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The Economics of Biodiversity – Nature, productivity and growth

Agri-TechE Blog
Agri-TechE

Productivity. Growth. Nature. These words seem to come up regularly in conversation with farmers – and, crucially, they are talking about how to maximise the first two without compromising the latter.
These words are also key pillars of a recent report (Feb 2021) from the University of Cambridge which aims to change policy and practice in order to put nature’s value at the heart of economics.
The 600 page report is a hefty read, but Chapter 16 focusses particularly on food production, biofuel generation and changes to the food system.

The Economics of Biodiversity: The Dasgupta Review

Professor Sir Partha Dasgupta’s review presents the first comprehensive economic framework of its kind for biodiversity. The government press announcement says “it calls for urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world”.
This is welcome news for the UK industry, where increasing emphasis on delivery of ecosystem services is counter-balanced by lack of clarity about the business model needed to translate ‘natural’ capital into tangible financial value.
Commissioned by the UK Treasury, the report ‘The Economics of Biodiversity’ by Prof Sir Partha Dasgupta is expected to set the agenda for the 25 Year Environment Plan, as well as challenge the way economies and governments traditionally view ‘growth’.
Economists have historically excluded Nature from their economic models. Yet the Dasgupta report argues that long-term prosperity relies on balancing our demand for natural goods and services with Nature’s ability to supply them. The numbers are stark. In the period of 1992 to 2014, the produced capital per person doubled globally, while the stock of natural capital declined by 40%.
New, alternative metrics for success are needed to define growth and productivity, and they need to focus more on natural capital.

Measuring natural capital

As every forward-thinking farmer knows, however, so-called ‘sustainability metrics’ have been a huge challenge.
A current Holy Grail on farms is to establish how carbon storage, efficient water management, biodiversity enhancement and soils improvement can be measured, monitored and – crucially –  valued.
But progress is being made by a range of technology enablers – in the UK and internationally – towards developing natural capital measurement and valuation tools. This will be critical if we are to re-balance the supply and demand relationship with Nature.

Potential for agri-tech

Other agricultural technologies will also be crucial in helping this process, argues Dasgupta (abridged report p47).
“Changing the biological capabilities of crops offers the possibility of using marginal land for production, improving crop resistance to pathogens, obtaining higher yield on existing farmland, and enhancing nutritional quality. Genetically modified crops remain controversial, even though prominent scientific bodies such as the Nuffield Council on Bioethics (NCB, 2003) continue to affirm their salience in a world with growing food needs.”
He contends that improving crop genetics using advanced breeding tools, adoption of precision agriculture approaches to reduce inputs such as nitrogen, and Integrated Pest Management, along with vertical farming and ‘cellular’ agriculture (for example for alternative meats production) are part of the solution.
Reconstructing global economics to include Nature as a key ingredient is a major task.
Reconstructing the economics of agriculture through its constituent farm businesses is already underway.
The journey has begun. Note: The Economics of Biodiversity – The Dasgupta Review
The Dasgupta Review is an independent, global review on the Economics of Biodiversity led by Professor Sir Partha Dasgupta (Frank Ramsey Professor Emeritus, University of Cambridge). The Review was commissioned in 2019 by HM Treasury and has been supported by an Advisory Panel drawn from public policy, science, economics, finance and business.

Is the future a carbon neutral basket of shopping? Asks Chris Brown at ASDA

Meet the Network
Agri-TechE

Chris is on the Agri-TechE Stakeholder committee and recently briefed delegates at a workshop for its members designed to create new thinking about the opportunities created by Net Zero for innovation.

“We’ve been talking about greenhouse gas emissions and I’ve been running GHG measurement on-farm for 15 years, but now its feels like there’s real momentum behind the conversation in terms of supply chains. For example, the EU has a proposal for a carbon tax for imports. So, there’s a clear focus from many directions.

“The ambition to eliminate carbon is great, and businesses are increasingly being asked to account for it. My own business is now under the streamlined energy and carbon reporting so for the first time our Scopes 1 and 2* are to be included in our financial reports.

“If you want a clear example of how important carbon is, we’ve been reporting carbon for the past three or four years but this is the first year I have had several accountants to actually audit what I’m presenting. It’s a big step on.”

Roadmap for moving towards Net Zero 

Chris explains that interest in Scope 3, which looks at carbon emissions in a business supply chain, has “suddenly shot up”:

“The supply chain also extends to our customers – the consumers – and they tell us very clearly that they expect us to help them reduce their waste. There is much investigation to understand what this could look like going forward.

