Copyright The proposed approach and methodology is protected by copyright and no part of this document may be copied or disclosed to any third party, either before or after the contract is awarded, without the written consent of ADAS.

RMP/5142 Analysis of Policy Instruments for

Reducing Greenhouse Gas Emissions from

Agriculture, Forestry and Land Management

Date: May 2009

Submitted to:

Farming for the Future Programme,

Food and Farming Group

Department for Environment, Food

& Rural Affairs

Area 5C, 9 Millbank

c/o Nobel House

17 Smith Square

London

SW1P 3JR

Prepared by:

ADAS UK Ltd

Woodthorne

Wergs Road

Wolverhampton

WV6 8TQ

Tel: 01902 754190

Fax: 01902 743602

0936648

ii

Acknowledgements

The authors would like to thank Defra, the Environment Agency, the Forestry

Commission and Natural England for funding this work.

We would also like to thank all of the staff of the sponsors, particularly Pam Mason

(Defra), Mike Thompson (Committee on Climate Change), Harry Huyton

(Environment Agency), David Thompson (Natural England) and Mark Broadmeadow

(Forestry Commission) for their technical guidance and support.

Project team

ADAS: David Harris (project leader), Dr. Glyn Jones, John Elliott, John Williams, Dr.

Brian Chambers, Roy Dyer

RPA: Carolyn George, Rocio Salado

CJC Consulting: Dr. Bob Crabtree

iii

EXECUTIVE SUMMARY

Introduction

Greenhouse gas emissions from the Agriculture, Forestry and Land Management

(AFLM) sector are a consequence of growing crops and keeping livestock. Nitrogen

from manures and fertiliser spread on crops and grassland increases the nitrogen in

the system and leads to emissions of nitrous oxide. The AFLM sector emits about

6.5% of all GHGs emitted by the UK. There is no sector target for reduction in GHG

emissions, but any policies which deliver abatement from the sector will contribute to

the overall national target of 80% reduction by 2050, subject to capture in the United

Kingdom Greenhouse Gas Inventory (UKGHGI). As such, abatement will need to be

within the methodologies of the relevant Tiers for assessing emissions, which

currently relate to the aggregate amount of mineral nitrogen fertiliser applied to land

and the number of dairy cows in milking herds

Scope

This study follows on from a project (RMP4950) carried out by the Scottish

Agricultural College (SAC, 2008) which constructed Marginal Abatement Cost curves

(MACC) for the AFLM sector. Since there is no existing policy framework of climate

change abatement in agriculture, land use, land use change, and forestry

(ALULUCF), this project builds on that work and identifies policy instruments (PIs)

that could lead to the abatement of GHG emissions in the sector in England. At the

present time, there is limited data available on costs and the levels of abatement

available through different mitigation methods (MMs) and much of this is highly

uncertain. MMs relating to soil carbon and biomass were not included in the SAC

MACC and are thus not included in the PIs discussed herein.

Against this background, the work included three key aspects; a review of mitigation

methods, the selection of policy instruments and an evaluation of abatement potential

and costs for these.

The report sets out several important aspects of each policy instrument:

rationale, scope, implementation and risks;

iv

timeframe for abatement: estimates are given for 2012, 2017 and 2022 to coincide

with the end of the first three carbon budget periods;

the percentage of the overall mitigation potential which is counted in the UK GHG

Inventory and will contribute to UK targets;

private cost effectiveness and, to a lesser degree, the policy costs (public and

private).

In addition to the main project, ADAS was commissioned to extend the SAC analysis

since it incorporated only one forestry option. This analysed 12 different forestry

options, five which apply to England and the reminder of which might be used

elsewhere in the UK and will be reported separately.

The main findings

We identified a very wide range of current and potential PIs. These were considered

with the help of stakeholders on the project steering group and the Rural Climate

Change Forum (RCCF) and a short list was agreed for more detailed evaluation.

Many of the PIs that are likely to be useful in GHG abatement are already in place, for

example Cross Compliance and Environmental Stewardship and can be adapted

relatively quickly to enhance GHG abatement. The short list of 10 PIs was based

around the following categories:

Regulatory - Cross Compliance and Nitrate Pollution Prevention Regulations

(known as the NVZ regs)

Economic (voluntary participation) - Environmental Stewardship

Voluntary - Extend Catchment Sensitive Farming (CSF), Farm Assurance

Public Procurement, Voluntary Agreements and Targeted Communications.

Other economic and market-based policy options are not included in this report.

Fiscal instruments are the responsibility of HM Treasury and would be considered as

part of the normal Budget cycle.

The abatement potential of the MMs as identified by SAC was reviewed and some

deemed to be overly optimistic. Key methods where abatement potential was

reduced in the SAC (ADAS) estimates included drainage and fertiliser / manure

v

application timing; for one MM (low N-use plants), ADAS estimated a higher potential

(see Table 5). Table 1 shows the PIs and their potential for mitigation by 2022 as

estimated by SAC and the less optimistic ADAS figures.

Table 1: Scale of Abatement Potential by 2022 by PI (ktCO2e per year)

Policy SAC ADAS

Extend Coverage of the NVZ a)*

Extend Coverage of the NVZ b) 2,531 602

Targeted Communications 351 212

Voluntary Agreements 480 238

Farm Assurance public procurement 10 6

X comp a) 896 896

X comp b) 3,420 1,491

Environmental Stewardship 647 647

Enhance CSF a) 515 200

Enhance CSF b) 648 333

* Estimates for the impact of NVZ regulations on GHG abatement are not covered by the MACCs

The ADAS review of the SAC estimates suggests that the aggregate maximum

abatement for all the MMs considered may be only half that estimated by SAC at

5,206 kt CO2e (compared with 9,448 kt CO2e).

From the ADAS estimates it is clear that enhanced Cross Compliance offers the

highest potential abatement.

At the other end of the scale a Farm Assurance Public Procurement offers limited

scope due to low coverage (public sector catering represent only a small segment of

the food market). The other policies all offer a moderate level of abatement (under

600 kt CO2e) and cannot be differentiated on this basis. Wider issues such as level of

abatement captured in the inventory, degree of verification and policy cost (public and

private) are key considerations.

Preliminary assessment of these criteria in this project suggests that Catchment

Sensitive Farming offers more certainty and lower policy costs than some of the other

options.

A significant gap in terms of the MMs utilised in the PIs is the absence of anaerobic

digestion. The financial commitment required to build AD units and other issues

vi

represent significant barriers. There is a large body of research on the potential for

AD and while capital grants are available from Defra and RDAs and ROCs can apply,

more needs to be done to deliver uptake.

Caveats and limitations

There is significant uncertainty relating to:

the potential abatement associated with given mitigation methods

variation of mitigation and cost by farm type and size (not considered by SAC)

farmer interaction with market and voluntary instruments – this will depend on

the wider policy and market environment and other barriers

PI abatement potentials are not necessarily additive as individual MMs are

counted in multiple policies.

The selection of the PI short list does not mean that excluded PIs are

unworkable, but we chose those that in our view provided the greatest potential

at this stage. Some of the excluded options could well prove fruitful and require

further definition and exploration

Recommendations

There is scope for some early wins in GHG abatement by extending the scope of

existing policies targeted at other environmental objectives such as water quality and

biodiversity. There is a good choice of current PIs that could be modified to focus on

GHG abatement by 2012, including Targeted Communications, Environmental

Stewardship, Catchment Sensitive Farming (CSF) and Nitrates Action Programme.

All of the others could be brought in with further work by 2017.

Regulatory PIs linked to EU policy require formal negotiation on scope and can have

a significant interaction with other PIs e.g. Cross Compliance forms the baseline for

Environmental Stewardship. However, they represent a higher level of certainty and

can deliver significant abatement due to high coverage.

Each of the policy instruments is currently presented on a stand alone basis but it will

be necessary to prioritise implementation to encourage participation and maximise

abatement. While there are opportunities to deliver some abatement in time for the

vii

first carbon budget, these would need to be combined with a longer term framework

to capture abatement from forestry options, as these will not deliver until after the first

three carbon budgets.

There is considerable opportunity for synergy with other policy objectives as well as

using the related policy instruments. As GHG emissions are not spatially defined,

action can be targeted to priority areas for delivery of other objectives, including

biodiversity, water quality, soil erosion, air quality, flood risk and landscape.

viii

GLOSSARY

Term Explanation

AD Anaerobic digestion or digester

Additionality Whether it can be verified that an amount of CO2 mitigation is above what would have occurred in any case (BAU)

AFLM Agriculture, forestry and land management

Anaerobic Bacterial processes carried out in the absence of oxygen

BAU Business As Usual - future performance given existing changes

Biofuel/biomass crops Crops grown to replace fossil fuel energy

BRE Building Research Establishment

bST Bovine Somatotropin, a hormone used to stimulate milk production in dairy cows

CAD Centralised anaerobic digester

DECC Department of Energy and Climate Change

Defra Department for Environment, Food and Rural Affairs

Denitrifcation Bacterial action degrading nitrogen containing organic material and releasing nitrogen compounds

EA Environment Agency

ECSDFI English Catchment Sensitive Farming Development Initiative

ETS Emissions Trading Scheme

ES Environmental Stewardship

Enteric fermentation Bovine digestion giving rise to methane emissions

FER Farm Environment Record

GAEC Good Agricultural and Environmental Condition

GHG Greenhouse gas

UKGHGI

UK Greenhouse Gas Inventory - the official record of UK Greenhouse Gas emissions is kept by the National Atmospheric Emissions Inventory

GWP Global warming potential

ix

Term Explanation

Ionophores Compounds used to reduce methane production in animals

LATS Landfill Allowance Trading Scheme

LCA Life Cycle Assessment

MACC Marginal Abatement Cost Curve

Methanogens Bacteria that produce methane

Mitigation Method (MM) A practice for the reduction of GHG emissions

MRV Monitoring, reporting and verification

MTP Maximum Technical Potential

N Nitrate

N2O Nitrous oxide

NAC Net annual cost

NVZ Nitrate Vulnerable Zone

OFAD On farm anaerobic digestion

PI

Policy Instrument - an administrative mechanism used by government to deliver policy - regulatory, economic or voluntary

Probiotics Bacteria that modify digestion to reduce methane production

RB209 Defra booklet: Fertiliser Recommendations for Agricultural and Horticultural Crops

ROC Renewable Obligation Certificate

SAC Scottish Agricultural College

SCC Social cost of carbon

SPS Single Payment Scheme

tpa Tonnes per annum

Verification The process whereby records of GHG emissions are officially traced and recorded

x

CONTENTS

Executive Summary .................................................................................................. iii

Glossary .................................................................................................................. viii

1. Introduction ......................................................................................................... 1

Background .............................................................................................................. 2

Policy Context ........................................................................................................... 4

2. Method ................................................................................................................. 5

Selection of policy instruments ................................................................................. 5

Selection of mitigation methods ................................................................................ 7

Evaluation of policy instruments ............................................................................... 8

3. Selection of Policy Instruments ....................................................................... 11

Evaluation of PI long list ......................................................................................... 12

Policy Instrument short list ...................................................................................... 15

4. Mitigation methods ........................................................................................... 21

Description of MMs ................................................................................................. 23

Mitigation potential of each method ........................................................................ 24

Contribution of methods to PIs ............................................................................... 28

5. Review of method abatement potential ........................................................... 30

ADAS Assessment of the SAC MACC ................................................................... 30

Improved land drainage – installation of full under drainage system ...................... 31

Avoiding excess N .................................................................................................. 32

Make full allowance of manure N supply ................................................................ 32

Improved timing of mineral fertiliser N application .................................................. 33

Improving timing of slurry and poultry manure application ...................................... 33

Plant varieties with improved N efficiency............................................................... 33

Separate slurry applications from fertiliser applications by several days ................ 34

Reduced tillage/no tillage ........................................................................................ 34

Use composts / straw based manures in preference to slurry. ............................... 35

Improved fertility, improved productivity, probiotics and maize silage .................... 35

Impact on MTP of the ADAS adjusted assumptions ............................................... 36

6. Policy Instrument abatement potential ........................................................... 42

xi

Policy Description ................................................................................................... 42

Assignment of mitigation methods .......................................................................... 43

Assign abatement to Policy Instruments ................................................................. 44

Abatement potential ................................................................................................ 46

Policy coverage ...................................................................................................... 46

Policy uptake .......................................................................................................... 48

7. Verification of abatement ................................................................................. 53

Verification of the SAC MACC Mitigation Methods ................................................. 54

8. Policy evaluation ............................................................................................... 57

Evaluation of quantitative data ................................................................................ 57

Estimated PI abatement potential ........................................................................... 58

Implications for policy choice and mix .................................................................... 60

Policy costs ............................................................................................................. 60

Illustration of approach used to estimate policy costs ............................................. 62

Scale of mitigation potential and UK GHG Inventory Issues ................................... 63

Other considerations .............................................................................................. 66

Synergies and Interdependencies .......................................................................... 74

Perverse outcomes/unintended consequences ...................................................... 75

9. Conclusions & Recommendations .................................................................. 77

Conclusions ............................................................................................................ 77

Limitations and need for further research ............................................................... 78

Recommendations .................................................................................................. 79

10. References ..................................................................................................... 81

Appendix 1 - Background to SAC Marginal Abatement Cost Curves ................. 88

Appendix 2 - Emissions Reduction Constraints and Policy Framework ............ 98

Appendix 3 - SAC Assessment of Ancillary Costs and Benefits ....................... 101

Appendix 4 - Assessment of the Policy Instrument Long List........................... 105

Appendix 5 - Verification of the SAC MACC Mitigation Methods ...................... 109

Appendix 6 - Policy Instrument Summary Sheets .............................................. 116

xii

LIST OF TABLES

Table 1: Scale of Abatement Potential by 2022 by PI (ktCO2e per year) v

Table 2: SAC MMs included/excluded from the analysis 8

Table 3: Short list of Policy Instruments 16

Table 4: Crop-soil methods 37

Table 5: Dairy methods 38

Table 6: SAC (ADAS) MTP of Mitigation Methods 39

Table 7: MTP and cost effectiveness for mitigation methods (SAC) 45

Table 8: Basis for estimating policy coverage 47

Table 9: Estimated percentage uptake of MMs by PI type 49

Table 10: Assessment of MM uptake by Policy Instrument 51

Table 11: Verification of Mitigation Methods 55

Table 12: Estimated abatement potential – SAC MACC data 59

Table 13: Estimated abatement potential – SAC (ADAS) data 59

Table 14: Likely policy costs associated with PIs 61

Table 15: GHG abatement by method 64

Table 16: SAC assessment of ancillary costs and benefits 101

Table 17: Voluntary Policy Instruments (long list) 106

Table 18: Economic Policy Instruments (long list) 107

Table 19: Regulatory Policy Instruments (long list) 108

LIST OF FIGURES Figure 1: Methodological Framework ....................................................................... 5

Figure 2: Impacts of ADAS adjustments to SAC MACC MTP (2022) ..................... 40

Figure 3: Flow diagram for assessment of abatement potential ............................. 43

Figure 4: Impacts of MMs on environmental goods and services ........................... 71

xiii

Figure 5: Impacts of PIs on environmental goods and services .............................. 72

Figure 6: Value of incremental impact on environmental goods and services ........ 74

1

1. INTRODUCTION

1.1 This project was commissioned by Defra, the Environment Agency, the

Forestry Commission and Natural England in October 2008. It follows

on from Defra project RMP4950, carried out by SAC, which looked a

wide range of greenhouse gas (GHG) mitigation methods (MMs) and

determined the maximum technical potential abatement of GHGs in the

UK from Agriculture, Forestry and Land Management (AFLM).

1.2 This project uses the MMs and their cost effectiveness identified in the

SAC work as a starting point for inclusion in policy instruments (PIs)

targeted at addressing GHG abatement.

1.3 The aims of the project are:

to identify the most cost-effective package of policy instruments

to reduce greenhouse gas emissions from the agriculture,

forestry and land management sector in England, within an

overall UK context;

to provide practical recommendations on how this package of

instruments should be implemented.

1.4 This project reviews relevant literature and develops a short list of PIs

with basic estimates of the potential to deliver GHG mitigation.

1.5 The project covers the period up to 2022 (to cover the first three carbon

budgets) and an extension project (reported separately) also considers

mitigation potential of PIs up to 2050 for forestry related MMs. Clearly,

policy will need to be based on sound scientific evidence.

2

Background

1.6 Emissions in the AFLM sector result from the activities relating to

cultivating crops (annual such as wheat and oilseed rape and perennial

such as grass) and managing livestock. The emissions from these

activities increase with the intensity and scale of the enterprise. For

example, adding fertiliser to crops raises the nitrogen content of the

system and the potential to give rise to emissions of nitrous oxide. For

milk production, fertiliser applications to grass and crops for

supplementary feed such as barley, bring nutrients onto the farm and

have the potential to produce nitrous oxide from crops and soil as well

as methane from enteric fermentation of the feed within the digestive

system of the cow. For these reasons, modern high input farming

systems have greater potential to create GHG emissions than

traditional low input systems.

1.7 However, low output systems will displace food production abroad,

assuming constant consumption, with no net impact on global

emissions. This report generally considers mitigation methods that do

not substantially reduce production of food in order to avoid exporting

emissions.

1.8 In the forestry sector the nature of emissions is somewhat different.

Emissions are created when the soil is disturbed by planting and for

some time after, but as the trees grow, they accumulate carbon as

wood at an increasing rate for many years, thus removing carbon

dioxide from the atmosphere, a process known as sequestration. In

addition, the forest soil removes carbon dioxide from the atmosphere as

the soil ecosystem develops. Hence there are significant negative

emissions from forestry. Forestry policy instruments were not covered

in detail by SAC and have been the subject of a separate project

(Extension to AFLM GHG policy instrument project, Forestry

Commission and Defra) carried out by ADAS, the findings of which will

be reported separately.

3

1.9 It should be noted that some activities, such as growing energy crops,

may not necessarily reduce agricultural emissions but their use as

replacements for fossil fuels will provide abatement in the energy

sector. This effect is captured in life cycle analysis (LCA), which cuts

across sectors. In this project we are concerned solely with the

abatement potential within the AFLM sector rather than life cycle

impacts and so growing of energy crops is not included.

1.10 Within AFLM, three major greenhouse gases are emitted: carbon

dioxide (CO2), methane (CH4) and nitrous oxide (N2O). These are

expressed in terms of kilo tonnes (kt) and million tonnes (Mt). In 2006,

total UK emissions of carbon dioxide, methane and nitrous oxide were

estimated at 555,860 kt, 2,345 kt and 124 kt, respectively, (NAEI 2008).

The UK National Atmospheric Emissions Inventory (NAEI) compiles

estimates of emissions to the atmosphere from UK sources.

1.11 The AFLM sector is a significant source of methane and nitrous oxide,

accounting for 38% (890 kt) and 66% (82 kt) of UK methane and nitrous

oxide emissions respectively, but less than 1% of UK carbon dioxide

emissions, (NAEI 2008).

1.12 In a sectoral context, the energy sector, which includes energy

generation, manufacturing and transport, accounts for some 90% of

total UK GHG emissions and the waste sector for less than 4%. The

AFLM sector accounts for 6.45% of UK emissions, (NAEI 2008).

1.13 Because there is a range of greenhouse gases, GHG emissions are

expressed in terms of carbon dioxide equivalent or CO2e. This refers to

the global warming potential (GWP) of greenhouse gases in keeping

solar radiation within the earth‟s atmosphere. Where the GWP of

carbon dioxide is 1, the equivalent (in CO2e) used for international

carbon reporting practice is 21 for methane and 310 for nitrous oxide

(NAEI, 2008).

4

1.14 Emissions from AFLM totalled 42.1MtCO2e in 2006, a reduction of 18%

from 1990, principally as a result of falling livestock numbers and

reduced fertiliser applications (NAEI 2008). Livestock numbers

continue to fall, but the area under arable cultivation is expected to

increase as a result of the abolition of obligatory set-aside from 2009

under the CAP Health Check Agreement (Fane 2008) (set aside was

0% in 2008 but previously at 8%) and this could lead to an increase in

emissions.

Policy Context

1.15 The Climate Change Act 2008 commits the UK to a greenhouse gas

reduction target of at least 80% by 2050, and to reduce GHG emissions

by at least 34% by 2020, against a 1990 baseline.

1.16 Under the Climate Change Act the Committee on Climate Change

(CCC) was created to provide advice to government on the level of

„carbon budgets‟ – these are legally binding five-year caps on UK

emissions. The CCC‟s first report, setting out their advice on the first

three carbon budgets (2008-12, 2013-17 and 2018-22) was published

in December 2008.1

1.17 As part of the work to determine suitable carbon budgets and in

advising whether budgets should be set in only CO2, or all Kyoto

greenhouse gases (GHGs), CCC have considered feasible potential to

reduce emissions across the UK economy. That work involved

developing MACCs for different sectors of the economy, of which

agriculture and LULUCF (ALULUCF) was one. SAC provided the

MACC for ALULUCF, which informed CCC advice.

1 www.theccc.org.uk/reports

5

2. METHOD

The approach to this work is summarised in Figure 1.

Figure 1: Methodological Framework

2.1 As illustrated, there are three key aspects to the work, selection of

mitigation methods, selection of policy instruments and evaluation of

mitigation abatement. These are discussed in turn in the sections

below.

Selection of policy instruments

2.2 The „long list‟ of PIs was derived from the policies in place and in

discussion with the Steering Group and used a qualitative assessment

process to derive a „Short List‟ of PIs, for evaluation.

6

2.3 A very wide range of both current and potential policy instruments

nationally and internationally have been identified by the literature

review and considered in co-operation with a large stakeholder base

substantially represented on the Project Steering Group and the Rural

Climate Change Forum.

2.4 The PIs fell readily into the following groups:

Voluntary – those which businesses carry out without any financial or

legal requirement but rely on engagement with farmers

Economic – those which offer economic incentives directly (financial)

or indirectly (advice) or combinations of both. These will require

additional funding and may require some prioritisation of policy

objectives overall.

Regulatory – those which have a legal requirement that businesses

or individuals must meet.

2.5 Many of the PIs that are likely to be useful in GHG abatement are

already in place, but others will require legal and process requirements

to be put in place or for technology and knowledge to improve. An

example of the first would be the extension of Environmental

Stewardship, which provided many options for improving biodiversity

that also reduce GHG emissions. An example of a regulatory PI is the

Nitrate Vulnerable Zone Action Programme which requires a range of

actions to do with nitrate use and loading on farmland. These can both

be adapted relatively quickly to enhance GHG abatement. Peatland is

an area where there is the potential for significant reductions in

emissions, but as yet there is insufficient knowledge on which to base a

relevant PI. Other economic and market-based policy options are not

included in this report. Fiscal instruments are the responsibility of HM

Treasury and would be considered as part of the normal Budget cycle.

