Ex-ante evaluation of policy measures to enhance carbon sequestration in agricultural soils

- Ex-ante investigation of potential policy measures to foster soil organic carbon
- Analysis is based on an incentivized extra-laboratory experiment with German farmers.
- The framing of a future policy measure affects the implementation.
- Subsidies and Certificates enhance application of soil improving measures similarly.
- Risk attitude, age, organization of the farm are also influential.

In the course of climate change, sequestration of soil organic carbon (SOC) has gained importance as a compensation for carbon emissions. Moreover, the promotion of SOC is increasingly advocated as a measure to sustainably increase crop yields and reduce agricultural production risks. Applying an incentivized extra-laboratory experiment, we evaluate the factors and policy measures that affect the decision to promote SOC using a sample of German farmers. Our results reveal that farmers were highly motivated to promote SOC. Political fostering through subsidy payments increased farmers' efforts to build SOC. Efforts remained constant if economically equal payments were designated as certificates rather than subsidies. Surprisingly, certificates with uncertain payments increased farmers' efforts to enhance SOC to a similar degree as subsidy and certificate scenarios, which provided fixed and therefore certain payments. Thus, these results contribute valuable information regarding the effectiveness of market-based policy measures which aim to include farmers in climate protection strategies.