Growing Returns

Replicable revenue streams can help natural infrastructure projects receive State Revolving Fund financing

Natural infrastructure can provide protective barriers to reduce flood risk while also offering community green space and supporting green jobs. Louisiana GOHSEP, CC BY SA 2.0.

Authors: Vincent Gauthier (EDF), Tee Thomas (Quantified Ventures)

The Bipartisan Infrastructure Law will invest more than $44 billion in the Clean Water and Drinking Water State Revolving Funds, or SRFs, presenting a tremendous opportunity to finance natural infrastructure solutions that can improve water quality and protect communities against flooding. While natural infrastructure can be a cost-effective way to improve water quality and reduce flood risk, these projects have historically been difficult to finance through SRFs due to a lack of consistent repayment streams.

EDF and Quantified Ventures recently published a report that identified five replicable repayment streams that communities and conservation groups can use to access SRF financing for natural infrastructure such as wetlands, floodplain restoration, and riparian buffers. These repayment streams include stormwater utility fees, source water protection fees, and environmental markets.

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Small North Carolina farms find profitability in climate resilience

Farms across North Carolina are experiencing more variable and extreme weather associated with climate change, including hotter nights and more frequent and severe rainfall. Small farms are adapting to these changes by adopting climate-resilient practices that help buffer weather extremes and improve soil health.

Measuring and communicating the financial costs and benefits of these practices is important to help more farmers adopt them profitably and find financial support for the transition. Cooperative extension agents — small farms’ closest technical advisers — will increasingly need to inform farmers about climate-resilient practices and their financial impacts.

Environmental Defense Fund and North Carolina Agricultural and Technical State University Cooperative Extension collaborated with three small North Carolina farms to measure the financial impacts of adopting reduced tillage, high tunnels and cover crops. The results are summarized in a new report and set of case studies. Read More »

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How banks can move toward net zero agriculture portfolios

Banks representing over 40% of global bank lending have joined the United Nations Environment Programme Finance Initiative’s Net Zero Banking Alliance and committed to align their lending and investment portfolios with zero net greenhouse gas emissions by 2050. By 2024, participating banks with substantial loan portfolios in agriculture will need to set net zero targets for the sector and rapidly embark on reducing emissions.

For this to be possible, banks must accurately measure the emissions they finance in agriculture. This is a particular challenge in agriculture, a sector that includes a vast array of different crops and livestock, farm sizes, and access to tools and technology. Read More »

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New program sheds light on cover crop financials with big data

This post was co-authored by Katherine Wilts Johnson, extension economist at the University of Minnesota’s Center for Farm Financial Management.

Farmers’ interest in cover crops is growing rapidly along with increased focus on soil health. But one of the most important questions farmers continue to ask is how cover crops will impact their finances.

A new program launched by Environmental Defense Fund and the University of Minnesota’s Center for Farm Financial Management (CFFM) aims to answer the economic questions farmers have about cover crops by developing a new farm financial benchmarking program within the FINBIN database — the largest publicly available farm financial database in the country.

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How a data-driven approach makes profitable on-farm conservation possible

New data and insights are now available from Precision Conservation Management, a partnership organization that connects 280 Illinois and Kentucky farmers with conservation specialists from local soil and water conservation districts to provide actionable data on conservation financials.

Over the last five years, PCM gathered field-level farm management data — including the number of passes across the field, the rate of inputs into those fields, tillage passes and cover crop use — integrating that management data with cost tables created by the University of Illinois to provide farmers with the financial outcomes of different conservation practices.

Here are the top three insights from five years of farm data. Read More »

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How financial data can bridge the investment gap to scale soil health

This blog post was co-authored by Camille Morse Nicholson of the Midwest Row Crop Collaborative.

The increasing attention being directed at agriculture and the environment by policymakers and the private sector is a welcome shift — one on which the future of our agricultural system depends.

However, there remain a host of uncertainties to be resolved as we shift the system to one that not only produces food, fuel and fiber, but also delivers soil health, biodiversity and climate resilience benefits.

The Midwest Row Crop Collaborative (MRCC), a coalition of companies and NGOs, is working to break down barriers to scaling climate-smart practices, including closing the information gap on the financial benefits of conservation practices like cover crops and nutrient management, and helping farmers invest in these practices, confidently. Read More »

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Cargill and Soil Health Institute find farmer experience with soil health pays off. Here’s how.

Findings from a recent Soil Health Institute study add to growing evidence that soil health practices can provide financial benefits to farmers.

The Soil Health Institute, with support from Cargill, interviewed 100 farmers across nine states to measure the farm budget impacts of soil health practices.

“I believe this work is a critical area and critical question that we need to better address as we look at scaling up of soil health principles,” said Ryan Sirolli, Global Row Crop Sustainability Director at Cargill, during a webinar hosted by the Soil Health Institute. Read More »

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Farm budget analysis finds 3 ways conservation affects the bottom line

Soil health practices can provide many public environmental benefits including reduced soil erosion, increased soil organic carbon and improved water quality. However, adoption of soil health practices such as no-till and cover crops only represent 26% and 4% of U.S. farmland respectively.

Still, we know farmers can be rapid adopters of new technologies, including new seed varieties and equipment, when presented with a profitable solution. Read More »

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Federal Reserve warns of financial risks from climate change. Agricultural banks must act fast.

Climate change poses a multitude of financial risks and financial leaders are increasingly calling for the measurement, disclosure and mitigation of these risks.

The Federal Reserve recently highlighted climate change in its annual financial stability report, warning that climate-driven weather events could cause price instability and other significant financial system vulnerabilities. The Fed’s report adds momentum to a growing wave of attention being paid to climate-related financial risk. Read More »

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How can we measure the profitability of healthy soils? There’s a new guide for that

Any investment, from Wall Street to a local park, requires investors to establish expectations for the costs, benefits and timing. They dedicate significant resources to researching and identifying these expectations to optimize their investment decision.

Investing in soil health should be no different.

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