7

Selection of mitigation methods

2.6 Defra projects AC0206, (the IGER report) and RMP4950 (the SAC

report) identified methods for reducing nitrous oxide and methane

emissions from agriculture and the potential for increasing carbon

storage. The methods fall into the 4 broad categories outlined below:

Soil nitrogen and land management

Methane utilisation

Livestock management

Land use change

2.7 Many of the mitigation methods listed in both studies show potential for

mitigating emissions of greenhouse gases. However, there is

insufficient evidence to be certain of the effectiveness of some of these

mitigation methods. Other methods, such as the use of ionophores to

improve feed efficiency and reduce methane emissions or the use of

bST hormones to increase milk yield, are currently not permitted in the

EU because of concerns over animal and human health. Public

concern about the use of bST in the USA is growing (IDF 2008).

2.8 Only MMs achieving abatement below £100/tCO2e (as in section 6.2)

were assessed in detail and available to contribute to PIs. The SAC

MMs included and excluded when considering PIs are shown below

with a rationale for exclusion, where appropriate.

8

Table 2: SAC MMs included/excluded from the analysis

Mitigation Method Included

Excluded

CE >£100/t

Illegal in EU

Limited evidence

BeefAn-ImprovedGenetics Y

BeefAn-Probiotics Y

BeefAn-Ionophores X

Crops-Soils-ReducedTill Y

DairyAn-MaizeSilage Y

Crops-Soils-FullManure Y

Crops-Soils-MineralNTiming Y

Crops-Soils-ImprovedN-UsePlants Y

Crops-Soils-OrganicNTiming Y

Crops-Soils-AvoidNExcess Y

DairyAn-Ionophores X

DairyAn-Probiotics Y

OFAD-PigsLarge Y

OFAD-BeefLarge Y

DairyAn-ImprovedProductivity Y

DairyAn-ImprovedFertility Y

Crops-Soils-SlurryMineralNDelayed Y

Crops-Soils-UsingComposts Y

OFAD-PigsMedium Y

OFAD-DairyLarge Y

BeefManure-CoveringLagoons Y

OFAD-BeefMedium Y

CAD-Poultry-5MW Y

Crops-Soils-Drainage Y

OFAD-DairyMedium Y

BeefManure-CoveringSlurryTanks Y

DairyManure-CoveringLagoons Y

Crops-Soils-Using biological fixation X X

Crops-Soils-Species introduction X X

Crops-Soils-Adopting systems less reliant X X

Crops-Soils-Reduce N fertiliser X X

Crops-Soils-Controlled release fertilisers X X

Crops-Soils-Nitrification inhibitors X X

DairyAn-bST X X

DairyAn-Transgenics X X

BeefAn-Concentrates X

Evaluation of policy instruments

2.9 For each method, the starting point was the Maximum Technical

Potential for abatement. SAC described this as the amount by which it

is possible to reduce GHG emissions by implementing a technology or

practice that has already been demonstrated i.e. the abatement that

could be achieved if everyone who could adopt the measure did so as

9

far as they could, regardless of cost.

2.10 MTP represents the highest level of abatement achievable and is

unlikely to be realised due to a range of factors. These are accounted

for as follows:

Revision of SAC abatement estimates: ADAS assessed the

assumptions used to provide the SAC MACC estimates as part of the

extension to this work, focusing on the crop and dairy related MMs as

they accounted for the vast majority of abatement potential, as estimated

by SAC. For crop related MMs, this considered both the unit abatement

available and the area that the MM could be applied to. This provides

for two sets of abatement potentials for a number of methods. This is

carried forward into two sets of policy instrument abatement potentials

reflecting both the SAC MACC estimates and the SAC (ADAS) estimates

of method abatement.

Assigning methods to policies: Methods appropriate to each of the

short listed policy instruments were then assigned based upon the

nature of the PI and whether the MM was likely to contribute to

abatement from that PI. For example, in extending the NVZ, all the

nutrient based MMs are included, but anaerobic digestion plays no direct

part in mitigation.

Policy coverage: Policy coverage is the proportion of a method‟s MTP

that a policy instrument could feasibly target. The coverage could be

based upon additional area covered by an existing policy or the number

of farms that could be brought under the umbrella of a new or existing

policy. Generally the coverage is common for all the methods within a

policy instrument but this is not necessarily always the case.

Policy uptake: Policy uptake is the proportion of a method‟s MTP

covered by the policy that is likely to be achieved by the sector adopting

the MMs and implementing them. This depends on both the

characteristics of the methods (capital cost, cost effectiveness and

acceptability to farmers) and the type of PI. A scoring process was used

10

to weight the former and evidence from existing policies (literature

review, including SAC analysis of uptake) informed uptake ranges

assigned to the latter. As such uptake is specific to the method/policy.

11

3. SELECTION OF POLICY INSTRUMENTS

3.1 A very wide range of both current policy instruments (PIs) and

suggestions of what may become potential PIs nationally and

internationally were identified by the literature review. Not all of these

were able to be expressed as formal policy proposals. The process

produced a long list of potential PIs, which naturally fell into regulatory,

voluntary and economic PI groups.

3.2 Some of the PIs were single options, for example Enhance Catchment

Sensitive Farming Initiative, but others covered a range of options, for

example, „Enhance the Implementation of the Integrated Pollution

Prevention and Control (IPPC) Directive had four sub-PIs:

Lower Limits for Methane and Nitrous Oxides Emissions under

Environmental Permitting Regulations (EPR) on Pig Farming

Lower Limits for Methane and Nitrous Oxides Emissions under

EPR on Poultry Farming

Application of EPR to Cattle Farming at Current Limits

Application of EPR to Cattle Farming at Lower Limits

3.3 The list of policy ideas was subjected to a filter process to remove

duplication, overlap, likelihood of leading to leakage, conflict with other

policy and abatement being counted in a different sector. A second

filter considered high regulatory burden and lack of data. Whilst this

was a relatively coarse filter, which was not based on a full proposal nor

full analysis, further development of policy proposals may yield

additional options.

3.4 For existing policies, potential abatement was considered at two levels,

(a) based on their present format with additional focus on GHG or

extension of their coverage and (b) through more radical revision to

increase GHG abatement. A qualitative evaluation of the long list was

undertaken by the consultants in consultation with a large stakeholder

base, substantially represented on the Project Steering Group and the

12

Rural Climate Change Forum. The aim of the evaluation was to

produce a short list for later detailed evaluation of abatement potential.

Evaluation of PI long list

3.5 The long list of policy instruments was evaluated on the basis of

whether each policy should stand on its own or could be included in

other current or new policies to produce the proposed short list. This

process was carried out with the assistance of the Steering Group and

others in Defra, Natural England, the Environment Agency and the

Forestry Commission.

3.6 Long list policy instruments were excluded using an initial filter that

included duplication, conflict with other PIs or that abatement would be

counted within another sector. A second filter was used to account for

PIs with a high regulatory burden or lack of data. The „long list‟ of PIs

was derived from a wide range of potential policies either currently in

place or discussed in the literature. A qualitative assessment

process (in discussion with the Steering Group) produced a „Short List‟

of PIs, for evaluation. The selection of the short list does not mean that

excluded PIs are unworkable, but we chose those that in our

view provided the greatest potential at this stage. Some of the

excluded options could well prove fruitful and require further definition

and exploration. The analysis is summarised in tables 17-19,

Appendix 4. This includes all PIs considered.

Long list PIs that were discarded

Enhance the Implementation of the Integrated Pollution Prevention and

Control (IPPC) Directive.

3.7 The IPPC Directive requires detailed recording of the management of

the business with respect to emissions. It is aimed at large businesses

that are major emitters and requires training and specialist staff.

Extending the Directive to smaller businesses would be a major burden

on those without the resources to implement the requirements. This

13

applies to smaller business in sectors already covered (pigs and

poultry). With regard to these and other sectors, such as beef and

dairy, we considered that there are more cost effective ways to address

emissions in terms of policy administration and farm costs.

Enhance Animal Welfare Regulations

3.8 This offered two alternatives, firstly to reduce stocking densities by

imposing an upper limit and hence limiting emissions due to fewer

animal numbers and secondly to increase stocking densities by

imposing a lower limit, thereby limiting land use and hence emissions

from that land. For the first option it was considered that it would lead

to adverse market constraints and for the second, emissions from the

land are one component of total emissions, but there would be no

guarantee of reducing emissions per head in the more densely stocked

units compared with the previous situation.

Link abatement methods to Renewable Obligation (ROCs)

3.9 Both on-farm anaerobic digestion and centralised anaerobic digestion

mitigation methods provided the basis for linking GHG abatement with

some form of ROC. ROCs operate in the energy sector for CO2

emissions only. Within AFLM, non-CO2 gases are under consideration

and there is no current legal basis to allow this, so this option was

rejected.

Voluntary offsetting of emissions

3.10 There is an active market in offsetting that has grown rapidly in recent

years. Farmers are as able to use it as anyone else. Using public

money to set up a rival system would be seen as anti competitive in the

industry, so this PI was not pursued.

Purchase of sequestration by Government

3.11 Whilst there are many ways that carbon can be sequestered, there are

few that guarantee the process will not be reversed. For example,

sequestration occurs when land use is changed from arable cropping to

14

grassland. However, the carbon will be lost if the land use reverts back

to arable cropping at some future date. Sequestration as an indirect

benefit from arable buffer strips and uncropped field corners is captured

in the Environmental Stewardship PI in the short list.

3.12 Other forms of sequestration will largely be connected with policies

related to forestry and that is the subject a separate project being

managed by the Forestry Commission.

Encourage the use of GHG measurement tools

3.13 This would be a policy aimed at encouraging the use of tools such as

the CLA CALM tool, ADAS PLANET, PAS2050 or product road maps,

for example, the Dairy Roadmap. Whilst these are helpful and well

intentioned, it was seen to be difficult to ensure compliance as a stand

alone PI and more helpful to include such tools within other PIs as

accompanying measures.

Environmental Management System & Nutrient Management Plan

3.14 Both of these PIs are similar in nature to GHG measurement tools in

that they would be difficult and costly to deliver through compliance.

They are, however, well suited to being included in other PIs such as

Environmental Stewardship.

Long list PIs that were ‘Parked’

Potential PIs that related to forestry

3.15 There were many potential PIs that related to forestry, ranging from

regulation of private forestry in a number of ways to changes to forestry

policy in the public sector. The potential contribution of forestry to GHG

abatement is the subject of a separate project and these options will be

reported in that.

PIs related to both upland and lowland peat

3.16 Several potential peatland related PIs were identified in the long list.

Peatland is known to play a significant role in sequestration in peat

15

bogs, in emissions from conversion of peatland due to drainage and

cultivation and in emissions from disturbed peat, e.g. cultivated fenland

soils. There is a lack of data to enable PIs related to peat to be taken

forward at this stage.

New grants to encourage abatement methods

3.17 A number of PIs include financial support, for example, the England

Woodland Grant Scheme, there are schemes for anaerobic digestion

and the Environmental Stewardship Scheme and the England

Catchment Sensitive Farming Development Initiative both provide

limited financial support. The Rural Development Plan for England

(RDPE) also provided financial support for business development

schemes. State aid rules also complicate the issue and at this stage, it

was considered better to encourage PIs that offered significant

abatement from existing schemes that were understood and accepted

before starting off a new scheme.

Regulatory PI to account for emissions not covered by the short list

3.18 The short listed PIs will provide a basis for delivering abatement within

the AFLM sector. However, these PIs may not capture all the methods

available and an additional PI may be required to account for this. This

„catch-all‟ option should be reconsidered in the light of more detailed

analysis of the short list options.

Policy Instrument short list

3.19 The evaluation of the long list provided a short list of policy options

(Table 2), which form the basis for much of the work in phase 1 of this

study. A summary description of the short list PIs is set out below with a

full description at Appendix 6.

16

Table 3: Short list of Policy Instruments

Policy Basis Current / New

Cross Compliance (a) additional standards within existing rules and b) extend scope through negotiation with the EU

Regulatory Current

Nitrogen Vulnerable Zones (NVZ) (a) extend to 100% farmed area and b) extend area and scope

Regulatory Current

Environmental Stewardship (ES) Voluntary Current

CSF a) extend to 100% farmed area and b) extend area and scope Voluntary Current

Farm assurance public procurement Voluntary Current

Voluntary Agreements Voluntary Current

Targeted communications Voluntary Current.

Cross Compliance (a) and (b)

3.20 Cross compliance is an existing policy and applies to all of those in

receipt of Single Farm Payment, which covers 90% of the England

farmed area. It can contribute to GHG abatement by extending the

scope of existing standards (option a) or introducing new methods

(option b). This should be at limited public policy cost; while additional

requirements could be promoted to the industry via the existing media

(website, booklets, workshops etc.) there would be increased inspection

costs and perhaps a need for an enhanced advisory function (e.g.

under the Farm Advisory System). Any increase in requirements for

Cross Compliance may affect Environmental Stewardship agreements

as it represents the baseline for these schemes. The IA for a new

GAEC suggested that the one-off public policy cost of re-negotiating

69% of ES agreements would be significant.

3.21 The cost to farmers will depend on the balance of mitigation methods

selected; nutrient management methods are cost effective but the costs

of buffer strips and taking field corners out of production would be

significant. A recent Impact Assessment2 on the cost of changes to

2 Impact Assessment of Changes to the cross compliance Good Agricultural and Environmental Condition standards in England http://www.defra.gov.uk/corporate/consult/gaec/consultation-stage-ia.pdf

17

Cross Compliance to introduce 6m margins next to watercourses on

arable land could be around £35.5million in private costs to farmers.

3.22 The policy also relies on continued payment of a significant element of

farmer subsidy under Pillar I direct payments, which the UK

Government are committed to phasing out by 2020. Some of the

methods under this PI could be introduced by 2012 (no changes in

regulations are needed) but ES methods are assumed to be introduced

for the next RDP (2014) and covering manure stores would require

negotiation in EU to secure agreement and would not be available until

2017.

3.23 As a regulatory measure, full uptake percentages (90% of the relevant

population) are assumed from the point of inclusion.

Nitrate Vulnerable Zone (a) and (b)

3.24 The Nitrate Vulnerable Zone (NVZ) Action Programme applies to 68%

of England and relates to the EU Nitrates Directive. As such, it focuses

on reducing diffuse nutrient pollution by setting limits to total N applied

and enforcing closed periods for application of slurries and manures.

The current NVZ is within the SAC baseline. By extending it to 100% of

England, the policy will potentially apply to all farms. This represents

policy option (a) and involves avoiding application of excess nitrogen,

making full use of organic manures and correctly timing application of

organic and mineral nitrogen. Option (b) builds on this by including

additional MMs relating to installation of covers on slurry lagoons or

tanks.

3.25 The policy will apply to all of England but will be enforced through Cross

Compliance and as such, only applies to those farms claiming Single

Payment (90% of the land area). Option (a) could be in place by 2012 if

a decision is made to implement but option (b) would require

negotiation with the EU and would not be in place until 2017. In the

absence of Cross Compliance, NVZ rules would continue to be

18

enforced by the Environment Agency but compliance rates might be

lower in the absence of leverage from SPS penalties.

Environmental Stewardship (ES)

3.26 This PI is already in place and represents a key tool for Government to

deliver environmental policy objectives. ES options are based upon

payments for income foregone by farmers and land managers but

participation is voluntary. ES has had a high level of uptake and is

relatively popular with farmers. Current uptake is 65% of all land and

this is used as the basis for coverage. This PI will focus on buffer strips

and arable field corners on arable land as these can be readily verified.

Abatement relates to not using inputs and sequestration from not

disturbing the land.

3.27 The abatement detailed in this PI is additional to the ES baseline and to

buffer strips required under GAEC14 of Cross Compliance. There

would be a need for more encouragement in ES for the promotion of

these options to increase levels of uptake beyond what they are now.

In order to achieve this, there may need to be additional funding

specifically for them, possibly through inclusion of a special tier for GHG

mitigation in ES. We assume this policy can be in place by 2017

following the new RDPE programme beginning 2014.

Catchment Sensitive Farming (CSF) (a) and (b)

3.28 This PI is already in place through the England Catchment Sensitive

Farming Delivery Initiative (ECSFDI), part of Defra‟s approach to tackle

diffuse water pollution from agriculture. CSF comprises information and

demonstration events, backed by support from Catchment Sensitive

Field Officers (CSFOs) and limited grant aid assistance for minor capital

works. This PI relates to extending Catchment Sensitive Farming to all

of England (currently applied to some 50 target catchments comprising

around 33% of England) under option (a) and re-focusing to cover GHG

emissions more effectively through adoption of additional methods.

Option (b) would include a number of new MMs as in CSF (a) but could

19

also include uptake of ES options.

3.29 As a voluntary PI, uptake would start by 2012 and increase steadily

towards 2022

Farm assurance public procurement

3.30 National and local government, through food procurement for hospitals,

schools, etc are estimated to procure food supplies to an annual value

of between £1.7 and £2.2 billion. The Public Sector Food Procurement

Initiative (PSFPI) was established to target this expenditure in ways that

support wider Government policy. This has focused on local sourcing

of quality produce to secure mainly environmental benefits but in

practice, progress is hampered by the cost and administration involved

in public procurement of relatively small contracts for a wide range of

produce at competitive prices, often to numerous sites at prescribed

times. This PI aims to extend the scope of the policy to encourage

uptake of methods which will increase the abatement delivered.

3.31 Suppliers to public sector customers will need to demonstrate good

practice in GHG mitigation methods in a similar way that assurance

schemes operate with the major retailers. Where available, existing

schemes would be used as the basis for this PI.

3.32 Whilst this PI targets a small % of emissions, it is expected to act as a

catalyst by Government showing leadership and will link with other

policies such as Act on CO2. It could be in place for 2012 and increase

uptake to 2022.

Targeted Communications

3.33 This PI is already in place through Farming Futures and includes

GHGs. Whilst it is having some impact, there is scope to prolong and

extend at marginal cost. Communications can increase market

awareness as well as the benefits of emissions reducing options. This

provides scope to increase the level of relevant MMs, particularly those

that are highly cost effective. Such activities would be most effective

20

when designed to support other interventions. The initiative would give

the GHG topic a higher profile and prompt relevant actions.

3.34 The PI should be in place for 2012, increasing in uptake towards 2022

Voluntary Agreements

3.35 This PI would be a voluntary funded agreement for farmers to

implement MMs and reduce GHG emissions. The approach has been

effective in achieving behavioural change by an engaged section of the

industry that recognise wider public benefit; an example of a similar

approach is found in LEAF, which covers 7% of the UK agricultural

area.

3.36 The agreements would be made available for all farmers to change

husbandry methods leading to significant GHG mitigation using limited

funding but might be targeted (as with CSF) at specific agricultural

areas where emitting enterprises are common, e.g. dairy farming areas.

Only cost negative methods with no capital expenditure have been

included.

Summary of section 3

The long list of potential policy ideas and instruments was assessed

across a range of criteria to give a short list of 10 PIs for evaluation

The list includes a range of PIs, covering regulatory, economic and

voluntary approaches and will accommodate a range of MMs

The PIs are described at a high level, with much of the detail yet to be

agreed.

Some of the short list PIs can be implemented by 2012 but most will be in

place by 2017

21

4. MITIGATION METHODS

4.1 Defra projects AC0206 (the IGER report) and RMP4950 (the SAC

report) identified methods for reducing nitrous oxide and methane

emissions from agriculture and the potential for increasing carbon

storage. The two reports used different expressions for some of the

MMs or for groups of MM as shown below, with those from IGER shown

first. The methods fall into the 4 broad categories outlined below:

(i) Soil nitrogen and land management

Methods for consideration included:

Do not exceed crop N requirements

Make full allowance of manure N supply

Spread manure at appropriate times/conditions

Use of nitrification inhibitors

Improving land drainage

Plant varieties with improved N use efficiency

Controlled release fertilisers

Use biological fixation to provide N inputs

Reduced/zero tillage

Take stock off wet ground

Change from solid manure to slurry system

(ii) Methane utilisation

The method involves anaerobic digestion (AD) for farm manures

and slurries. This may be located on farm (OFAD) or at a

centralised anaerobic digestion (CAD) plant, which draws

slurry/manure from a number of contributing farms. Agricultural

manures and slurries do not yield a great deal of methane and in

order to justify the capital expenditure on the installation CAD

would have to use other materials as well.

22

For some time, units in Germany have used whole crop maize and

other digesters have used food waste in order to save on landfill

costs as well as to mitigate emissions. While there are wider

environmental benefits from processing waste materials, using

farmland to grow crops material for AD will displace food

production, with potential GHG emissions exported.

(iii) Livestock management

Methods for consideration included:

Increase livestock nutrient use efficiency

Make use of improved genetic resources

Use bST and increased milking frequency

Improved feed characterisation

Vaccination against methanogens

Modification of rumen metabolism by antibiotics and natural

extracts

Use of cloned animals

Use of ionophores

Genetic manipulation of livestock

(iv) Land use change

Methods for consideration included:

Change land use – to establish permanent

grasslands/woodlands

Change land use – to grow biofuel/biomass crops

4.2 Many of the mitigation methods listed in both studies show potential for

mitigating emissions of greenhouse gases. However, there is

insufficient evidence to be certain of the effectiveness of some of these

mitigation methods and these have been „parked‟ pending further

research. Other methods, such as the use of ionophores to improve

23

feed efficiency and reduce methane emissions or the use of bST

hormones to increase milk yield, are currently not permitted in the EU

because of concerns over animal and human health. Public concern

about the use of bST in the USA is growing (IDF 2008).

Description of MMs

4.3 The literature review enabled us to identify eight main approaches to

mitigate GHG that were considered to have a robust scientific evidence

base and could be implemented now. These are listed below (not in any

order of priority):

Nitrous oxide mitigation:

Do not exceed crop N requirements

Make full allowance of manure N supply

Spread manure at appropriate times/conditions

Increase livestock nutrient use efficiency

Methane mitigation:

Make use of improved genetic resources

Anaerobic digestion

Change land use

Establish permanent grasslands/woodlands

Grow biomass crops (biofuels and biomass crops are

considered separately in the forestry section).

4.4 The following section sets out the mitigation potential of the first seven

headline approaches (excluding biomass). These mitigation

approaches formed the basis for the 26 detailed MMs described by the

SAC work and the 25 (excluding biomass and woodlands) considered

in this report. We have also estimated the potential abatement from two

Environmental Stewardship options (buffer strips and uncropped field

corners).

24

Mitigation potential of each method

4.5 The mitigation potential of each of the first seven methods relevant to

this work is discussed below (the woodlands element of method 7 and

method 8 are currently being researched in another project and will be

reported separately):

Do not exceed crop N requirements.

