The European gas emergency plan comes into force today. The EU member states aim to cut gas consumption by at least 15 percent between August and March of next year – voluntarily at first and mandatorily in the event of a Union-wide alert. This is meant to be a signal to the Kremlin, even if the majority of member states have negotiated exceptions. To reach the 15 percent target, Germany would have to reduce its gas consumption by about 10 billion cubic meters.
But despite Germany’s heavy dependence on Russian gas, a gas emergency in Germany is avoidable, even if no more Russian gas were to flow, as concluded in a recent model calculation by the Federal Network Agency. Read more about this in the News.
Who will succeed Klaus Welle? After 13 years as Secretary General of the European Parliament, Welle has announced his retirement in the coming year, and the competition for the upcoming vacancy is fierce. Five candidates have applied, but one particular – yet controversial – candidate stands out among the rest, as Markus Grabitz reports.
Farmers should work their soils in a way that increases the amount of CO2 it can hold – that is the idea behind carbon farming. To incentivize this, farmers could receive financial subsidies based on certificate trading. Is this an impactful climate protection measure or just greenwashing? And how do we measure CO2 reduction in the soil? This was the core topic of Timo Landenberger‘s interview with Georg Goeres, the European Managing Director of Indigo Agriculture. The US company has already sold its first certificates on the growing Voluntary Carbon Market in the US, and now wants to launch in Europe.
The “yellow vests” as a cautionary tale: A contemporary climate policy should not limit its focus to the climate and the economy but should also consider the population’s social needs, as Avram Alpert and Dennis J. Snower detail in today’s Opinion. In their view, this is achievable by the Climate Club proposed by German Chancellor Olaf Scholz – provided that it is implemented properly.
After 13 years, the European Parliament will have a new Secretary General next year. The incumbent Klaus Welle, a native of Westphalia with a CDU party membership book, who observers attest great merit for the parliament regardless of party affiliation, has announced his retirement for the beginning of 2023. In the ongoing hard-fought process to fill his post, Parliament President Roberta Metsola and the European Parliament are at risk of being damaged.
The deadline for applications for the post of head of administration, which is located at AD 15 on the EU internal grade level and receives a basic salary of €19,958 per month, was August 1. According to information available to Europe.Table, five applicants submitted their applications. Among them is reportedly an external application, for which it is still being clarified whether it is admissible. The call for applications had been addressed to “interested civil servants”.
However, four candidates are definitely in the running. Among them are three directors-general from the EU Parliament administration: Agnieszka Walter-Drop of Poland, responsible for conference services (DG LINC), Leena Maria Linnus of Finland, in charge of the Parliament’s real estate (DG INLO), and Jaume Duch Guillot of Spain, head of the communications department (DG COMM). In addition, the Italian Alessandro Chiocchetti, office manager of Parliament President Metsola and grouped in the parliamentary hierarchy as a director one step below the directors general, has also applied.
Welle’s deputy, Markus Winkler – a former close associate of Martin Schulz (SPD) – has not submitted an application. It is not known from whom the external application comes.
Candidates applied with a letter of motivation and their CV for the position, where you coordinate over 8,100 employees. The procedure: Actually, a panel of five directors-general would now conduct interviews with the applicants and then propose the three best-rated candidates to the parliamentary board for a final decision. But in parliamentary circles, it is suspected that the interviews at the director-general level will not take place at all. It is said that it would be strange if directors-general were to prepare among themselves the decision on who will be their boss in the future.
Instead, it is expected that Speaker Metsola and her 14 deputies will receive a list of admissible applications during the first week of the session after the summer break. In October, either in the first or second week of the session, the decision will then be made in the Presidium. This will involve Speaker Metsola and the 14 vice presidents.
The four candidates who are known are all considered suitable. They are said to be business fluent in at least three of the EU’s lingua franca. The three directors general have also already proven that they can lead large staffs.
However, Alessandro Chiocchetti is considered the most promising candidate. Metsola would like to elevate her office manager and closest colleague to the post. Whether she will follow through with her wish remains to be seen. According to reports, Metsola, who belongs to the Christian Democratic party family, has not yet made a final decision.
Personnel decisions of this significance at the EU level are often complicated. Usually, packages are “put together” that contain other decisions in addition to the post that is actually at stake. This time, a decision about a property in the vicinity of the Strasbourg European Parliament is also involved, at least indirectly. A package solution is usually used to organize the necessary support from other party families.
In the case of the Welle succession, the package could provide for the Christian Democratic EPP to bring Chiocchetti through as Secretary General and for a castling at the director-general level, from which the Left Group (GUE) as well as the Conservative Group (ECR) would also benefit. For this purpose, another Directorate General is to be newly established – it would be the 13th organizational unit in the Parliament’s organizational chart.
