Can carbon farming provide a stable source of income?

Increasing understanding of carbon credits and their role is vital to the importance of addressing the global climate crisis. This crisis continues to have a detrimental impact and we now require creative solutions to ease the rising levels of greenhouse gas emissions.

A sustainable solution is the use of farmland for carbon credits which will not only help the climate crisis, but it could also hold great potential as a sustainable source of income for farmers.

What are carbon credits?

Carbon credits are financial incentives offered to farmers who reduce their carbon footprint through sustainable practices. Each credit signifies a quantifiable decrease in greenhouse gas emissions, which can either be kept by farmers to offset emissions and meet sustainability goals in relation to their own land or can be sold to companies who are seeking to compensate for their carbon pollution.

The revenue produced by selling credits should both encourage farmers to invest in more sustainable agriculture and generate a substantial and sustainable income for them.

Can carbon credits provide long-term income?

The Country Land and Business Association have addressed the question of whether farmers could now utilise this practice of carbon sequestration as a method of generating income. Although appreciating that this is ultimately up to farmers personal circumstances, they do identify the advantages of carbon farming and its ability to be a potential income source.

It is necessary to question the longevity of using carbon credits as a source of income, it is perhaps more realistic to consider it a viable source of income alongside alternative incentives. The Environmental Improvement Plan 2023 states that the government will provide grants to farmers to decarbonise agricultural emissions through implementing sustainable land management practices.

This does not mean however, that farmers should not be cautious. Allen and Overy have commented on the topic, highlighting the expansion of carbon markets and how these developments are presenting new opportunities for businesses. They do however advise a cautionary approach to participants due to carbon price instability. While carbon markets are still becoming more established, the potential for price fluctuations due to changing supply and demand dynamics can create uncertainty for those considering the option.

Should farmers participate in carbon farming?

While concerns about price volatility in the carbon market are valid, it should not deter farmers and stakeholders from participating in this important effort to combat climate change. Carbon farming has the potential to be a valuable tool for both environmental sustainability and as a source of income. Although caution should be taken when navigating the process, perhaps thorough planning could help farmers to navigate through market uncertainties.

How Moore Barlow can help

If you’re unsure of your legal rights in this area of carbon farming, contact our expert rural legal team today who can assist you with all your legal needs.