4.6 The SAC report suggests that there are some areas where N is applied

in excess and notes that there is a range of schemes and activities to

determine optimum N rates. This will require the use of a recognised

fertiliser recommendation system (e.g. RB 209, MAFF, 2000), PLANET

(Planning Land Applications of Nutrients for Efficiency and the

Environment; www.planet4farmers.co.uk) and other sources of

information (e.g. on canopy management) to plan the correct fertiliser

applications to all crops. Fertiliser N application should not exceed

economic optimum recommended rates in order to limit the amount of

excess N in the soil available for nitrous oxide production. Timing

fertiliser applications to minimise the risk of nitrate leaching losses (e.g.

by avoiding autumn applications) will reduce the potential for indirect

nitrous oxide emissions from leached N. By not exceeding crop

requirements, N fertiliser is not simply reduced, but applied at the

optimum level and a reduction of approximately 5% in N2O emissions is

estimated to be possible compared to baseline losses (Cuttle et al,

2007).

Make full allowance for manure N supply

4.7 Where manures are applied, a recognised fertiliser recommendation

system (e.g. RB209, PLANET, MANNER (Chambers et al., 1999)) will

help quantify the amount N applied that is available for crop uptake. In

most cases, making proper allowance for the N content of manures will

result in a reduction in mineral fertiliser N applications and reduce the

surplus N in the soil available for nitrous oxide emission. This is in

accordance with the view expressed in the SAC report. In addition,

25

nitrate leaching losses are likely to be reduced, which will limit indirect

nitrous oxide losses. The IGER report estimated that a 5% reduction in

nitrous oxide emissions from reducing the amount of mineral fertiliser

used could be achieved by making full allowance for manure N supply –

mainly as a result of the reduction in mineral N fertiliser applications.

Spread manure at appropriate times

4.8 Applying high readily available N content manures (slurry and poultry

manures) at times when there is little crop requirement (e.g. in

autumn/early winter) will increase surplus N in the soil available for

direct nitrous oxide emission. Nitrate leaching losses are also likely to

be increased, leading to enhanced indirect losses. SAC notes that

correct matching of crop requirement and the application of organic N is

likely to lead to reduced losses of N2O. This method will only be

applicable on farms that have sufficient manure storage capacity to

allow farmers the flexibility to spread manure in the spring or when

ground conditions are appropriate. A reduction of approximately 50% in

direct N2O emissions from the N in slurries has been achieved when

slurry was applied to free draining grassland soils in spring compared to

autumn (Thorman et al., 2007).

Increase livestock nutrient use efficiency

4.9 Avoiding excess nitrogen in the diet, correctly balancing protein with

energy requirements and/or making dietary N more available for

digestion enables the N content of feed to be reduced without affecting

animal performance. These methods reduce the amount of N excreted

and minimise the amount of surplus N available for loss by diffuse

pollution. An increase in livestock N use efficiency of up to 10% has

been estimated to reduce direct N2O emissions from livestock manures

and slurries by about 6% (Del Prado and Scholefield, 2007). In addition,

reduction in crude protein fed to dairy cows has been estimated to

reduce nitrate leaching losses from livestock manures and slurries by 5-

6% (Cuttle et al., 2007) and 2-3% on pig/poultry farms.

26

Make use of improved genetic resources

4.10 The use of improved animal genetics to increase the animal longevity

and fertility and the use of improved forage plant varieties to improve

the nutritional characteristics of forage will improve the efficiency of

livestock systems. Increased efficiency would reduce production

requirements and therefore nitrous oxide and methane emissions would

be reduced because of reduced livestock numbers. The IGER report

estimated that making use of improved genetic resources would reduce

enteric methane and nitrous oxide emissions from slurries and manures

by 3%. The SAC estimates for improved genetics assumes a figure of

7.5% for CH4 reduction in both dairy and beef herds.

Anaerobic digestion

4.11 Methane produced from slurry and manure has the potential to be used

for energy. Burning methane that would otherwise be lost to the

atmosphere will reduce consumption of fossil fuels and the carbon

dioxide produced has a lower global warming potential compared to

methane. To increase methane yield food „wastes‟ are commonly

added to the digestion process. Methane emissions from slurry storage

would be significantly reduced (the IGER report estimated by up to

90%) by anaerobic digestion. The digestate remaining has a high

readily available N content following mineralisation of organic nitrogen

during the process. Further research is required to quantify the

ammonia and nitrous oxide emissions during storage and land

spreading of the digestate before the impacts of anaerobic digestion on

greenhouse gas emissions can be fully quantified.

Establish permanent grasslands/woodlands

4.12 Permanent grassland will remove carbon dioxide from the atmosphere

in above ground growth and within the soil. However, unless it is never

disturbed, much of the carbon fixed in this way will be lost as emissions

once the grassland is cultivated.

4.13 The establishment of permanent grassland is generally seen as arable

27

reversion, that is, changing land use from arable cropping to low input

permanent pasture with no fertiliser inputs or cultivations. The

Environmental Stewardship PI uses this as a mitigation method for two

options, buffer strips in arable crops and (uncropped) field corners in

arable crops. The abatement from these options is 7.13t/ha CO2e and

7.85t/ha CO2e respectively. Unwin and Jarvis (2008) showed that

buffer strips in intensive grassland, woodland margins and creation of

woodland provided the highest GHG mitigation potential of all ES

options. However, these options are difficult to include in the PI for the

following reasons:

the establishment of permanent grassland buffer strips in grassland

would present a difficulty in terms of verification for GHG

abatement as differential management is not readily visible;

woodland margins have considerable coincidence with buffer strips

as woodland often forms the boundary for fields (both arable and

grassland) and

woodland creation is dealt with in a separate forestry project and is

not considered as an ES option to avoid the risk of double counting

abatement.

4.14 With regard to buffer strips and field corners, there is already an area of

some 27,000ha in ES buffer strips on arable land and 15,500ha of ES

field corners. For all farmers in the Single Payment Scheme (SPS),

there is a requirement not to cultivate or apply fertilisers or pesticides to

land within 2 metres of the centre of a hedgerow, watercourse or field

ditch. Taking into account the width of the hedgerow, watercourse or

ditch, this may be expected to leave a 1m buffer strip in the field. A

second requirement of the SPS is not to cultivate or apply fertilisers or

pesticides to land within 1 metre of the top of the bank of a watercourse

or field ditch (GAEC14 RPA 2009). This needs to be accounted for in

assessment of the additional abatement from using these methods.

4.15 The width of buffer strips for cross compliance is not fixed by the EU

28

and may be altered at the discretion of the member state. In this

context, it may be possible within England or the UK to increase the

width of the buffer strip for cross compliance without requiring

negotiation at EU level. This would mean that a PI with these MMs

could be put in place at an early stage, perhaps by 2012 but for the

purposes of this work we have assumed changes are aligned with the

next rural development programme (RDP) from 2014.

4.16 Although these options were not included in the SAC MMs, they are

able to provide significant abatement per hectare as well as to deliver

other important government targets such as biodiversity, water quality,

soil erosion, flood amelioration, landscape value and public access.

4.17 Forestry was only covered to a limited extent in the SAC report. A

number of suggestions were put forward by the Forestry Commission

and a more extensive consideration of the issue is being carried out in a

separate project.

Contribution of methods to PIs

4.18 Any policies that encourage any of the 7 approaches (or underlying

mitigation methods) are likely to lead to reductions in GHG emissions.

As such the short list of PIs set out in section 3 draw on the MMs as

appropriate to provide a policy option for GHG abatement. However,

given the inclusion of many of the MMs across a number of PIs, it will

be necessary to consider how best to utilise the abatement potential in

a coherent policy mix. Further work is needed to consider the effects of

policy interaction.

4.19 Specific policy instruments for driving abatement using forestry options

are considered in the separate forestry work and will be reported

shortly. However, there is likely to be considerable scope for policy

interaction between the PIs considered in this report and the forestry

PIs.

29

Summary of section 4

MMs from four main categories, soil nitrogen and land management,

methane utilisation, livestock management and land use change are

relevant to the AFLM sector

The literature review identified eight main approaches to mitigate GHG that

were considered to have a robust scientific evidence base and could be

implemented now. These mitigation approaches formed the basis for the

26 detailed MMs described by the SAC work and the 25 (excluding

biomass and woodlands) considered in this report.

A comparison of MMs with those used by SAC indicated some significant

variation in mitigation on both a unit basis and the extent to which they

apply, that is hectares of land or head of livestock.

Forestry MMs are the subject of a separate project.

30

5. REVIEW OF METHOD ABATEMENT POTENTIAL

5.1 SAC produced Marginal Abatement Cost Curves (MACC) for GHG

mitigation methods in AFLM that provided an assessment of the

abatement in GHG emissions for a range of mitigation methods against

their costs.

5.2 ADAS has reviewed the scope for (unit abatement per hectare or head

of livestock) and extent (number of hectares or head of livestock) of

abatement reported by SAC. The data were felt by the team in some

cases to contain unit abatement and extent rates that were higher than

both other sources and our experience would suggest. This is

supported by EA (2009), who concluded that „The SAC study was

deemed to be overoptimistic. It is concluded that there are fewer

opportunities and less abatement potential than did SAC.‟

ADAS Assessment of the SAC MACC

5.3 The abatement potential as identified by SAC incorporate a number of

assumptions.

5.4 The tables below provide the ADAS assessment of the assumptions

made for the crop and dairy MMs which account for the majority of the

identified abatement potential of the MMs considered (excluding the

forestry options). For the crop MMs we assess the assumptions

relating to the area of additional land that SAC estimated the MM could

be applied to by 2022 as well as the abatement rate per unit area. For

the dairy MMs we consider the assumptions on yield and methane

production.

5.5 The principal difference from the SAC estimates lies in the additional

area that ADAS believes the MMs could be applied to. The abatement

potential for the dairy MMs all appear within ranges that ADAS are

comfortable with. The SAC cost effectiveness estimates may be more

moderate in reality but appear to be within the bounds of possibility.

31

5.6 Our rationale and commentary on each of the MMs is provided below.

In considering the SAC assumptions it is clear that there is a great deal

of uncertainty in these estimates. The following notes relate to tables 3

and 4.

Improved land drainage – installation of full under drainage system

5.7 This MM is based on no effective current under drainage system and

the need to have a full installation. It does not relate to mole ploughing

where it has not been carried out for some years which has resulted in

declining performance of an existing under drainage system. The

potential for improving land drainage is likely to be greatest on

grassland soils. Much grassland was subject to under drainage

systems during the latter half of the twentieth century and these are still

in place. The SAC assessment that 40% of grassland could beneficially

receive a full under drainage system is a high figure and we would

regard 30% as being at the maximum.

5.8 Arable production on clay and medium soils is usually dependant on

functioning under drainage systems (i.e. if the land did not have an

effective drainage system it would make it very difficult to grow winter

cereals/oilseeds on a significant area of drained clay and medium soils

in most years). Therefore, the potential to improve land drainage on

arable land is likely to be lower than on grassland. Our view is that the

SAC estimate of 30% of arable land that could benefit from improved

drainage is too high and a more realistic estimate may be 10%.

5.9 Root crops are generally grown on lighter soils that don‟t need draining

so the potential for improving drainage on land used for growing

potatoes sugar beet etc is low (<5%) or not applicable. We assume

„other‟ crops quoted by SAC refer to horticulture with a figure of 20%

that could benefit from under drainage; again the same logic holds (i.e.

low potential for improving land drainage) and we estimate a figure of

5%.

32

5.10 The effect of soil drainage status on nitrous oxide emissions is

uncertain. In waterlogged conditions, denitrification is likely to occur

which may lead to the formation of N2 gas in preference to nitrous

oxide, so the quantity of nitrous oxide emitted may be reduced

compared to well drained soils. Also, nitrate leaching losses may be

greater on land with improved drainage compared with undrained land

which may lead to increased indirect nitrous oxide losses. For these

reasons, we estimate that the abatement rate for drainage is very low.

Adoption rates have not been assumed due to the cost of full under

drainage systems.

Avoiding excess N

5.11 The IGER report suggests a 5% reduction (equivalent. to 680 kt CO2e)

in nitrous oxide emission from fertiliser, manure spreading and grazing

by not exceeding crop N requirements. There is no good information

available on whether excess N is being applied and if so over what land

area. The main source of information on fertiliser use is the British

Survey of Fertiliser Practice which suggests that fertiliser N use has

reduced in recent years especially on grassland. For this reason, we

have suggested the potential area for avoiding N excess on grassland

is 5% compared with SAC at 20% and on all other land 5% compared

with SAC at 20%. Recent significant increases in fertiliser prices

means there is economic pressure to avoid applying excess N.

Make full allowance of manure N supply

5.12 The IGER report suggests a 5% reduction in N2O emission from

organic fertiliser applications which would be equivalent to 110kt CO2e.

SAC rates of implementation on 80% of grassland and 50% of arable

land are in our view very high and a more realistic assumption would be

15% on both grassland and arable. With regard to root crops, SAC

suggests implementation of 20% of the area where we would suggest

10% and for other crops, we would agree with the SAC estimate of

10%.

33

Improved timing of mineral fertiliser N application

5.13 Farm practice is to spread fertiliser in spring when crops are actively

growing and taking up nitrogen. There is very limited scope for

improving fertiliser N application timings to improve fertiliser N utilisation

by crops. We have suggested scope for implementation on 10% of

land for all categories where SAC suggest 70% for grassland, 80% for

arable, 70% for root crops and 50% for other crops.

Improving timing of slurry and poultry manure application

5.14 The IGER report suggests that spreading manure at appropriate

time/conditions will reduce nitrous oxide emissions from organic

fertiliser applications by 2-10% (equivalent to 40-230 kt CO2e). Smith et

al 2001a and b suggest that around 50% of slurries and poultry

manures are applied in the autumn/winter period, so the maximum

improvement that can be achieved would be on 50% of the land

receiving slurries and poultry manures. However, there are a number

of practical issues that make it difficult to spread manures in spring

(especially on heavy clay soils) such as damage to soils, run off from

spreading a low dry matter slurry in high volumes on to wet soil and the

risk of rain following application. A certain amount will always be

spread on stubbles in the autumn although this is now limited by the

new NVZ rules which only allow applications in August and September

or from January. The SAC implementation levels of 70% on grassland,

60% on arable, 50% on roots and 40% on other crops are in our view

high and we would suggest 15% on all categories of land.

Plant varieties with improved N efficiency

5.15 This method has a lot of potential – anything that reduces the optimum

fertiliser N application rate will reduce excess N in the soil and reduce

the potential for nitrous oxide emissions. Further research evidence is

required before the extent of abatement can be quantified, but if

fertiliser N rates can be reduced by (as much as two thirds in oilseed

34

rape3), it is fair to assume that nitrous oxide emissions from fertiliser

applications will be reduced on a pro-rata basis. Uptake will be

dependent on the crops being acceptable in the market place.

Separate slurry applications from fertiliser applications by several days

5.16 There is no evidence to suggest that this is not current farm practice. It

is unlikely that farms will apply slurry and fertiliser within a few days for

a number of practical reasons. In the first instance, nutrients are

applied to crops in the spring in a sequential manner to match uptake.

It would be risking losses of costly fertiliser (mineral or organic) if all of

the crop requirement were applied in a short period. Normal practice is

to apply an early amount to promote initial growth following the winter

and a further one or two applications to meet crop demand.

5.17 There is some uncertainty about the effect of combined slurry and

fertiliser applications on the magnitude of nitrous oxide emissions from

soils. Work in the Netherlands (Schils et al., 2008) suggest that nitrous

oxide emissions were not increased when fertiliser and cattle slurry

applications were combined, compared with when fertiliser or slurry

were applied separately. In contrast, Stevens and Laughlin (2002)

found that emissions were increased when cattle slurry was applied

within 3 days of nitrogen application.

5.18 SAC suggested implementation rates of 70% for grassland, 60% for

arable, 50% for roots and 40% for other crops. We have concluded that

there is no substantive scope for abatement using this method and it is

not used for the ADAS estimates in this analysis.

Reduced tillage/no tillage

5.19 Defra project SP0561 states that approximately 50% of primary tillage

practices in England and Wales use mouldboard ploughing

(„conventional tillage‟), c.43% use reduced tillage (heavy discs, tines or

powered cultivators) and 7% use direct drilling/broadcasting („zero

3 http://www.arcadiabio.com/contact.php

35

tillage‟). Reduced tillage/zero tillage is only generally applicable on

clay/medium soils in arable production, so the potential for increasing

the area under these cultivation practices is limited. We would suggest

that there is potential for increasing the area under reduced/zero tillage

on arable land by 20%, but zero for roots and other crops. This is lower

than SAC‟s assessment of a 50% increase for the arable area and 10%

increase for roots and other crops. Reduced tillage/zero tillage uses

less energy during cultivations and is likely to result in some short term

increases in soil C storage compared with ploughing. However, this is

likely to be largely lost when the soil is rotationally ploughed every 3 to

4 years. Reduced tillage/zero tillage may result in greater nitrous oxide

emissions compared with ploughed land; however the overall balance

of CO2e emissions is uncertain.

Use composts / straw based manures in preference to slurry.

5.20 Nitrous oxide emissions following land spreading of low readily

available N materials (<25% readily available N, e.g. compost and

straw based FYM) are likely to be lower than following applications of

slurry (typically 50-60% readily available N). However, nitrous oxide

production during housing and storage in solid manure systems may be

greater than from slurry based systems. The IGER report suggests that

converting from slurry to a solid manure system may increase nitrous

oxide emissions from manure storage and land application by 15%.

Also, there is no research evidence that has quantified nitrous oxide

emissions from composting of manure. Overall, the effect of applying

composts and FYM rather than slurry on emissions of nitrous oxide may

be at best neutral, but it is likely to lead to increases in greenhouse gas

emissions.

Improved fertility, improved productivity, probiotics and maize silage

5.21 SAC states that the above methods are applicable to 100% of farms

apart from probiotics at 90%. We feel their estimates for increases in

yield and changes to methane emissions are optimistic. In terms of

36

adoption, changes to breeding policy at the farm level are beginning to

see a shift away from purely breeding for yield, but the use of probiotics

is not commonplace. Improvement of maize silage varieties is ongoing

with earlier harvested varieties becoming more available, for example.

We would anticipate a straight line of uptake for all but probiotics where

slower uptake is assumed due to market perception of effectiveness.

5.22 The two beef animal management MMs are estimated by SAC to

produce costs effectiveness per tonne of CO2e reduced of an order of

magnitude better than any of the other MMs. They are estimated to

provide private benefits of £2,000 to £3,000 pounds per tonne as

compared to around £200 per tonne for the best of the rest. They are

not reviewed in detail here since this section focuses upon those MMs

that provide the majority of the estimated abatement potential.

However, their apparent highly cost effective nature will have

implications for individual policies if they are taken up to any great

degree. The impact of these two MMs on the cost effectiveness of

individual PIs is considered in more detail in section 8.

Impact on MTP of the ADAS adjusted assumptions

5.23 The ADAS assessments of the SAC MACC assumptions were then run

within the SAC MACC spreadsheet to include the impact of the

interactions between the various methods. ADAS did not assess the

scale and direction of the interactions. Table 5 shows the impact of the

adjusted assumptions on the maximum technical potential of these

methods for England.

5.24 Clearly the ADAS assessment of the abatement potential from the crop

related methods diverges significantly with the SAC estimates,

approximately halving the maximum technical potential. In terms of the

MACC, the chart below is from the SAC report annotated to show the

impact of the ADAS assessment on the width of the method

columns. In simple terms the ADAS adjustments halve

the total width of the MACC curve (Figure2).

37

Table 4: Crop-soil methods

Estimated maximum additional % area of each land category that each measure could be applied to in England by 2022

Abatement rates

(t CO2e / ha/y)

Rate of adoption

by (as % of 2022 %):

Cost effectiveness

(£ / tCO2e)*

Grassland (LFA + non-

LFA) not including

rough grazing

Cereals and oil seeds

Root crops Other crops

Methods SAC ADAS SAC ADAS SAC ADAS SAC ADAS SAC ADAS

201

2 2017 SAC ADAS

Drainage 40 30 30 10 20 5 20 5 1 V low 46

Avoiding N excess 20 5 20 10 20 5 20 5 0.4 Low -50

Full manure 80 15 50 15 20 10 10 10 0.4 Low -119

Mineral N timing 70 10 80 10 70 10 50 10 0.3 V low -164

Organic N timing 70 15 60 15 50 15 40 15 0.3 Low -137

Improved N-use plants 20 60 40 40 0.2 Medium 0 10 -76

Slurry mineral N delayed 70 60 50 40 0.1 N/A 0

Reduced till 0 50 20 10 0 10 0 0.15 V low -153

Using composts 50 50 40 30 0.1 No effect 0

* No information is available to ADAS on the method used by SAC to establish cost effectiveness values, but based on expert opinion, we would not dispute most of the figures apart from the values for a) plants varieties with improved N use efficiency based on the fact that oilseed rape varieties developed so far can produce conventional yields using 60% less N so a saving of £76/tCO2e may be low and b) the figure for reduced tillage seems high compared with the nitrogen MMs and the effectiveness of reduced till in avoiding emissions is unclear.

38

Table 5: Dairy methods

Estimated yield and CH4 production impact for each land category that each measure could achieve in England by 2022

Rate of adoption by (as % of

2022):

Cost effectiveness (£ / tCO2e)

All cows/heifers in milk (cubicle)

Yield CH4

All cows/heifers in milk (Litter)

Yield CH4

Heifers in calf (cubicle)

Yield CH4

Heifers in calf (litter) Yield CH4

Method (applicability)

SAC ADAS SAC ADAS SAC ADAS SAC ADAS 2012 2017 SAC ADAS

Improved fertility (100%)

11.25% 7.5%

+ 11.25%

7.5% +

11.25% 7.5%

+ 11.25%

7.5% + St. line St. line -86 +

Improved productivity (100%)

22.5% 0%

+ 22.5%

0% +

22.5% 0%

+ 22.5%

0% + St. line St. line -144 +

Probiotics (90%) 10% 7.5%

+ 10% 7.5%

+ 10% 0%

+ 10% 0%

+ 0% 25% -21 +

Maize silage (100%)

7% -2%

+ 7% -2%

+ 7% -2%

+ 7% -2%

+ St. line St. line -263 +

+ No reason to dispute SAC data

39

Table 6: SAC (ADAS) MTP of Mitigation Methods

Method SAC MACC 2022 MTP [ktCO2e]

SAC (ADAS) 2022 MTP [ktCO2e]

Difference [ktCO2e]

Cost effectiveness

BeefAn-ImprovedGenetics 50 50 -£3,603

BeefAn-Probiotics 111 111 -£2,032

BeefManure-CoveringLagoons 12 12 £9

BeefManure-CoveringSlurryTanks 13 13 £24

CAD-Poultry-5MW 370 370 £5

Crops-Soils-AvoidNExcess 410 148 -262 -£50

Crops-Soils-Drainage 2,493 155 -2,338 £46

Crops-Soils-FullManure 798 189 -609 -£119

Crops-Soils-ImprovedN-UsePlants 552 1,380 828 -£76

Crops-Soils-MineralNTiming 1,088 148 -940 -£164

Crops-Soils-OrganicNTiming 747 176 -571 -£137

Crops-Soils-ReducedTill 269 104 -165 -£153

Crops-Soils-SlurryMineralNDelayed 69 0 -69 £0

Crops-Soils-UsingComposts 116 0 -116 £0

DairyAn-ImprovedFertility 502 502 -£86

DairyAn-ImprovedProductivity 547 547 -£144

DairyAn-MaizeSilage 139 139 -£263

DairyAn-Probiotics 409 409 -£21

DairyManure-CoveringLagoons 49 49 £25

OFAD-BeefLarge 106 106 -£4

OFAD-BeefMedium 55 55 £5

OFAD-DairyLarge 362 362 -£2

OFAD-DairyMedium 64 64 £6

OFAD-PigsLarge 87 87 -£6

OFAD-PigsMedium 30 30 -£3

Total 9,448 5,206 -4,242

40

Figure 2: Impacts of ADAS adjustments to SAC MACC MTP (2022)

41

Summary of section 5

All of the changes relate to a number of the crop-soils MMs and are

primarily due to the view that the MMs cannot be applied as widely as

suggested by the SAC assumptions

Two sets of assumptions made by SAC were reduced by the ADAS team

for specific MMs and these are shown in Table 3. These are (i) abatement

per unit area and (ii) the area (hectares or head) over which the MM could

be applied

In terms of abatement per unit area slurry mineral N delayed and

composting MMs were viewed as having no abatement potential. In

addition, drainage was viewed as having a much less potential per unit

area – 0.1 against the 1 t CO2e/ha/yr – reducing MM potential by 90%.

