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FORNY20-FORNY2020

KVAL: COOLCROWD 2.0 - Testing of a local crowdfunding concept for financing climate mitigation measures in Norwegian agriculture

Alternative title: COOLCROWD 2.0: Utprøving av et konsept for lokal folkefinansiering av klimatiltak i norsk landbruk

Awarded: NOK 0.50 mill.

The project COOLCROWD 2.0 builds on a previous research project funded by the KLIMAFORSK program. The purpose of COOLCROWD was to assess the potential for a locally crowdfunded system that enables Norwegian farmers to install climate-friendly technologies on their farms and the Norwegian public to invest in local climate mitigation measures. The project developed a business model concept that is ready for implementation by industry partners. However, there is the need to gain more knowledge on the potential of the concept that will help to determine a future commercialization path. The aim of COOLCROWD 2.0 is to test out this concept in a pilot study, which will help to verify the theoretical findings related to the willingness to pay by backers, provide more information on the type of backers, farmers’ experiences with crowdfunding and the overall feasibility of the concept. The project carried out two crowdfunding campaigns in Norway with farmers, which show very different levels of success. The pilot testing confirms that several of the previously identified success factors for crowdfunding are also relevant for crowdfunding of climate measures in agriculture. In addition, the pilot study shows that backers' motivation to support crowdfunding campaigns is not primarily climate related. The biggest motivating factor was a personal connection to the farmers, or personal experiences with farming. This testing of local crowdfunding of climate measures has several practical implications for crowdfunding campaigns in Norwegian agriculture. The study shows that crowdfunding campaigns related to agriculture have some special features that must be taken into account for the implementation of future campaigns. The project concludes with several recommendations for further implementation of crowdfunding climate measures in Norwegian agriculture: 1) Keep the target amount relatively low (NOK 45 000). The possibility of equity-based crowdfunding can be considered for larger amounts. 2) Contribute to more knowledge about crowdfunding and offer communication support so that farmers are aware of possible target groups and do not feel that they are alone during the campaign period. 3) Adapt the implementation of the crowdfunding campaign to the farm operation and when the climate measure is most visible to backers. 4) Use food products as a reward if the farmer produces this and clarify delivery in advance as these products seem to be very popular. 5) Furthermore, the project recommends creating a "how to" crowdfunding guide for farmers that contains the above recommendations. In addition, the project recommends more research on equity-based crowdfunding in particular. This may be relevant for financing larger climate measures with higher investment costs. 6) In addition, there is a need for more research into contributors' motivation and which types of rewards are preferred as the sample in this pilot study was very small. It is also possible to explore further the involvement of companies as backers. Many companies are concerned about carbon compensation and reducing their climate footprint and can be a relevant actor here.

Achieved effects in the project include the following: The project tested 2 crowdfunding campaigns with Norwegian farmers. One crowdfunding campaign was successful and financed (solar PV system on mountain farm). COOLCROWD 2.0 contributed to more knowledge about crowdfunding in Norway, especially in agriculture. The project provided more information on critical issues related to the implementation of the COOLCROWD-concept. Results were presented at an internal webinar at University of Southern Queensland (26.10.2022). Furthermore, projects results were also presented at three international conferences. This includes the European Marketing Academy Conference 2022 in Budapest, 24.-27.05.2022, the International Conference for Crowdfunding Research in Oslo (20.11-01.12.2022), and the International Conference on Alternative Finance Research in Gdansk 01.-02.06.2023. In addition, the results from testing the COOLCROWD- concept are published in Norwegian in a Ruralis report with practical recommendations for further development. Furthermore, a scientific article is submitted to the to the Journal of Alternative Finance. Potential long-term effects include: Further testing of the COOLCROWD-concept on a large scale. The project team plans to submit an application to "Proof-of-Concept – Research Commercialisation from Publicly Funded Research 2023" with a deadline of 18 October 2023 to take the pilot study further and carry out technological and market clarifications. The project can contribute to the achievement of Norway's climate goals in the agricultural sector and Sustainable Development Goal (SDG) 13 (Climate Action), SDG 7 (Affordable and clean energy), and SDG 15 (Life on land).

Funding scheme:

FORNY20-FORNY2020