Increasing the sustainability of the grapevine sector by introducing payments for ecosystem services
Sustainable Innovation Pilot 10 (SIP10) aims at establishing sustainable vineyard management practices by promoting the payment of ecosystem services (PESs) and highlighting the benefits of healthy ecosystems.
SIP10 develops a system for Carbon Credits (CCs) calculation and tracing that provides strong incentives to apply sustainable farming practices. Moreover, a parametric insurance mechanism is introduced to help farmers face certain environmental conditions that can conduce to grape disease development. Finally, the development of a system for calculating Verified Emission Reduction (VER) facilitates the process of selling CCs in the voluntary market through ad hoc platforms and creates extra revenue for the
farmers.
How does the pilot work?
In the past, farmers were required to comply with the law by recording all information about their farms, including details about the vineyard treatments they performed, manually. No additional data was gathered, and the existing data was not utilized to calculate carbon credits or to support parametric insurance. The manual recording method seemed to be the only option available to farmers to maintain accurate records and meet legal requirements. Even until this day, only a limited number of farms utilize a Decision Support System (DSS) to aid in their decision-making process.
The pilot is designed with the end strategy in mind. This means that the goal is to create a system that can calculate the amount of carbon dioxide saved or stored by winegrowers, and to convert it into valuable Carbon Credits (CCs) that could be sold on the voluntary CC market, as well as to support the implementation of parametric insurance. To this end, extensive data was gathered, analyzed (including weather patterns, farming practices, and various vineyard characteristics) and integrated via a Decision Support System (DSS) created by Horta. By utilizing this system, winegrowers were able to accurately determine the amount of CO2 saved or stored, and convert it into valuable CCs that could be sold in the market. Additionally, the data and analysis supported the implementation of parametric insurance, providing added benefits and protection for the industry.
Unlocking the power of 4 key insights
Through the implementation of the pilot, some key insights were gained.
The challenges and problems faced so far, help us gain a better understanding, create sustainable innovations that will rebalance the agri-food value chains and move towards a fair agricultural system.
Outcomes: Important outcomes that motivate farmers to adopt sustainable farming practices include:
the introduction of Carbon Credits (CCs) and;
the adoption of parametric insurance.
Practical Recommendations: It is recommended to invest more time and effort in effective and clear
communication towards farmers, as well as towards the actors engaged across the entire value chain.
Farmers can, in this way, understand that sustainable management practices may generate “new income” from selling CCs on emerging markets.
Problems: One problem reported is that “old-school” farmers are not tech savvy, possibly due to lack of trust in technology. Farmers need to trust the DSS platform and the support provided, for the successful uptake of the technology and the widespread adoption of the solution.
Outlook: Concerning the future of the pilot, it is important to involve a third party certificator, a CCs expert and an insurance company to cover all possible issues that might come up. As regards the replicability scheme, it’s estimated that a 2-year period is needed.
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