This is a very complex area with no definitive rates of emissions. They are

subject to many factors, which can go in different directions depending on

conditions. Finally, the Improved N-use plants MM was viewed as

potentially having a higher per unit abatement. The “medium” potential

suggested in Table 3 was applied in the SAC MACC spreadsheet as 0.5 t

CO2e/ha/yr, a 150% increase on the SAC MACC assumption.

In terms of area over which the MM could be applied, Table 3 shows that 6

MMs were viewed as having a much more restricted applicability. For

example, the Full manure MM was viewed by SAC as having the potential

to be applied to 80% of grassland whereas we considered 15% more

likely, thus reducing this aspect of the MM potential by roughly four fifths.

The ADAS assumptions were then plugged into the SAC MACC

interactions spreadsheet to calculate the SAC (ADAS) MTP. The SAC

interaction factors further adjust the MTP based upon the order in which

the spreadsheet assumes they are applied. As we did not alter the CE,

they would be applied in the same order as SAC.

Assumptions with respect to the cost effectiveness per tonne of CO2e

were more difficult given that they were generated by the SAC linear

programme model to which we do not have access. In the report we state

that whilst they appear more positive to the farmer than we would have

estimated, they seem within the bounds of probability.

42

6. POLICY INSTRUMENT ABATEMENT POTENTIAL

6.1 The assessment of abatement potential for the short listed policies is

based on the mitigation methods from the SAC MACC analysis that

were estimated to reduce GHG emissions at below £100/tCO2e

(excluding any forestry related methods). Environmental stewardship

related methods have been incorporated here via an extension project

undertaken by ADAS in parallel with this work.

6.2 The analysis of MM abatement potential allows for a baseline which

comprises existing policies as they are applied within the relevant

timescale; for example the Water Framework Directive is not yet

implemented but will be by 2022. For the current policies, potential

abatement in their present form but with some enhancement (extension

of area targeted) was considered. Where appropriate a second version

of the PI (version b) was also considered; in this case the policy was

extended in scope to include additional methods to capture GHG

abatement.

6.3 The ADAS assessment of the assumptions used to provide the SAC

MACC estimates provides for two sets of abatement potentials for a

number of methods. The SAC MACC estimates were viewed as

optimistic and therefore we present two sets of policy instrument

abatement potentials reflecting both the SAC MACC estimates and the

SAC (ADAS) estimates.

6.4 Key steps in the process of moving from MTP for each method to

abatement potential for each PI is detailed in the following sections.

Policy Description

6.5 For each policy instrument on the proposed short list, a Policy

Instrument description was produced using the following criteria:

Rationale for it to be introduced

Scope and how it would work

43

Policy coverage – area or scale it would apply to

Method uptake – likely uptake by method according to PI

List of mitigation methods associated with the Policy Instrument

Other considerations – certainty, flexibility and permanence

Policy costs – set up and operation

On-farm costs – if relevant

Verification – means and estimated verified abatement

6.6 These descriptions, along with their estimated abatement, are detailed

at Appendix 6.

6.7 Further work is required on each policy instrument to be examined in

greater detail to determine the cost effectiveness of the short list of

policy instruments.

Assignment of mitigation methods

6.8 The flow of information feeding into the assessment of abatement

potential for any of the short listed policies is illustrated in Figure 3.

Figure 3: Flow diagram for assessment of abatement potential

44

Assign abatement to Policy Instruments

6.9 Mitigation Methods appropriate to each of the short listed policy

instruments were assigned based upon the nature of the PI. For

example, in the regulatory PI, Extend NVZs, the central point is to

minimise the risk from nitrous oxide derived from mineral fertilisers and

organic manures. In reviewing the MMs which might contribute to

abatement, those concerned with application of nutrients directly relate

to this PI, whereas Anaerobic Digestion (AD) or animal genetics do not.

There is some value in the fact that animal genetics may reduce

emissions if those with faster growth rates are used to reduce the time

spent to produce finished stock but these methods would not rationally

be part of a regulatory approach. The NVZ Action Programme sets

standards for nutrient loads and timing so covering a slurry lagoon may

or may not be appropriate. However, it may suit a farmer to cover a

lagoon and avoid rain falling into it if he is close to the storage limit

thereby saving sufficient capacity to avoid the more expensive option of

extending the lagoon.

6.10 For each method, the starting point was the Maximum Technical

Potential for abatement. SAC described this as the amount by which it

is possible to reduce GHG emissions by implementing a technology or

practice that has already been demonstrated i.e. the abatement that

could be achieved if everyone who could adopt the measure did so as

far as they could, regardless of cost. This represents the highest level

of abatement achievable and is unlikely to be fully realised depending

on a range of factors.

6.11 A quantitative evaluation of the shortlisted policies considered how a PI

could unlock the abatement potential via the methods as described in

the SAC MACC and the extension work. Of the non-forestry methods,

it was decided to exclude methods with a cost effectiveness (in 2006

£/tCO2e) above £100 which left 22 methods to which were added 3

additional methods from the SAC MACC work. One other change was

45

that ionophores were replaced by probiotics since the former are

currently illegal in the UK. The excluded methods account for c4.5 Mt

CO2e from the SAC MACC methods (c2.9 Mt CO2e for England) the

lowest cost effectiveness of which is £174/tonne for the crop-soils

species introduction (including legumes) method. This is itself over

£100/tonne less cost effective than the next more effective method.

6.12 None of the cost effectiveness estimates include policy costs.

Table 7: MTP and cost effectiveness for mitigation methods (SAC)

Method 2022 Volume

Abated [ktCO2e]

Cost Effectiveness [£2006/tCO2e]

BeefAn-ImprovedGenetics 50 -£3,603

BeefAn-Probiotics 111 -£2,032

BeefManure-CoveringLagoons 12 £9

BeefManure-CoveringSlurryTanks 13 £24

CAD-Poultry-5MW 370 £5

Crops-Soils-AvoidNExcess 410 -£50

Crops-Soils-Drainage 2,493 £46

Crops-Soils-FullManure 798 -£119

Crops-Soils-ImprovedN-UsePlants 552 -£76

Crops-Soils-MineralNTiming 1,088 -£164

Crops-Soils-OrganicNTiming 747 -£137

Crops-Soils-ReducedTill 269 -£153

Crops-Soils-SlurryMineralNDelayed 69 £0

Crops-Soils-UsingComposts 116 £0

DairyAn-ImprovedFertility 502 -£86

DairyAn-ImprovedProductivity 547 -£144

DairyAn-MaizeSilage 139 -£263

DairyAn-Probiotics 409 -£21

DairyManure-CoveringLagoons 49 £25

OFAD-BeefLarge 106 -£4

OFAD-BeefMedium 55 £5

OFAD-DairyLarge 362 -£2

OFAD-DairyMedium 64 £6

OFAD-PigsLarge 87 -£6

OFAD-PigsMedium 30 -£3

Stand alone results

Estimated from England BAUe 2022 stock numbers

46

6.13 The 25 methods (excluding forestry and ES MMs) included in the

evaluation had a combined 2022 MTP of 9.5 MtCO2e for England

based on the SAC estimates. The two ES methods included have a

combined 2022 MTP of 5.6 MtCO2e for England.

Abatement potential

6.14 Each policy instrument was considered in the light of the available SAC

MACC and ES methods that could be applied within the policy. The

methods for some existing instruments (e.g. NVZ) were limited by the

objectives of that policy. For most of the existing instruments (NVZ,

Cross Compliance, and CSF) additional methods were applied to

consider the impact of a slight change in emphasis in the objectives of

those instruments toward GHG mitigation. A more detailed description

of the methods utilised by policy instrument is provided in Appendix 6.

6.15 The evaluation assessed the proportion of the MTP that a policy

instrument could objectively target for abatement. For each policy this

is a function of the number of methods available, the geographic extent

of the policy, and the target level for GHG reduction that would be set.

For example, extending the NVZ requirements to cover 100% of

England means that only a small number of the SAC MACC methods

are appropriate and that not all of England is “available” for reductions

since the existing policy covers nearly 70% of the country.

Policy coverage

6.16 Coverage is the proportion of a method‟s MTP that a policy instrument

could feasibly target. The coverage could be based upon additional

area covered by an existing policy or the number of farms that could be

brought under the umbrella of a new or existing policy. Generally the

coverage is common for all the methods within a policy instrument but

this is not necessarily always the case.

47

Table 8: Basis for estimating policy coverage

Policy

Instrument

Basis for coverage

NVZ a) Extend to current non-NVZ area (32% England)

b) As (a) with additional methods

Targeted

Communications

General PI with capacity to target the whole industry

but at a modest level of uptake

Voluntary

Agreements

General PI with capacity to target the whole industry

but at a modest level of uptake

Farm Assurance

public

procurement

Scale of public sector procurement as proportion of all

food procurement (1.4%)

Cross compliance Area of land benefiting from single farm payment (90%)

Environmental

Stewardship

Use current ES at 65%. Many agreements are due to

expire and there is uncertainty over re-application

Enhance CSF Priority catchments current and potential

48

Policy uptake

6.17 The mitigation available under a given policy instrument will depend on

the uptake of mitigation methods under that PI. In order to estimate

uptake, each MM has been scored against three uptake criteria and

given an overall score, namely High (H), Medium (M) or Low (L). The

uptake criteria and underlying assumptions are as follows:

Capital cost: assessed by ADAS and SAC

Low = nil or small capital investment

Medium = modest investment for investment in improved

genetics or specialist equipment e.g. for maize silage

High = significant investment in buildings or equipment or both

Cost effectiveness: based on SAC data or ADAS estimates (ES

options)

>£0 t CO2e = Low

0 to -£50 t CO2e = Medium

< -£50 t CO2e = High

Acceptability to farmers: subjective assessment by ADAS

Low = financially, operationally and culturally unattractive;

perceived risks

Medium = fits moderately well with farmers‟ common (existing)

practices

High = fits well financially, operationally and culturally; few

perceived risks

6.18 A second level of analysis considers whether the uptake will vary

according to the type of policy instrument used, that is, regulatory,

economic or voluntary. This is broadly in line with the SAC estimates of

uptake by PI type but is more detailed, allowing for a range of MM

uptake scores as set out in table 9.

49

Table 9: Estimated percentage uptake of MMs by PI type

Uptake score Type of Policy Instrument

Regulatory Economic Voluntary

High 90% 50% 20%

Medium 90% 30% 10%

Low 90% 10% 5%

6.19 The rationale for these numbers is based on an increasing likelihood of

uptake according to the uptake score and on the incentive to respond.

Thus for regulatory instruments, the risk of penalty will ensure uptake at

a high level; this is a stronger incentive than that provided by economic

instruments which is in turn more compelling than voluntary

approaches. For voluntary approaches, the response will further

depend on whether the engagement with farmers is generic and remote

(low uptake) or targeted and active (higher uptake).

6.20 The assessment of uptake score for mitigation methods by PI type is

set out in table 9. This also indicates that some mitigation methods are

not applicable (N/A) to regulatory or voluntary PIs. Thus, while

Government may specifically require farmers to use some MMs as part

of a regulatory PI e.g. fertiliser planning under NVZ, other MMs such as

improved genetics or use of probiotics for cattle provide indirect

mitigation and are not linked to the PI itself. In this instance, we have

indicated that uptake of these MMs are N/A under regulatory PIs. In all

other cases the assumption is that the level of uptake is 90%,

consistent with the existing level of compliance for similar measures

under cross compliance audits (ADAS et al, 2009). In practice,

verification of some methods is not as reliable; this is dealt with the

section on verification (section 7) and is detailed in the PI summary

sheets (Appendix 8).

50

6.21 In terms of voluntary PIs, it is clear that methods which involve high

capital cost e.g. anaerobic digestion plants are very unlikely to be

undertaken. Similarly, methods with moderate or low cost effectiveness

(SAC CE >0) would also not be attractive under voluntary schemes.

Thus methods scored High (H) for capital cost and/or cost effectiveness

are considered N/A for voluntary PIs.

6.22 For economic instruments, there is an element of voluntary participation

and this limits the scale of uptake. In practice, the „acceptability‟ score

of the component MMs is very important for these PIs. Thus while

optimal use and timing of fertiliser N and uptake of genetics score well

on acceptability, the ES methods which take land out of productive

agriculture or investment in AD will have a lower uptake score.

51

Table 10: Assessment of MM uptake by Policy Instrument

Methods

Uptake criteria1

Up

take S

co

re

Cap

ital co

st

SA

C C

ost

eff

ecti

ven

ess

(£/u

nit

)

Accep

tab

ilit

y

Beef An – Improved genetics N/A -3,603 H H N/A for regulatory PI

Beef An – Probiotics N/A -2,032 M M

Beef Manure – Covering lagoons M 9 M L N/A for voluntary PI

Beef Manure – Covering slurry tanks M 24 M L

CAD – Poultry 5MW H 5 M L N/A for regulatory or voluntary PI

Crops Soils – Avoid N excess N/A -50 H H Available for all PIs

Crops Soils – Drainage M 46 H L N/A for regulatory or voluntary PI

Crops Soils – Full manure N/A -119 H H Available for all PIs

Crops Soils – Improved N-use plants N/A -76 M M N/A for regulatory PI

Crops Soils – Mineral N timing N/A -164 H H Available for all PIs

Crops Soils – Organic N timing L – H1 -137 H M

Crops Soils – Reduced tillage L – H1 -153 M M N/A for regulatory PI

Crops Soils – slurry mineralNdelayed N/A 0 M M Available for all PIs

Crops Soils – Use composts L 0 M M

N/A for regulatory PI

Dairy – Improved fertility L -86 H H

Dairy – Improved productivity L -144 H H

Dairy – Maize silage L -263 M H

Dairy – Probiotics N/A -21 M M

Dairy Manure – Covering lagoons M 49 M L N/A for voluntary PI

OFAD – Beef (large) H -4 M L N/A for regulatory or voluntary PI OFAD – Beef (medium) H 5 M L

OFAD – Dairy (large) H -2 M L

OFAD – Dairy (medium) H 6 M L

OFAD – Pigs (large) H -6 M L

OFAD – Pigs (medium) H -3 M L

ES – Buffer strips N/A ~02 M M Available for all PIs

ES – Field corners N/A ~02 M M Available for all PIs

ES- Woodland edge N/A ~02 M M Available for all PIs

ES – Afforestation (small scale) M ~02 M M N/A for regulatory PI

Table notes: 1. The need for investment to deliver mitigation can vary depending on the baseline situation. For organic N timing, farmers may need to invest in slurry storage facilities; for reduced till, they may need to buy new equipment.

2. SAC estimates of cost effectiveness are not available; that these options are cost +ve in terms of income forgone.

52

Summary of section 6

Mitigation methods have been assigned to the short list PIs on the basis of

relevance and cost effectiveness

Factors affecting the proportion of MTP available through the policy (by

method) are coverage (area of land or head of livestock) and uptake (by

the industry).

Uptake has been scored according to capital cost, cost effectiveness and

acceptability of the method. Additionally it will vary by the type of policy

instrument i.e. regulatory, economic or voluntary. Estimates used for the

latter are; regulatory 90%, economic 10% to 50%, voluntary 5% to 20%.

53

7. VERIFICATION OF ABATEMENT

7.1 Verification of reported emissions is required to ensure that reported

emissions reductions are genuine . Robust procedures for the

monitoring, reporting and verification (MRV) of emissions are necessary

to maintain confidence in Inventory measurement and any scheme to

reduce emissions..

7.2 The nature of GHG emissions from the AFLM sector means that

uncertainty is pervasive and likely to persist to some degree. The

dispersed nature and heterogeneity of emissions sources in the AFLM

sector poses particular challenges.

7.3 It is not necessarily the case that methods used to measure emissions

associated with each point of obligation in each chain of production will

be exactly those used to generate the national inventory. It is clear that

verification may be more straightforward in some cases (e.g. anaerobic

digesters) than others (e.g. changes in fertiliser application practices).

Where monitoring of emissions is done by monitoring simple proxies

(e.g. tonnes of fertiliser input, or number of livestock), the abatement

measures incentivised may be limited, because it will not be possible to

recognise the benefit of alternative ways of applying fertiliser, or of

rearing livestock.

7.4 The verification of emissions also can be carried out in different ways.

Options include independent third-party verification, self-certification

protocols via trade associations, or self-reporting. Any of these may be

combined with either risk-based or random audit methodologies. A

particular feature of the AFLM sector is that emissions are likely to

depend on the ongoing use of particular practices. Verification

therefore, may need to be repeated or ongoing to ensure that emissions

reductions continue to accrue. The AFLM sector already is subject to a

range of voluntary and mandatory inspection and certification schemes,

and these may serve as a starting point for defining the MRV

54

procedures.

Verification of the SAC MACC Mitigation Methods

7.5 In light of the above discussion the following sections consider each of

the MMs in the context of current levels of record keeping and

inspection. Three levels of verification are considered. The highest

level is an outcome based verification whereby actual emissions can be

either measured or easily agreed via GHG Inventory procedures. The

second level is an implementation based verification process that has

much in common with many of the compliance procedures already in

place in the agriculture sector. This is based upon farm inspections and

detailed records. The final level relies on simple check lists that may be

applied in the case of voluntary procedures.

7.6 We have considered the verification status of 25 mitigation methods

(excluding forestry and ES MMs), as defined by the SAC work and

within a cost effectiveness threshold of £100 /t CO2e, and the level of

confidence in each approach is assessed.

7.7 Some MMs have been grouped in view of common verification issues.

The analysis is detailed at Appendix 5.

It is apparent that most methods are based on verification of farm-level

implementation, mainly through farm records or records from a third

party (for example, invoices for purchases or fieldwork). The level of

confidence in these records is dependent on the critical factor for

mitigation e.g. usage or timing of nitrogen fertiliser; thus invoices can

verify that fertiliser has been purchased but the purchase date does not

reliably indicate the timing of application. For other methods, such as

covers for lagoons or slurry tanks and AD plant, evidence of use is

readily visible and sufficient to give a high degree of confidence in the

level of mitigation achieved.

55

Table 11: Verification of Mitigation Methods

Basis of verification

Farm records

Third party

records

Degree of confidence

(H / M / L)

BeefAn-ImprovedGenetics

Implementation () M

Beef/Dairy - Probiotics Implementation H

Covering lagoons / slurry tanks – beef and dairy

Implementation Visible H

Crops-Soils-AvoidNExcess

Implementation H

Crops-Soils-Drainage Implementation (& Outcome)

H

Crops-Soils-FullManure

Implementation () M

Crops-Soils-ImprovedN-UsePlants

Implementation H

Crops-Soils-MineralNTiming

Implementation () M

Crops-Soils-OrganicNTiming

Implementation () M

Crops-Soils-ReducedTill

Implementation () () M

Crops-Soils-SlurryMineralNDelayed

Implementation () () L / M

Crops-Soils-UsingComposts

Implementation H

DairyAn-ImprovedFertility

Implementation & Outcome

H

DairyAn-ImprovedProductivity

Implementation & Outcome

H

DairyAn-MaizeSilage Implementation Visible H

Anaerobic Digestion Outcome H

Buffer strips Implementation Visible () H

Field corners Implementation Visible () H

Woodland margins Implementation Visible () H

New woodland Implementation Visible H

() = partial records; = full records; = full and reliable/audited records

56

Summary of section 7

Verification of abatement in AFLM is a major challenge.

Most MMs can only be verified at farm record level as implementation

based, that is, a record to say that a given operation has been carried out.

This will require an audit process of some form and may be expensive to

implement unless it uses existing processes

Robust monitoring, reporting and verification (MRV) will be essential for

schemes that reduce emissions to be captured accurately in the

greenhouse gas inventory.

Few MMs provide outcome based mitigation, that is, evidenced by direct

measurement example e.g. by an electricity meter.

57

8. POLICY EVALUATION

8.1 This section provides a quantitative evaluation of the short list PIs but is

dependent on a wide range of assumptions and should be seen as

illustrative rather than absolute. The proposed PIs provide abatement

at potentially little cost to the sector, indeed much of the mitigation

could be achieved at negative cost, based on SAC CE values.

However, given the fairly inelastic demand for food and increasing

demand for biofuels, any reduction in domestic agricultural output

without simultaneously reducing demand could have knock on effects.

The potential for emissions leakage and other ancillary impacts are also

considered within this section.

Evaluation of quantitative data

8.2 The basic methodology for estimating the abatement potential of the

short list PIs was described in section 6 and the output from the

calculations is shown in Tables 12 and 13.

8.3 First we provide an example of how the estimates are arrived at, using

the Cross Compliance a) PI. For this policy the following MMs were

deemed appropriate:

Crop soils – Avoid N excess

Crop soils – Full manure

Crop soils – Mineral N timing

Crop soils – Organic N timing

Crop soils – Mineral N delayed

Arable buffer strips

Arable field corners

8.4 Each of these MMs has an associated Maximum Technical Potential.

There are two sets of estimates, those estimated by SAC and those

adjusted by ADAS (the SAC (ADAS) estimates); arable buffer strips and

arable field corners were estimated by ADAS. Clearly not all of the

58

MTP can be achieved as Cross Compliance covers only 90% of

England. Thus, the MTP for each method is first adjusted downwards

by a coverage factor of 0.9. The crop soils MMs were assumed to be

taken up at 90% also as Cross Compliance is a regulatory scheme.

