Soil Sustainability: Dirt to Life | At Scale – A Sustainability Podcast – Morgan Stanley

soil-sustainability:-dirt-to-life-|-at-scale-–-a-sustainability-podcast-–-morgan-stanley

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Korena Mafune:

A lot of people might just think dirt, soil, same thing. But when you start getting into what really separates dirt and soil, it may open your eyes to how important soil really is. So if somebody says dirt, I think not living. Soil is the life.
Audrey Choi:
Today on At Scale, we're going underground to explore that life up close with soil ecologist, Korena Mafune.
Korena Mafune:
So if you are just starting where you'll still see plant leaves and twigs, you may see some light, but the deeper you go kind of like the ocean, the light is going to go away.
Audrey Choi:
And that, that sound is what you hear if you put a microphone underground. You'll be hearing more of these sound soil recordings throughout this episode. And if we shine a light down there in the dark, what would we see in a healthy soil ecosystem?
Korena Mafune:
First of all, there would be a lot of different particles. For example, sand particles, tiny clay particles, and within those particles and in between those spaces, you would see roots from plants. I see larger insects, centipedes, millipedes, worms. I see the organic matter, like little tiny pieces of leaves, little twigs, little pieces of wood.
Audrey Choi:
But there's so much more you can't see, unless you zoom in with a microscope.
Korena Mafune:
When you pick up a handful of soil, it has millions to even billions[1] of organisms, especially when you consider bacteria. You can have meters of fungal hyphae. You could have hundreds of micro arthropods, for example, mites. They'll be bacteria living on mites and all of the other organisms that are in there and they'll be living just in almost every pocket of the soil that you could imagine.
Audrey Choi:
And so if you think about at all that activity that you've been describing going on underground, why should humans care? What does all that microscopic activity really do for us above ground?
Korena Mafune:
Yeah. Why should humans care about the sole thing below our feet that supports all life on earth? That's a good question.
Audrey Choi:
I'm Audrey Choi, CEO of the Morgan Stanley Institute for Sustainable Investing. Like everything we've explored so far in this season of At Scale, soil has been overlooked and misunderstood for a long time, which is staggering because it's literally the foundation of life. Soil grows 95%[2] of our food. It sustains the plants and trees that clean the air and create shelter for animals and humans. It stores carbon and filters and hold water, but only if it's healthy.
Korena Mafune:
Without a healthy soil environment, we're not going to have a healthy planet, and we can see that right now. Soil environments are changing[3] and that is causing an increase in, for example, carbon dioxide emissions, methane emissions, and nitrous oxide emissions.
Audrey Choi:
The United Nations Food and Agricultural Organization says about a third of the world's soil is degraded[4] large due to human activity, intense farming, deforestation, and pollution. And when soil degrades, it becomes more like dirt, not alive, not able to perform all those critical ecosystem services. So today, we'll meet people in science, agriculture, and finance who are working to reverse that trend. People who understand that protecting and restoring soil is one of the best investments we could make for a sustainable future.
Audrey Choi:
For Korena, the key to correctly valuing and protecting soil is knowing what makes it work. Her research focuses on the complex relationships between the plants we see above ground and the microorganisms that nurture them underground, fungi, bacteria, insects, and the interplay between them. Korena is especially interested in the relationship between plants and fungi.
Korena Mafune:
Plants need nutrients to grow strong and tall and survive. And with just their rooting system, they can sometimes access these nutrients, but underground it can be a battle. There's a lot of competition between different plants and different organisms for these nutrients and what happens is a plant is basically like, I really, really need to reach that nitrogen or that phosphorus, but I can't.
Audrey Choi:
So the plants turn to a vast network of mycorrhizal fungi for help. They look like a bunch of tiny threads or floss,
Korena Mafune:
Like little ropes that are connected together. And those can go on for a really long distance and interconnect different plants.
Audrey Choi:
And in just a gram of soil, if you stretch them out end to end, the fungi filaments could span 60 miles[5]. And when a plant puts out the call for help, this fungal network responds with a request of its own.
Korena Mafune:
Well, if you want to provide me some food that I need, for example, sugars, I can extend my network out and I can actually get my hands on those nutrients and uptake them for you.