The Liberals (Renew) are said to be involved via the property. The French government in the Élysée Palace has a strong influence on the Renew Group. And so it happens that Renew primarily wants to strengthen Strasbourg as the headquarters of the European Parliament in the course of the personnel decision. It is unclear whether the Social Democrats (S&D) will join in the package and what they hope to achieve.
Now there is not only criticism concerning a potential “package”. Chiocchetti’s integrity is also being questioned. The 53-year-old worked as an assistant in the EU Parliament for the MEP and Berlusconi intimate Marcello Dell’ Utri almost 20 years ago, they say. Dell’ Utri served several years in prison for mafia contacts. He was acquitted last year in a spectacular trial in which he was accused of negotiating with the mafia on Berlusconi’s behalf.
The fact that Chiocchetti is not yet director general does not disqualify him as a candidate for the post of head of administration, according to parliamentary circles. It has already happened in the past that a director immediately rises to the post of Secretary General. To prevent criticism here, the Welle successor was also not advertised as an AD-16 position, as the German has, but one step lower at the AD-15 grade.
Observers report that package solutions have been common practice in parliament for many years. The critical point is that other factors always play a role in filling a position than the applicant’s qualifications alone. Moreover, package solutions have contributed to the enormous increase in the number of top positions in the EU Parliament over the years.
By switching to carbon farming practices, agriculture is expected to increase CO2 storage in the soil and thus contribute more to climate goals. In return, farmers could tap into a new source of revenue through certificate trading. At least if it’s up to companies like Indigo Agriculture, which has already sold its first certificates on the growing Voluntary Carbon Market in the US. Now Indigo is also waiting in the wings in Europe, where the right legal framework is still being worked out.
Mr. Goeres, critics say carbon farming is primarily a new way of greenwashing for CO2-intensive industries. What do you say?
Carbon farming is first and foremost about sequestering CO2 in the soil and avoiding other gases in cultivation, so it is something good for the environment and a contribution to achieving climate targets. We want agriculture to be part of the solution in climate policy and also for the private sector to help finance that, not just the taxpayer paying for it. Most of the big companies now have sustainability strategies. And many already want to invest in high-quality carbon credits that are certified and where they know that the climate performance has been delivered. I don’t see that as greenwashing. After all, that doesn’t take away from the companies’ obligation to reduce their own emissions.
Yet agriculture itself is one of the biggest emitters. In Germany alone, the sector is responsible for over 60 million metric tons of greenhouse gases per year, not including energy consumption. This contrasts with estimates of five to 15 million tons that can be recaptured through carbon farming. This imbalance makes it clear that sinks in a climate-neutral future will be needed primarily to offset unavoidable residual agricultural emissions.
Farmers can bind CO2. This should be rewarded. We need the land sector as a sink. Without it, climate change cannot be combated, and the neutrality targets cannot be achieved, as the IPCC also says. That’s why I believe we’re better off if we create incentives that encourage as many farmers as possible to improve climate performance as quickly as possible. And here, an additional source of income, for example, through certificates or the cultivation of low-carbon grain, is the better answer than making it a mandatory system. Otherwise, agriculture will have to pay for it itself in the end.
There is a comprehensive framework of rules with the express purpose of leveraging billions in public subsidies to drive things like increased climate protection in agriculture, while at the same time maintaining competition and food security: the Common Agricultural Policy (CAP). In recent years, the money for climate protection has fizzled out more or less ineffectively. What is the argument against earmarking a larger share of it for carbon farming?
One example: In Germany, there is to be €30 per hectare for extended crop rotation. That is good, but still not sufficient. Supplemented with a private carbon farming program, things look quite different. Complementary to the eco-schemes, this would also bring in private money, because CAP budgets are also limited. The interaction between the private and public sectors must be promoted here. The overall package must be attractive enough for farmers to convert their farms and make the necessary investments.
What could measures to convert the farm and increase the CO2 storage capacity of the soils look like?
One possibility is the cultivation of catch crops. Those who use high-quality legumes can significantly increase the storage capacity by building up humus. Some of these catch crops can also be harvested and used as animal feed. It is also important to plow as little as possible because this releases CO2 again. The third point would be the optimal coordination of crop rotations in order to maintain or improve the quality of the soil. In principle, this also includes area grazing with livestock. This helps the soil but is difficult to implement. If only because there are no fences around fields in Germany, for example. And also important: the reduction of synthetic fertilizers.
What is the disadvantage for farmers? In other words, why does it take such high incentives from eco-schemes and certificate trading to take measures that lead to better soil?
