At a time when nature is coming under stress like never before, grasslands are both a resource and opportunity, one that stakeholders of all types, from NGOs, to governments, carbon off-takers, landowners and farmers, are now awakening to. Investment in grasslands as a nature-based solution can prove transformative to people and the planet.
Grasslands cover 40% of the world’s land area and store more than 30% of its terrestrial carbon. They provide climate resilience in the face of increasing droughts and heatwaves; they’re home to countless species of plant and animal; and they’re essential to the livelihoods and food security of communities around the world.
Unfortunately, due to mass conversion to agricultural land, unsustainable agricultural and grazing practices, climate change, desertification, and other hazards, grasslands are some of the most-threatened ecosystems on Earth. Half of global grasslands have been degraded by human activities and climate change, drastically reducing their capacity to provide climate, ecosystem, and social benefits.
But therein lies an opportunity: because of their crucial role in carbon sequestration and biodiversity preservation, their resilience in the face of a changing climate, and the way they mesh positive climate activism with real-world economics and financial security, grasslands regeneration projects are an effective and durable climate solution. At the same time, investment in grasslands is crucial to job creation in communities, both in the Global South as well developed economies, including the United States.
At Cultivo, we are committed to restoring 1% of the world’s land to healthy ecosystems. We bring together the stakeholders including landowners, farmers, investors and offtakers, to regenerate natural ecosystems from forests to mangroves. We harness the power of advanced geospatial analysis, satellite imagery, machine learning, ground-truth data, and generative AI to regenerate our planet’s ecosystems.
Grasslands: An important carbon sink
Atmospheric CO₂ is absorbed by plants through the process of photosynthesis. The carbon is then stored in plant biomass, including leaves, stems, and roots, or is transferred into the soil through the roots.
Like forests, grasslands fix carbon from the atmosphere. Some 90% of the carbon is stored below ground in deep roots and soil organic carbon, or SOC, a fact that has given grasslands the nickname “inverted forests.” And the world’s inverted forests have the potential to sequester up to 8 billion tons of CO₂ equivalent annually.
Biodiversity
Global grasslands account for nearly a third (4.2 million square miles) of Key Biodiversity Areas. They’re home to a diverse range of plants and animals – including crucial pollinators – and many endangered and threatened species. Grasslands harbor an incredibly rich community of soil microbes and invertebrates, which play essential roles in nutrient cycling, soil health, and plant growth. Studies have shown that grasslands could rival tropical rainforests in plant species diversity, especially in small, concentrated patches.
In addition, grasslands play a critical role in supporting soil health and water regulation, resulting in rich, moist soil that is perfect for agriculture. This is why more than 50% of the world’s temperate grasslands have been converted for agricultural use, with croplands making up one-third and grazing land making up the rest. Unfortunately, typical modern grazing practices destroy the native vegetation, damage soils, and disrupt natural processes of these grasslands; when livestock graze on the same area, chew grasses down to the ground and even extract the roots, they kill the plants and erode the soil.
The use of regenerative practices such as rotational grazing – sometimes called holistic grazing – imitates actions of wild herbivores by continually moving herds of domesticated animals to new areas and giving grazed off vegetation a chance to recover and grow. Regenerative agriculture practices serve as an important carbon sink. Grasslands regeneration projects can promote soil health, biodiversity gain, and ecosystem function while also creating jobs, enhancing food security, and strengthening local economies.
Measuring soil health
A robust measurement approach for SOC is essential to accurately assess carbon storage, monitor soil health, and support sustainable grassland management strategies. A reliable approach combines remote sensing data, systematic soil sampling, and stratified sampling methods to capture accurate spatial variability across grassland landscapes. Standardized protocols for sample collection, preparation, lab methodologies, and analysis—integrated with cross-validation from remote sensing, biogeochemical models, and statistical rigor—ensure the reliability and consistency of the data.