Audrey Choi:
And when that fungal network underground is strong, the plants above are healthy and more resilient to extreme weather like floods and droughts. This partnership also plays another really critical role, carbon storage.
Korena Mafune:
To paint a picture of this, you can think of a tree that is connected to this mycorrhizal network and the tree is taking in CO2 and then it's transforming that CO2 into different things, for example sugars, which is what it gives to the fungi in trade for nutrients. But what happens is that the carbon enters the fungal network. And even when those fungal organisms, for example, die, that standing dead biomass still holds on to a lot of carbon.
Audrey Choi:
But that's less likely to happen when we alter the soil environment.
Korena Mafune:
If you go in and clear cut a forest, you are taking away one half of that partnership. When you go into an agricultural ecosystem and you put a bunch of synthetic nitrogen fertilizers into the soil, what happens is yes, that makes the plants happy and it makes them grow larger. But what it does is if they have a bunch of extra nitrogen, they don't really need this mycorrhizal relationship.
Audrey Choi:
Which means that network may not be there to save the plant in times of stress and it's not nearly as effective its storing carbon, plus excess nitrogen can run off into groundwater[6] polluting rivers and lakes. It can also become a source for nitrous oxide[7], a very harmful greenhouse gas. That's just one of how a small change to the soil ecosystem has a cascading effect. Korena would like to see us shift the way we view soil and start working with it.
Korena Mafune:
A lot of people say it's a black box. I say, it's a treasure chest.
Audrey Choi:
Korena points to scientists who are using naturally occurring bacteria and fungi to help plants grow and create higher yields.
Korena Mafune:
We can really find ways to not only understand these organisms better, but to harness them in a friendly manner, so not a detrimental manner.
Audrey Choi:
In the agricultural world, some farmers are already on the same page. There's a growing movement towards regenerative agriculture, a way of farming that makes soil health a priority. Gabe Brown is one of the pioneers of that movement.
Gabe Brown:
Farmers and ranchers get told every day we got to feed the world, so we got to keep doing what we're doing and produce more food.
Audrey Choi:
And doing what we're doing means.
Gabe Brown:
Conventional type practices, tillage, and use of fertilizers and synthetics and season long grazing with the livestock. And so that's how I learned to farm.
Audrey Choi:
This way of farming involves costly inputs, fertilizers, pesticides, seeds, all designed to maximize yield and production. Many farmers rely on bank loans and subsidies to those inputs. But after four years of droughts and hailstorms wiped out his harvest and his income, Gabe couldn't afford to farm that way anymore.
Gabe Brown:
Okay. Bank's not going to loan me money anymore to buy all these inputs, how am I going to make my soils productive? How am I going to be profitable? I tell people that even though that was very difficult to go through, it was absolutely the best thing that could have happened to my family and I. If I wouldn't have had those four years of hail and drought, I wouldn't have sought out a different way.
Audrey Choi:
Forced to look at different, less costly ways of farming, Gabe started researching. He read about the importance of organic matter level. That's the percentage of plant or animal material like leaves, manure, that's decomposing and feeding the soil ecosystem.
Gabe Brown:
Well, scientists tell me historically speaking the area of North Dakota where I'm at, soil organic matter levels[8] should have been in the seven to 8% range. Well, we were less than 2%.
Audrey Choi:
Gabe came to realize that conventional farming got the math wrong. Costly chemical fertilizers and pesticides do increase yields, but they also damage the soil ecosystem, leaving plants more vulnerable to extreme weather.
Gabe Brown:
Fertilizer, in particular, is antagonistic to mycorrhizal fungi[9]. It collapses the soil. Then you're prone to flooding. You're prone to drought because you're not infiltrating this water. It's simply sitting on the soil surface running off.
Audrey Choi:
To reverse the damage, Gabe started feeding all those microorganisms, the fungi, bacteria and insects in the soil. He stopped tilling or plowing the land. He stopped using fertilizers and pesticides. He planted crops designed to put nutrients in the ground and reseed themselves.
Gabe Brown:
I added peas to the rotation. I started putting in false cereals like cereal rye, winter triticale, hairy vetch. So I was diversifying.
Audrey Choi:
He also used animal grazing strategically to reintroduce organic matter.