First of all, a farm is, of course, a business that is run from an economic point of view. Other equipment is needed for the conversion, for example, to no-till. These investments have to be financed. And if a farm has been run successfully in a certain way for years or decades, such a conversion is not immediately obvious. There are risks, uncertainties, and questions. We have noticed that many farmers are basically open to the idea. But it is a process that needs moderation. Also, the reduction of chemical fertilizers is often equated with a reduction in yield. This can happen in the short term because the changeover does not happen overnight. That’s where carbon farming programs come in. This is where the CAP can provide financial support for conversion, and where certificate trading can provide additional revenue later on.
For this, the CO2 sink power in the soil must be measurable. How does it work?
There are various models for this. One instrument is the evaluation of data based on scientific studies. In other words, how do certain activities, such as special intercropping, affect CO2 sequestration under certain climatic conditions and soil characteristics? The other option is to measure on the ground. Sampling all fields is not feasible because it would incur enormous costs. But pure modeling is also not sufficient to be sure that the effect really occurs. That is why we use a mixture of modeling and sampling of statistically selected fields in our concept, which also reduces the models’ susceptibility to error over the years.
Doesn’t that still leave some loopholes?
Farmers care about the health of their soils and want to do the right thing. They’re not looking for loopholes. And because of the many existing requirements, farmers today already have to record basically everything they do in files. All the documentation is already very comprehensive, especially in Europe. Nevertheless, control mechanisms are provided for safety. Today, satellite images make it very easy to see whether catch crops have actually been planted or whether a field has been plowed. If this does not match the information, the system immediately says: something is wrong.
Now, a subsidence only has a climate-relevant effect if it is as permanent as possible. If the field is plowed up again only after a few decades, CO2 will be released again, and the effect will fizzle out. How can this be avoided?
MRV – Monitoring, Reporting, Verification. All enrolled fields are subject to strict quality control. Changes in the field are detected and reported. And not every certificate is put on the market. About 20 percent is retained by the registry – an independent organization that lists all certificates – as a safety buffer to offset risks and ensure longevity. This builds up a reserve, and if a farmer plows again at some point, the community offsets it. In addition, the allowances are not paid out all at once but spread over a few years. And we fundamentally believe that the healthier soils will benefit farmers in the long term and that the benefits will catch on so that farms won’t even want to go back.
The system is based on the principle of additionality, i.e., additional services are rewarded. Simply put, if a soil has been particularly poor up to now, the potential for improvement and thus the financial incentive is all the higher. Conversely, a farmer who already has healthy soil with plenty of humus can hardly benefit. Sounds pretty unfair for organic farmers who are already actively protecting the environment.
Innovations and financial incentives on the path to low-carbon agriculture are multifaceted and not limited to carbon credits alone. What we want to achieve is the highest possible CO2 sink in the soil. And that won’t work without engaging conventional agriculture. We need to mobilize them. Of course, there should be no shortage of support for organic farming: governmental or private. In our Scope 3 emissions reduction program, investments include food companies that want to minimize CO2 and other greenhouse gases in their value chain. These programs are also open to organic farmers, and they can benefit from them.
Demand is high. Now it’s a question of expanding the supply. Which markets are affected and how does it work?
There is the government-regulated Carbon Market and the Voluntary Carbon Market. We focus on the latter. In their efforts to achieve climate neutrality, companies need reliable solutions for offsetting unavoidable emissions. Reduction alone is not enough. It is important that the high demand is met with quality and that uniform standards apply to carbon credits, such as authenticity, additionality, and long-term validity. This must be reflected accordingly in the price and the appropriate remuneration of farmers.
What role does Indigo Agriculture play in this?
We bring together the various participants and create farmer access to the growing Voluntary Carbon Market. With the independent organization Verra, we have developed a methodology standard that for the first time quantifies and verifies soil-related GHG reduction and carbon sequestration. We support farmers in the program with the conversion, sometimes with specialized partner companies. Then it’s a matter of recording the data, quality assurance, modeling, and external verification and certification by independent bodies. In Europe, that would be Verra. In the USA, we work with the Climate Action Reserve. They give us the certificates and we sell them to the industry and return the revenue to the farmers.
In Brussels, carbon farming is now a much-discussed approach. The EU Commission is working on a regulatory framework for the certification of sink services. What are your expectations?
We welcome the fact that the Commission is addressing this. For the market to work, we need regulatory clarity, trust, and uniform quality standards. It is important to organize the interaction between the public and private sectors and to harness the innovative leap of the international carbon market for European climate targets. This will bring us a significant step closer to the goal of marrying food security with climate protection.
