Farmers worried about financial risks of carbon capture schemes - MDX research

The research was commissioned by the Food Farming and Countryside Commission which warns farmers are facing a "volatile future"

Farmers are desperate to make extra money through carbon capture schemes but worried they are poorly regulated and the financial risks are too high, according to a new report.

Middlesex University researchers looked at the challenges facing farmers with projects where they could earn regular extra cash through capturing carbon from the soil, managing woodlands, wildlife space and water supplies.

The report – Natural Capital, what farmers and policy makers need to know– was written by Professor Fergus Lyon and Dr Amy Burnett of Middlesex University’s Centre for Enterprise, Environment and Development Research (CEEDR).

"Lots of the pieces of the jigsaw are in place with businesses wanting to finance change and farmers wanting to put the projects into practice. What is missing is a safe, certain and assured market place." Prof Lyon.

This research, commissioned by the Food Farming and Countryside Commission (FFCC) and supported by the Prince’s Countryside Fund, explains how farmers can be paid for improving ‘natural capital’ which they define as soil, woodland, wildlife habitats and water.

Prof Lyon is sharing the results of the work as a speaker at the Cereals, Arable Event today  (June 13) in Nottinghamshire which is one of the largest agricultural events of its kind.

In a foreword to the report Sue Pritchard, the Chief Executive of the FFCC, said: “Farmers are facing a volatile and uncertain future.

“From changes to the Common Agriculture Policy, post Brexit, to the impacts of climate change and a nature crisis, let alone the turbulent geopolitics affecting global food markets – all of these are having a substantial impact on the farming operating context.

“Farmers are central to supporting nature’s recovery, protecting waterways, planting trees and hedgerows, restoring sensitive habitats and much more.”

Academics explain benefits of various potential money-making schemes for farmers, including:

• Payments for carbon sequestration (woodland creation) and emission avoidance (peatland restoration) through carbon offset credits.
• Payments from within the supply chain for verified emission reduction, often called ‘carbon certificates’, and considered as carbon insetting
• Payments for reducing fertiliser use, avoiding intensive cultivations and planting cover crops help farmers transition to regenerative agriculture.
• Building developers can pay farmers to create habitats to offset damage created by new builds, which could include sponsorship from businesses for wildlife projects.
• Selling farm produce with a premium in recognition of benefits to the environment.
• Water companies can pay farmers for reducing phosphate and nitrate with long- and short-term contracts.
• Offering nature-based diversification for tourist and local community rural stays, field sports, wildlife watching. The report included a case study of how one livestock farmer based in south west England who offers glamping ecotourism on a campsite with access to wild swimming opportunities.

Researchers concluded that “without good regulation” many farmers consider the risks of getting involved in public or private schemes to be too high.

Prof Lyon said: “There has been a delay in action due to uncertainty, at a time when we need fast progress.

“Lots of the pieces of the jigsaw are in place with businesses wanting to finance change and farmers wanting to put the projects into practice. What is missing is a safe, certain and assured market place.

“There is a need for government to play a key role in creating certification and integrity in measurements. There is also a need for a register or national ledger to avoid double counting.

“Farmers can also benefit by coming together in clusters and working together to make sure these opportunities reach both the large and smaller farmers.”

You can download the full report from the FFCC website.

A working paper from the FFCC, Guardrails, guidance and actions which accompanies the report, further explores what role governments should play.

This report builds on a range of projects being led by the Centre for Enterprise, Environment and Development Research on sustainable business and finance which includes research on SME Financing for Biodiversity led by Dr Robyn Owen from Middlesex University and funded by the Natural Environment Research Council.

Find out more about the work of CEEDR which is also a research partner of the Centre for the Understanding of Sustainable Property. (CUSP).

Photo by Chris Ensminger on Unsplash