“We’re part of the British Retail Consortium roadmap to be Net Zero by 2040, and that includes our agri supply chain. Agricultural and sourcing needs to respect and restore – so we’re doing a lot of work around natural capital and biodiversity, which also has to be taken into account.

“We will also have an ambition about being more regenerative – but first we need to have an understanding of what that means in practice and how to define it.

“I don’t personally see a future in which we’ll try to index the carbon account, because you end up having to work up how much evil you’re going to balance with good – a better alternative is to be more transparent about, for example, GHG emissions by product.

Carbon neutral basket of shopping

“I can see us having an ambition to talk about being a ‘carbon neutral basket of spend’ – i.e. products in the shopping basket balance out to carbon neutrality. Understanding what that might mean in terms of choices and the customer experience is complex.

“I recognise that the science isn’t developed and there’s a lot of conversation to be had over how that is calculated and presented. My customers spend 10-20 seconds in front of a shelf to make an informed choice – they’re not going to read a library of information on the back of a pack!

“We have very clear responses from market surveys: the customers expect us to make these choices on their behalf. If we ask, ‘do you want to pay more for a low-carbon product?’ the response we get back is ‘you wouldn’t sell me something that was high-carbon’.

“We need to be able to meet those customer expectations.

Potential future labelling were used by Method to stimulate discussion of the options for a Net Zero future
Potential future labelling were used by Method to stimulate discussion of the options for a Net Zero future

“However, I don’t think that will mean labels on products. This was trialled by the Carbon Trust a decade ago and it didn’t deliver as expected. Additionally, it can be difficult to interpret. About seven years ago we had a low carbon egg offer on our shelves, produced by renewable-powered free-ranged egg units – it was clearly marketed as a low carbon egg and sold very well.

“But the brutal reality is, if you wanted a low carbon egg, you’d have gone for a caged egg, because the carbon cost is that much lower than that of a free-range egg.

“My final comment is we need to find a way through communicating and taking our consumers with us which talks about understanding the trade-offs associated with a Net Zero future.

“Regrettably I don’t think there are many compromises in this – and so we’re going to need to face into some very clever innovation to be able to level out the market that we are all aiming to achieve.”

*GHG emissions are categorised into three groups, or ‘Scopes’:

Scope 1 covers direct emissions from owned or controlled sources.

Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the reporting company.

Scope 3 includes all other indirect emissions that occur in a company’s value chain.

Find out more about GHG scopes at ghgprotocol.org

GHG Protocol - Diagram of scopes and emissions across the value chain
GHG Protocol – Diagram of scopes and emissions across the value chain [diagram from ghgprotocol.org]

Nitrogen enriched slurry to cut carbon footprint and boost yields

Meet the Network
Agri-TechE

“Our technology can cut the carbon footprint of a dairy farm by 27% and produce a valuable organic nitrogen fertiliser with three times the crop-available nitrogen in slurry,” explains Chris Puttick of N2 Applied. He is one of the speakers discussing alternatives to inorganic fertiliser at an Agri-TechE event “Putting the N Into FarmiNg” 24th March 2021.
Chris explains: “A high proportion of the greenhouse gas emissions of a dairy farm are from slurry. Slurry is a hazardous product as the fumes can be toxic and detrimental to air quality, human health and our environment.”

Organic liquid fertiliser

“Our technology overcomes these issues and converts by-products like slurry into a valuable nitrogen enriched organic liquid fertiliser, which we call NEO. The scalable technology fits within a 20ft shipping container on the farm.”
Nitrogen can be present in the environment in multiple forms, including the gases N2 and ammonia NH3, causing air pollution, N2O, a strong greenhouse gas, and as the salt nitrate NO3, which is soluble in water and a source of pollution. N2 Applied originates from Norway. The company has developed a unit which uses electricity to extract nitrogen from the air via plasma. Nitrogen is captured within slurry and enriches it.
As a result of the process, the output NEO is slightly acidic which increases its stability and reduces the amount of ammonia released whilst eliminating methane emissions.
The technology can also be used with the digestate, produced after anaerobic digestion (AD). As the AD plant is used to produce biogas, it is anticipated that some of this energy could be used to produce NEO, adding value to the digestate within a circular onfarm system.