However, it seems highly unlikely that Cross Compliance would make it

mandatory to apply buffers or field corners to such a high level, so for

these MMs we have assumed that the obligation would be to apply

buffer strips to one quarter of field margins and one eighth of field

corners (N.B. this equates to approximately 125,000 hectares or 1.4%

of agricultural land). In summary, using a nominal MTP OF 100, total

abatement for the PI is calculated as follows:

MMs MTP

(a)

Coverage

(b)

Uptake

(c)

Abatement

(a) x (b) x (c)

Crop soils 100 90% 90% 81.0

Arable strips / corners

100 90% 25% 22.5

PI Total 103.5

8.5 The rationale for specific coverage and uptake levels of MMs by PI are

provided in section 6 and Appendix 6.

Estimated PI abatement potential

8.6 The abatement potential for 2012, 2017 and 2022 is calculated as

above. The Inventory column is the amount of the abatement potential

assessed as being within inventory. The private cost columns are the

abatement potential multiplied by the cost effectiveness figure.

Negative figures represent gains to farmers. Note that the private cost

figures relate purely to the implementation of the MM and not the public

and private policy-related cost of the PI. These are discussed in the

following section.

59

Table 12: Estimated abatement potential – SAC MACC data

Abatement Potential (kt CO2e)

Inventory 2022

Annual Private cost (£000)

Policy Instrument 2012 2017 2022 2012 2017 2022

Extend Coverage of the NVZ a)*

Extend Coverage of the NVZ b) - 1,670 2,531 759 £0 -£152,555 -£319,701

Targeted Communications 90 221 351 147 -£8,838 -£27,212 -£58,393

Voluntary Agreements 138 321 480 156 -£8,735 -£26,817 -£55,421

Farm Assurance public procurement 3 6 10 4 -£247 -£762 -£1,635

X comp a) - 896 896 - £0 £50,056 £50,056

X comp b) - 2,561 3,420 759 £0 -£102,597 -£269,793

Environmental Stewardship - 388 647 - £0 £0 £0

Enhance CSF a) 138 323 515 145 -£6,789 -£21,203 -£52,869

Enhance CSF b) 138 456 648 145 -£6,789 -£13,750 -£45,416

Table 13: Estimated abatement potential – SAC (ADAS) data

Abatement Potential (kt CO2e)

Inventory 2022

Annual private cost (£000)

Policy Instrument 2012 2017 2022 2012 2017 2022

Extend Coverage of the NVZ a)*

Extend Coverage of the NVZ b) - 404 602 203 £0 -£29,601 -£61,979

Targeted Communications 33 102 212 96 -£5,421 -£17,569 -£40,094

Voluntary Agreements 29 95 238 57 -£1,830 -£6,692 -£21,332

Farm Assurance public procurement 1 3 6 3 -£152 -£492 -£1,123

X comp a) - 896 896 - £0 £50,056 £50,056

X comp b) - 1,295 1,491 203 £0 £20,357 -£12,072

Environmental Stewardship - 388 647 - £0 £0 £0

Enhance CSF a) 29 86 200 67 -£2,545 -£6,709 -£21,644

Enhance CSF b) 29 219 333 67 -£2,545 £744 -£14,191

As can be seen in the tables, all of the PIs (except Environmental

Stewardship) provide a positive financial return to the participants due to the

high level of cost effectiveness of the MMs.

8.7 Given the potential commercial gain for farmers for some of these

methods, it could be argued that there must be other barriers to their

60

uptake including:

knowledge and understanding of the cost: benefit of technology

uptake

access to support and advice

poor links to supply chain and market needs

focus on other income streams, notably Single Payment but also

agri-environment payments, secondary enterprises or off-farm

employment

tradition and embedded behaviour

8.8 The significance of these behavioural drivers is that they may militate

against economically rational behaviour and might impact on

engagement with policies targeted at climate change. Thus, cost

effectiveness per se may not be a good indicator of policy uptake. This

analysis also suggests that any economic instruments might need to be

supported by advisory or knowledge transfer instruments to deliver

behavioural change.

Implications for policy choice and mix

8.9 A further issue is that of policy interaction. This is particularly the case

for combinations of PIs of a similar type, i.e. regulatory, economic or

voluntary PIs. For example the abatement from the ES MMs is counted

within both the Cross Compliance and Environmental Stewardship PIs.

8.10 The development of a policy mix will require an iterative process

whereby abatement is captured under the most appropriate or cost

effective PI and other PIs are revised to remove the abatement from

these MMs. Policy costs are an important element of this process and

while not the main focus of this work, are considered broadly in the

following section.

Policy costs

8.11 This project considered the costs of setting up and running the PIs as

well as the non-MM related private costs accruing to the obligated units

61

in interacting with the PI. Table 14 below summarises the likely policy

costs by PI; this is a mix of quantitative estimates or varying robustness

and some qualitative statements where there is no available evidence.

The analysis is very much illustrative and significant input is required to

detail and verify these numbers before any policy appraisal.

8.12 However, it should be noted that in some cases the policy costs could

outweigh the private benefits. The impact assessment for extending

NVZs estimated significant policy costs to a level which would offset the

substantial private benefits suggested in tables 12 and 13.

8.13 We have not considered whether the differences in the SAC MACC and

SAC (ADAS) estimates would have an impact on policy costs.

Table 14: Likely policy costs associated with PIs

Policy instrument

Public costs Private costs

Set up Operating

Cross Compliance a)

Marginal increase to current regime to consult and define.

Pro rata increase in inspection costs from current c£7.5m. Dependent on inspection rates

Low – c£2/ha to cover additional management or secretarial time

Cross Compliance b)

As (a) but also negotiation with EU

As (a) Low – c£2/ha

Voluntary Agreements

Nil – not for profit organisation funded by donation Assurance scheme type costs c £1,000 per farm

Extend Nitrogen Vulnerable Zones (NVZ) to 100% a)

Marginal increase to current

Pro rata with increase in costs to 68% coverage = c£5m (based on IA)

Pro rata with increase in costs to 68% coverage = c£75m-£112m

Extend Nitrogen Vulnerable Zones (NVZ) to 100% b)

Marginal increase to current

a) plus incremental costs for additional MMs

a) plus incremental costs for additional MMs

Environmental Stewardship (ES)

Marginal increase to current

Depends on availability of additional funding. Option payment rate c£400 per ha

c4-8 days depending on scheme

Extend CSF a) National project team currently costs c£600k per annum

Pro rata in CSFOs – currently c£1.5m (£3.5m total costs)

Low – c£2/ha

Extend CSF b) Pro rata in CSFOs Low – c£2/ha

Targeted communications

£150,000 in place Continuous scheme? Minimal

Farm assurance public procurement

Nil – in place Part of evidence provided at tender stage

Assurance scheme type costs c £1,000 per farm

62

Illustration of approach used to estimate policy costs

8.14 For illustration of our approach, the public and private costs of cross

compliance are discussed below in some detail. These were considered

in detail by ADAS in the recent Evaluation of Cross Compliance (ADAS

et al, 2009). Farmer costs were split into administrative costs,

investment costs and production costs. The latter two are analogous to

SAC MACC MM cost effectiveness calculations. The Regulatory

Impact Assessment of Cross Compliance in July 2004 estimated that

the costs per farm varied by farm type, ranging from £730 for a cereal

farm to £350 for a dairy farm. The 2009 evaluation estimated lower

costs than these possibly due to the exclusion of those standards that

were deemed not to provide additional benefits directly attributable to

Cross Compliance.

8.15 The public cost of Cross Compliance was considered in terms of policy

cost, support cost, and inspection costs. These costs relate to over

100,000 farms in receipt of SPS (covering 8.5 m ha).

8.16 The policy cost related to the dedicated personnel at Defra responsible

for the design, management, and development of the policy. Using

standard costs per grade and the amount of effort required, it was

estimated that these costs were of the order of £225,000 per annum

(2008/09 prices).

8.17 Support costs relate to the provision of information and support to

farmers so that they are aware of their obligations and understand them

in order to implement them. These costs include the Momenta Advice

contract as well as the website, guidance booklet, helpline, direct

delivery in regions (face-to-face), admin, press articles, newsletters,

attendance at shows etc. The annual support cost (based upon

2008/09 budgets) is £550,000.

63

8.18 Inspection costs include those relating to the RPA Cross Compliance

Management Unit, report processing and inspection costs for each of

the Competent Control Authorities (CCA) and costs of the stand alone

livestock identification inspection programmes. The total cost of

inspection is around £7.5m per annum. Of this, £5.1m relates to the

inspection of livestock which has a requirement for a 10% inspection

rate as compared to the 1% rate for other Cross Compliance standards.

In terms of the number of inspections, this equates to around 1,100 per

annum for cereal farms, 5,000-6,000 inspections of cattle farms per

annum, and a further 2,000 inspections for sheep and goat holdings.

Overall this equates to £700-800 per inspection.

Scale of mitigation potential and UK GHG Inventory Issues

8.19 There may be high expectations of the abatement that the proposed PIs

could deliver and the Steering Group have stressed that proposed PIs

will need to be practical. The individual policy instrument descriptions

detailed in Appendix 6 set out what each PI may deliver. Care has

been taken with assumptions and use of SAC data to avoid

overestimations and to include potential perverse outcomes such as

pollution swapping or substitution between enterprises that increase

emissions or costs.

8.20 Mitigation methods have different status in the UKGHGI; some are

counted within it, whilst others are not. Table 15 shows the SAC

analysis of methods and their inventory status.

64

Table 15: GHG abatement by method

Method 2022 MTP

Volume Abated [ktCO2e]

Table AC1 - % of method in inventory

2022 tonnage

BeefAn-ImprovedGenetics 50 0% -

BeefAn-Probiotics 111 59% 65

BeefManure-CoveringLagoons 12 0% -

BeefManure-CoveringSlurryTanks 13 0% -

CAD-Poultry-5MW 370 100% 370

Crops-Soils-AvoidNExcess 410 100% 410

Crops-Soils-Drainage 2,493 0% -

Crops-Soils-FullManure 798 20% 160

Crops-Soils-ImprovedN-UsePlants 552 10% 55

Crops-Soils-MineralNTiming 1,088 20% 218

Crops-Soils-OrganicNTiming 747 20% 149

Crops-Soils-ReducedTill 269 0% -

Crops-Soils-SlurryMineralNDelayed 69 0% -

Crops-Soils-UsingComposts 116 20% 23

DairyAn-ImprovedFertility 502 60% 301

DairyAn-ImprovedProductivity 547 100% 547

DairyAn-MaizeSilage 139 140% 195

DairyAn-Probiotics 409 59% 241

DairyManure-CoveringLagoons 49 0% -

OFAD-BeefLarge 106 100% 106

OFAD-BeefMedium 55 100% 55

OFAD-DairyLarge 362 100% 362

OFAD-DairyMedium 64 100% 64

OFAD-PigsLarge 87 100% 87

OFAD-PigsMedium 30 100% 30

Total 9,448 3,439

Source SAC report tables AC1 and AC2 p149-149 (figures in green are ADAS estimates in the absence of SAC estimates). It can be seen that for maize silage the abatement as measured by the inventory would be higher that the abatement potential estimated by SAC. There is an unfavourable effect on CH4 production, in that output per animal increases but this increase is outweighed by the production increase and the knock-on effect of reducing animal numbers.

8.21 The third column shows whether it is in the inventory and the fourth the

estimated proportion of the abatement potential reflected in the

inventory. Those numbers highlighted in green represent ADAS

estimates of percentage of method in inventory where there were gaps

in the SAC report. Of the total MTP of 9.4 mtCO2e only 36% is

estimated to be currently within the inventory, thus drastically reducing

65

the potential for reductions to “count”.

8.22 With regard to so-called „smart inventory‟ methodology, it is hoped that

the results of research yet to be completed will enable greater spatial

resolution of data as well as improved descriptions of processes. At

this stage, it is not possible to put a figure on the proportion of current

emissions that may be captured by „smart inventory‟ methodologies.

One research project, Defra project AC0101, has a timescale of 5 years

and started only recently. The main priority is to develop Tier 2

methodologies4 for all livestock categories and it is hoped to have an

initial draft by the end of 2009. However, even though the methodology

might be changed, calculated emissions can only change if the data are

available. Therefore whilst the models may be developed in order to

improve the methodology, if no data exist, the model will operate on the

same basis as if it was Tier 1.

8.23 Above all Smart Inventory issues are a question of robust data as well

as methodology. The legal basis for carbon budgets under the Climate

Change Act give a greater impetus for the research work on moving to

„smarter inventories‟, but at this point, the outcome cannot be

speculated upon.

4 Tier 1 methods are designed to be the simplest to use, for which equations and default parameter values (e.g.,

emission and stock change factors) are provided in this volume. Country-specific activity data are needed, but for Tier 1 there are often globally available sources of activity data estimates (e.g., deforestation rates, agricultural production statistics, global land cover maps, fertilizer use, livestock population data, etc.), although these data are usually spatially coarse. Tier 2 can use the same methodological approach as Tier 1 but applies emission and stock change factors that are based on country- or region-specific data, for the most important land-use or livestock categories. Country-defined emission factors are more appropriate for the climatic regions, land-use systems and livestock categories in that country. Higher temporal and spatial resolution and more disaggregated activity data are typically used in Tier 2 to correspond with country-defined coefficients for specific regions and specialized land-use or livestock categories.

66

Other considerations

Emissions leakage

8.24 Suppliers of products or processes in England may be disadvantaged in

international markets because they face a carbon price, whereas

competing suppliers of the same or similar products do not. There is a

concern that emissions leakage may occur if production can be moved

to a country or region with no carbon cap thus leading to no (or smaller)

reduction in CO2e.

8.25 With respect to emissions leakage, Greenhalgh et al (2007) state that,

in general, policy design should:

Protect only trade exposed emissions intensive products or

processes (exported or competing with imports) that would

otherwise contribute to significant emissions leakage.

Prevent emissions leakage only where it is cost effective;

address firm/production relocation not financial losses resulting

from higher costs.

Ensure there are sufficient incentives to reduce GHG emissions

intensity in the manufacture of trade exposed emissions

intensive products.

Establish thresholds for identifying those trade exposed

emissions intensive products or processes with significant

potential for emissions leakage. Clearly defining trade exposed

emissions in intensive products or processes is complex and as

some policies will be implemented through firms, they will be

blunt instruments.

Be flexible. As more countries implement climate policies, adjust

the list of trade exposed emissions intensive products and the

extent of protection in response to any changes in price and

trade signals.

67

8.26 Many of the MMs considered in this work are estimated to produce

positive financial returns for their use. What is unclear is whether these

productivity enhancing methods will lead to reduced land use/livestock

to produce the same amount of produce or whether both production

and emissions will increase. Conversely, the environmental

stewardship related MMs all have the impact of taking land out of

production, with resultant potential for leakage. The net position in

terms of leakage will depend upon the extent of uptake of these two

groups of MMs (through the policy mix) and how they interact with each

other in the policy mix.

8.27 For example, a combination of policies which requires arable farmers to

take land out of production for buffer strips would reduce cereal

production but if combined with livestock productivity measures which

reduced the size of the dairy or beef herd (with output maintained) and

encouraged more extensive systems, the demand for cereals would

reduce. The result might be limited or no net leakage for cereal

production. Perhaps the most commonly used methods are N-excess

and Full Manure, given their high cost effectiveness and ease of

implementation. The aggregate effect is a reduction in N fertiliser use;

this may impact on the levels of both livestock and crop production at

the margin and when combined with other methods such as minimal

cultivation and buffer strips, could result in significant leakage.

8.28 For the policy instruments considered in the quantitative assessment,

apart from Cross Compliance (a), none have private cost effectiveness

greater than zero overall i.e. it is financially worthwhile for the farmer to

undertake the methods. The ES MMs are approximately neutral to

those individuals who take them up under a stewardship agreement as

they are compensated for income foregone in ES payments. Where ES

MMs are used in Cross Compliance, no compensation is paid and there

will be a significant cost to farmers. Other MMs with cost effectiveness

greater than zero (i.e. they impose financial costs) are relatively unused

within the instruments considered. The MMs that are cost positive are

68

drainage, covering manure tanks/lagoons and AD plants; these MMs

are only apparent in regulatory instruments on the basis that they are

made mandatory. Given this, it seems that the potential for leakage

might be limited.

8.29 It is possible, however, that private costs relating to the policy

instrument, rather than the MM itself, may alter this position as they are

not included in the SAC MACC calculations which include private costs

related to the method only.

Ancillary impacts

8.30 The importance of ancillary benefits and costs from climate change

mitigation has been acknowledged by the OECD. The ancillary benefits

and costs of climate change mitigation: a conceptual approach, for the

OECD available at http://www.oecd.org/dataoecd/31/46/2049184.pdf).

Although quantification can be a burdensome exercise and is not within

the scope of this project; a “simpler” qualitative approach should be

sufficient to highlight any issues with the development and

implementation of the MMs (and associated policy instruments).

8.31 To this end we consider the categories of environmental goods and

services as set out in the Environmental Accounts for Agriculture

(Defra, 2008b). These accounts provide a framework for measuring

and valuing the positive and negative impacts of agriculture on the

environment. Physical data used was the most recent available and

Appendix 4 of the report5 provides an audit trail of the calculations. The

detail in the sheets contains the original valuation reference and the

amount of environmental asset to which the value is applied. The

tables in these sheets also provide comments on the scale of the

figures used in the accounts and illustrate the considerable uncertainty

(and probable underestimation) in these figures. The figures in the

tables represent the positive and negative environmental flows from

5 Spreadsheets of these accounts can be downloaded from

https://statistics.defra.gov.uk/esg/reports/envacc/SFS0601App4_FINAL_rev4.xls

69

agriculture. The data as reported by the accounts frequently uses

figures for England and Wales combined.

8.32 The values for air emissions are not strictly compatible with the

timescales for the measurement of annual income as for the other

environmental impacts as they represent the present value of the whole

lifetime of damages from units of pollutant emitted in the accounting

year.

8.33 The values for impacts on bathing waters and air quality relate to

valuations of human health (as does the estimate of the social cost of

carbon). The accounts treat the issue of human health as follows:

“Since health impairment is a major cause of the loss of human wellbeing, the inclusion of health impacts in environmental accounts for agriculture is both logical and policy-relevant. Therefore, where agriculture impacts on human health through environmental pathways (e.g. through air or water pollution), these impacts are included in the analysis. However, the study does not include human health impacts that arise directly from agricultural production, such as deaths or injuries from operation of on-farm vehicles as these are regarded as occupational risks and not as environmental costs. Neither does the analysis include chemical residues in food and the impacts of BSE or foot and mouth disease”.

8.34 Figure 4 presents the MMs against the goods and services as defined

in the accounts with the cells coloured green representing positive

impacts and red negative. These are amalgamated in Figure 5 to show

the goods and services against PIs.

8.35 What is clear is that it is the crop related MMs have broader positive

environmental impacts primarily due to their impact on diffuse water

pollution. Drainage has a generally negative impact. The positive and

negative effects indicated are subjective and there will be some

variation due to weather and timing of operations.

8.36 Negative effects come mainly from drainage as follows:

landscape may be changed;

biodiversity affected as habitats dry out;

70

bathing waters may be more easily contaminated as nitrates are

more easily transported downstream;

flood risk may be increased with increased movement of

rainwater.

8.37 Maize cultivation is generally on light soils in spring and there may be

an increased risk of soil erosion compared with the alternative of grass.

Changes associated with switching from high input grass to maize bring

improvements in water quality in bathing waters and estuaries resulting

from reduced inputs of mineral nitrogen, but this is not certain. For

example, if significant rainfall occurred shortly after drilling, this could

result in leaching of nitrates to surface waters that could be carried to

estuaries and bathing waters before the crop has time to take up the

nutrients.

8.38 Positive effects are mainly linked to better management of nutrients

leading to improved water quality through reductions of nutrient losses

in drainage and air quality through reductions in losses of greenhouse

gases and ammonia to the atmosphere. For example, the positive

effect of CAD Poultry 5MW on climate change and air quality results

from the removal of methane and ammonia from livestock emissions.

71

BeefA

n-I

mpro

vedG

enetics

BeefA

n-P

robio

tics

Beef M

anure

-cover

slu

rry lagoons

Beef M

anure

-Cover

slu

rry tanks

CA

D-P

oultry

-5M

W

Cro

ps-S

oils

-Avoid

NE

xcess

Cro

ps-S

oils

-Dra

inage

Cro

ps-S

oils

-FullM

anure

Cro

ps-S

oils

-Im

pro

vedN

-UseP

lants

Cro

ps-S

oils

-Min

era

lNT

imin

g

Cro

ps-S

oils

-Org

anic

NT

imin

g

Cro

ps-S

oils

-ReducedT

ill

Cro

ps-S

oils

-Slu

rryM

inera

lND

ela

yed

Cro

ps-S

oils

-Usin

gC

om

posts

DairyA

n-I

mpro

vedF

ert

ility

DairyA

n-I

mpro

vedP

roductivity

DairyA

n-P

robio

tics

DairyA

n-M

aiz

eS

ilage

Dairy M

anure

-Cover

slu

rry lagoons

OF

AD

-BeefL

arg

e

OF

AD

-BeefM

ediu

m

OF

AD

-DairyLarg

e

OF

AD

-DairyM

ediu

m

OF

AD

-Pig

sLarg

e

OF

AD

-Pig

sM

ediu

m

Buffer

str

ips

Fie

ld c

orn

ers

Woodla

nd m

arg

ins

Affore

sta

tion

Landscape & habitats

Linear features

Biodiversity

Rivers

Lakes

Bathing waters

Estuaries

Abstraction

Provision of waste sink

Agricultural waste

Drinking water

Pollution incidents

Flooding

Soil erosion

Climate change

Air quality

Annual impacts on

society

Annual impacts on

other sectors

Air emissions

Figure 4: Impacts of MMs on environmental goods and services6

6 As considered in the Environmental Accounts for Agriculture

72

Figure 5: Impacts of PIs on environmental goods and services

Exte

nd

Covera

ge o

f th

e N

VZ

a)

Exte

nd

Covera

ge o

f th

e N

VZ

b)

Targ

ete

d C

om

mu

nic

atio

ns

Volu

nta

ry A

gre

em

ents

Farm

Assura

nce p

ublic

pro

cure

ment

X c

om

p a

)

X c

om

p b

)

Enviro

nm

enta

l S

tew

ard

ship

a)

Enviro

nm

enta

l S

tew

ard

ship

b)

Enh

ance C

SF

a)

Enh

ance C

SF

b)

Annual impacts on society

Landscape & habitats

Linear features

Biodiversity

Rivers

Lakes

Bathing waters

Estuaries

Abstraction

Provision of waste sink

Agricultural waste

Annual impacts on other sectors

Drinking water

Pollution incidents

Flooding

Soil erosion

Air emissions Climate change

Air quality

73

8.39 For the Environmental Stewardship MMs, the positive effects are due

largely to a complete absence of the use of mineral or organic nitrogen,

which are both likely to improve water quality and increase biodiversity.