Gabe Brown:
We raised grass-finished beef. We have a flock of ewes. We raised grass-finished lamb. We have 1,400 laying hands out on pastures. We have bees. And so a very, very diverse array of enterprises.
Audrey Choi:
It took years, but all of those changes had a big effect.
Gabe Brown:
Our farm became much more profitable. The ecosystem was much healthier. Organic matter levels on our ranch are now from 5.3 to 7.9%. Now I would say we're still degraded, but we're getting there. For every 1% increase in soil organic matter, we can hold approximately 20,000 gallons of water per or acre. That is huge. That makes us very resilient to drought while providing all these ancillary benefits.
Audrey Choi:
If implemented at scale, experts say regenerative agriculture could deliver up to $1.4 trillion[10] in increased crop production without using any more land. That's key as the population continues to grow and cities expand. So Gabe went on to share what he learned by opening up his ranch to visitors and by teaching other farmers through a nonprofit called the Soil Health Academy[11].
Gabe Brown:
We show them on the ground on a working farmer ranch, and what we found is that those who attend our academies adoption is very high. And for years after, their profitability keeps in racing because they're enhancing ecosystem function.
Audrey Choi:
But getting farmers to try these methods isn't easy. Breaking from tradition is difficult. There's also a lack of financing.
Gabe Brown:
Well, the lending institutions are not going to loan them money if they don't feel comfortable with what that farmer or rancher is doing. And so we need to educate those lenders also as to the benefits of regenerative agriculture.
Audrey Choi:
But that's a long process. Farmers who are interested in detaching from the traditional heavily subsidized model of agriculture need support from people like Gabe, but they also need money to reduce their risks. And that's where a new type of financial service comes in.
Robyn O'Brien:
In the United States, our farmers carry $426 billion of debt[12]. That debt is largely used to purchase this portfolio of chemicals[13] in these genetically engineered seeds. And if they're locked into getting all these subsidies from the government, it makes it really hard for them to make that transition. There's a gap.
Audrey Choi:
Robyn O'Brien is the co-founder and managing director of rePlant Capital[14], a financial services firm dedicated to fighting climate change through soil health and regenerative agriculture.
Robyn O'Brien:
My goal is to deploy $2 billion over the next 10 years to US farmers to help them transition their farmland. And what we see is that it's a three to five year process to transition to regenerative and organic agriculture and a lot of the conventional lending institutions aren't in a place to lend at that capacity. So we come in with this low cost of capital and we tie those metrics to these biological metrics around soil health. So metrics around water conservation, water infiltration, pollinator count, carbon soil sequestration. All those metrics can now be part of the return that an investor receives.
Robyn O'Brien:
But we can't just stop there because you can come in with low cost of capital, but if the farmer doesn't know how to engage in deployment in that transition, what are required of these technical assistance partners?
Audrey Choi:
So rePlant matches farmers with experts like Gabe, and then they go a step farther. To help the farmers and growers find stability and profits, rePlant helps them build partnerships with big food companies[15] like McCains, Danone and Nestle. They all need to meet a growing consumer demand for organic and sustainably produced food and corporate accountability.
Robyn O'Brien:
Let's say you're the CEO of General Mills, you know that 85%[16] of consumers are trying organic, 75%[17] of grocery store categories carry organic and only 1%[18] of your farmland is organic. So, that's the opportunity and that's the focus that we have at rePlant is how do we actually catalyze the conversion of farmland here in the United States. Because what's happening in order to meet that demand, we have to import the food that Americans want to eat. And you've got to stop for a minute and you've got to say, food security is national security.
Robyn O'Brien:
And if we're importing the food we want to eat, we are incredibly vulnerable there. So how do we step back and say, how can we look at US farmland and how can we actually grow on US farmland the foods that us families want to eat?
Audrey Choi:
To be clear, regenerative and organic farming are not the same thing[19]. Organic farmers grow food without synthetic fertilizers and pesticides. They have to meet legal standards to qualify as organic. Regenerative agriculture takes it a few steps further, prioritizing the health of the whole ecosystem, not just the health of the food. But the increasing consumer demand for organic food indicates a growing awareness of the environmental impact of traditional farming on ecosystems and the food itself.