By the end of 2022, the G7 aims to launch an “open, cooperative international Climate Club” to foster coordinated action to achieve the Paris climate agreement’s maximum-warming target of 1.5° Celsius without leaving anyone at a competitive disadvantage. Though we have been hearing calls for international climate action for decades, there is good reason to think that this time will be different.
The Climate Club is the brainchild of German Chancellor Olaf Scholz, whose proposal is based on four premises. First, international climate action needs to be broad-based and consistent, with all club members aiming for the same objectives. Second, countries should be allowed to pursue these common objectives in their own ways, as long as everyone abides by “a uniform measurement of CO2 content of products and materials.” Third, developing countries should receive support to achieve the common objective. And, lastly, having to compete against cheaper, more carbon-intensive methods should not put “climate policy pioneers” at a disadvantage in the global marketplace.
This proposal might sound like a rehash of past policies, but it fundamentally shifts the focus in policy design. Historically, we have viewed climate policy in only two dimensions: the climate and the economy. This has led to a focus on ideas like global carbon pricing, which makes a lot of sense in strictly economic terms. Polluters emit excessive amounts of CO2 into the atmosphere because the costs are imposed on society. The solution, therefore, is to ensure that polluters pay.
The problem is that citizens often oppose such policies, especially if there is no mechanism to compensate those who are disadvantaged by the higher costs (such as low-income households that cannot afford basic goods at environmentally friendly prices, or those working in carbon-intensive sectors).
Moreover, the costs associated with carbon pricing are not just economic but also social. Even if the proceeds from a carbon tax are spent on the poor and the displaced, fossil fuel-reliant communities may collapse, and some people may feel as though they are no longer shaping their own futures.
These were some of the lessons of the 2018-19 French gilets jaunes (yellow vest) protests, which erupted in response to a modest increase in the tax on diesel fuel. And a similar problem has long plagued the global climate-policy debate. Low- and middle-income countries resent being asked by rich, industrialized countries – the biggest emitters historically – to pay more for the energy they need for development. To acknowledge these potential ramifications is to move from an abstract two-dimensional world to a three-dimensional one that is closer to the reality we inhabit.
While the two-dimensional world of economic models can be measured in terms of GDP and carbon prices, the real world requires different metrics to account for the full meaning of any policy. To that end, one of us (Snower) and Katharina Lima de Miranda have proposed a metric with the acronym SAGE: solidarity, agency, gain, environment.
Here, solidarity refers to the extent of social inclusion and cohesion, agency refers to people’s ability to shape their own lives, and gain and environment refer to traditional measures of economic output and environmental sustainability, respectively.
A solidarity score increases when there is more social trust, generosity, and so forth, and an agency score increases when people report greater confidence in their ability to achieve worthwhile goals. By broadening the scope beyond GDP growth, SAGE allows us to recouple the links between economic policies and social well-being.
As a new way to discuss and evaluate climate policies, the SAGE model can help us understand why some past climate policies have not worked. Traditional carbon pricing, for example, has often failed the solidarity test, by creating winners and losers (both economically and socially), as well as the agency test, by ignoring people’s voices in the process.
One of the gilets jaunes’ grievances, for example, was that the unaffordability of French urban life forced many laborers to live outside the cities, where limited public transit options forced them to drive to work. The protesters felt a lack of solidarity and agency (because they had little choice in where they lived or how they got around).
Only by accounting for people’s social needs (alongside economic and environmental needs) will we be able to advance viable policy reforms. That brings us back to the G7’s proposed club model. If correctly implemented, it can accommodate social factors alongside economic and environmental factors, succeeding where similar past efforts have failed.
According to Scholz, the Climate Club will promote “cooperation between countries that want to press ahead with the social and economic transformation needed to tackle climate change.” The result, in practice, would be a partnership in which participants commit to ambitious, well-defined climate goals as well as to the specific domestic measures that are required to reach those goals.
Scholz’s team acknowledges that wealthy countries that have emitted the most carbon historically are in a different position than others. They refer to “common but differentiated responsibilities and respective capabilities” – one of the core principles of the 1992 United Nations Framework Convention on Climate Change. The Climate Club thus appreciates the different demands that a common set of goals places on different countries, and that this calls for “intensive cooperation on industrial transformation and capacity-building.”
By encouraging countries to shape their climate policies in accordance with their socioeconomic realities, the Climate Club is well positioned to avoid some of the problems that led to the gilets jaunes. But to succeed, it must be maximally ambitious (aiming for the 1.5 °C target), maximally inclusive, and maximally permissive in the policy pathways that it opens up. It is this flexibility that will help developed and developing countries work together, listen to one another’s perspectives, and learn from it. If it works, the club could create a worldwide ripple effect, offering much-needed hope that the fight against climate change can be won.
In collaboration with Project Syndicate.
