Tax & subsidise

Use taxes and support payments to reduce emissions and manage impacts on farmers and consumers

Mitigating greenhouse gas emissions in agriculture cost-effectively will involve using both carrots and sticks, to encourage better practices among producers to reduce emissions. This means, for example, pricing emissions, using emissions trading, and paying farmers for practices that lower emissions and help put carbon back into the soil through carbon sinks.

These measures all involve different trade-offs and the right mix of measures will vary by country. For example, policies requiring farmers to pay for emissions are the most effective and efficient way forward in agriculture in some countries and can help generate government revenue, but they can also impose relatively high costs on farmers - not all of whom can bear them - and can lead to higher food prices. On the other hand, paying farmers to reduce their emissions can ease the impact on producers and consumers, but will also put pressure on public finances unless balanced by a reduction in existing agricultural support.



Report: Enhancing Climate Change Mitigation through Agriculture, OECD (2019)

Paper: Policy strategies and challenges for climate change mitigation in the Agriculture, Forestry and Other Land Use (AFOLU) sector (2021)

Paper: Soil carbon sequestration by agriculture: Policy options (2022)