Transparent documentation and regular methodology reviews further guarantee that SOC measurements remain scientifically sound and practically applicable for long-term monitoring. This structured process builds confidence in SOC data accuracy through rigorous sampling, detailed analysis, and optimized resource allocation. Minimizing measurement uncertainty creates dependable insights into carbon stock levels, enabling informed decision-making and enhancing the value of SOC data for land stewards, investors, and other stakeholders.
In north Mexico, Culitivo is working with stakeholders to improve over 100,000 hectares of grasslands across four ranches in the Chihuahuan Desert using Sustainable Grassland Management activities such as rotational grazing. The program is designed to enhance and improve soil health, water, biodiversity, and carbon removal. Monitoring and transparency is vital to the success of the project.
Investment opportunities
Grasslands regeneration projects represent a variety of options for financial returns, including eco-tourism and recreation, land value appreciation, bio-based materials, and ecosystem services payments.
Payments for ecosystem services, of PES, are payments to land stewards or landowners who have agreed to take certain actions to manage their land to provide an ecological service, which is any positive benefit that wildlife or ecosystems provide to people: providing drinking water, preventing erosion, providing habitat for crucial pollinators, and sequestering carbon. These ecosystem service payments are becoming increasingly common, both for land owners in developed markets and the Global South and are an effective way to help finance land regeneration.
As a result of the numerous possible revenue streams, grasslands regeneration projects represent an opportunity for investors to help in the fight against land degradation while also earning a significant financial return. The World Resources Institute estimates that every dollar invested in nature restoration activities provides a $7-$30 return in economic benefits.
The investment appeal of grasslands is why Octopus Energy Generation, one of Europe’s largest specialist investors in renewables and energy transition technologies, partnered with my company Cultivo in 2024 to deploy up to $40 million into projects that regenerate grasslands, primarily in the United States.
The economic case for regenerating grasslands can also be measured in mitigating risks and liabilities, and providing landscape resilience against extreme weather events and natural disasters. For example, the 2022 Hermits Peak-Calf Canyon Fire, the largest wildfire in the State of New Mexico’s history, is expected to cost the US government over $5.1 billion in liabilities.
Carbon removal credits
Because grassland regeneration removes of CO₂ from the atmosphere, such projects can produce carbon credits — certificates that businesses can use to help to offset their greenhouse gas emissions. The price of these carbon removal credits is currently anywhere between $30 and $60 per ton of CO2 depending on geography and commercial terms, with US grasslands projects commanding a premium. To date, the majority of credits from grasslands projects have primarily been purchased through B2B over-the-counter transactions, not on exchanges.
For off-takers, which include US tech companies, automobile manufacturers, and airlines, carbon credits from grasslands regeneration projects offer unique benefits. Grasslands act as significant carbon sinks, effectively storing carbon in both plant biomass and soil with a low risk of reversal. Regenerating grasslands also provide co-benefits, such as preserving critical habitats, promoting biodiversity and providing essential ecosystem services such as water filtration and soil stabilization. They support local communities by providing jobs and fostering sustainable land practices, improving food security and livelihoods. And they enhance climate resilience by improving soil health and increasing water retention, reducing the impacts of extreme weather events.
For organizations with 2030 net-zero commitments, when proper techniques are applied, grasslands can show signs of regeneration and carbon sequestration within a few years. Cultivo’s AI-powered data-driven platform provides full transparency and authenticates the claims made by a project, which is crucial to companies buying high-quality carbon removal credits.
Regenerating grasslands, nature’s inverted forests, is the next, and most compelling, frontier for investment in nature-based solutions. It offers an efficient — and, with monitoring, transparent — solution for carbon sequestration, while providing for jobs and community development. A community-first, ecologically sound approach to grasslands can benefit all stakeholders while protecting and restoring delicate ecosystems and contributing to the reduction of carbon in our atmosphere.
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Dr. Manuel Piñuela, Ph.D, is founder and CEO of Cultivo.