The European gas emergency plan comes into force today. The EU member states aim to cut gas consumption by at least 15 percent between August and March of next year – voluntarily at first and mandatorily in the event of a Union-wide alert. This is meant to be a signal to the Kremlin, even if the majority of member states have negotiated exceptions. To reach the 15 percent target, Germany would have to reduce its gas consumption by about 10 billion cubic meters.
But despite Germany’s heavy dependence on Russian gas, a gas emergency in Germany is avoidable, even if no more Russian gas were to flow, as concluded in a recent model calculation by the Federal Network Agency. Read more about this in the News.
Who will succeed Klaus Welle? After 13 years as Secretary General of the European Parliament, Welle has announced his retirement in the coming year, and the competition for the upcoming vacancy is fierce. Five candidates have applied, but one particular – yet controversial – candidate stands out among the rest, as Markus Grabitz reports.
Farmers should work their soils in a way that increases the amount of CO2 it can hold – that is the idea behind carbon farming. To incentivize this, farmers could receive financial subsidies based on certificate trading. Is this an impactful climate protection measure or just greenwashing? And how do we measure CO2 reduction in the soil? This was the core topic of Timo Landenberger‘s interview with Georg Goeres, the European Managing Director of Indigo Agriculture. The US company has already sold its first certificates on the growing Voluntary Carbon Market in the US, and now wants to launch in Europe.
The “yellow vests” as a cautionary tale: A contemporary climate policy should not limit its focus to the climate and the economy but should also consider the population’s social needs, as Avram Alpert and Dennis J. Snower detail in today’s Opinion. In their view, this is achievable by the Climate Club proposed by German Chancellor Olaf Scholz – provided that it is implemented properly.
After 13 years, the European Parliament will have a new Secretary General next year. The incumbent Klaus Welle, a native of Westphalia with a CDU party membership book, who observers attest great merit for the parliament regardless of party affiliation, has announced his retirement for the beginning of 2023. In the ongoing hard-fought process to fill his post, Parliament President Roberta Metsola and the European Parliament are at risk of being damaged.
The deadline for applications for the post of head of administration, which is located at AD 15 on the EU internal grade level and receives a basic salary of €19,958 per month, was August 1. According to information available to Europe.Table, five applicants submitted their applications. Among them is reportedly an external application, for which it is still being clarified whether it is admissible. The call for applications had been addressed to “interested civil servants”.
However, four candidates are definitely in the running. Among them are three directors-general from the EU Parliament administration: Agnieszka Walter-Drop of Poland, responsible for conference services (DG LINC), Leena Maria Linnus of Finland, in charge of the Parliament’s real estate (DG INLO), and Jaume Duch Guillot of Spain, head of the communications department (DG COMM). In addition, the Italian Alessandro Chiocchetti, office manager of Parliament President Metsola and grouped in the parliamentary hierarchy as a director one step below the directors general, has also applied.
Welle’s deputy, Markus Winkler – a former close associate of Martin Schulz (SPD) – has not submitted an application. It is not known from whom the external application comes.
Candidates applied with a letter of motivation and their CV for the position, where you coordinate over 8,100 employees. The procedure: Actually, a panel of five directors-general would now conduct interviews with the applicants and then propose the three best-rated candidates to the parliamentary board for a final decision. But in parliamentary circles, it is suspected that the interviews at the director-general level will not take place at all. It is said that it would be strange if directors-general were to prepare among themselves the decision on who will be their boss in the future.
Instead, it is expected that Speaker Metsola and her 14 deputies will receive a list of admissible applications during the first week of the session after the summer break. In October, either in the first or second week of the session, the decision will then be made in the Presidium. This will involve Speaker Metsola and the 14 vice presidents.
The four candidates who are known are all considered suitable. They are said to be business fluent in at least three of the EU’s lingua franca. The three directors general have also already proven that they can lead large staffs.
However, Alessandro Chiocchetti is considered the most promising candidate. Metsola would like to elevate her office manager and closest colleague to the post. Whether she will follow through with her wish remains to be seen. According to reports, Metsola, who belongs to the Christian Democratic party family, has not yet made a final decision.
Personnel decisions of this significance at the EU level are often complicated. Usually, packages are “put together” that contain other decisions in addition to the post that is actually at stake. This time, a decision about a property in the vicinity of the Strasbourg European Parliament is also involved, at least indirectly. A package solution is usually used to organize the necessary support from other party families.
In the case of the Welle succession, the package could provide for the Christian Democratic EPP to bring Chiocchetti through as Secretary General and for a castling at the director-general level, from which the Left Group (GUE) as well as the Conservative Group (ECR) would also benefit. For this purpose, another Directorate General is to be newly established – it would be the 13th organizational unit in the Parliament’s organizational chart.
