Crowdfunding of climate mitigation measures in agriculture: Developing a sustainable business model concept

Otte, Pia Piroschka; Maehle, Natalia Article Crowdfunding of climate mitigation measures in agriculture: Developing a sustainable business model concept Journal of Business Models (JOBM) Provided in Cooperation with: Aalborg University, Aalborg Suggested Citation: Otte, Pia Piroschka; Maehle, Natalia (2024) : Crowdfunding of climate mitigation measures in agriculture: Developing a sustainable business model concept, Journal of Business Models (JOBM), ISSN 2246-2465, Aalborg University Open Publishing, Aalborg, Vol. 12, Iss. 2, pp. 57-78, https://doi.org/10.54337/jbm.v12i2.8843 This Version is available at: https://hdl.handle.net/10419/319032 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by-nc-nd/3.0/ 57 Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 Crowdfunding of Climate Mitigation Measures in Agriculture: Developing a Sustainable Business Model Concept Dr. Pia Piroschka Otte1 and Dr. Natalia Maehle2 Abstract Purpose: The purpose of this article is to develop a sustainable business model (SBM) concept for local crowdfunding of climate measures in agriculture. Many climate measures entail significant capital costs preventing farmers from their adoption, and existing finance schemes have experienced limited success. Crowdfunding can be a novel financing tool for farmers to implement climate measures in agriculture. Design/Methodology/Approach: We apply the adapted SBM canvas framework and argue that the framework presents a suitable tool for identifying and validating business models for a local crowdfunding program. Findings: By applying the adapted SBM canvas tool and through an extensive mixed method approach, the study identifies 6 relevant design principles for SBM development and relates them to different dimensions in the SBM canvas. Practical Implications: The study develops a proven business model concept that can be implemented by practitioners and farmers to facilitate the adoption of climate change mitigation measures, overall contributing to the transition to a low emission society. Originality/Value: This study demonstrates the existing limitations of the adapted SBM canvas and suggests how it can be improved by integrating external structural constraints that can be a barrier to business model development. Moreover, we contribute to the SBM literature by being the first to connect Design Science with crowdfunding and the adapted SBM canvas. Keywords: crowdfunding, agriculture, sustainable business models, climate mitigation Acknowledgements: The authors would like to thank all project participants and informants for their valuable inputs to this research. This study was financed by the Research Council of Norway, under the project Coolcrowd: Local crowdfunding for a low-emission society: Investigating the concept of local climate crowdfunding for Norway (grant number: 268223) and Karbonmat: Designing sustainable business model (SBM) concepts for carbon sequestration in soils to transform the Norwegian food system (grant number: 344285). Please cite this paper as: Otte, P. P., and Maehle, N. (2024), Crowdfunding of Climate Mitigation Measures in Agriculture: Developing a Sustainable Business Model Concept, Vol. 12, No. 2, pp. 57-78 1 Senior researcher, Institute for Rural and Regional Research, Pia.ott[email protected] 2 Professor, Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences, [email protected]o Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 58 58 Introduction Governments worldwide have committed to ambitious climate goals via the Paris Agreement, a legally international binding treaty on climate change with the goal to limit global warming to below 2, preferably to 1.5 degrees Celsius, compared to pre-industrial levels (UNFCC, 2022). The agricultural sector is part of this treaty. Agricultural activities related to crop and livestock production release a significant amount of anthropogenic greenhouse gas (GHG) emissions globally. In 2018, agriculture and related land use emissions accounted for 17 percent of global GHG emissions from all sectors (FAO, 2020). Significantly reducing GHG emissions from agriculture requires a combination of complementary actions including carbon capture, renewable energy and changing soil management, and soil practices (Hansen, Bakke Haavik, Bergslid, Elvatun, van Gool, Lunnan, Røthe, and Walland, 2018; Hohle, Bardalen, Haugen, Kvalevåg, Øygarden, Hanssen-Bauer,Walland, and Brunvatne, 2016). However, the uptake of climate change mitigation measures by farmers has been low due to a complex combination of social, cultural (Burton and Farstad, 2020; Davidson, Rollins, Lefsrud, Anders, and Hamann, 2019), psychological (Kreft, Huber, Wuepper, and Finger, 2021) and structural (Wreford, Ignaciuk, and Gruère, 2017) constraints. In addition, many climate measures entail significant capital costs preventing farmers from adopting these (Wreford et al., 2017). Hence, farmers’ limited financial capacity can be a barrier to adoption (Baumgart-Getz, Prokopy, and Floress, 2012). Moerkerken, Blasch, van Beukering, and van Well (2020) show in their study on Dutch farmers that economic reasons such as saving or earning money are negatively influencing the willingness to adopt climate mitigation measures. Similar, Dumbrell, Kragt, Meier, Biggs, and Thorburn (2017) show that abatement costs differ across different farms in Australia and can in some cases be