Trials show available nitrogen three times higher than untreated slurry

Trials by ADAS have shown that NEO is stable, which means it can be applied to the growing crop in a wider range of weather conditions. Further trials with the Norway University of Applied Sciences show there is no risk of scorching the crop.
Total nitrogen (NH4, NO3 and NO2) needs to be considered within a nutrient management plan for the crop, and is particularly important where the farm lies within a nitrate vulnerable zone (NVZ).
Trials of NEO have shown that the nitrogen available to the crop is three times higher than untreated slurry and when applied to a grass sward increased the yield by 41% over two cuts.
Chris continues: “We have seen interest from industry members that have set climate targets to reduce the carbon footprint of their supply chains. We are receiving encouraging feedback that these businesses are serious about sustainability and willing to invest in a technology that will reduce on farm emissions significantly.
“The benefit for the livestock producer is a high value organic fertiliser that is more nutrient dense. A considerable amount of heat can be recycled from the plasma unit. This means that farmers can turn a by-product into a valuable commodity.”
Chris Puttick of N2 Applied will join other speakers Guðbjörg Rist of Atmonia and Andrew Neal of Rothamsted at the Agri-TechE event “Putting the N In FarmiNg—Solutions for On-Farm Nitrogen Production” on Wednesday 24th March from 2pm – 4pm.

On-farm fertiliser production comes out of a box

Agri-TechE Article
Agri-TechE

Would it be possible to produce nitrogen fertiliser on-farm and reduce the agricultural sector’s greenhouse gas emissions? Early-stage agri-tech companies Atmonia and N2 Applied say it is. They have developed alternative approaches to generating fertiliser in a shipping container using renewable energy sources, offering the potential for carbon neutral production.
Food production accounts for 26% of global greenhouse gas emissions*. Changing the way we produce and use nitrogen fertiliser would make a significant difference to these headline-grabbing figures, and this is to be discussed at the Agri-TechE event “Putting the N in FarmiNg — SolutioNs for On-Farm Nitrogen ProductioN”on 24th March 2021.

Renewable alternative to energy intensive Haber-Bosch

Guðbjörg Rist, the CEO of Atmonia, explains that current inorganic fertiliser production uses an energy intensive process.
“The Haber-Bosch process splits hydrogen from coal and natural gas, creating free hydrogen ions that combine with nitrogen gas in air to produce ammonia, a raw product for inorganic fertiliser production.
“Current ammonia production facilities are huge factories, producing millions of tonnes of ammonia, and double that amount of carbon dioxide.
“Our process takes a completely different approach: it uses an electro-chemical reaction to split nitrogen, which combines with hydrogen from air and water, removing the need for coal or natural gas. It also reduces the energy requirement, which can be sourced from renewables.
“Our facility is designed to produce hundreds of tonnes of ammonia from a unit the size of a shipping container, creating a liquid fertiliser that can be produced close to the point of need.”

Cutting the carbon footprint of dairy farm by 27%

Another greenhouse gas, nitrous oxide (N2O), is released when synthetic nitrogen fertilizers are applied to soils. N2O and methane are also produced from the decomposition of animal manures under low oxygen conditions.
N2 Applied is tackling this issue by converting by-products like slurry into a valuable nitrogen enriched organic liquid fertiliser. As a result of the process, the output, known as NEO, is slightly acidic, which increases its stability. This reduces the amount of ammonia released whilst eliminating methane emissions.
“Our technology can cut the carbon footprint of a dairy farm by 27% and produce a valuable organic fertiliser with three times the crop available nitrogen in slurry,” explain Chris Puttick of N2 Applied.
Nitrogen is found in different forms in the environment and total nitrogen (NH4, NO3 and NO2) needs to be considered within a nutrient management plan for the crop. This is particularly important where the farm lies within a nitrate vulnerable zone (NVZ).
Trials of NEO have shown that the nitrogen available to the crop is three times higher than untreated slurry and when applied to a grass sward increased the yield by 41% over two cuts.

Use of nitrogen is also important

Work by Professor Andrew Neal of Rothamsted Research has shown that the way nitrogen is applied to the soil is also important. Results suggest that decades of artificial fertiliser inputs on UK soil without a corresponding return of organic matter have altered the balance of carbon and nitrogen in the soil, changing the way microbes get their energy, which has in turn altered the soil structure.
In the experiment, soil with high nitrogen content but low carbon content had an altered microbial community, which was associated with less pores and connectivity in the soil. As the pores close up, and oxygen in the soil is lost, microbes are forced to turn to nitrogen and sulphur compounds for their energy. This inefficient process drains nutrients from the soil and results in increased emissions of N2O.
Andrew Neal of Rothamsted Research will be joining Guðbjörg Rist of Atmonia and Chris Puttick of N2 Applied to discuss nitrogen production and use at the Agri-TechE event “Putting the N in FarmiNg—SolutioNs for On-Farm Nitrogen ProductioN” on Wednesday 24th March from 2:00 pm – 4:00 pm.