The Liberals (Renew) are said to be involved via the property. The French government in the Élysée Palace has a strong influence on the Renew Group. And so it happens that Renew primarily wants to strengthen Strasbourg as the headquarters of the European Parliament in the course of the personnel decision. It is unclear whether the Social Democrats (S&D) will join in the package and what they hope to achieve.
Now there is not only criticism concerning a potential “package”. Chiocchetti’s integrity is also being questioned. The 53-year-old worked as an assistant in the EU Parliament for the MEP and Berlusconi intimate Marcello Dell’ Utri almost 20 years ago, they say. Dell’ Utri served several years in prison for mafia contacts. He was acquitted last year in a spectacular trial in which he was accused of negotiating with the mafia on Berlusconi’s behalf.
The fact that Chiocchetti is not yet director general does not disqualify him as a candidate for the post of head of administration, according to parliamentary circles. It has already happened in the past that a director immediately rises to the post of Secretary General. To prevent criticism here, the Welle successor was also not advertised as an AD-16 position, as the German has, but one step lower at the AD-15 grade.
Observers report that package solutions have been common practice in parliament for many years. The critical point is that other factors always play a role in filling a position than the applicant’s qualifications alone. Moreover, package solutions have contributed to the enormous increase in the number of top positions in the EU Parliament over the years.
By switching to carbon farming practices, agriculture is expected to increase CO2 storage in the soil and thus contribute more to climate goals. In return, farmers could tap into a new source of revenue through certificate trading. At least if it’s up to companies like Indigo Agriculture, which has already sold its first certificates on the growing Voluntary Carbon Market in the US. Now Indigo is also waiting in the wings in Europe, where the right legal framework is still being worked out.
Mr. Goeres, critics say carbon farming is primarily a new way of greenwashing for CO2-intensive industries. What do you say?
Carbon farming is first and foremost about sequestering CO2 in the soil and avoiding other gases in cultivation, so it is something good for the environment and a contribution to achieving climate targets. We want agriculture to be part of the solution in climate policy and also for the private sector to help finance that, not just the taxpayer paying for it. Most of the big companies now have sustainability strategies. And many already want to invest in high-quality carbon credits that are certified and where they know that the climate performance has been delivered. I don’t see that as greenwashing. After all, that doesn’t take away from the companies’ obligation to reduce their own emissions.
Yet agriculture itself is one of the biggest emitters. In Germany alone, the sector is responsible for over 60 million metric tons of greenhouse gases per year, not including energy consumption. This contrasts with estimates of five to 15 million tons that can be recaptured through carbon farming. This imbalance makes it clear that sinks in a climate-neutral future will be needed primarily to offset unavoidable residual agricultural emissions.
Farmers can bind CO2. This should be rewarded. We need the land sector as a sink. Without it, climate change cannot be combated, and the neutrality targets cannot be achieved, as the IPCC also says. That’s why I believe we’re better off if we create incentives that encourage as many farmers as possible to improve climate performance as quickly as possible. And here, an additional source of income, for example, through certificates or the cultivation of low-carbon grain, is the better answer than making it a mandatory system. Otherwise, agriculture will have to pay for it itself in the end.
There is a comprehensive framework of rules with the express purpose of leveraging billions in public subsidies to drive things like increased climate protection in agriculture, while at the same time maintaining competition and food security: the Common Agricultural Policy (CAP). In recent years, the money for climate protection has fizzled out more or less ineffectively. What is the argument against earmarking a larger share of it for carbon farming?
One example: In Germany, there is to be €30 per hectare for extended crop rotation. That is good, but still not sufficient. Supplemented with a private carbon farming program, things look quite different. Complementary to the eco-schemes, this would also bring in private money, because CAP budgets are also limited. The interaction between the private and public sectors must be promoted here. The overall package must be attractive enough for farmers to convert their farms and make the necessary investments.
What could measures to convert the farm and increase the CO2 storage capacity of the soils look like?
One possibility is the cultivation of catch crops. Those who use high-quality legumes can significantly increase the storage capacity by building up humus. Some of these catch crops can also be harvested and used as animal feed. It is also important to plow as little as possible because this releases CO2 again. The third point would be the optimal coordination of crop rotations in order to maintain or improve the quality of the soil. In principle, this also includes area grazing with livestock. This helps the soil but is difficult to implement. If only because there are no fences around fields in Germany, for example. And also important: the reduction of synthetic fertilizers.
What is the disadvantage for farmers? In other words, why does it take such high incentives from eco-schemes and certificate trading to take measures that lead to better soil?