Robyn O'Brien:
So whatever we do to the soil, the plants that are coming out of that soil are uptaking those things. And so how we treat the soil is how we treat our children, how we treat the soil is how we're treating the food that we eat. And to me, you really got to look at soil as just this incredible operating system that can inform so much around human health, climate health, environmental health, the health and wellbeing of our farmers. And so to really stop for a minute and say, let's honor this thing for what it is, this isn't some kind of hippy thing.
Robyn O'Brien:
This isn't some kind of left coast. We're standing on something that's so foundational to absolutely everything that we do.
Audrey Choi:
But at a policy level, we're still catching up. Some of the things we've talked about this season, bees, trees and now soil, they all provide critical ecosystem services. Pollinating and growing food, cleaning the air, storing carbon and filtering and holding water. Robyn points out that government farm subsidies and incentives still don't really reflect the value of those services.
Robyn O'Brien:
If we were actually given the choice, hey, I want my tax dollars to subsidize a food system that is actually exercising precaution and over the long term are starting to prove safe, not only for human health, but soil health, climate health, and all these other things. We haven't been given that choice. So could we say instead of fully subsidizing the agrichemical model, provide a subsidy system for farmers that are entering into regenerative and organic agriculture. Not just for the products that are coming off their farms and consumer health and human health, but we now understand the important role that this type of farming can play in climate health.
Robyn O'Brien:
So to look at that subsidy system in a much more holistic and comprehensive way.
Audrey Choi:
As we reconsider the value of soil and subsidies, tools that help us understand how to maximize soil's potential will become more and more important. Chris Covey has been working on a project to help farmers and ranchers understand and potentially monetize the health of their soil in new ways.
Chris Covey:
I'm not a soil scientist, I'm a forester and some colleagues and I had done a project where we tried to count all the trees in the world. And we were really excited about that. And then my colleague, Charlie and I were working in a research center at Yale that was focused on private land managers in the American West and helping them use some to better manage their lands. And so we were asking all of these ranchers we were working with what can we count for you? We think we're pretty good at counting stuff. What could we count for you?
Chris Covey:
And around 2015, all the ranchers we were working with started talking about soil carbon. And they said, can you count soil carbon for us?
Audrey Choi:
Chris was intrigued. As we've heard already, carbon is a key ingredient in healthy soil and healthy soil can store a lot of carbon, making it a potential climate change solution. So Chris dove in and discovered an opportunity.
Chris Covey:
What we found out pretty quickly was that there's not enough data and what plot data is out there, it hasn't been gathered together. It's a tired cliche, but you can't manage what you can't measure. You have to be able to put carbon on the balance sheet.
Audrey Choi:
More and more ranchers and farmers wanted to do just that. One of the big issues Chris identified early on was that farmers were really keen on learning how carbon stored in soil could help them ride out droughts, get more consistent crops and boost yields. But without even knowing how much carbon they currently storing in their soil, farmers didn't know what practices would achieve the best results. So Chris co-founded the Soil Inventory Project[20] to help them.
Chris Covey:
Right now, what we're asking producers to do is make changes. We say to them, "You should change your practice. You should do no till. You'll get more carbon." "Well, how much more do I get?" "Well, you get more." "And well, okay, I get more carbon then what do I get for it?" And we say, "Well, yields, you get more yield." And they say, "Well, how much more yield?" And we say, "Well, more, you're going to get more." And it's not that there's not evidence that's true, but what we have a difficult time doing is saying how much soil carbon leads to how much outcome.
Audrey Choi:
The first step to figuring that out is doing a soil sample. Usually, this means a technician comes out to the farm or ranch and collects soil in different locations and then those samples get analyzed in a lab. But that processes costly and the farmers who do it tend to keep that information to themselves.
Chris Covey:
And particularly when you get into these larger consumer products groups that aggregate producers, that data becomes an important, valuable strategic resource. And so what that means is that it's difficult to get that data to be freely shared.
Audrey Choi:
But Chris believes there's public benefit in having open data on soil carbon and best practices. So the Inventory Project has been developing a low cost tech friendly process that farmers and ranchers can do on their own. All they need is an app, a testing kit that arrives in the mail and an inexpensive drill attachment that they can buy at a hardware store. The app tells the farmer where to test and the farmer sends the soil samples in a pre-printed, prepaid envelope straight to the lab.