In turn, this may have some effect on the costs of water treatment by

the water companies. It should be noted that whilst the ES MMs show

positive impacts, if there is no new funding for the scheme these

options could be promoted to the detriment of others, thereby

potentially causing unintended negative impacts.

8.40 The positive and negative effects at PI level represent the aggregate

effects of the component MMs. No net negative effects are anticipated

from any of the PIs. This is because in broad terms, they reduce or

make better use of nutrients, decrease losses from soils and increase

carbon sequestration. None, however, affect abstraction or could be

said to provide a waste sink overall or remove agricultural waste,

although there are these components in some of them.

8.41 Whilst Cross Compliance, Environmental Stewardship and Catchment

Sensitive Farming all have a positive effect on reducing soil erosion,

only Environmental Stewardship necessarily reduces flooding (although

the others may contribute).

8.42 The accounts use a range of different methods to estimate the flows

e.g. avoided costs or contingent ranking of pesticide impacts on

biodiversity and these may differ from the nature of the impacts of the

MMs. Estimating the scale or value of the impacts of the MMs is

beyond the scope of this work but Figure 6 shows the value of a 1%

impact (positive or negative) on the account flows and highlights the

most sensitive services.

74

Figure 6: Value of incremental impact on environmental goods and services

Synergies and Interdependencies

8.43 For many of the PIs in place currently or their extensions, there are

significant synergies. For example, extending policies such as NVZs,

CSF, Environmental Stewardship and Cross Compliance to include

GHG abatement would be technically relatively easy. The

administration of such changes would vary depending on the PI, but for

example with Cross Compliance, there may be negotiating issues at EU

level at given negotiating dates that are some years in the future,

namely 2014.

8.44 This also applies to costs where current structures would only need to

be extended to enable additional compliance visits, for example rather

than develop new systems.

8.45 There are also likely synergies in targeted communications and

voluntary agreements where a change of emphasis may be all that is

required.

8.46 Farm assurance is a further area where most of UK farm produce is

now within assurance schemes, notably the Red Tractor logo. Given

the significance of climate change for consumers as well as

75

Government, there is a common need to extend assurance to cover

GHGs.

8.47 With a limited range of MMs and PIs, it is evident that many of the PIs

access the same MMs. There is an obvious need to avoid double-

counting the associated abatement but it would also be important to

consider how best to administer these and develop complimentarity

where possible. Thus it seems clear than information based policies

have a good fit with economic policies to encourage uptake and

minimise costs.

8.48 These aspects should be considered in further work on policy

interactions, but SAC gave some consideration to interactions between

pairs of MMs.

Perverse outcomes/unintended consequences

8.49 This is a highly complex issue, but examples of pollution swapping

include improving land drainage and increasing dairy productivity. In

this case, drainage may be intermittently poor depending on the

weather during the season. So simply installing a drainage system may

or may not result in abatement. In addition, there is the issue of

improved drainage leaching nutrients out of the soil for them to be

subject to secondary emissions later down the chain. These may

cause diffuse pollution in the meantime. This may include ammonia

and other compounds such as phosphate and soil particles.

8.50 Further to this is the potential problem of increased flow of drainage

water from large areas of land adding to the problems of flooding and

the emissions caused by such occurrences along with other

environmental problems.

76

Summary of section 8

Abatement available has been estimated using the MTP (tCO2e) and

allowing for the extent of coverage (the proportion of a method‟s MTP a PI

can target) and uptake (the scale of implementation of a method)

Private costs are all negative apart from ES because the SAC MMs are all

cost negative. However, the presence of barriers to negative cost MMs

(including lack of knowledge and understanding, access to advice, market

factors and tradition) suggests that cost effectiveness may not be a good

indication of uptake.

Policy costs have been estimated in line with current policies and

estimates from previous research on new PIs. However, they remain

poorly defined and need additional work.

For many MMs, the abatement would not register in the UK GHGI due to

the methodologies used.

Smart inventory methodologies are not available at present; while they are

under development, there is a need for data to support them.

Leakage is a risk, but much depends on the policy mix implemented and

the balance of supporting MMs, given the interaction between them.

Ancillary impacts include water quality, air quality, soil erosion, biodiversity,

flood protection and landscape. A qualitative analysis suggests that

impacts are largely positive across a range of public goods and services.

Significant synergies and interdependencies exist between GHG

abatement methods and current PIs enabling some abatement to be

unlocked relatively easily and possibly within the 2012 budget period. This

does not obviate the need for consideration of policy costs or securing

sector support.

Many PIs have access to the same MMs and it will be important to avoid

double counting and ensure that the optimum mix of policies allows

abatement to be maximised within policy constraints.

Perverse outcomes need to be recognised such as the negative effects of

drainage and the leakage issue.

77

9. CONCLUSIONS & RECOMMENDATIONS

Conclusions

9.1 The project was required to consider a range of potential PIs and

associated mitigation methods. Much effort has been expended on the

process of arriving at the policy short list, reviewing the MMs and

revising the SAC MTP abatement estimates but the evaluation and

wider process allows us to draw some key conclusions at this stage:

a. There is a significant amount of uncertainty over a number of areas:

SAC abatement both unit (e.g. kg/ha) and extent (e.g. number of

hectares). The ADAS appraisal of the SAC mitigation potential

indicates that abatement may be around half of that suggested

by SAC.

Variation in mitigation potential between farm types and across

farm sizes. The SAC data only covered three farm types

showing data for one farm in each type. There will be variation

in the mitigation potential between farm type and size due to

every farm being individual. This may impact differently on given

PIs according to the distribution of expected uptake.

Farmer interaction with non-regulatory policy instruments. There

will also be variation between farms in the way they respond to

whether a PI is regulatory, economic or voluntary.

b. There is scope for some early wins in GHG abatement. There is a

good choice of current PIs that could be modified to focus on GHG

with some abatement gains by 2012. These include Targeted

Communications, Environmental Stewardship, Extend CSF and

Extend NVZ. All of the others could be brought in with further work

by 2017. Possibly the earliest might be Public Procurement of farm

assured produce which is already subject to purchasing agreements

and these could be modified to bring in abatement of GHGs.

78

c. Voluntary Agreements will require policy input to be established and

run. The extent of impact is related to the degree of engagement

(given a common set of methods) and an advisory input can deliver

significant benefit e.g. CSF approach.

d. For the regulatory PIs which require formal negotiation on scope e.g.

Extend Cross Compliance, there is likely to be a great deal of work

to do in stakeholder consultation due to the regulatory nature of the

PI. This PI is also significant as it represents the baseline for

Environmental Stewardship.

e. Each of the policy instruments is currently presented on a stand

alone basis (as a PI summary sheet at Appendix 6) but it will be

necessary to prioritise implementation to encourage participation

and maximise reductions. While there are opportunities to deliver

some abatement in time for the first carbon budget through

modification of existing policy instruments, these would need to be

combined with a longer term framework. There is considerable

opportunity for synergy with other policy objectives as well as using

the related policy instruments. As GHG emissions are not spatially

defined, action can be targeted to priority areas for delivery of other

objectives, including biodiversity, water quality, soil erosion, air

quality, flood risk and landscape7.

Limitations and need for further research

9.2 Key limitations identified include:

i. Policy descriptions: All are fairly rudimentary and need more

detailed definition in order to allow a robust assessment of

abatement.

ii. Policy uptake: Some heroic assumptions have been made in

terms of uptake of mitigation methods within policies. Some

engagement with industry would be useful in validating these

assumptions.

7 This is the focus of an LUPG research contract currently being undertaken by ADAS and SAC (Estimating the Scale of Future Environmental Land Management Requirements for the UK) which will report later in 2009.

79

iii. Policy gaps: Anaerobic Digestion is an area that has significant

potential not only to capture abatement in AFLM, but to link with

the waste sector and in turn the energy sector. The significant

sums involved in building AD units and the need to secure gate-

fees from other waste are a significant barrier to widespread

uptake. While there is a significant body of research on the

opportunities for AD and capital grants are available from Defra

and RDAs, more needs to be done.

iv. Policy costs: Additional work needs to be undertaken to quantify

these more robustly and on a common basis.

v. Ancillary impacts: While the qualitative assessment of MM

impacts in this report highlights key synergies and conflicts with

other policy objectives, the analysis at PI level is less helpful and

should be developed further.

vi. Forestry MMs and PIs: Conclusions from the Extension project

are still outstanding; while this report will report separately, the

findings needs to be considered alongside this work in

subsequent research

vii. Additional Methods and PIs: In the medium term further research

is needed to provide evidence for a number of PIs and associated

MMs which were „parked‟ due to lack of data, notably those

relating to peatland.

Recommendations

9.3 Assuming there is broad consensus on the ADAS figures for abatement

potential from this work, the emphasis should be on defining the short

list policy instruments in more detail before any decisions are taken.

This will require some detailed work on the coverage and uptake data,

and characterisation of costs and ancillary impacts for all PIs.

9.4 Extending the research should recognise the scale of the input needed

before any firm recommendations can be made on which PIs to

implement. Key elements of this work would include:

80

resolve uncertainty over abatement potential for key MMs

consider which policy is best suited to capture abatement from the

most promising methods

consider variability of MM cost effectiveness between farm types and

size to ensure realistic estimates of abatement available and effective

targeting of the PI

81

10. REFERENCES

ACCSG (2008): Climate Change and Scottish Agriculture: Report and

recommendations of the agriculture and climate change stakeholder group

ADAS et al. (2009): Evaluation of Cross Compliance. Report for Defra, March

2009. https://statistics.Defra.gov.uk/esg/ace/research/published/index.htm

ADAS et al. (2007): Baseline Projections for Agriculture and Implications for

Emissions to Air and Water, SFF0601 report prepared for Defra, dated July

2007.

ADEME (2008): Charter for Voluntary Carbon Offsetting, prepared for the

French Ministry of Ecology, Energy and Sustainable Development.

AEA Technology (2005): Assessment of Methane Management and

Recovery Options for Livestock Manures and Slurries, report prepared for

Defra, December 2005.

AEA (2008): Policy options development and appraisal for reducing GHG

emission in Wales. Report to Welsh Assembly Government.

Appleton AF (2002): The Working Landscapes Development Authority – A

Concept Paper for Increasing Private Investment in Ecological Services

and Rural Economic Development, May 2002.

Bruce D White Consulting Limited (2006): Methods to Address Agriculture

Sector GHG Emissions, Report to The Ministry of Agriculture and Forestry

Climate Change Policy July 2006

http://www.maf.govt.nz/climatechange/slm/bruce-white/bruce-white-

report.pdf

Canadian Public Policy – Analyse the Politiques, Vol. XXIV, No 3, 1998,

available at

http://economics.ca/cgi/jab?journal=cpp&view=v24n3/CPPv24n3p309.pdf

CCC - http://www.theccc.org.uk/reports/supporting-research/

CCC‟s inaugural report, Building a low-carbon economy – the UK‟s

82

contribution to tackling climate change, is available from the website:

www.theccc.org.uk

Central Iowa Power Cooperative, http://www.cipco.net/contactus.asp

Chadwick D R, J.M. Moorby J M, Scholefield D, B.J. Chambers B J and

Williams J R, A Review of Research to Identify Best Practice for Reducing

Greenhouse Gases from Agricultural and Land Management, Defra Project

AC0206, 2007

Chambers, B.J., Lord, E.I., Nicholson, F.A. and Smith, K.A. (1999). Predicting

nitrogen availability and losses following application of organic manures to

arable land: MANNER. Soil Use and Management, 15, 137-143.

Community and Countryside Research Institute and The Macaulay Institute

(2007) Understanding and influencing positive behaviour change in farmers

and land managers – a project for Defra.

http://randd.Defra.gov.uk/Document.aspx?Document=WU0104_6750_FRP.

doc www.crosscompliance.org.uk

Council Directive 96/61/EC of 24 September 1996 concerning integrated

pollution prevention and control

Cuttle, S., Macleod, C., Chadwick, D., Scholefield, D., Haygarth, P., Newell-

Price, P., Harris, D., Shepherd, M., Chambers, B. and Humphrey, R. (2007)

An inventory of methods to control diffuse water pollution from agriculture –

User manual. Defra final report, project ES0203, 115 pp

Defra (2009) Impact Assessment of Changes to the cross compliance Good

Agricultural and Environmental Condition standards in England

http://www.defra.gov.uk/corporate/consult/gaec/consultation-stage-ia.pdf

Defra and Natural England (2008) Environmental Stewardship: Review of

Progress, available at http://www.Defra.gov.uk/erdp/schemes/es/es-

report.pdf

Defra (2008b) Environmental Accounts for Agriculture, SFS0601

83

Defra (2007) Partial Regulatory Impact Assessment on Proposals to revise

Nitrate Vulnerable Zone (NVZs) Action Programme and extend NVZ

coverage in England, Defra.

Defra (2007) The effects of reduced tillage practices and organic material

additions on the carbon content of arable soils, SP0561.

Defra (2007), Development of „Land‟ Earth Observation Requirements as

Input to the Defra Earth Observation Strategy, DM/65524/RPT/001

Defra (2007) Baseline Projections for Agriculture and implications for

emissions to air and water, Defra project SFF0601

Defra (2006): The United Kingdom‟s Initial Report under the Kyoto Protocol,

20 November 2006.

Defra (2007) The Social Cost of Carbon and the Shadow Price of Carbon:

What They Are, and How to Use Them in Economic Appraisal in the UK

www.defra.gov.uk/ENVIRONMENT/climatechange/research/carboncost/pdf

/background.pdf

Del Prado, A.; Scholefield, D.; Chadwick, D.R.; Mills, J.A.N.; Crompton, L.A.;

Dragosits, U.; Newbold, J.C.. 2007 The implications of farm-scale methane

mitigation measures for long-term national methane emissions. Final

report. Centre for Ecology & Hydrology, 27pp. (CEH Project No: C02749)

(Unpublished)

Del Prado, A., Merino, P., Estavillo, J. M., Pinto, M., & Gonzalez-Murua, C.

(2006). N2O and NO emissions from different N sources and under a range

of soil water contents. Nutrient Cycling in Agroecosystems, 74, 229-243.

Ecologic (2008): Climate Change Mitigation through Agricultural Techniques

– Policy Recommendations, Deliverable D11 PICCMAT.

Environment Agency (2006): IPPC: Intensive Farming – How to Comply,

IPPC Technical Guidance Note, April 2006. Available from

http://www.environment-

gency.gov.uk/commondata/acrobat/ippc_comply_0406_1397535.pdf

84

Environment Agency (nd): Guidance for Operators on Manure Management

Planning for IPPC Installations, available from http://www.environment-

agency.gov.uk/commondata/acrobat/manure.pdf

Environment Agency (2002): Agriculture and natural resources: benefits, costs

and potential solutions.

Fane P (2008), Healthcheck of the CAP Prospects for agreement in Council of

Farm Ministers, Eurinco 2008

Farming Futures (2008): Climate Change Survey – Stage One Report,

provided by Farming Futures.

Forster, D & Levy P Policy Options Development & Appraisal for Reducing

GHG Emissions in Wales ED43483 - Issue 1 AEA Energy & Environment,

2008

Frelih-Larsen1, A. Leipprand1, A, Naumann1, S, Beucher, O, PICCMAT,

Policy Incentives for Climate Change Mitigation Agricultural Techniques

Climate Change Mitigation through Agricultural Techniques, policy

recommendations, 2008

Garnett, T Cooking up a storm, food, greenhouse gases and climate change,

Food Climate Research Network, Centre for Environmental Strategy,

University of Surrey, September 2008.

Greenhalgh, S., Sinner, J., & Kerr, S. (2007). Emissions trading in New

Zealand: Options for Addressing Trade Exposure and Emissions Leakage.

Paper prepared for New Zealand Climate Change Policy Dialogue

IGER & ADAS (2007): A Review of Research to Identify Best Practice for

Reducing Greenhouse Gases from Agriculture and Land Management,

AC0206 report prepared for Defra, dated October 2007.

IGER (2005): Synopsis and Review of Relevant Projects to assess Mitigation

Options for Nitrous Oxide and Methane to Inform the Climate Change

Programme, CC0272 report for Defra.

85

Krupnick, A, Burtraw D and Markandya A the Ancillary Benefits and Costs of

Climate Change Mitigation: A Conceptual Framework. OECD 2002.

Land Use Consultants (2005): Evaluation of accreditation scheme standards.

The way in which public benefits are addressed by UK accreditation

schemes in the land-based sector. Final report produced for the

Countryside Agency.

Ludington, D and Johnson, E L Dairy Farm Energy Audit Summary FlexTech

Services, New York State Energy Research and Development Authority

July 2003.

McManus W (2008): Financial Performance of Wheat and Oilseed Rape

Farm Enterprises Following Adoption of Greenhouse Gas Emissions

Reduction Techniques, MSc thesis, Imperial College London.

MAFF (2000) Fertiliser recommendations for agricultural and horticultural

crops (RB209): Seventh edition

www.defra.gov.uk/FARM/environment/land-manage/nutrient/fert/rb209/

Market Mechanisms for Reducing GHG Emissions from Agriculture, Forestry

and Land Management, Defra project SFF0602, 2007.

Milne R (nd): Land Use Change and Forestry: The 1999 Greenhouse Gas

Inventory for England, Scotland, Wales and Northern Ireland. Centre for

Ecology and Hydrology.

NAEI 2008 http://www.naei.org.uk/index.php

NFU/CLA/AIC Climate Change Task Force (2007): Part of the Solution:

Climate Change, Agriculture and Land Management, available from

http://www.agindustries.org.uk/content.output/1662/1662/Cross%20Sector/

News%20and%20Current%20Activities/Climate%20Change%20Report%2

0by%20AIC%20-%20NFU%20and%20CLA%20-

%20Part%20of%20the%20Solution.mspx

O‟Hara, P, Freney J and Ulyatt, M, Abatement of Agricultural Non-Carbon

Dioxide Greenhouse Gas Emissions, A Study of Research Requirements

86

Report prepared for the Ministry of Agriculture and Forestry, ISBN No. 0-

478-07754-8 May 2003

Owen, L., Seaman, H. & Prince, S. (2007): Public understanding of

sustainable consumption of food.

Oxera, Policy Instruments for the Control of Pollution of Water by Diffuse

Agricultural Sources, report for Defra 2003

Pareto Consulting (2008): Reviewing and Developing Agricultural Responses

to Climate Change, CR/2007/11 report to the Scottish Executive, February

2008.

Planning Land Applications of Nutrients for Efficiency and the Environment;

www.planet4farmers.co.uk

RPA (2004): Review of Key Issues Related to Economic Instruments to

Reduce the Environmental Impact of Pesticide Use, report prepared for

Defra, April 2004.

RPA (2003): Water Framework Directive – Indicative Costs of Agricultural

Methods, report prepared for Defra, July 2003.

RPA (2002): The Role of Economic Instruments in Managing Diffuse

Pollution: A Focus on Nitrogen, Report No. 462 prepared for English

Nature, April 2002.

Schils, R.L.M. (2008). Nitrous oxide emissions from multiple combined

applications of fertiliser and cattle slurry to grassland. Plant and Soil 310

89-101.

Smith, K.A., Brewer, A.J., Crabb, J. and Dauven, A (2001) A survey of the

production and use of animal manures in England and Wales; II. Poultry

manure. Soil Use & Management, 17, pp 48-56.

Smith, K.A., Brewer, A.J., Crabb, J. and Dauven, A. (2001) A survey of the

production and use of animal manures in England and Wales. III. Cattle

manures. Soil Use & Management, 17 (2), pp 77-87.

87

Stevens and Laughlin (2002) Slurry timing affects emissions of nitrogen

gases. Journal of the Soil Science Society of America 66 647-652

Thorman, R. E., Sagoo, E., Williams, J. R., Chambers, B, J., Chadwick, D. R.,

Laws, J. A. & Yamulki, S. (2007). The effect of slurry application timings on

direct and indirect N2O emissions from free draining grassland. In: Bosch,

A., Teira, M. R., Villar, J. M. [eds]: Proceedings of the 15th Nitrogen

Workshop: Towards a better efficiency in N use, Editorial Milenio, Lleida

(Spain), pp.297-299.

University of Hertfordshire, Research into the current and potential climate

change mitigation impacts of environmental stewardship Defra Project

BD2302, 2007.

University of Nottingham (2003): Mitigation of Greenhouse Gas Emissions

from Agriculture: Socio-economic Costs and Impacts, CC0262 report

prepared for Defra, dated February 2003.

Unwin R, Environmental Stewardship and Improved GHG Mitigation -

Amending Current, and Introducing New, Options Defra project- BD2305,

2008

88

Appendix 1 - Background to SAC Marginal Abatement Cost Curves

With the work in this project being so closely related to the SAC work

(RMP/4950), it is important to understand the background, the use of MACCs

(Marginal Abatement Cost Curves), approach, mitigation, uncertainty, ancillary

costs and benefits and relation to the UKGHGI. This note outlines some of

the key approaches used and messages that can be drawn from the CCC-

commissioned SAC project to develop marginal abatement cost curves

(MACCs) for the agriculture and LULUCF sectors8.

In particular the note covers:

introduction to the MACCs and CCC‟s use – why they were developed and

how they have been used by CCC;

coverage of the MACCs – what costs are included and excluded, what

qualitative assessments are available of unquantified costs

uncertainty – its treatment in the CCC MACCs and suggested treatment in

the ADAS project

some key results – headline abatement potential, life-cycle effects,

ancillary impacts

CCC’s use of the MACCs

Under the Climate Change Act (2008) the Committee on Climate Change

(CCC) was created and asked to propose carbon budgets to government –

legally binding five-year caps on UK emissions9. As part of the work to

determine suitable carbon budgets and in advising whether budgets should be

set in only CO2, or all Kyoto greenhouse gases (GHGs), CCC have

considered feasible potential to reduce emissions across the UK economy.

That work involved developing MACCs for different sectors of the economy, of

which agriculture and LULUCF (ALULUCF) was one.

8 For the full report, please see: http://www.theccc.org.uk/reports/supporting-research/ 9 CCC’s inaugural report, Building a low-carbon economy – the UK’s contribution to tackling climate change, is available from the website: www.theccc.org.uk

89

At the same time CCC considered what a suitable emissions reduction would

be, given: appropriate contribution towards global emissions reduction;

required emissions reduction in preparing for an 80% reduction in all

greenhouse gases across all sectors by 2050; the EU framework.

