Paying farmers for carbon

Although costs for monitoring, reporting and verification are high for many result-based schemes, the European Commission favours a wider implementation.

The European Commission has announced that by the end of this year they will publish a Communication on Carbon Farming. This will include an action plan for carbon farming and a regulatory framework for certifying carbon removals.

In a preliminary study, “Operationalising an EU carbon farming initiative”, the Commission has looked at existing payment schemes that reward carbon sequestration, reduced or avoided emissions in agriculture. Note that they do not address here the sensitive issue of whether carbon credits from agriculture are allowable for trading.

The report recognises that farm-level payments for carbon farming can be action-based or result-based. The action-based schemes are already common in various forms, not least in the Common Agricultural Policy. Farmers get paid for carrying out certain actions, e.g. planting cover crops or maintaining hedges. The benefit of result-based schemes is that they directly link payments to measurable indicators and the climate benefits they provide. Another advantage is that farmers are free to choose the management strategy they use to achieve a desired result, rather than following a set of rules. The recurring challenge with result-based schemes is that you need to find ways to monitor, report and verify that emissions are either avoided or reduced.

A middle way is the use of hybrid schemes, where farmers receive a basic action-based payment topped up with an additional result-based payment if climate benefits can be demonstrated.

Five thematic areas for carbon farming are identified in the report: peatland restoration and rewetting; agroforestry; maintaining and enhancing soil organic carbon on mineral soils; grasslands; and livestock farm carbon audits.

Degraded peatlands are a major source of greenhouse gas emissions, but represent a relatively small share of all EU farm land. This provides great potential to reduce emissions through restoration and rewetting. Another advantage is that greenhouse gas fluxes from peatlands and emission factors in peatlands are well correlated with water table levels, land use and vegetation type. Thus, they are easy to monitor, report and verify.

Agroforestry is a range of farming systems that involves growing shrubs and trees next to crops or in pastures. Calculating the amount of carbon in trees can be done relatively easily, but it is more difficult to assess the carbon that is stored in the ground. The report recommends that priority should be given to the restoration and maintenance of already existing agroforestry systems mainly in the Mediterranean region. Many of these are of high natural and cultural value and are currently under threat. Establishing new agroforestry systems can also provide climate mitigation and adaptation benefits. However, this should be done with forethought, considering cost-effectiveness and adaptation to local conditions.

Farmers have a range of options to improve levels of carbon in the soil, including cover cropping, improved crop rotations, agroforestry, and converting from cropland to grassland. The report states that the costs to monitor, report and verify carbon fluxes have been high in the studied projects. The potential for carbon storage in different soils is also uncertain. However, technological development that includes remote sensing could remedy some of those problems.

Grasslands cover more than a third of farmland in the EU and already contribute to a considerable level of carbon sequestration each year. The potential to retain and increase the stored carbon is considered good. The difficulty is again about measuring. The scope for carbon sequestration is dependent on soil type, climate, previous land use and subsequent management practices. However, the report believes that the potential outweighs the constraints. Results-based schemes are considered suitable for both the management of existing grasslands and the conversion of arable, fallow and marginal land to grassland.

The livestock sector accounts for 81per cent of the greenhouse gas emissions of the agricultural sector. On-farm measures such as improved feeding, better manure management, reduced use of energy and fertilisers are estimated to have an overall potential to reduce greenhouse gas emissions by 12–30 per cent. There are already several carbon auditing tools that calculate how much greenhouse gas emissions are reduced by different actions. Here, the report recognises a trade-off between certainty and cost, e.g. it is cheaper to rely on average emissions factors than exact measurements. More stringent methods will be costlier and in the end limit uptake among farmers.

The need for technological and methodological developments to reduce the uncertainties and costs of monitoring, reporting and verification is clear. The report also highlights the need for farmers’ involvement in the design of schemes, as well as including the co-benefits that contribute to other environmental objectives, such as biodiversity.

Kajsa Pira

The report “Operationalising an EU carbon farming initiative”: https://op.europa.eu/en/publication-detail/-/publication/b7b20495-a73e-1...