Chris Covey:
And so some weeks later, the producer's going about their business, phone buzzes again, and it says your inventory is ready. So at that point, they get a map of soil carbon on their property. But more than that, they get information about how their value relates to like producers. People who are growing corn on your soil type in your county with your climate have about this much carbon. And you know what, it's not as much as you do, so keep doing what you're doing. And also if you keep doing it, we expect your soil carbon value will be here in five years.
Audrey Choi:
The lower cost and the simplicity of the whole process means Chris and his colleagues collect a lot more samples and eventually all the data creates a carbon map and a broad picture of best practices that can help farmers weigh the costs and benefits of making changes like shifting to specific regenerative practices.
Chris Covey:
And it's the kind of information that an ecosystem service marketplace can use to reward producers who are making positive changes. It's the kind of information that a crop insurer can use to give crop insurance rates, which are linked to outcomes or an agricultural lender who can say you're actually likely to be able to pay this back because you are outperforming on a metric which until you actually have that data at scale, that takes really robust inventory. And that's all built on linking reliable soil carbon values to locations and space.
Audrey Choi:
Another upside of the Soil Inventory Project is that farmers could use the same data to tap into the growing soil carbon offset market. It's expected to be worth more than $100 billion[21] by the end of the decade. We've seen it happening with trees, but not happening yet at scale with soil.
Chris Covey:
The idea of a carbon offset is that you have an emitter and they're concerned about this emission. They know that carbon going into the atmosphere is contributing to climate change. And so they want to know is there a way that someone else could pull one down for everyone that I up? And if there is, could I pay you to do that? Then you can therefore offset my emissions.
Audrey Choi:
There's a lot of debate in the scientific community about the viability of the soil carbon offset market, but making this knowledge about soil carbon and best practices accessible to more farmers is a big part of what drives the Soil Inventory Project.
Chris Covey:
The challenges in ecosystem service markets have been directed at fixing the problem for large scales, producers that are growing on thousands of acres. And that's certainly important and we want to solve that problem, but I want to solve it in a way that is also accessible to small producers, that is accessible to BIPOC farms and farmers in the US who are typically growing on smaller acreages and have been locked out of opportunities like this thus far. And so we want the Soil Inventory Project's data to be accessible to all kinds of producers and that's at the core of what we're trying to do.
Audrey Choi:
The Soil Inventory Project is currently working with the Morgan Stanley Sustainable Solutions Collaborative[22] to figure out how to scale up. They'd like to be able to offer these services and solutions to more farmers across the United States and around the world. Chris believes the Soil Inventory Project will give farmers the data they need to make decisions and change business as usual. Ultimately, he hopes agriculture will become a key problem solver in the fight against climate change.
Chris Covey:
Agricultural emissions are huge. They're a huge part of the climate problem. So when you're looking at ways to combat climate change and to mitigate climate change, what changes can you make in this big source to make it a smaller source or make it part of the solution?
Audrey Choi:
As we think about solutions, as we think about the scope of the soil health problem and how it intersects with the climate crisis, we could take Robyn's advice.
Robyn O'Brien:
My ask and my invitation is please participate in soil health wherever you can, whether it's an evergreen debt fund or whether it's a nonprofit. Participate in soil health because it is the foundation, it is the operating system upon which everything is based.
Audrey Choi:
We started this season talking about bees and trees and how they are critical infrastructure for sustainability. And in this episode, we've seen how soil is with the foundation for all of it. This incredibly powerful and critical ecosystem has been right under our feet out of sight and out of mind for too long. If we don't start investing in it and changing our behavior as food producers, as consumers, as policy makers, as corporate leaders, we put the whole system at risk. A special thank you to Marcus Maeder at Zurich University of the Arts and the Sounding Soil Project for giving us permission to use the soil sounds you heard in this episode.
Audrey Choi:
You can find out more about that project at soundingsoil.ch[23]. Next time on At Scale, the power of on the knowledge of local experts, the people at the front lines of climate change, biodiversity loss and pollution. I'm Audrey Choi, CEO of the Morgan Stanley Institute for Sustainable Investing. Thanks for listening.

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