The 2022 Oxford Farming Conference earlier this month saw the release of two comprehensive and timely reports focused on quantifying, qualifying and ensuring good governance in the trading of natural capital and carbon. These activities are seen as potential income streams for farmers and land managers as direct support payments are phased out post-Brexit and climate change mitigation measures become more important.
The reports’ authors believe the market potential value of UK land-based carbon credits alone could equate to as much as £1.7bn annually – half the current UK farm support budget. However, the governance of these markets will be crucial to make the marketplace a credible and practical reality while delivering meaningful action towards climate targets, they warn. In addition, farmers are advised to reduce their own farm emissions before considering the trading of their carbon to offset pollution in other sectors.
The two-part report was commissioned and funded by the World Wildlife Fund (WWF) NGO and supermarket Tesco.
Part one – The opportunities of agri-carbon markets (110 pages) – was led by the Green Alliance in partnership with Tesco and WWF and researchers from Manchester University and Scotland’s Rural College. It cites scientific research to show which land management interventions – such as agroforestry and incorporating crop residues into soils – have the most potential for sequestering carbon on working farms in the UK. The authors make recommendations for the development of a credible domestic on-farm agri-carbon sequestration market.
The second part – Natural Capital: The Battle for Control (48 pages) – was also led by the three main partners above with additional input from the Oxford Farming Conference and land agency Savills. It examines how land could be used for net zero gain within the robust overarching governance of the emerging carbon and natural capital markets. It also explores how associated income can be optimised for social and public good. The authors recommend that government puts in place a land use framework and Office for Carbon Removal to avoid a ‘dash for carbon’ leading to undesirable consequences for food production, local communities and nature recovery.
“Overall, there is a significant opportunity for farmers and landowners to profit from the provision of public goods, whether they are paid by private actors or the state,” Part 2 of the report concludes. “Natural capital payments are unlikely to wholly replace farm support, but they are likely to be a major source of income for farms that are not on high grade agricultural land.
“Who exactly benefits, and how natural capital is controlled, is up in the air. The consequences of how society decides to govern its natural capital will be decisive, not only for the physical character of the countryside but for prospects of the people who make a living from it.”
James Elliott of the Green Alliance and one of the report authors, states: “While this research shows there are new opportunities for farmers to earn additional income from carbon markets, we’ve also highlighted the pitfalls. It is important that farmers and land managers understand that, once they sell carbon offset credits, they cannot then count them towards the farm’s own efforts to cut carbon. Collaborating with their customers to cut emissions and sequester carbon within the supply chain, rather than selling the offsets to other sectors, could be a safer bet for farmers.
“If done badly, carbon offsetting could be counter-productive, with poorly operated schemes leading to more emissions than if no offsetting was done,” Mr Elliott continues. “People may be taken in by clever accounting and overstated claims by carbon off-setters, but you cannot trick the atmosphere.
“We need strong standards, so we know that carbon credits from the agriculture sector are accurately measured, genuinely additional and that the carbon remains stored in the long term. And those buying and using credits must also be doing everything they can to reduce their own emissions in line with limiting global heating to 1.5⁰C, before relying on offsets.”
Emily Norton, the OFC director who heads rural research at Savills, adds that the report does not aim to resolve the inherent complexities of markets and land use, but rather to give strong guidance for regulators and pioneering market actors.
“We cannot jump at this new opportunity without the right safety nets to prevent an overly dominant focus on those emissions-reducing land-use practices that deliver the most carbon capture – afforestation and peatland restoration – to the exclusion of food production and biodiversity gain.
“The reminder to those land-owners keen to trade in these new markets is loud and clear: don’t jump too soon and focus on offsetting your own emissions before giving opportunity to others to reduce their own.”