Carbon farming: The foundation for carbon farming schemes – lessons learned from 160 European schemes

Overview & Synopsis

Enhancing carbon sequestration while maintaining and improving the soil ecosystem services of agricultural soils, including managed peatland, is an important lever for mitigating climate change in the Land-Use, Land-Use Change and Forestry sector. This can be achieved through the application of a mix of agricultural practices that may reward farmers in a green business model, often referred to as carbon farming (CF). To ensure the credibility of CF and acceptance among farmers, investors, and policymakers, there is a need to design CF schemes that enable the effective implementation of such practices across Europe. The objective of this study is to explore the design of existing CF schemes in relation to quantifying carbon removal, ensuring additionality, long-term storage, and sustainability. Further, to discuss the implications for the design and implementation of CF schemes in Europe, including the basis and potential for developing results-based CF schemes. Our analysis is based on an inventory of 160 CF schemes implemented across Europe, and an in-depth assessment of 40 of them. A majority of the schemes we identify are found in Northwestern Europe and are activity-based schemes funded by public expenditure. Further, across schemes, we observe substantial differences in the quality of the carbon removal due to different measures supported, documentation requirements, and years of carbon storage. While result-based schemes provide farmers with a direct incentive to increase carbon sequestration and are emphasized as an important policy objective, our analysis documents that currently, most existing CF schemes in Europe use activity-based incentives.