very high and even reduce profitability. Furthermore, a study on adoption of carbon farming practices among Australian farmers argues that they hesitate to invest in these due to uncertainty about policies and the economic and environmental impact of these practices (Dumbrell, Kragt, and Gibson, 2016). Common policy approaches for enabling adoption of climate measures and overcoming economic constraints are subsidies, grants, tax incentives and voluntary offset programs (Cooper, Boston, and Bright, 2013). However, these have experienced limited success and there is a need for more tailored interventions that address the different needs of specific farmer groups (Barnes and Toma, 2012). The availability of credit to cover implementation costs is important (Wreford et al., 2017). Furthermore, cost-sharing, microfinance and R&D finance can be possible instruments to establish adoption (Wreford et al., 2017). In recent years, alternative finance systems have emerged (Caputo, Schiocchet, and Triose, 2022). Crowdfunding defined as obtaining funding from a large pool of investors, where each one provides a relatively small amount of money, often without standard financial intermediaries (Shneor and Maehle, 2020) is one of them. Crowdfunding can be a novel financing tool for farmers to implement climate measures in agriculture. This study focuses on the case of Norway as crowdfunding of climate mitigation measures can be particularly relevant for Norwegian agriculture. In 2019, the two largest farmer organisations signed a voluntary agreement with the Norwegian government to reduce GHG emissions and increase carbon capture from agriculture, which accounts for approximately 9.1 % of Norwegian GHG emissions (Miljødirektoratet, 2021). The goal is to reduce emissions by 5 million tonnes of CO2-equivalent for the period 20212030 (Regjeringen, 2019). Experts assume that such a target is feasible, but it requires a rapid implementation of a comprehensive set of climate measures (Miljødirektoratet, 2020). Norway is a small, developed country with high per capita income and high levels of social trust, suggesting a high crowdfunding potential (Ziegler, Shneor, Wenzlaff, Wang, et al., 2020). Crowdfunding has experienced a significant growth in Norway recently (Shneor, 2020) and previous research has shown that well-designed crowdfunding campaigns can be a promising tool to incentivise climate change mitigation on farms (Kragt, Burton, Zahl-Thanem, and Otte, 2021). Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 59 59 The current article is based on an international research project aiming to assess the potential of a local crowdfunding system enabling instalment of climate-friendly technologies on the Norwegian farms. This article puts together the findings from all work packages in the abovementioned project. The aim is to develop a sustainable business model (SBM) concept for local crowdfunding of climate measures in Norwegian agriculture. For designing such a SBM concept, we apply the adapted SBM canvas framework (Bocken, 2015 in Bocken Schuit, and Kraaijenhagen, 2018) and argue that the framework presents a suitable tool for identifying and validating BM for a local crowdfunding program. However, we show through our research that it can be improved by integrating external structural constraints that can influence the implementation of a business model. Hence, we contribute to the literature by applying the SBM canvas to a new field of research and combining it with crowdfunding. Combining crowdfunding and sustainability is a contribution in itself, as there is still lack of research “at the interface of crowdfunding and sustainability.” (Böckel, Hörisch, and Tenner, 2021:447). Furthermore, by focusing on reduction of GHG emissions from Norwegian agriculture, we contribute to more research on national level barriers to climate mitigation adoption (Wreford et al., 2017) and address socio-economic transitions in agriculture. The paper is structured as follows. First, we present the theoretical background by discussing sustainable business models and crowdfunding. Then, we describe our methodological approach and provide an overview of the main results. After that, we discuss our main findings by aligning them with the existing theoretical perspectives and identifying the possibilities to extend the theory. Finally, we conclude by debating our contribution, current limitations, and future research opportunities. Crowdfunding for sustainability Sustainable business models Business models can play an important role in societal transitions (Ruggiero, Kangas, Annala, and Lazarevic, 2021). Recent years have witnessed a growing interest towards sustainability both among businesses and their stakeholders which has been reflected in the increased research focus around sustainable business models. A sustainable business model (SBM) can be defined as “a simplified representation of the elements, the interrelationship between these elements, and the interactions with its stakeholders that an organisational unit uses to create, deliver, capture, and exchange sustainable value for, and in collaboration with, a broad range of stakeholders” (Geissdoerfer, Bocken, and Hultink, 2016:1219). The main idea is to embed sustainability into the business model, so that a company can achieve sustainable outcomes as to an increasing degree expected by its stakeholders. SBMs have three distinctive characteristics making them different from traditional business