This average increase in temperature in different areas of the planet, along with extreme weather phenomena, deforestation, and crop scarcity are consequences which place climate change at the top of the global agenda given how its effects can be felt around the world.
However, do we really know what global warming is and how it impacts our daily lives?
In order to understand its impact, we must first define the main cause of global warming: greenhouse gases.
The “greenhouse effect” refers to the warming of the Earth that occurs when certain gases like CO2, one of the leading greenhouse gases (GHG), enter the atmosphere and trap the sun’s heat.
This type of warming happens naturally on Earth. In fact, the average temperature and carbon dioxide concentrations always fluctuate and are compensated by nature itself.
Over the past decade, the rapid increase of global concentrations of these greenhouse gases has greatly accelerated this process. The planet can no longer compensate these concentrations naturally, which in turn causes the climate to change at such a fast pace.
The vast majority of the scientific community states that there is over 90% certainty that this increase is due to a rise in the concentration of greenhouse gases as a result of human activities, with the burning of fossil fuels like petroleum and coal among the leading causes.
The most recent message about climate change mitigation from the Intergovernmental Panel on Climate Change (IPCC) is clear: urgent and drastic measures are needed if we want to limit global warming to 1.5℃, the global target established in the Paris Climate Accords (COP21).
In order to limit global warming and stabilize global temperature, greenhouse gas emissions must decrease immediately and significantly across all sectors. In other words, achieving this target of 1.5℃ means we have to reach net zero carbon emissions on a global scale by the early 2050s.
In keeping with this objective, the European Union (EU) is working towards achieving climate neutrality by 2050. This is a key goal of the European Green Deal, in line with the objectives established by the Paris Agreement (COP21) signed in December 2015. The goal is to prevent an uncontrolled, or runaway, climate.
With these objectives in mind, many companies in the wine and grape sector have started to set decarbonization goals as part of their business strategies.
As part of this process, many organizations within the industry are introducing systems to control and monitor their carbon footprint, allowing them to quantify their scope 1, 2 and 3 emissions. Despite our best efforts, however, some emissions are inevitable, especially during the early stages of any decarbonization process.
This is when compensation or offsetting measures come into play as a way of addressing these inevitable emissions and encouraging companies to continue improving their decarbonization efforts over time. Carbon offsetting is a way of compensating some of your emissions by financing an equivalent amount of CO2 capture/sequestration elsewhere.
This type of compensation functions on the basis of carbon credits to achieve a carbon neutral state. For example, company X could offset these inevitable emissions by buying carbon credits from company Y that works in the renewable energy business. In turn, company Y would set up a new solar power plant or a new wind park. In this case, company Y profits from clean energy while X receives a reduction in its carbon footprint.
So far these types of transactions have represented the most common method for organizations to mitigate their emissions in a financially viable way. However, this system presents certain risks, such as double counting and additionality, which have the potential of turning the impact of carbon markets from positive to negative. Returning to the previous example, this could occur when both company X and Y claim the emissions reduction in their carbon footprint calculation, thereby producing a double count.
Given this context, we have to find more robust climate methodologies to mitigate our carbon footprint. One of these is carbon insetting.
In carbon insetting schemes, we compensate our emissions through a carbon footprint mitigation project within our own value chain.
In order for a company to implement an insetting scheme, it must first evaluate its own supply chain to identify the areas where it produces most of its GHG emissions. Regenerative farming practices provide a clear example of carbon insetting. Through regenerative agriculture, soils can increase their capacity to act as carbon sinks that sequester CO2 from the atmosphere.
In the wine and grape sector, this provides an option for business models built on wine sales and distribution. Rather than buying carbon credits, these companies could compensate their high level of scope-3 emissions by investing in the implementation of regenerative agricultural practices in some of the vineyards that produce the wines they distribute and sell.
Not only would these companies carry out decarbonization initiatives, they would also improve the economic and social development of communities in specific wine regions.
Considering that there is a limited supply of carbon credits, this new carbon footprint mitigation tool opens up new opportunities for sectors like the wine industry, which is highly dependent on agricultural practices in the vineyard. Carbon insetting offers us a new way of preventing runaway climate change.
Marta Juega, Ph.D.
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