Innovative Financing for Global South Inclusive Carbon Dioxide Removal: Enhanced Rock Weathering on Agricultural Lands

Full citation:

Barder, Owen, Yifan Powers, and Ellie Chen. 2024. “Innovative Financing for Global South Inclusive Carbon Dioxide Removal: Enhanced Rock Weathering on Agricultural Lands.” Precision Development. https://precisiondev.org/wp-content/uploads/2024/12/ERW-Innovative-Financing-for-Global-South-Inclusive-Carbon-Dioxide-Removal_PxD_19_11_24-1.pdf

Authors:

Owen Barder, Yifan Powers, Ellie Chen

Links:

https://precisiondev.org/wp-content/uploads/2024/12/ERW-Innovative-Financing-for-Global-South-Inclusive-Carbon-Dioxide-Removal_PxD_19_11_24-1.pdf

Abstract:

ERW has high potential to contribute to global carbon dioxide removal goals as well as to deliver considerable agricultural co-benefits for farmers. However, one of the main challenges in catalyzing an ERW market that is inclusive of emerging economies is the way projects are currently financed. Investment in ERW is driven by the private sector through deals in voluntary carbon markets. Private sector firms, focused on recovering their investments and maintaining a competitive edge, are unlikely to invest sufficiently in the broader research and development necessary to implement ERW at scale in diverse geographies. There are, however, innovative finance alternatives to scale ERW in the ways required to meet its CDR potential. An evolution of the advanced market commitment (AMC), a type of pull financing which aims to stimulate investment in products that may otherwise be ignored by the private sector, can help address current market failures with respect to access, innovation, service delivery, and risk management. An AMC that blends resources from funders interested in achieving diverse goals, such as climate aims and poverty alleviation, can help incentivize distributionally equitable CDR investment. We present in this paper an example of how this diverse market commitment might work in practice, to accelerate the deployment of ERW as a public good for both carbon dioxide removal and sustainable development goals.