models: creating value for multiple stakeholders, society, and the environment; delivering non-financial value, e.g., social and environmental values; considering not only value creation, but also value destroyed as a result of company’s negative effects on society and environment and value uncaptured (Goni, Gholamzadeh Chofreh, Estaki Orakani, Klemeš, Davoudi, and Mardani, 2021). There is a growing demand for sustainable business model tools, but they are still rare (Geissdoerfer et al., 2016). One of the few tools available is an adapted sustainable business model canvas (Bocken, 2015 in Bocken et al., 2018), see Figure 1. This tool is based on the Business Model Canvas from Osterwalder and Pigneur (2010), which represents one of the most well-known business model tools. It consists of nine basic business model components visualized through a canvas, and its main purpose is to help mapping, designing, and inventing new business models. The main benefits of the Business Model Canvas are its simplicity and practice-orientation. However, this simplicity leads to important limitations. For instance, according to the traditional business model logic, the Canvas focuses only on financial success and satisfying customer needs, neglecting other social and environmental values (Kraaijenbrink, 2012 in Ching and Fauvel, 2013). To adjust to the growing focus on sustainability, there is a need to adapt this business model mapping tool. Sustainable organizations aim to embed sustainability in the core purpose of the firm, and Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 60 60 the value proposition needs therefore to encompass environmental and social values in addition to the economic one (Bocken, Short, Rana, and Evans, 2013; Bocken, Short, Rana, and Evans, 2014). This is reflected in the adapted sustainable business model canvas. Crowdfunding The idea behind crowdfunding is to acquire funding from a large pool of investors, where each of them provides a relatively small contribution (Shneor and Maehle, 2020). Despite the small amounts given by each investor, the collective contribution can be rather significant if the necessary number of investors is reached. Crowdfunding has experienced substantial growth in recent years, with the global crowdfunding market valued at USD 12.27 billion in 2021 and forecasted to double by 2027 (Statista Research Department, n.d.). Crowdfunding involves three main actors: the fundraiser, the backer, and the platform. Fundraiser is defined as any individual or organization making a public call for financing a project, while backer is any individual or organization providing this financing. A crowdfunding platform serves as a market maker bringing fundraisers and backers together via a common trusted system (Shneor, Zhao, and Flåten, 2020). There are two principal types of crowdfunding; investment-based and non-investment based (Shneor, 2020). The investment crowdfunding includes two main models, i.e., debt-based and equity-based. The debt-based crowdfunding is represented by peer-to-peer loans, where investors receive fixed periodic income as well as repayment of the loan. The equity-based crowdfunding is when backers invest in equity or bond-like shares issued by a business, via the internet (Ahlers, Cumming, Günther, and Schweizer, 2015). In the non-investment crowdfunding, backers provide funding without expectations of monetary returns (Shneor, 2020). Here there are two models; donationand reward-based. Donation-based crowdfunding is characterised by backers donating money to support a certain cause based on philanthropic motivations. Reward-based crowdfunding is when backers receive various nonmonetary rewards or products, it is often used for pre-sale.  Figure 1. Adapted sustainable business model canvas (Bocken, 2015 in Bocken et al., 2018:82).  Key stakeholders Suppliers, cofinancers, distributors, revers logistics, and partners for positive impact Key activities Processes, development technology from a systemic point of view Key resources & capabilities Materials, human financial, network, infrastructure, brand image, data, knowledge Profit Superior value that is offered to customers compared to competitors People Positive impact for common interest of society Planet Positive impact for the environment Cost structure For stakeholders in the entire system Revenue structure For stakeholders in the entire system Customer segments Target group who makes use of the offering Customer relationships Relation between customers and company Channels Touchpoints with customers incl. How to retrieve products Value creation Value delivery Value capture Value proposition Figure 1: Adapted sustainable business model canvas (Bocken, 2015 in Bocken et al., 2018:82). Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 61 61 The literature identifies several benefits of crowdfunding in addition to an obvious financial one. For instance, crowdfunding can give a company or a product cost-efficient marketing publicity through increased exposure (Belleflamme, Lambert, and Schwienbacher, 2014) and “word of mouth” (Lehner, 2013). Moreover, studies (Lam and Law, 2016) demonstrate that crowdfunding offers entrepreneurs an unusually high degree of independence in decision making, feedback from the crowd, and public support and legitimacy. Crowdfunding was also identified as an ultimate source of funding for sustainable entrepreneurs, as socially relevant aspects may attract attention from many backers (Belz and Binder, 2017). Since the invested amounts in crowdfunding are usually rather small, the backers tend to consider not only financial but also intangible benefits, e.g., social and environmental ones (Cumming, Leboeuf, and Schwienbacher, 2017). Sustainability orientation is shown to positively affect funding success for crowdfunding projects (Calic and Mosakowski, 2016). Several studies (Bocken et al., 2014; Testa, Nielsen, Bogers, and Cincotti, 2019) therefore argue that crowdfunding can help develop and scale up sustainable innovations. Lack of funding represents one of the main obstacles for sustainable development as it is often difficult to acquire financing for sustainable projects, e.g., climate mitigation measures, via traditional investment channels (Ortas, Burritt, and Moneva, 2013). Compared to pure for-profit projects, sustainable projects are more ambiguous and complex as they are pursuing multiple goals, e.g., economic and environmental ones (Bocken et al., 2014; Belz and Binder 2017). Balancing several goals may also extend the time for projects to reach profitability. Some sustainable projects such as climate mitigation measures in agriculture often do not lead to increased productivity in the short term and are associated with monetary and non-monetary costs (Wreford et al., 2017). Mitigation benefits represent a global public good while the costs are often carried locally by farmers. Mitigation is also associated with uncertainty and effect can only be seen in the future (Wreford et al., 2017). Altogether, this makes sustainable projects less attractive for traditional investors (Messeni Petruzzelli, Natalicchio, Panniello, and Roma, 2019). It is therefore necessary to investigate new alternative financing possibilities such as crowdfunding (Testa et al., 2019). Connecting crowdfunding with carbon offset programs In this study, the innovative idea was to connect crowdfunding to volunteer carbon offset programs in aviation. Nowadays, travellers can voluntarily compensate for their climate emissions from air travel by paying for carbon offset projects1. A wide range of companies and NGOs working with voluntary carbon credits have recently emerged. However, the uptake of these measures has been low and carbon-offset programs have suffered from a “cowboy” atmosphere (Danda and Hartmann, 2011) where the systems used very different approaches to calculate and compensate for emissions, making them complex and opaque (Gössling, Haglund, Kallgren, Revahl, and Hultman, 2009). In addition, many carbon offset projects are located in countries far away, which contributes to a high level of distrust amongst the general public (Conte and Kotchen, 2010). Crowdfunding could enhance current carbon offset programs by providing the required transparency for funders/backers that these programs currently lack. Local crowdfunding differs from carbon offsetting since it enables backers to choose from a variety of climate projects and follow up their progress. Furthermore, it allows to develop a sense of ownership and personal connection (Shneor and Vik, 2020) that carbon offsetting does not provide. It could even be possible for travellers - who want to locally compensate for some of their climate emissions - to pass by the farm they are crowdfunding. Hence, a local climate crowdfunding program could be a promising tool to help farmers to install new climate technologies and at the same time a good way for the general public to compensate for some of their emissions from the transport sector. 1 Through a carbon offset project airline passengers and corporate customers can compensate for their proportion of an aircraft’s carbon emissions on a particular journey by investing in carbon reduction projects (IATA, 2022). Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 62 62 Methods Research approach and study design The study applies a proof-of-concept approach, defined as “the realization of a certain method or idea to ascertain its scientific or technological parameters” (National Science Foundation 2014, 14-569 in Kendig, 2016: 736). The objective of the study is to demonstrate and verify concepts that theoretically may have real world application, and to determine their feasibility but not necessarily to implement them. For doing this, we apply a design science research approach, which “focuses on developing design principles that provide the main guidelines to develop targeted solutions for a problem in a specific context” (Van Aken and Romme, 2009 in Van Burg, Jager de, Reymen, and Cloodt, 2012: 458). Design principles “involve a coherent set of normative ideas and propositions, grounded in (e.g. entrepreneurship) research, which serve to design and construct detailed solutions” (Van Burg, Romme, Gilsing, and Reymen, 2008: 116 in Van Burg et al., 2012: 458). In our study, the design principles represent business model attributes that shape the different dimensions of the adapted SBM canvas (Bocken, 2015 in Bocken et al., 2018). To obtain information for each dimension of the SBM canvas and hence identify the design principles (BM attributes), we apply a mixed method approach Table 1 Method Description Year Focus group with farmers 5 farmers (both organic and conventional) with an interest in climate change mitigation measures. 