Burying the problem: carbon markets and sustainable agriculture

The European Commission initiative on ‘carbon farming’ due today is expected to rely on a market in sequestration.

Climate change is already causing droughts, heatwaves and floods. Two-thirds of soils in the European Union are degraded, costing around €50 billion a year, partly due to yield losses. The collapse of biodiversity on farmland is affecting crucial ecosystem services, such as pollination and natural pest control.

These crises affect farmers but agriculture is also a major contributor to these problems. Farmers can become a central part of the solution but it will not easy: the sector needs to undertake a complex transition towards sustainability and resilience.

Restorative practices

How does ‘carbon farming’ fit into this? This is about land-management practices which reduce greenhouse-gas (GHG) emissions and remove carbon dioxide from the atmosphere. It is best done by restoring degraded peatlands, maintaining and restoring high-nature-value grasslands, deploying agroforestry (trees on agricultural land), restoring and maintaining healthy forests, afforesting or reforesting sustainably and sequestering carbon in soils through agroecological or regenerative farming practices.

Debates mainly centre however on this last approach—how farmers can sequester carbon in their soils and especially how this should be incentivised. There is strong scientific evidence that agroecological practices, such as constant soil cover, diverse crop rotations with deep-rooting and nitrogen-fixing crops, organic fertilisation (especially with compost) and reduced soil disturbance, are the most important practices for healthy soils and carbon sequestration.

Some of these practices are however at odds with the mainstream, intensive farming system, based on growing a small variety of (cash) crops with high use of synthetic fertilisers and pesticides. Many economic actors are therefore pushing for more ‘business as usual’ approaches to carbon farming, with only minimal changes to intensive practices. Going down this route would be to miss a huge opportunity.

Carbon farming seems to be attracting the attention of many farmers. For some it is perhaps only the lure of more cash but for many it is rather the chance to do their bit and be part of a good-news story. This makes carbon farming a crucial opportunity to start a conversation—across the usual dividing lines of environment versus farming—about a different model for agriculture in the EU. This would be based not on intensive and extractive land use but on restoring healthy soils and agro-ecosystems—farming with nature, not against it.

Dangerous path

Unfortunately, instead of harnessing this opportunity, the European Commission seems set to take the dangerous path of narrowing carbon farming down to carbon credits, or carbon removal certificates, seeing this as an opportunity to inject (private) cash into more sustainable farming practices. It is a slippery slope which could lead to short-sighted techno-fixes, greenwashing and, at worst, perverse incentives.

Currently, the economic signals guiding farmers’ decisions are stacked against soil protection, biodiversity conservation and climate mitigation. So the right incentives are needed. But voluntary incentives are not enough: under the Common Agricultural Policy, they have so far had barely any impact.

The urgency of the climate and environmental crises requires bold action to restore healthy soils this decade. This will require a much more comprehensive policy mix, combining voluntary and mandatory instruments, including legally-binding targets, safeguards and basic soil-protection measures.

The commission’s recent commitment to develop a Soil Health Law and its long-awaited Nature Restoration Law are crucial pieces of this puzzle. A proposed application of the polluter-pays principle to emissions from agricultural activities (contained in a draft of the commission’s communication on carbon cycles) would also be a step in the right direction. The commission needs to clarify how these separate initiatives fit into a coherent picture.

Narrow focus

The biggest concern with the commission’s stress on carbon credits is the narrow focus on counting how much carbon gets sequestered. Organic matter is the fuel of soil life, which in turn delivers crucial ecosystem services: plant nutrition and protection, water regulation and purification, climate regulation and nutrient cycling.

But soil carbon does not tell the whole story about the health of soil. Its structure, concentrations of contaminants and the abundance and diversity of soil life are other crucial parameters. If the EU sets up a whole incentive scheme focused solely on the amount of carbon in soil, things could go very wrong.

First, we could see significant trade-offs on biodiversity, soil health or other environmental dimensions. A frequently mentioned approach to carbon sequestration is no-till and cover crops. It’s easy to apply in intensive farming but often farmers adopting no-till end up substituting the plough with herbicides to kill off the cover crop before the new growing season. Will carbon farming lead to an explosion in glyphosate use?

Biochar (coal-like pyrolysed biomass) is another techno-fix promoted by some. But serious concerns remain around possible contamination of soils with carcinogenic compounds. Unless carbon farming is strongly framed around holistic approaches with strict safeguards, and other quantitative and qualitative indicators—such as soil health or agrobiodiversity—it could do more harm than good for the environment.

Socio-economic impacts

Secondly, there could also be negative socio-economic impacts. Those farmers who will benefit most are those with large farms who have depleted their soils of carbon through decades of intensive farming. Small farmers and those already caring for their soils will struggle to secure access to finance.

This could worsen the already-skewed distribution of CAP funding driving many smaller farmers out of business. It could also drive up land prices, exacerbating the concentration of ownership and barriers to access for young and new farmers, again already evident as a consequence of CAP subsidies.

Thirdly, will this deliver genuine climate benefits? Soils don’t only sequester carbon: they are constantly cycling carbon and nitrogen and releasing gases from this process, including GHGs such as CO₂ and nitrous oxide. Significant emissions are also linked to the manufacture of fertilisers and pesticides and machinery use. Focusing on counting soil carbon could thus miss a big part of the GHG balance sheet. Soil carbon might increase at the cost of increased emissions of N₂O from soils or CO₂ from increased machinery or input use.

What’s more, soil carbon exists in different forms and measuring it is extremely complex. Scientists have warned that existing models lack accuracy, so even just counting carbon will be highly challenging.

The polluter purchases

Finally, carbon markets rely on polluters purchasing carbon offsets. The availability of cheap offsets would however disincentivise prior emissions reductions. And soil carbon sequestration is not permanent, so the climate-mitigation benefits could be very short-lived, while the emissions offset would remain in the atmosphere for hundreds of years.

Even if these issues are properly addressed by the commission’s framework for the certification of carbon removals, it remains questionable whether polluters should be allowed to buy the right to claim ‘climate neutrality’. This could send confusing signals to consumers, slowing the shift to more sustainable lifestyles.

For all these reasons, non-governmental organisations and organic farmers wrote to the commission on December 3rd, calling for the EU’s carbon-farming initiative to drive a just, holistic and ambitious agenda for ecosystem restoration, climate mitigation and adaptation in European agriculture—not reliant on carbon markets. The indications are that this is not however what the commission intends, which would be a great shame.