First of all, a farm is, of course, a business that is run from an economic point of view. Other equipment is needed for the conversion, for example, to no-till. These investments have to be financed. And if a farm has been run successfully in a certain way for years or decades, such a conversion is not immediately obvious. There are risks, uncertainties, and questions. We have noticed that many farmers are basically open to the idea. But it is a process that needs moderation. Also, the reduction of chemical fertilizers is often equated with a reduction in yield. This can happen in the short term because the changeover does not happen overnight. That’s where carbon farming programs come in. This is where the CAP can provide financial support for conversion, and where certificate trading can provide additional revenue later on.
For this, the CO2 sink power in the soil must be measurable. How does it work?
There are various models for this. One instrument is the evaluation of data based on scientific studies. In other words, how do certain activities, such as special intercropping, affect CO2 sequestration under certain climatic conditions and soil characteristics? The other option is to measure on the ground. Sampling all fields is not feasible because it would incur enormous costs. But pure modeling is also not sufficient to be sure that the effect really occurs. That is why we use a mixture of modeling and sampling of statistically selected fields in our concept, which also reduces the models’ susceptibility to error over the years.
Doesn’t that still leave some loopholes?
Farmers care about the health of their soils and want to do the right thing. They’re not looking for loopholes. And because of the many existing requirements, farmers today already have to record basically everything they do in files. All the documentation is already very comprehensive, especially in Europe. Nevertheless, control mechanisms are provided for safety. Today, satellite images make it very easy to see whether catch crops have actually been planted or whether a field has been plowed. If this does not match the information, the system immediately says: something is wrong.
Now, a subsidence only has a climate-relevant effect if it is as permanent as possible. If the field is plowed up again only after a few decades, CO2 will be released again, and the effect will fizzle out. How can this be avoided?
MRV – Monitoring, Reporting, Verification. All enrolled fields are subject to strict quality control. Changes in the field are detected and reported. And not every certificate is put on the market. About 20 percent is retained by the registry – an independent organization that lists all certificates – as a safety buffer to offset risks and ensure longevity. This builds up a reserve, and if a farmer plows again at some point, the community offsets it. In addition, the allowances are not paid out all at once but spread over a few years. And we fundamentally believe that the healthier soils will benefit farmers in the long term and that the benefits will catch on so that farms won’t even want to go back.
The system is based on the principle of additionality, i.e., additional services are rewarded. Simply put, if a soil has been particularly poor up to now, the potential for improvement and thus the financial incentive is all the higher. Conversely, a farmer who already has healthy soil with plenty of humus can hardly benefit. Sounds pretty unfair for organic farmers who are already actively protecting the environment.
Innovations and financial incentives on the path to low-carbon agriculture are multifaceted and not limited to carbon credits alone. What we want to achieve is the highest possible CO2 sink in the soil. And that won’t work without engaging conventional agriculture. We need to mobilize them. Of course, there should be no shortage of support for organic farming: governmental or private. In our Scope 3 emissions reduction program, investments include food companies that want to minimize CO2 and other greenhouse gases in their value chain. These programs are also open to organic farmers, and they can benefit from them.
Demand is high. Now it’s a question of expanding the supply. Which markets are affected and how does it work?
There is the government-regulated Carbon Market and the Voluntary Carbon Market. We focus on the latter. In their efforts to achieve climate neutrality, companies need reliable solutions for offsetting unavoidable emissions. Reduction alone is not enough. It is important that the high demand is met with quality and that uniform standards apply to carbon credits, such as authenticity, additionality, and long-term validity. This must be reflected accordingly in the price and the appropriate remuneration of farmers.
What role does Indigo Agriculture play in this?
We bring together the various participants and create farmer access to the growing Voluntary Carbon Market. With the independent organization Verra, we have developed a methodology standard that for the first time quantifies and verifies soil-related GHG reduction and carbon sequestration. We support farmers in the program with the conversion, sometimes with specialized partner companies. Then it’s a matter of recording the data, quality assurance, modeling, and external verification and certification by independent bodies. In Europe, that would be Verra. In the USA, we work with the Climate Action Reserve. They give us the certificates and we sell them to the industry and return the revenue to the farmers.
In Brussels, carbon farming is now a much-discussed approach. The EU Commission is working on a regulatory framework for the certification of sink services. What are your expectations?
We welcome the fact that the Commission is addressing this. For the market to work, we need regulatory clarity, trust, and uniform quality standards. It is important to organize the interaction between the public and private sectors and to harness the innovative leap of the international carbon market for European climate targets. This will bring us a significant step closer to the goal of marrying food security with climate protection.