2018 National survey with farmers National survey sent to 2000 Norwegian farmers by mail and email 2018 Focus groups with general public 2 focus groups (5 participants at the first and 7 participants at the second) 2018-2019 Focus group with a company Focus group with an energy company currently involved in a carbon credit program, 7 participants 2019 Survey with general public Survey sent to 1500 respondents in the general population 2020 Stakeholder workshops An iterative process throughout the project including 3 meetings 2017-2020 Workshop with the commercial aviation sector Workshop session at the national aviation conference with representatives of the commercial aviation sector 2019 Table 1: Overview of the methods applied in the study Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 63 63 consisting of a mix of qualitative and quantitative studies with multiple relevant stakeholders relevant for the business model design. Table 1 provides an overview of the methods applied in the project. Such a comprehensive approach is necessary due to the complexity of developing a BM concept for crowdfunding climate mitigation measures in agriculture, which requires involvement of multiple stakeholders from different sectors (e.g., agriculture, alternative finance, consumers, and transport companies). The applied mixed method approach helps to identify, create, and validate the design principles (Van Burg et al., 2012). Figure 2 illustrates the role of each method for construction of the design principles. To identify the first relevant design principles for the SBM, we carried out two focus group interviews with farmers and relevant backers and one stakeholder workshop. In the next phase, we supplemented these findings with two surveys with farmers and the general public to create more measurable and quantifiable design principles. These were then validated again during a stakeholder workshop and a workshop with the commercial aviation sector, to explore how local crowdfunding can be integrated into global carbon offset programs. As a result, a final SBM concept for local crowdfunding was designed. This paper synthesises the findings of the whole research project. The next section presents a concise description of each method with references to the relevant previously published articles in this project where more information about the choices and details of each method can be obtained. Workshop with external stakeholders To determine the social and environmental layer of the SBM canvas, there is a need to include a stakeholder perspective (Joyce and Paquin, 2016). Hence, we conducted in total 3 iterative workshops with external stakeholders during the project period (between 2017-2020). The aim of the workshops was twofold. First, we identified primary design principles for the SBM that later were measured in a quantitative study. Second, the workshops helped to validate the preliminary identified concepts of the business model design that were derived from the work packages on farmers’ and the general public’s willingness to participate in a local crowdfunding scheme. The stakeholder group consisted of representatives from the two Norwegian farmers’ unions, a local taxi company, a travel agency, the Norwegian Environment Agency, a sustainable bank, a crowdfunding platform, a national airline, a company offering a range of services to companies and the public for reducing GHG emissions, and a governmental agency stimulating entrepreneurship and green growth in Norway. In addition, the stakeholder group included several experts, e.g., a researcher specialized in crowdfunding, an interested farmer who earlier invested in climate measures, and an environmental activist. Several researchers from the different work packages in the project attended the Figure 2: The role of each method for constructing design principles for SBM concept Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 64 64 stakeholder sessions to gain direct insights from the stakeholders. In average between 10 and 16 participants were present during the workshops (see for more information Haring, 2019). Focus group with farmers We conducted a focus group with 5 Norwegian farmers in 2018. Farmers were selected through a previous climate project led by one of the research partners. The group included both organic and conventional farmers. The aim was to explore preferences for various types of crowdfunding and climate measures and potential socio-cultural factors that can limit or foster farmers’ interest to participate in a local crowdfunding system. Furthermore, the focus group provided qualitative validation for a planned choice experiment. The focus group was carried out at one of the involved farms in October 2018 (see for more information Farstad and Hårstad, 2022). Survey with farmers We sent out a nationwide survey by email and mail to 2000 farmers in November 2018. A total of 465 respondents completed the questionnaire with an overall response rate of 23.3 percent (Otte, Zahl-Thanem, Hansen, and Maehle, 2019). The questionnaire was divided into 4 sections. Part 1 included questions about farmer’s socio-economic background and farm characteristics, followed by part 2 that investigated farmers’ perceptions of crowdfunding and willingness to participate in a local crowdfunding program for financing climate mitigation measures. Part 3 asked about farmers’ perceptions of climate change and interest in adopting various climate mitigation measures. Part 4 consisted of 6 discrete choice experiment questions to investigate farmers’ preferences for different types of crowdfunding (see for more information Kragt et al., 2021 and Otte et al., 2019). Focus groups