Let’s just forget it. Why have a test that everybody breaches anyway, which is illogical, because we want the market to motivate everybody in the system to figure out how to become the most profitable carbon storers in the world anyway. So we, in our marketplace, to the extent that we have an additionality test, there’s a verifiable switch state change in practice investment that someone made that a third party can prove happened.
Other than that, go for it, if you can figure out how to make a lot of money without carbon credits doing it, we really want you in our marketplace. Because we really want to be moving the whole world in that direction.
Elisabeth Ignasiak: So you’re defining additionality a little bit different: less in terms of money, but more in terms of, do we actually draw down carbon, rather than does the company make profit or not.
Aldyen Donnelly: Yeah, do we actually draw down carbon and has there been a discernible change in how you operate.
Elisabeth Ignasiak: In terms of regenerative practises on the farm, you mean?
Aldyen Donnelly: Yes
Chinmai Gupta: Where can our listeners find you?
Please check out Nori www.nori.com.
Elisabeth Ignasiak: Cool. Yeah, it was really nice to talk to you. So thank you so much for this conversation.
Chinmai Gupta: Thank you very much for your time
Aldyen Donnelly: Thank you for the honor I love what you’re, what you’re doing.
Chinmai Gupta: Thank you.
Chinmai Gupta: We hope you enjoyed that interview with Nori and will look them up. You can buy Nori Carbon Removal Tonnes (NRT) for roughly $17 per ton. You can find the link to their website in our show notes and on our blog on carbon offsetting.
Elisabeth Ignasiak: Let us know how you liked our show. And, if you’re in the spirit of not just saving the planet but helping us out as well, please write a review about our show or give us a rating. It really helps us a lot to be found more easily.
Chinmai Gupta: That’s it for today, then! Bye bye.
Elisabeth Ignasiak: Bye