Farmers should focus on reducing their own emissions before considering the trading of their carbon to offset pollution in other sectors, according to researchers.
A new two-part report has been released today which focuses on quantifying, qualifying and ensuring good governance in the trading of natural capital and carbon.
It states that the market potential value of UK land-based carbon credits alone could equate to as much as £1.7 billion annually.
However, the report's authors say that the governance of these markets is crucial to make the marketplace a credible and practical reality.
Added to this, they have urged farmers to focus on their own agricultural emissions reduction before trading their carbon to offset pollution in other sectors.
The report was commissioned by the WWF and Tesco partnership, and launched on Wednesday (5 January) at the virtual Oxford Farming Conference.
Part one of the research uses scientific research to show which land management interventions, such as agroforestry and incorporating crop residues into soils, have most potential for sequestering carbon on working farms in the UK.
It also provides recommendations for developing a credible, domestic on-farm agri-carbon sequestration market.
Central to part two's recommendations is how land is used for net zero gain within robust overarching governance of the emerging carbon and natural capital markets.
It recommends that government puts in place a land use framework and Office for Carbon Removal in order to avoid a ‘dash for carbon’ leading to undesirable consequences for food production, local communities and nature recovery.
The report aims to support the farming industry in determining how it can balance emissions reduction on farm with income generating potential from the emerging markets.
James Elliott of Green Alliance, one of the authors, said it makes important recommendations that need to be addressed for natural capital trading to have maximum positive impact.
And while the research shows there are new opportunities for farmers to earn additional income from carbon markets, pitfalls have also been highlighted.
"It’s important that farmers understand that, once they sell carbon offset credits, they can’t then count them towards the farm’s own efforts to cut carbon," he said.
"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, he warned, with poorly operated schemes leading to more emissions than if no offsetting was done.
"People may be taken in by clever accounting and overstated claims by carbon off-setters, but you cannot trick the atmosphere," Mr Elliott added.
"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 1.5oC, before relying on offsets.”
Emily Norton, OFC director and head of rural research at Savills, said 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.
“The potential market value of £1.7bn per year for carbon credits suggested within these reports, is roughly half the value of all public support payments for agriculture.
“We cannot jump at this new opportunity without the right safety nets to prevent an overly dominant focus on the most emissions reducing land-use practices, afforestation and peatland restoration, at the exclusion of food production and biodiversity gain."
She added: “The reminder to those landowners 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.”
The report also includes recommendations for natural capital payments to deliver multifunctional land use and social good, as well as two scenarios in which government steers land use intentionally.