with potential backers In the original project description, the general public was identified as the main group of backers. The target group was described as consumers/individuals who are looking for ways to reduce or compensate for their GHG emissions. However, early in the project the research team realized that companies should also be included as potential backers since they can provide more stable financing over a longer period through the subscription to a local carbon offset program. Hence, we also conducted a focus group with a relevant company. In total, we carried out two focus groups with the general public and one with a company. Each focus group lasted for approximately two hours. In the beginning, the researchers shortly introduced the project, defining crowdfunding and describing different crowdfunding models. After that, four crowdfunding scenarios were presented. These scenarios included four different climate mitigation measures: solar panels on the barn roof, biogas from animal manure, drag hoses for improved manure dispersal, and the addition of biochar to soils. The first focus group included 5 informants and was carried out in November 2018. Informants were recruited through the university network of the involved research partner and represented different age groups, genders, and socio-economic backgrounds. All informants were more concerned about climate change than an average consumer. The second focus group took place in September 2019. It included 7 informants representing a parent group from a school in the outskirts of Oslo. The aim with this selection approach was to attract the informants with a less biased green profile, so that we could identify potential constraints with the BM concept. The company focus group was carried out with an energy company involved in a carbon credit program and recruited through the network of one of the researchers. This focus group was conducted in September 2019 and included 7 participants. The focus group interviews were transcribed and analyzed with special focus on the issues such as knowledge of and willingness to pay for climate mitigation measures in agriculture through crowdfunding (see for more information Stoknes, Soldal, Hansen, Kvande, and Skjelderup, 2021). Survey with the general public A survey was sent to a representative sample of the general Norwegian population via email in January 2020. This was done by using a professional survey panel. In total 1500 responded to the survey. The survey was designed based on insights from the three focus groups described above. It consisted of four main Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 71 71 constraints. For instance, for local crowdfunding of climate measures, there is still uncertainty around their effect in agriculture. Every farm is different in terms of different diets of animals, tillage intensity, soil composition, application of fertilizer etc. This makes it challenging to calculate the exact impact of investments in climate measures on the amount of GHG emissions from a specific farm per year (Stoknes et al., 2021: 12). This issue was raised during the stakeholder workshop by referring to the complexity of the carbon quota market, which is based on certain rigid methodologies. As a result, it is currently not feasible to transfer GHG emissions from one farm to GHG emissions from the aviation. In addition, there is still lack of research on GHGemission reduction linked to agricultural carbon credits (Lokuge and Anders, 2022). Current GHG mitigation policies in agriculture have mainly focused on carbon taxes while more attention should be given to exploring the possibility of carbon-credit and carbon-offset systems (Lokuge and Anders, 2022). The voluntary carbon credit market has grown significantly in recent years (Lokuge and Anders, 2022) but agriculture has not been part of the EU Emissions Trading System (ETS) sector and hence there has not been a very ambitious climate policy concerning agriculture (Verschuuren, 2018). One way to realize the intended local crowdfunding SBM concept would be to include agriculture in carbon pricing mechanisms, such as the EU’s ETS. However, this is a complex process and would require new rules and regulations. For example, in terms of climate measures related to soil carbon this would require farmers to establish a baseline level of soil carbon, and to monitor, report and verify the amount of CO2 sequestered in the projects under the ETS offsets. In addition, governments would have to set commitment periods, and methodologies need to be developed to determine the scope and types of the allowed projects (Verschuuren 2018: 321). Hence, the realization of the SBM on crowdfunding climate measures in agriculture through carbon credits from aviation is doubted to be feasible as long as the appropriate policy framework is not established and there is no accuracy in emission accounting on farms. At the current stage, it is more feasible to focus on exploring the possibility of crowdfunding climate mitigation measures directly. However, with a change in politics this might transform. Conclusion This study developed a SBM concept for local crowdfunding of climate mitigation measures in agriculture and explored how local crowdfunding can be integrated into global carbon offset programs in commercial aviation. By applying the SBM canvas tool and an extensive mixed method approach, relevant design principles for SBM development were identified and related to