By the end of 2022, the G7 aims to launch an “open, cooperative international Climate Club” to foster coordinated action to achieve the Paris climate agreement’s maximum-warming target of 1.5° Celsius without leaving anyone at a competitive disadvantage. Though we have been hearing calls for international climate action for decades, there is good reason to think that this time will be different.
The Climate Club is the brainchild of German Chancellor Olaf Scholz, whose proposal is based on four premises. First, international climate action needs to be broad-based and consistent, with all club members aiming for the same objectives. Second, countries should be allowed to pursue these common objectives in their own ways, as long as everyone abides by “a uniform measurement of CO2 content of products and materials.” Third, developing countries should receive support to achieve the common objective. And, lastly, having to compete against cheaper, more carbon-intensive methods should not put “climate policy pioneers” at a disadvantage in the global marketplace.
This proposal might sound like a rehash of past policies, but it fundamentally shifts the focus in policy design. Historically, we have viewed climate policy in only two dimensions: the climate and the economy. This has led to a focus on ideas like global carbon pricing, which makes a lot of sense in strictly economic terms. Polluters emit excessive amounts of CO2 into the atmosphere because the costs are imposed on society. The solution, therefore, is to ensure that polluters pay.
The problem is that citizens often oppose such policies, especially if there is no mechanism to compensate those who are disadvantaged by the higher costs (such as low-income households that cannot afford basic goods at environmentally friendly prices, or those working in carbon-intensive sectors).
Moreover, the costs associated with carbon pricing are not just economic but also social. Even if the proceeds from a carbon tax are spent on the poor and the displaced, fossil fuel-reliant communities may collapse, and some people may feel as though they are no longer shaping their own futures.
These were some of the lessons of the 2018-19 French gilets jaunes (yellow vest) protests, which erupted in response to a modest increase in the tax on diesel fuel. And a similar problem has long plagued the global climate-policy debate. Low- and middle-income countries resent being asked by rich, industrialized countries – the biggest emitters historically – to pay more for the energy they need for development. To acknowledge these potential ramifications is to move from an abstract two-dimensional world to a three-dimensional one that is closer to the reality we inhabit.
While the two-dimensional world of economic models can be measured in terms of GDP and carbon prices, the real world requires different metrics to account for the full meaning of any policy. To that end, one of us (Snower) and Katharina Lima de Miranda have proposed a metric with the acronym SAGE: solidarity, agency, gain, environment.
Here, solidarity refers to the extent of social inclusion and cohesion, agency refers to people’s ability to shape their own lives, and gain and environment refer to traditional measures of economic output and environmental sustainability, respectively.
A solidarity score increases when there is more social trust, generosity, and so forth, and an agency score increases when people report greater confidence in their ability to achieve worthwhile goals. By broadening the scope beyond GDP growth, SAGE allows us to recouple the links between economic policies and social well-being.
As a new way to discuss and evaluate climate policies, the SAGE model can help us understand why some past climate policies have not worked. Traditional carbon pricing, for example, has often failed the solidarity test, by creating winners and losers (both economically and socially), as well as the agency test, by ignoring people’s voices in the process.
One of the gilets jaunes’ grievances, for example, was that the unaffordability of French urban life forced many laborers to live outside the cities, where limited public transit options forced them to drive to work. The protesters felt a lack of solidarity and agency (because they had little choice in where they lived or how they got around).
Only by accounting for people’s social needs (alongside economic and environmental needs) will we be able to advance viable policy reforms. That brings us back to the G7’s proposed club model. If correctly implemented, it can accommodate social factors alongside economic and environmental factors, succeeding where similar past efforts have failed.
According to Scholz, the Climate Club will promote “cooperation between countries that want to press ahead with the social and economic transformation needed to tackle climate change.” The result, in practice, would be a partnership in which participants commit to ambitious, well-defined climate goals as well as to the specific domestic measures that are required to reach those goals.
Scholz’s team acknowledges that wealthy countries that have emitted the most carbon historically are in a different position than others. They refer to “common but differentiated responsibilities and respective capabilities” – one of the core principles of the 1992 United Nations Framework Convention on Climate Change. The Climate Club thus appreciates the different demands that a common set of goals places on different countries, and that this calls for “intensive cooperation on industrial transformation and capacity-building.”
By encouraging countries to shape their climate policies in accordance with their socioeconomic realities, the Climate Club is well positioned to avoid some of the problems that led to the gilets jaunes. But to succeed, it must be maximally ambitious (aiming for the 1.5 °C target), maximally inclusive, and maximally permissive in the policy pathways that it opens up. It is this flexibility that will help developed and developing countries work together, listen to one another’s perspectives, and learn from it. If it works, the club could create a worldwide ripple effect, offering much-needed hope that the fight against climate change can be won.
In collaboration with Project Syndicate.
