It is almost universally agreed that we have now entered a new geological era, the ‘Anthropocene’, marked by human’s significant influence on the Earth’s life-support system and atmosphere. This has resulted in several global environmental crises coming to the forefront, each of them critical in its own right, and each with huge consequences on the livelihoods and well-being of current and future generations.
From the climate crisis to the biodiversity emergency, to the pollution of land and water resources, scientists from the Stockholm Resilience Center declared in 2015 that we are in the midst of a planetary emergency and if we do not take swift and drastic action, life as we know it will cease to exist!
As the world community sprang to action through various global conventions, agreements, and pledges such as the Sustainable Development Agenda 2030 and its 17 goals, the Paris Agreement, and the more recent Methane Pledge, tools to incentivize companies and countries to take action where needed. Particularly tools for curbing the climate crisis, as besides the fact that global warming aggravates all the other crises, it is an existential problem for humans. The expected shifts in climatic zones, disruptions to the water cycle and accompanied extreme weather events, and rising sea levels will have detrimental social, economic, and environmental consequences.
Environmental Commodities and carbon management
Environmental commodities provide an important market mechanism to incentivize economic growth along lower emission-producing paths by encouraging the uptake of emission-reducing interventions. Â This is why the Paris Agreement included provisions to support international carbon trading and effective market-based mechanisms.
So, what are environmental commodities? They are non-tangible energy credits that the entity – be it governmental, non-governmental, or private- acquires as a result of carbon management interventions which include projects that reduce greenhouse gas emissions and/or projects that sequester carbon from the atmosphere. These credits can then be traded locally, regionally, or globally. Since 2017, global carbon markets had seen a steady increase, showing remarkable resistance during covid. The value traded value in 2021 reached $851 billion, and the markets are expected to substantially grow in the future.
Traditionally carbon credits were most widely used for renewable energy projects, reforestation, and efforts to halt deforestation and forest degradation. But the landscape is changing and moving forward interventions pertaining to food loss and waste are expected to gain ground. Food loss and waste amount to a staggering 2.5 billion tons which are about closer to 40% of all food produced, and that waste is responsible for emitting 10% of global greenhouse gases.
Moreover, as food decomposes in landfills it emits methane gas, a greenhouse gas 27 times more heat-trapping than carbon dioxide. Â The recent UNEP Global Methane Assessment Report indicates that methane emissions associated with food loss and waste amount to around 50 million tons per year, and reducing food loss and waste is one of the high-impact interventions. The good news is that voluntary carbon credit programs related to preventing food loss and waste and keeping in the food value chain, or related to valorizating unavoidable waste are coming up.
The sale of the carbon credits obtained can support interventions to reduce food loss and waste, a win-win situation. The UAE-based EPIC+ consortium of three UAE-based start-ups Thriving Solutions, Element Six, and The Waste Lab was established to fill this niche gap. By supporting entities within the food sector to prevent, redistribute and valorize their waste, companies are managing their carbon. The added advantage is that when feasible, they can obtain carbon credits for their initiatives.