different dimensions in the adapted SBM canvas. Furthermore, we provide the suggestions on how to improve SBM canvas by including the external context that can hamper the implementation of new SBMs. We demonstrate that it is not feasible at the current stage to implement a SBM for local crowdfunding of climate measures connected to the commercial aviation sector since current policy regulations do not allow including GHG emission reductions into the complex accounting system for carbon offsets. In addition, there is still uncertainty around the effect of climate measures in Norwegian agriculture. This study is however characterized by several limitations. First, it is a proof-of-concept study conducted in one country (Norway), so it is important to consider its relevance at a larger scale (Banerjee, Banerji, Berry, Duflo, Kannan, Mukerji, Shotland, and Walton, 2017). The developed SBM is relevant to the Norwegian context where agricultural sector is highly regulated by the government. It would be interesting to conduct a comparative study including countries with less regulated agricultural production and a more liberal approach to see whether the results would differ depending on the political system. Furthermore, since this research is a part of a proof-of-concept study, it does not address how collaboration between the various stakeholders could lead to scaling up the suggested SBM. Future research can investigate the types of collaboration in the SBM, by applying Ciulli’s et al. (2022) Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 72 72 framework and its four ‘scaling-through-collaboration’ strategies. In addition, previous research has criticized the original BM canvas for not taking into account existing competition (Ching and Fauvel, 2013) and competitive strategy (Coes, 2014). This has not been addressed in this paper and for future research it would be interesting to investigate how far the local aspect of carbon credits can be a competitive advantage in comparison to traditional carbon credit programs where air travel passengers compensate for their emissions in international projects like rain forest projects in Brazil. Previous research has shown that local relevance is important for climate action (Stoknes, 2014) and that could be investigated to a larger degree. Moreover, future studies can use other sustainable business model tools, e.g., the Triple Layered Business Model Canvas proposed by Joyce and Paquin (2016). It extends the original Osterwalder and Pigneur (2010)’s model by adding two layers: an environmental layer and a social layer. The environmental layer is based on a life cycle perspective of environmental impact, while the social layer incorporates a stakeholder management approach seeking to balance the interests of all the stakeholders instead of only maximizing company’s gain (Joyce and Paquin, 2016). To conclude, this study contributes theoretically to the SBM literature by being the first one to connect Design Science with crowdfunding and the adapted SBM canvas. In addition, it suggests how an adapted SBM canvas tool can be further developed by taking into consideration the external context, which can hamper or enable the implementation of SBMs. As for the practical implications, the study develops a proven business model concept that can be implemented by practitioners and farmers to facilitate/ accelerate the adoption of climate change mitigation measures, overall contributing to the transition to a low emission society. In terms of policy implications, we recommend policy makers to investigate the ways to improve the inclusion of agriculture in carbon pricing mechanisms, which will facilitate the market development of more tailored practices to finance climate mitigation measures in agriculture. This can provide the appropriate regulatory framework to accelerate the transition towards a more sustainable and climate friendly food production. Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 73 73 References Ahlers, G. 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Ziegler, T., Shneor, R., Wenzlaff, K., Wang, W.B., et al., (2020). The Global Alternative Finance Market Benchmarking Report, Cambridge, UK, Cambridge Centre for Alternative Finance. Available at: https:// www.jbs.cam.ac.uk/wp-content/uploads/2020/08/2020-04-22-ccaf-global-alternative-financemarket-benchmarking-report.pdf Journal of Business Models (2024), Vol. 12, No. 2, pp. 57-78 78 78 About the Authors Pia Piroschka Otte is a senior researcher at Ruralis – Institute for Rural and Regional Research. She holds a PhD from the Norwegian University of Science and Technology (NTNU). Her work focuses on social science research addressing crowdfunding of climate measures in agriculture, energy transitions, and social acceptance of new technologies. Natalia Maehle is a Professor at the Mohn Centre for Innovation and Regional Development, Western Norway University of Applied Sciences (HVL). She holds a PhD from the Norwegian School of Economics (NHH). Prof. Maehle is doing teaching and research in the field of digital innovation, sustainability, crowdfunding, and marketing. She has an excellent track record of publications in the highly-ranked international peer-reviewed journals such as Journal of Marketing, Journal of Cleaner Production, European Journal of Marketing, British Food Journal, European Planning Studies, Baltic Journal of Management, International Journal of Market Research and Journal of Consumer Behaviour.