By Gary Hartley

Incentivising carbon farming: how to make a good idea have mass appeal

It has long been established that agricultural soils have huge potential as a reservoir for greenhouse gases, helping to mitigate climate change. Research suggests that just a 1% increase in farm carbon storage could make a significant difference in meeting global climate targets.

There’s also a consensus that a mix of direct incentives, carbon credit schemes and falling costs of soil carbon measurement and verification could encourage a rapid move towards ‘carbon farming’ practices such as conservation tillage, strategic grazing approaches and cover cropping.

But despite the range of options, a universally accepted approach to incentivising farmers to make these changes remains elusive.

Soil carbon credit schemes, both public and private, have appeared around the world, with the aim of paying farmers for soil carbon sequestration above an agreed baseline, and offering offset certificates for emissions incurred elsewhere.

However, take-up remains modest, schemes are often only reaching those already engaged, and many farmers are carrying out carbon farming practices without necessarily branding it as such or seeking remuneration.

So, are incentives inadequate, are farmer’s motivations not properly understood, or is there something else going on? In truth, the evidence suggests, it’s a little of all three.

Certification consternation

A group of German researchers has suggested that soil carbon certification schemes are simply not a tool for effective climate change mitigation; instead, they said that funds should go towards supporting emissions reductions.

Their reasons include the risk of emissions ‘leakage’ over time threatening the permanence of carbon stored, and inadequate monitoring of the storage over time. Accountability for such leakage is low as things stand, they argued.

Despite their concerns, they do stress that private investment in the sustainable transformation of agriculture is highly desirable, through alternative incentive schemes or labelling focused on matters such as soil health, biodiversity or climate change adaptation.

But while such views exist, given that certification schemes have momentum behind them it’s unlikely that they are going to go away any time soon. That there is room for improvement is undeniable, though.

Turning critique into improvement

There are no shortage of barriers to incentivised carbon farming, which have been summed up in a paper from University of Illinois researchers.

On top of the headline issues highlighted by the German team, some of the more practical issues include unattractive rates of payment and a distrust of multiyear contracts coupled with uncertainty about the future landscape for carbon credits. On top of that are land tenancy and ownership complications.

But with every criticism comes opportunity to put things right, and there are plenty of smart people making suggestions on how to make them more realistic, transparent and attractive.

Researchers in Finland think they’ve got an answer one key issue: the tension between the fact that farmers seem only willing to enter contracts of finite length with private entities or governments, while effective climate mitigation demands that carbon is stored permanently in soils, and so those running carbon credit schemes seek to agree long-term contracts with participants.

Using what they describe as offset ratios, the researchers factor uncertainty into awarding of credits. This involves calculating equivalence to existing units of emissions by valuing the capacity of shorter-term carbon sequestration in delaying emissions, rather than necessarily removing them forever.

However, they acknowledge that such calculations would mean that payouts from short-term carbon farming contracts would be notably lower than long-term agreements.

Honing Europe’s soil carbon rules

The EU has approved a voluntary carbon removal scheme and issued a certification framework for carbon removals (CRCF). The framework aims to address the potential impermanence of carbon removals, and issues with overestimating of the amount of carbon that can be stored in soils.

However, analysis by German experts has identified some potential flaws in the idea.

The main issue, according to the researchers, is that the rules put carbon removal in soils on the same footing as carbon emissions reductions, which is at odds with international climate law placing emissions reductions higher up the hierarchy.

It also doesn’t give a clear idea of just how short shorter-term carbon sequestration through carbon farming could be. Further, the rules fail to consider the fact that carbon farming in one place could potentially shift biodiversity degradation elsewhere.

Carbon credit certificates from carbon farming are also a problem, they say, as there is no limit to how they can be used, while the system could result in farmers being certified for practices they have to carry out under the Common Agricultural Policy, meaning that they are in effect ‘double funded’.

All is not lost, however. The researchers make it clear that territory-wide voluntary carbon removals are necessary, and tweaks are possible.

“Some of these shortcomings can and should be addressed… Furthermore, when correctly handled, carbon farming can contribute significantly to biodiversity conservation and nature restoration, offering significant co-benefits to climate and biodiversity policy, as it is well-aligned with the EU’s Nature Restoration Law and Forest Strategy,” they said.

“Moreover, implementing carbon farming techniques that boost soil health may enhance nutrient management in agriculture by reducing nutrient loss and enhancing soil structure.”

A further study in Germany provided added insight into what farmers do — and don’t — want from schemes to improve the organic carbon in their soils.

It seems that using field-specific average values as the starting point to build on is much preferred to using regional averages, farmers want a relatively lengthy period from the start of a programme to when success is assessed for remuneration purposes, and that there shouldn’t be a threat of repayment hanging over them.

Not a totally unreasonable demand, the researchers said. A possible incentive to maintain carbon stocks that could fly with farmers is withholding part of the premium until the stocks are maintained for a certain period, they suggested.

Man with soil in hands

Aussie rules can be clarified further

There’s also much to be learned from the Australian experience of a decade’s worth of carbon farming legislation.

Analysis by Beverley Henry of Queensland University of Technology concluded that incentives have been successful in encouraging good practice, but that getting the balance right between usability and integrity can be tricky.

Expanding options for quantifying sequestration, as well as extending the list of eligible interventions several years into the scheme resulted in the biggest growth in registered projects, Henry said.

She also underlined the importance of understanding baseline soil organic carbon stocks before entering into certification schemes, given that soils all have different capacities for storage, as well as a need for greater insights into the most cost-effective measures to implement and more reliable measurement options.

“The Australian example illustrates that, despite research investment and some promising innovations, current monitoring, reporting and verification costs and accuracy remain an impediment to uptake by farmers,” Henry said.

“Measurement protocols are needed not only for accurately monitoring SOC stock changes but to account for greenhouse gas emissions arising from project activities to ensure the number of carbon credits genuinely representing climate change mitigation can be quantified.”

Navigating ‘chaotic’ climate picture is hard

A more fundamental point that regularly appears in research is that farmers believe the environmental and financial benefits of building soil organic carbon should be better publicised. Though before the carbon credit promotion campaigns are reinvigorated, it’s worth noting that there are some dissenters who go even further in their criticisms, arguing that it’s not just incentives for carbon sequestration that are flawed, but the idea of agricultural soils as a totem of climate mitigation at all.

Gabriel Moinet, from Wageningen University and Research, thinks that there needs to be a shift away from “climate-smart soils” to “soil-smart agriculture”, with land sustainability and food security the main priorities.

This vision may well fit neater with farmers’ priorities, where improving degraded soils and maintaining yield are watchwords which exist regardless of what incentives are being offered their way.

Maybe there will never be a ‘one-size-fits-all’ for carbon farming, or indeed the future of our agricultural soils more broadly. Professor Bruno Basso of Michigan State University has argued that it shouldn’t be the end goal, and that a certain acceptance of “living in chaos” is essential as policies are built on the shifting sands of the fight to prevent the catastrophic effects of climate change.

Total consensus in one of the world’s fastest moving policy areas may well be unachievable, and it may also be the case that false starts like the UK’s Sustainable Farming Incentive hindering farmers looking to explore joining private carbon credit schemes should be accepted as inevitable ‘teething problems’. But a degree of acceptance doesn’t mean existing policies shouldn’t be subject to rapid change, when smarter options are available.

If nothing else, research has shown that what motivates farmers to participate in landscape-scale initiatives is far more nuanced than it might be assumed.

It seems abundantly true that no scheme is going to entice every food producer to get involved. That may well be fine, so long as there are a range of incentives to ensure effective and sustainable management of soils in the years ahead.  

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