Synthesising these analyses CCC conclude that a suitable emissions

reduction (of 42% by 2020 against 1990 levels, under a global deal to cut

emissions) can be achieved through reductions in energy CO2 emissions and

some purchase of offset credits. Government is advised to immediately put in

place policies to unlock this potential. Identified potential in non-CO2 gases

(including from agriculture) is considered to be less certain, and to be harder

to unlock given existing policy frameworks. As such, CCC recommend that

non-CO2 emissions reduction potential is pursued as part of prudent budget

management and as an opportunity to meet carbon budgets at minimum cost.

Particularly, CCC stress that in the agriculture sector analysis of abatement

options is at a far earlier stage than in other sectors. For example, MACCs for

energy CO2 have been constructed for years, and sophisticated models such

as MARKAL exist, bringing together a systems wide approach, with bottom-up

estimates for costs of a multitude of potential technologies across the energy

sectors and optimisation to choose the cheapest package of technologies

right out to 2050. By contrast, SAC‟s work was one of the first to develop any

MACC for the agriculture sector, and was the first to look out to 2050 and

include estimates specifically for 2012, 2017 and 2022 (the last years of the

first three carbon budgets).

Additionally CCC note the importance of a range of issues raised in

agriculture, which are not directly built into the MACC (e.g. on animal welfare

and local environmental issues), and the need to develop a policy framework.

The section of CCC‟s report that deals with these issues is reproduced in

annex 1 of this note.

90

One of the issues raised is competitiveness. It is worth noting that CCC‟s

report also covers competitiveness in the context of the EU ETS in another

chapter (10). That chapter concludes that competitiveness is only an issue in

principle for a few sectors that are exposed to carbon pricing – notably those

where carbon pricing would increase production costs by a significant

proportion of GVA (e.g. more than 10%), where there is significant trade

intensity with countries not imposing carbon pricing (e.g. over 15%), and

where the UK product is not significantly differentiated so that consumer

choice is mainly price driven. Even for those industries it is suggested that

design of the policy mechanism can prevent significant leakage occurring

under carbon pricing.

The approach taken in the ALULUCF MACC

SAC‟s work has the advantage of building in a number of features that are

integral to all MACCs developed by CCC. As such its results are generally

comparable to those of abatement options identified by CCC in other sectors,

and to prices for offset credits. The work has built on several previous projects

and international evidence, and is the latest and most comprehensive analysis

of its type available. SAC used a range of expert working groups in forming

their assumptions and discussed methodological approaches at length with

CCC project managers, a Defra steering group and at a workshop of informed

and interested parties. Prior to the ADAS policy project however, the SAC

work has not been formally peer reviewed.

This section now outlines some of the key aspects of the SAC work:

(i) Basis for abatement potential (AP)

AP is constructed throughout on an „IPCC basis‟, i.e. it methods the

potential to reduce emissions attributable to the UK. It does not include

impacts on overseas emissions or on UK purchase of offset credits.

91

AP is method against the baseline activity and emissions in Defra‟s BAU3

projections for the given year of the MACC.

AP is permanent and ongoing once a method is introduced – i.e. once

nitrogen fertiliser use is reduced it will give emissions savings against the

baseline year after year. [Note that AP from afforestation is the one

notable exception to this rule.]

Abatement methods that would clearly imply displacement of emissions to

overseas are ruled out (e.g. simple reduction in livestock numbers). Those

that imply a risk of displacement are highlighted in the report.

(ii) Interactions between methods

SAC allow for the interactions between methods by fairly simplistic

assumption. This means for example that where reduced nitrogen excess has

already been implemented the impact of improved timing of application is

reduced. This is key to getting a realistic method of abatement potential for a

package of methods, and in this analysis is captured by using „interaction

factors‟, which are set by assumption for each potential pairing of methods.

(iii) Technical and feasible potential

Technical potential estimates the full abatement that could be achieved were

a method to taken up at all possible locations where it is not already in place

in the baseline. Note that this is regardless of how expensive such an option

would be or on how likely farmers would be to undertake the method.

Feasible potential takes a view of how much of this potential is realistically

achievable using imaginable policy instruments and given barriers to

implementation. For SAC‟s work, feasible potential is not evaluated in detail

on a case by case basis. Rather a generic scaling factor is applied – 45% for

central feasible potential, 85-92% for high feasible (dependent on how easily

a method can be monitored and enforced), 7-18% for low feasible (depending

on how costly a method is). These scaling factors are based on historic

success of incentive-based, regulatory and voluntary methods. Additionally in

the CCC analysis ionophores are excluded from feasible potential since they

are currently banned in the EU. They are replaced as an option by probiotics

92

in the MACC.

(iv) Basis for costs

Costs are derived on a net present value (NPV) basis over the lifetime of a

method. Capital costs are annualised at a social discount rate (3.5% in line

with HMT Green Book guidance) for the headline figures reported by SAC and

CCC. Changes to costs and revenue streams are reflected in the costs,

excluding taxes and subsidies (which are transfers, rather than resource

costs) and with future impacts discounted at 3.5%. The MACC model gives

the flexibility to change these discount rates, and sensitivity with a private rate

of 7% is provided by SAC.

(v) Ancillary costs and benefits

The SAC project did not quantify ancillary costs and benefits (e.g. from

effects on water pollution, etc), although the MACC model has been set up

with placeholders for this data in future. SAC did undertake a qualitative

assessment of the potential ancillary impacts of each abatement method

analysed. A similar task was undertaken for life-cycle impacts.

This assessment is reproduced in annex 2 (it is annexes A and B of the

SAC report), and could easily form the basis of a simple scoring

assessment for the ADAS policy project.

It is notable that crops and soils methods generally have positive ancillary

impacts, and are likely to have positive life cycle impacts. Livestock

methods are more likely to have negative external impacts.

MACC potential and the UK inventory

SAC give an indication of how much of the identified abatement potential is

likely to be reflected in the UK‟s greenhouse gas inventory as currently

compiled. They distinguish between methods that would be directly included

(such as reducing nitrogen excess, which implies less fertiliser is applied,

which would be fully reflected in the inventory) and those with indirect effects

(such as improved fertiliser timing, which mainly impacts N2O as more of the

applied fertiliser is taken up by the crop, which would not be captured in the

93

inventory, but also implies some reduction in fertiliser use, which would be

recognised).

This is covered in annex C of SAC‟s report, reproduced as Appendix 3 here.

Uncertainty and specific assumptions

SAC did not undertake any formal assessment of uncertainty, nor do they

provide ranges or confidence intervals around their estimates. This is in part

due to time constraints on an already large project, and in part reflects the

approach of the CCC, which called for an estimate of what level of abatement

could reasonably be thought to be cost effective across the sector. The

approach of cutting back technical potential to an estimate of feasible potential

is also hoped to capture the uncertainty inherent in the estimates. However,

for the policy instrument project, rather than use the range that different

feasible potentials would imply, the range used should be based on an

assessment of what proportion of technical potential (e.g. 25-50%) would be

unlocked by particular policy instruments.

SAC are clear throughout their report that constructing the MACC for

agriculture requires many assumptions to be made where there is not always

good data available. Their approach to this was to use expert groups to come

to suitable judgements. It is inevitable that a case can be made for a higher or

lower figure in each specific case, but, having aimed for a central view across

the board, SAC state that it „is hoped that in aggregate across the various

cost-effective methods identified these assumptions are fit for purpose‟

(comparisons of aggregate figures to previous studies suggest this to be

broadly the case).

Rather than start to tweak specific assumptions then, which may imply biases

are introduced (particularly if interaction factors are not altered to reflect new

assumptions), it is suggested that follow-up projects quote the SAC figures,

and quote alternatives alongside them where particular contentions arise.

Key Results

The key abatement methods that come through as attractive from the SAC

94

MACC can be grouped into four categories (there are a few minor methods

that are not covered by these and are responsible for about 0.25Mt CO2e of

the 6Mt central feasible potential – reduced tillage, beef genetics, and maize

feed)10:

(i) Improved nitrogen efficiency

When nitrogen is applied to soils it is not necessarily all taken up by the plants

– the most important set of abatement options are related to reducing the

nitrogen not taken up. These methods have positive life-cycle and ancillary

impacts, but are generally limited in how far they are reflected in the UK

inventory.

The main methods are:

Improved Drainage (1.5Mt CO2e central feasible potential in 2020 at around

£20/tCO2e): Wet soils can lead to anaerobic conditions favourable to the

direct emission of N20. Improving drainage can therefore reduce N2O

emissions by increasing soil aeration, hence reducing wet conditions.

Improving land drainage has significant one-off costs and recurring costs.

These costs are likely to be offset by increases in yield; it is estimated that

improving drainage will increase yields by 10%.

Full allowance for manure Nitrogen (N) supply (0.7Mt, -ve cost):

Manure contains nitrogen. In some cases it will be applied to fields without

properly accounting for the nitrogen it contributes to plants – inorganic

fertiliser will then be applied as well. Full allowance of the nitrogen in

manure can result in a reduction in inorganic fertiliser use, and again

reduced excess in the soil. Manure fertilisers are also more likely to be

applied when the crops will make most use of it (e.g. in spring).

Improved timing of mineral fertiliser (0.6Mt, -ve cost): Essentially this is

matching the timing of application with the time the crop will make most

use of it, hence reducing what‟s left in the soil, i.e. avoiding applying

fertiliser when the crop is not growing, or when there is no crop. Both these

methods are essentially best practice and should not entail any additional

10 See annex 4 for a table of abatement methods with their maximum technical potential and cost effectiveness

95

costs (providing adequate storage is available). In fact, improving timing

should result in small (3-5%) increases in yield through more efficient use

of the nutrients.

Improved timing of organic fertiliser (0.4Mt, -ve cost): The same, but for

manures and slurries.

Plants with improved N Use (0.3Mt, -ve cost): Different plant species

utilise N with different levels of efficiency. There should therefore be scope

for selectively breeding plants that utilise N more efficiently. Adopting new

plant varieties that can produce the same yields using less N would reduce

the amount of fertiliser required and the associated emissions. SAC

assumed that new varieties will be able to produce current yields with 30%

less N fertiliser, but note that doing this without adverse effects on other

important characteristics could take many years.

Avoiding N Excess (0.2Mt, -ve cost): Simply avoiding applying more than

plants need. No effect on yield; reduces costs.

Separating slurry and fertiliser applications by several days (0.04Mt, -

ve cost): Avoids bringing together easily degradable compounds and

higher moisture content, i.e. bad conditions for N2O release. Requires

storage facilities.

Using composts (0.07Mt, £0): Composts provide a more steady release

of N than slurries and increase anaerobic conditions less; thereby loss of

nitrous oxide is avoided. There should be no significant costs associated

with this method, assuming yield can be maintained (which SAC do).

(ii) Livestock genetics and feed

Main abatement options are:

Improved breeding of dairy cows (0.6Mt, -ve cost) – focusing breeding

goals to select animals with (further) improved productivity and/or

improved fertility (which has fallen since 1995). These involve the use of

genetic improvement tools – indices and data that help effective breeding

selection. Higher fertility and productivity both mean that the same amount

of milk can be produced from a smaller herd. Since the UK produces milk

96

to a quota this implies a reduction in livestock numbers and hence a

reduction in emissions.

Probiotics for beef and dairy cows (0.3Mt, -ve cost) – Probiotics are a

dietary additive that affects the digestive process so that more acetate is

produced and less methane. There is an added benefit in that acetate is a

source of energy for the animal and therefore can improve overall

productivity of the animal. This is an option in the feasible scenario that

replaces the use of ionophores in the full technical potential – ionophores

are another feed additive, but are currently banned in the EU due to

concerns over potential side-effects

(iii) Anaerobic Digestion

Anaerobic Digestion (0.6Mt, cost -£10 to +£10 /tCO2e): Options cover on-farm

AD for large and medium beef, dairy and pig farms and centralised AD from

poultry litter transported first to a centralised location off-farm. The bulk of the

emissions saved here are because the CO2 released from burning the

captured gas is over 20 times less potent than the methane otherwise

released.

(iv) Forestry mitigation methods

SAC‟s analysis was useful in giving an indication of potential levels of

abatement from forestry (1 Mt CO2e per year from sequestration), but it was

not sufficiently detailed to suggest what the most suitable precise mitigation

methods might be. In particular, the scaling factor applied to get to feasible

potential allowed for the possibility of some broadleaf planting in place of the

conifers assumed in the maximum technical potential, but SAC did not for

example consider the total achievable lifetime abatement or path of

abatement from different tree types – either when harvesting and substitution

is assumed, or when forests are assumed to be left standing. For example –

since afforestation offers only „one-off‟ potential it may be interesting to

consider planting trees that offer the most sequestration potential per hectare,

regardless of growing rates. In contrast the potential for substitution benefits,

and to the extent that early abatement is valued higher than future abatement

(which need not be the case under rising abatement costs), may suggest that

97

quick growing species are preferred. Harvesting potential affects cost

effectiveness of course.

98

Appendix 2 - Emissions Reduction Constraints and Policy Framework

This background information is taken from the CCC‟s inaugural report

[Chapter 9.3. (iii)] and sets out the key constraints to GHG emission reduction

and the policy framework context.

Emissions reduction constraints

There are a number of constraints which would have to be addressed through

development of the policy framework if agricultural emissions reduction

potential is to be unlocked. These are similar to constraints in the context of

energy efficiency improvement for households and firms:

There may be some inertia to changing practices

Farmers may not be able to invest time in finding out what new practices

may be appropriate

Farmers may lack capital required to invest in new technologies

The financial benefit of adopting new practices/investing in new

technologies may be small at the farm level (not withstanding that the

saving may be large for the sector as a whole).

The policy framework

The agricultural sector does not currently have any policies focused directly

on reducing non-CO2 emissions. We would expect some emissions reduction

to occur under the current framework (e.g. due to continuing CAP reform and

Environmental Stewardship), but these would not include the bulk of realistic

emissions reduction potential that we have indentified.

In developing the policy framework to provide more focus on and stronger

incentives for emissions reduction, there are at least three options that should

be considered:

Direct regulation: practices that have been proven to reduce emissions at

reasonable cost would be mandated.

Voluntary agreements: as with direct regulation, but practices would be

implemented on a voluntary basis. Incentives for voluntary implementation

99

could be strengthened if emissions reductions were allowed to be sold in

carbon markets.

Grants, subsidies, charges, levies and taxes: these would provide financial

incentives for emissions reduction.

Information provision: encouraging awareness of best practice could result

in emissions reduction.

There are a number of complexities that relate to one or more of these

options:

There is currently limited measurement of emissions at farm level. This

precludes the introduction of systems that provide financial rewards for

emissions reductions. Moreover, the use of aggregate factors means that

much of the abatement identified in our analysis would not be recognised

in the current UK national emissions inventory.

Introducing a price on emissions would raise costs. To the extent that

agriculture is a globally competitive industry, this could result in

displacement of production abroad with no environmental benefit.

The administrative cost of incentive mechanisms for reducing emissions

could be high given the diffuse nature of the farming industry.

There are multiple policy objectives for agriculture. Policy focused on

achieving one objective will often have implications for other objectives. It

is not necessarily the case therefore, that a policy that has positive impacts

from a climate change perspective should necessarily be regarded as

desirable.

In our view, however, none of these complexities should be seen as

prohibitive and further effort is warranted in resolving them. For example:

Better measurement of emissions will be available in the future as the UK

develops a new smart emissions inventory.

100

Whilst competitiveness may be a concern in principle, there is little

evidence to say that it should be a concern in practice.

Regarding administrative costs, there are other areas of the economy

where there are diffuse sources of emissions, and where policies have

been introduced to reduce emissions (e.g. energy efficiency).

`And it is not clear that policies to support emissions reduction would have

sufficiently large adverse impacts for other objectives that they should not

be pursued.

The Committee recognises the multiple policy objectives and various

sensitivities related to agriculture, but believe that the sector can contribute to

tackling climate change whilst achieving other objectives. Given the

significant realistic potential that our analysis suggests exists in agriculture,

this sector could provide an important means for meeting GHG budgets. Our

high level assessment suggests that there are barriers which can be

potentially addressed. Our recommendation is that the government seriously

considers developing a policy framework for agriculture focused specifically

on climate change and reducing emissions.

101

Appendix 3 - SAC Assessment of Ancillary Costs and Benefits

Methods costing below £40 / tCO2e, and with CFP > 50ktCO2e in 2022 are

highlighted; those with CE>100 are not likely to be desirable

Table 16: SAC assessment of ancillary costs and benefits

Method Potential ancillary

cost/benefits LCA-Systems Observation

MACC rank (2022, CFP, S)

Using biological fixation to provide N inputs (clover)

Water quality improvement due to reduced run-off

Lower externalities from N production/transport

Improved biodiversity

Greater land take for arable to counteract reduced yield

Reduced yields of crops, massive effects on land use, possible relocation of livestock nationally.

15 (CE>100)

Reduce N fertiliser

Water quality improvement due to reduced run-off

Lower externalities from N production/transport

Greater land take for arable to counteract reduced yield

Long term yield reductions expected (increases cultivation energy per t), particular problems with bread wheat quality and N supply.

13 (CE>100)

Improving land drainage

Water quality improvement due to reduced run-off

Good as long as yield up for same N in, expect more P and K as off take increases.

9 (0<CE<100)

Avoiding N excess

Water quality improvement due to reduced run-off

Lower externalities from N production/transport

Good rational use of resources, but how widespread these days?

6 (CE<0)

Full allowance of manure N supply

Lower externalities from N production/transport

Increased road transport externalities (congestion, noise, accidents, infrastructure, fuel use) from manure transport

Potentially higher land take for arable to counteract reduced yield due to nutrient variability

Excellent rational use of resources and will provide positive benefits. The practical challenge is in implementation because manures, especially solid, have variable chemical properties.

3 (CE<0)

Species introduction (including legumes)

Water quality improvement due to reduced run-off

Lower externalities from N production/transport

Increasing N utilisation efficiency must be good, secondary effects may be larger.

10 (CE>100)

Improved timing of synthetic fertiliser N application

Water quality improvement due to reduced run-off

Secondary effect may be in more N applications, so more fuels, but expect 2

nd order.

1 (CE<0)

102

Method Potential ancillary

cost/benefits LCA-Systems Observation

MACC rank (2022, CFP, S)

Controlled release fertilisers

Higher externalities from N (urea) production

Increased run-off if N release assumptions not realised

Urea takes more fossil energy (i.e. CO2 release) to produce 1 kg N than NH4NO3. What are these ones? NH3 field losses from urea tend to be higher than. Need to allow for sub-optimal performance. Great potential if all benefits fully realisable.

12 (CE>100)

Nitrification inhibitors

Higher externalities from manufacturing

Must allow for manufacturing energy costs and CO2 emissions and possible extra field applications.

11 (CE>100)

Improved timing of slurry and poultry manure application

Water quality improvement due to reduced run-off

Good rational use of resources. Can be practical conflict in timing field operations, sometimes causing cropping changes, e.g. winter to spring.

2 (CE<0)

Adopting systems less reliant on inputs

Water quality improvement due to reduced run-off

Biodiversity improvement (on-farm)

Potentially higher land take for arable to counteract reduced yield

Expect land use changes; must allow for long term effects of yield of reductions in inputs.

14 (CE>100)

Plant varieties with improved N-use efficiency

Water quality improvement due to reduced run-off

Excellent, secondary effects of more P and K with more off take

4 (CE<0)

Separate slurry applications from fertiliser applications by several days

Water quality improvement due to reduced run-off

May need extra slurry storage, may be conflict in field operation timing causing secondary effects.

8 (CE=0)

Reduced tillage / No-till

Reduced soil erosion

Water quality improvement

Also affects cultivation energy, hence reduced fossil CO2, more herbicides needed, not always possible to maintain indefinitely, hence soil C storage potential reduced, not for all crops (e.g. potatoes).

5 (CE<0)

103

Method Potential ancillary

cost/benefits LCA-Systems Observation

MACC rank (2022, CFP, S)

Use composts, straw-based manures in preference to slurry

Lower emissions from N production/transport

Higher emissions from manure storage

Increased road transport externalities (congestion, noise, accidents, infrastructure, fuel use) from straw transport

Must allow for emissions in housing and manure storage (both direct GHG and N as NH3), changes in housing systems from slurry to straw (both capital and higher running fossil energy costs), transport of straw to areas where not currently grown and effects on land where straw was once incorporated in soil.

7 (CE=0)

Animal management

Increased high starch concentrate in diet

Increased arable production impacts

Reduces enteric CH4, but land use changes (more arable per unit output), possible loss of soil C if more grassland cultivated.

# Potential

reduction of “free” beef calf supply through higher productivity (PRBC).

CE>100

Increased maize silage in diet

Increased arable production impacts

Needs higher protein concentrates for dairy. Limits on land suitability for maize. PRBC.

CE<0

Propionate precursors

Manufacturing externalities

Public/consumer acceptance

Need to allow for fossil energy (CO2 emissions) in manufacture. PRBC.

CE<0

Probiotics Manufacturing externalities

Public/consumer acceptance

Need to allow for fossil energy (CO2 emissions) in manufacture. PRBC.

CE<0

Ionophores Manufacturing externalities

Public/consumer acceptance

Need to allow for fossil energy (CO2 emissions) in manufacture. PRBC.

CE<0

Bovine somatotropin

Manufacturing externalities

Public/consumer acceptance

Need to allow for fossil energy (CO2 emissions) in manufacture. PRBC.

CE>100

Improved genetic potential for dairy cows – productivity

Public/consumer acceptance

Animal health/welfare

Potential benefits of smaller cows with capacity to digest more forage. PRBC. Extra benefit if male dairy calves have enhanced beef potential.

CE<0

Improved genetic potential for dairy cows – fertility.

Public/consumer acceptance

Animal health/welfare

Reduced overheads. PRBC.

CE<0

104

Method Potential ancillary

cost/benefits LCA-Systems Observation

MACC rank (2022, CFP, S)

Improved genetic potential for beef cattle

Public/consumer acceptance

Animal health/welfare

Little effect if the improvement is only better nutrient utilisation, if higher performance requires a dietary change, some land use is implied

CE<0

Transgenic manipulation of ruminants

Public/consumer acceptance

Animal health/welfare

PRBC CE>100

Manure management

Covering lagoons

Potential air quality (ammonia) impacts

Water quality improvement

N losses as NH3, N2 and N2O reduced, so potential fertiliser N savings, but require low loss applicators. Water management can save money in wet areas, but cost more in drier. Must include fossil energy of cover.

0<CE<100

Covering slurry tanks

Potential air quality (ammonia) impacts

Water quality improvement

As above 0<CE<100

Switch from anaerobic to aerobic storage – tanks

Potential air quality (ammonia) impacts

Water quality improvement

CH4 emissions reduced, but N2O emissions increase and must allow for fossil CO2 from electricity. More N lost as NH3, so less synthetic N fertiliser replacement is possible and secondary N2O emissions occur. Side benefits of odour control.

Dairy, Pigs: CE>100

Beef: 0<CE<100

Switch from anaerobic to aerobic storage – lagoons

Potential air quality (ammonia) impacts

Water quality improvement

As above D, B: 0<CE<100

P: CE>100

Anaerobic digestion

Water quality improvement

CAD: Increased road transport externalities (congestion, noise, accidents, infrastructure, fuel use)

CAD: Higher emissions from N production/transport to replace digestate nutrients

CAD: Externalities associated with digestate disposal if not utilised for N

Variable depending on whether other wastes are imported and on the on-farm use of generated electricity and heat. A side benefit of the Holsworthy operation was much better manure management by participating farmers because each load of digestate had an analysis certificate for NPK and was easier to spread than raw manure.

CE variable

(-6 <CE<113)

105

Appendix 4 - Assessment of the Policy Instrument Long List

The long list of policy instruments was evaluated on the basis of whether each

policy should stand on its own or could be included in other current or new

policies to produce the proposed short list. This process was carried out with

the assistance of the Steering Group and others in Defra, Natural England,

the Environment Agency and the Forestry Commission.

The abatement potential of each policy instrument was then assessed using a

spreadsheet based tool.

106

Table 17: Voluntary Policy Instruments (long list)

Type of Instrument

Description Outcome of assessment

Include GHG Emissions in Farm Assurance Schemes

Use public procurement to provide a lead on extending GHGs in farm assurance

Included. Public procurement: Farm Assurance Schemes can advise for example on using carbon footprinting tools.

Public sector procurement

Targeted Communications through Farming Futures

Included. This has been successful and is a worthwhile policy that needs re-focusing – accompanying measure.

Encourage Use of GHG Measurement Tools

BSI Standard PAS 2050

Not included but likely to be part of other PIs.

CALM Tool

Product Roadmaps

Environmental Management System

Not included but likely to be part of other PIs.

Voluntary Agreements for Reducing GHG Emissions

Included. Many farmers will reduce emissions as part of their future farm development in response to economic conditions e.g. LEAF.

Voluntary Offsetting of GHG Emissions

Excluded. Unlikely to happen to any significant extent. Most farmers likely do so within the current framework.

Voluntary Scheme to Encourage Peat Restoration

Not included -no methods in the SAC MACC, but loss of peat must be avoided. Further work required

Nutrient Management Plan

Not included but within other PIs e.g. NVZ

Enhance the Implementation of Environmental Stewardship

Increase Payment Level for Peat Restoration

Not included -no methods in the SAC MACC, but loss of peat must be avoided. Further work required

Included GHG Emissions as part of Farm Environmental Record (FER)

Not included explicitly. No SAC MACC MMs but included in extension project as increase in field margins and corners (the most effective options for abatement)

Offer Longer-term Agreements for Restoration and Creation Options

Not included. ES included in general terms in extension project as increase in field margins and corners (the most effective options for abatement)

Include Additional Management Criteria

Increase Payments for Certain Land Use Changes

107

Table 18: Economic Policy Instruments (long list)

Type of Instrument Description Outcome of assessment

Enhance the Woodland Grant Scheme

Increase Payment Rates to Encourage Additional Planting

No included. All forestry/biomass taken into extension project.

Issues with respect to abatement counting in other sectors Tailor Payments to

Favour High Sequestration Species

Payments to Encourage Continuous Cover Forestry

Payments to Change Rotation Lengths

Enhance Challenge-funded Schemes for Forestry

Auction 'top-up' grants to encourage higher sequestration rates

Enhance Energy Crops Grant Scheme

Extend Catchment Sensitive Farming (CSF) Incentive

Included.

Link abatement methods to Renewable Obligation (RO) Certificates

Not included. ROCs are for energy based schemes where measurement is verifiable in terms of CO2 produced, such as burning short rotation coppice or methane from AD to produce electricity.

Public Sector Procurement

Included.

New Grants to Encourage Abatement Methods

Not included. But could be essential to achieve methods with capital investment such as AD.

Incentive Scheme linked to Nutrient Management Plan

Performance Bonds Not included. Could be included in other ways in other PIs, e.g. Cross Compliance.

Credits linked to Nutrient Management Plans

Convert FC Estate Policies to Increase Sequestration Rates

All forestry options in extension project.

Abandonment of Open Habitats Policy

National Strategic Rural Land Use Programme

108

Table19: Regulatory Policy Instruments (long list)

Type of Instrument Description Outcome of assessment

Enhance the Implementation of the Nitrates Directive

Include Additional NVZ Measures in the COGAP

Included within Cross Compliance option of NVZ PI

Extend the Geographical Coverage of the NVZ

Included.

Enhance the Implementation of the IPPC Directive

Lower Limits for Methane and Nitrous Oxides Emissions under Environmental Permitting Regulations (EPR) EPR on Pig Farming

Not included. IPPC is aimed at large businesses with trained personnel. It would be a burden to smaller farms and there are less costly ways of achieving abatement. Issues of leakage

Lower Limits for Methane and Nitrous Oxides Emissions under EPR on Poultry Farming

Application of EPR to Cattle Farming at Current Limits

Application of EPR to Cattle Farming at Lower Limits

Enhance Animal Welfare Regulations

Reduce Stocking Densities Not included. No SAC MACC MM and issue of leakage or animal welfare Increase Stocking Densities

Set Legally Binding Targets for Emissions

Not included. Potential for leakage

Regulation of Private Forestry

Specification of Species and Yield Classes for Planting/Re-stocking

All forestry options in extension project.

Specification of Ground Preparation/Re-stocking Methods

Specification Rotation Lengths for Existing Plantations

Requirement for Forest Improvement

Ban on the Conversion of Intact Peatlands

Not included -no methods in the SAC MACC, but loss of peat must be avoided. Further work required

Enhance the Implementation of the CAP - X-compliance

Introduce Annual Nutrient Management Plan to GAEC

Included as a) mitigation methods that do not require negotiation in EU and b) mitigation methods that would need negotiation in EU

Introduce Annual Energy Plan to GAEC

109

Appendix 5 - Verification of the SAC MACC Mitigation Methods

Each of the MMs is considered below in terms of the main basis for

verification (EU ETS, outcome or implementation based) along with an

assessment and justification of the confidence in the ensuing abatement.

Beef Animals - Improved Genetics

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

The MM refers to using either natural or artificial insemination (AI) by bulls of proven genetic potential. This will include those with improved growth rates, which means that progeny will achieve maturity at an earlier date, thereby reducing emissions over their lifetime.

Confidence level: Farm records will include invoices from the purchase of semen from breeding companies along with the services of a trained AI operator (if not carried out by farm staff) or payments for bull rental. However, many suckler herds may not retain evidence of bull proofs. The breeding records will show which females were bred from which bull or AI and dates of calving; farm records and cattle passports will show the date of purchase / sale where animals do not spend their whole life on one holding. Market records and invoices will show the date of slaughter and liveweight / deadweight; from these, it will be possible to calculate average growth rate to show if improved efficiency has been achieved. Clearly, animals vary as well as diets, but overall, there should be a medium level of confidence in the data provided for this method.

Beef Animals - Probiotics

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

This MM refers to the feeding of bacterial preparations to ruminants. Probiotics can be used to avoid acidosis (the reduction in rumen pH due to changes in the diet) in beef and dairy cattle. The farm records will show invoices for purchases of the product and feed records will show how they were fed.

Confidence level: Whilst the records will show what has been bought and how it has been administered, there are no third party records to confirm the facts. As such, the confidence level is high, but not certain.

Beef Manure-cover slurry lagoons, Beef Manure-Cover slurry tanks and Dairy Manure-Cover slurry lagoons

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

This MM refers to placing covers on slurry lagoons or tanks. These covers are manufactured articles supplied and fitted by companies that specialise in this area of work. Apart from invoices, the covers will be readily visible to inspect. However, efficacy is another matter, since no metering of emissions is carried out.

Confidence level: Whilst confidence in their installation is high, the level of confidence in their operation has to be assumed from any data that may be available from experiments carried out to show how they can reduce emissions.

110

Crops-Soils-Improved N-Use Plants

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

This MM refers to the use of reduced N use on oilseed rape in temperate areas although work is currently underway on tobacco and rice

11. Research shows that N use can be reduced

significantly although work is at an early stage.

Confidence level: Farm records will show varieties of crop used and fertiliser applied; as such, a high level of confidence is associated with this MM. Farm invoices will also provide supporting information on the farm-level use of N.

Crops-Soils-Mineral N Timing

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

This MM refers to the application of purchased manufactured fertiliser. Farmers buy this on an annual basis, store it until required and apply it when the crop is growing actively in the spring and when weather conditions allow. Commercial pressures and unexpected weather events may lead to a loss of fertiliser through run-off or leaching (wet conditions) or through loss to air (dry / warm conditions). This may lead to a further application to make up for the loss of the first. Timeliness of application is therefore very important to the achievement of optimum yields.

Confidence level: Farmers have a commercial imperative to achieve a good yield response from expensive fertiliser inputs and consequently to optimise the timing of application. Farm records will show how much has been applied to each field, so there will be a medium to high level of confidence in the verification in this case.

Crops-Soils-Organic N Timing

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method. This MM refers to ensuring that organic N from farmyard manure (FYM) and slurry is applied to the land at the most suitable times. The assumption is that at present, it is applied to suit crop rotations and manure handling and storage rather than being directly related to the risk of GHG emissions or diffuse pollution.

Confidence level: If this were to be part of a PI, detailed record keeping of the type used for the NVZ Action Plan would be required for a high level of confidence. Clearly, in 68% of the country, farmers are already required to comply with the NVZ Action Plan. This allows a high level of confidence in verification of this MM because of the extensive and detailed records it produces and the risk of penalties for non-compliance. Written evidence as well as physical evidence of slurry stores will be available and farmers are well aware of the penalties, both financial and to their reputation.

Under NVZ rules, organic manures with a high available N content (not FYM) now have specific time windows when application is prohibited

12. This means that the crop will benefit

11

LINK project 0979, Nitrogen use efficiency in oilseed rape OREGIN project

Monsanto http://www.arcadiabio.com/nitrogen.php http://www.isb.vt.edu/articles/may0801.htm http://www.northerncanola.com/update/canolajournal/upfiles/MarchAprilCanolaDigest.pdf

12 http://www.Defra.gov.uk/corporate/regulat/forms/agri_env/nvz/nvz4.pdf

111

from the available N in the manure and the risk of losses of nutrients to the atmosphere or water will be minimised.

A calculation showing storage capacity is required for inspection and compliance purposes. For farmyard manure, records must show field sites on a risk map and dates farmers must not exceed the maximum N loading and records must show:

numbers and types of livestock and the number of days spent on the holding

the nitrogen produced by livestock on the holding each calendar year

details of any livestock manures brought on to the farm from other farms (imported) or sent to another farm (exported)

a calculation showing the livestock manure N loading.

Records must also be kept which show for each crop in each field the crop type and date sown, soil nitrogen supply, crop nitrogen requirement, and details of each planned application of organic manure and manufactured nitrogen fertiliser. They must also demonstrate compliance with the maximum application rate - the amount of nitrogen actually spread including details of each application of organic manure and manufactured nitrogen fertiliser.

Further details of record keeping are at the following web site:

http://www.Defra.gov.uk/environment/water/quality/nitrate/help-for-farmers.htm

Since this is based on records of actions taken, the verification is entirely implementation based, but confidence in the records would be high in most instances. Where a farm has a history of non-compliance, for example, the confidence level may be low. The alternative of a tick sheet would provide a low level of confidence.

Crops-Soils-Reduced Till

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

This MM is based on using a cultivation system for crop establishment that creates less soil disturbance and hence there is less risk of oxidation leading to GHG emissions. The implication is that the land is currently ploughed and the change will be to a system that uses surface cultivation. This is generally not appropriate on light land, where compaction can occur very easily, since the soil is deformed by traffic or slumps due to rainfall through the season. Reduced till cultivation is more suited to heavier land, but on these soils, ploughing is generally needed every few years to remove compaction that tends to build up at the cultivation depth and can lead to reduced root activity and waterlogging.

There has been a great deal of interest in recent years in so called „one pass‟ cultivation with the development of a range of specialist one pass machines. These are expensive and a large area of land is needed to justify their purchase or for smaller farms, a contractor is the answer.

Confidence level: Where cultivations are carried out using the farmer‟s own equipment, farm field records would record this but these are not used exhaustively. For those farms where contractors are used, third party invoices should evidence the cultivation approach, although this will not always be the case. Together with an audit of farm equipment, this would provide a medium to high level of confidence of verification for this method.

112

Crops-Soils-Slurry Mineral N Delayed Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method. This MM refers to sequential application of organic manures and manufactured fertiliser in the spring. Organic manures contain readily available nitrogen that is at risk of loss through leaching or being lost to the atmosphere and when applied to an actively growing crop, the intention is for it to be taken up rapidly. If further readily available nitrogen were to be applied in the form of manufactured nitrogen, it is likely that there would be an excess of readily available nitrogen, raising the risk of losses significantly. Farmers are aware of this and plan to avoid losses of expensive nutrients, but in difficult conditions, such as wet periods with short opportunities to get on to the land, some may have no alternative to close sequential application. Confidence level: Farm records will show timing of application of organic and manufactured fertiliser and if a contractor is used for either or both operations, third party evidence in the form of invoices will confirm. Where records are kept, there is a low to medium level of confidence in verification of this MM.

Crops-Soils-Using Composts

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

Composts can be in the form of municipal green waste or other composts such as paper waste or paper crumb. Most composts have little readily available nitrogen, so will not displace organic and manufactured fertiliser. On the contrary, some composts may in fact cause available nitrogen to be utilised in their breakdown, reducing the amount available for the crop.

Confidence level: Composts will generally be sourced from outside the farm and will therefore mean farmers can provide third party evidence of their application, giving a high level of confidence in verification of this MM.

Dairy Animals-Maize Silage

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

Maize silage provides a higher level of starch than grass silage, which has more low-grade protein and hence leads to higher levels of enteric methane production. Maize is restricted in where it can be grown in the UK due to temperature and soil type. It is susceptible to frost and production is more reliable on light land. However, new varieties are being developed all the time and the area on which forage maize can be grown is expected to continue expanding. The maize crop is made into silage and stored through the winter period; benefits in terms of enteric methane will be available over this part of the year.

Confidence level: Drilling and harvesting maize are specialist operations and many dairy farmers use contractors for this crop. Hence third party records will be available to show the area of maize produced on the holding. Field records will show which fields it has been grown in and the inputs used, all of which provide a high level of confidence in the verification of this MM.

113

Dairy Animals-Improved Fertility, Productivity

Basis of verification – part implementation based and part outcome based. Implementation based: the records that have been kept and the actions that have been taken under the mitigation method. Outcome based: reductions in numbers of replacements required to maintain herd size.

If dairy cows do not become pregnant on an annual basis, they may be culled from the herd and sold or sent for slaughter. This imposes a significant cost on the business in terms of increasing the number of replacement young females kept and increases the relative emissions per cow in the herd.

Most diary farmers keep extensive records of dairy cow performance:

(a) Breeding records – these may be informal and difficult to validate

Service records, that is when inseminated and by which sire. This may be naturally by a bull kept on the farm, or more likely, by a selected sire using AI. The breeding company, as a third party, will have fully detailed records of AI use by bull and date used.

Pregnancy diagnosis. Confirmation of pregnancy and calving date.

Calving date. Farmers record the date of calving and the sex of calf delivered along with health information, for example a healthy birth or if there was an injury/fatality or damage to the cow.

(b) Production records

Milk production. Not all farms keep records of milk produced by each cow.

Records of dates for the start and end of the lactation. .

These records are kept on the farm and may be determined by third parties, such as veterinary surgeons, who will have their own verifiable records.

A time series of annual records can demonstrate whether herd fertility or productivity is being improved but this is not always available.

Confidence level: Most of these records are at a high level of confidence of verification, particularly when kept by third party consultancies or breeding companies. This MM is both implementation based using generally verifiable records and outcome based in terms of animal numbers (ratio of heifers to cows).

114

Anaerobic Digestion – CAD Poultry 5MW and all OFAD

Basis of verification – outcome based: Plant records of gas produced and methane content.

Anaerobic digestion (AD) plants involve complex engineering equipment that requires detailed instrumentation for their proper functioning. Readings from these instruments can be recorded for verification purposes in a similar way as for installations in the EU ETS. Records include:

Gas production

Gas analysis

Digestate temperature

Confidence level: These records provide a high level of confidence for verification of the outcome of the MM in terms of methane emissions savings. The performance of the AD unit will be clear from the records kept. In the past, on-farm AD units have suffered from requiring high levels of skills to operate the equipment correctly, but if this is the case, the instrumentation will show that the unit is running at a low level of efficiency.

Crops-Soils-Avoid N Excess

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method. Many farmers look very carefully at their use of nutrients by using soil analysis, planning nutrient requirements by crop and the use of organic manures. The farm records will show fertiliser purchases, the results of any soil analysis from third party agencies and the nutrient management plans which will include the use of organic manures.

Confidence level: These records will provide a low to high level of confidence for verification on an implementation basis, depending on which records are kept.

Crops-Soils-Drainage

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method. Outcome based records may be possible if the water flowing from the pipe outlet were analysed on a regular basis, but this would be unlikely on most farms.

This MM refers to the installation of a full underdrainage system using a specialist contractor that is, installing drainage pipes, generally at a depth of 1m in a trench excavated for that purpose and back filled with a porous material, usually gravel, to within approximately 300mm of the soil surface. The pipes emerge at the field edge and discharge into a ditch. Clearly, there will be invoice information to show that the process has been carried out and the system can be inspected in situ.

Confidence level: Abatement by drainage systems is a complex issue depending on the soil type, the efficacy of operation and the risk of secondary losses if nutrients are carried in the drainage water. Whilst there would be a high level of confidence in the installation, confidence in the abatement provided is another issue and may be no more than low.

115

Crops-Soils-Full Manure

Basis of verification – implementation based: Farm records kept to evidence actions that have been taken under the mitigation method.

In the past, many farmers valued organic manures more in terms of supplying soil organic matter than for their nutrient value, due to the variability of the material. However, in recent times the significant cost increases in manufactured fertiliser have meant that organic manures are very valuable for their nutrients as well, so where farmers use organic manures, they tend to make full use of the nutrients in them to reduce their purchases of manufactured fertiliser. This involves using organic manures within maximum rates recommended in Defra publication RB209 http://www.Defra.gov.uk/farm/environment/land-manage/nutrient/fert/rb209/index.htm.

Confidence level: If manures are analysed for nutrient content, third party records may be available as well as invoice evidence of reduced purchase of manufactured fertiliser. The organic manures may or may not be applied by a contractor who will be paid through the normal invoicing process. This means that confidence levels are medium to high depending on the farm and the rate of application of manures per hectare.

Forestry-Afforestation

To be completed following MACC extension work and reported separately

116

Appendix 6 - Policy Instrument Summary Sheets

Abatement and inventory figures based on SAC (ADAS) estimates.

Cross Compliance (a) MMs that do not require negotiation in EU

Regulatory Current 2022 Abatement potential = 896 kt CO2e

Rationale for the instrument: Cross compliance is a requirement for those claiming Single Farm Payment (currently up to 2013). This obliges farmers to meet a number of Good Agricultural and Environmental Condition (GAEC) standards largely relating to the protection of soils, habitats and landscape features and Statutory Management Requirements (SMR), which are either pre-existing legislative requirements or those that Member States must implement under EU law. It includes an independent audit process (1% sample) which can enforce penalties readily by deducting an element of Single Payment at source. It has been shown to be very effective at driving change in farm practices, albeit with some negative impact on farmer attitudes due to the perceived risk of penalties.

The policy is already in place but does not target GHGs directly; there is scope under existing rules to extend the current impacts by bringing in additional abatement methods. . For example it would be possible to introduce buffer strips along watercourses to address the issue of “water protection against pollution and run-off” through the standard allowing

establishment of buffer strips along water courses. It might also be possible to establish uncropped field corners and field margins to address the issue of “ensuring a minimum level of maintenance and avoid the deterioration of Habitats” through a new standard on “Establishment and/or retention of habitats”.

ES options in the form of 6m buffer strips next to watercourses is expected to be introduced in targeted locations next to some arable land via a voluntary scheme to offset the loss of water protection benefits previously gained through set aside. There has been considerable opposition to inclusion of such measures and efforts to recapture the benefits of set-aside in habitat creation into cross compliance; however the legal framework allows these measures to be incorporated as additional GAECs.

Scope of policy instrument and how it will work

Scope: Cross compliance applies to all of those in receipt of Single Farm Payment, which covers 90% of the England farmed area. The mitigation methods relate to new actions and are additional to land already in buffer strips or field corners under Cross Compliance and ES.

Implementation: The new standards would be added to the existing list and requirements promoted to the industry via the existing media (website, booklets, workshops etc.).

Risks: Any increase in requirements for Cross Compliance may affect Environmental Stewardship agreements as it represents the baseline for these schemes. This is particularly so if current ES options are made mandatory (without compensation), as under this policy. An analysis of the proposal to include 6m buffer strips next to watercourses on all arable land indicated that Natural England would incur one-off costs for renegotiating the 69% of ES agreements that would be affected by such a change.

The policy also relies on continued payment of a significant element of farmer subsidy under Pillar I direct payments. A recent impact assessment estimates that the costs to farmers of instating buffer strips on cultivated land next to watercourses under cross-compliance would be substantial (£35.5million for arable farmers).

Timing: This PI could potentially be introduced by 2012 as no changes in regulations are needed. As a regulatory measure, full uptake percentages are assumed from 2012.

117

Mitigation methods targeted

% of MM MTP the PI could achieve

Comments

Coverage Uptake

Buffer strips

1.5% of cultivated land area

90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are already required to use 2m buffers along hedges and 1-2m along watercourses, which could readily be extended in width to 6m. This will lead to loss of revenue (income forgone) but it will be in farmers‟ interest to comply for avoidance of penalties under Cross Compliance.

Field corners

1.1% of cultivated land area

90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are already required to manage land out of agricultural production, including field corners (GAEC 12); this PI assumes that the area of land taken out of production as field corners is extended. This will lead to limited private cost as loss of revenue (income forgone) but it will be in farmers‟ interest to comply for avoidance of penalties under Cross Compliance.

Other considerations

Degree of certainty

High given the regulatory approach and established enforcement process.

Degree of flexibility

Low do to regulatory approach

Degree of permanence

For these ES methods, any carbon sequestration would be subject to later losses.

Policy cost

Initial set up cost

Already covered by compliance through RPA unit.

Annual operational cost - public

£1.7m Rural Payments Agency with one-off cost for Natural England could be over £1 m in the year of establishment (figures taken from current IA of changes to Cross Compliance).

Annual operational cost - private

Increased time spent on establishing buffers/field corners but annual operational costs would be limited to income forgone once the buffers/field corners have been established; this is estimated at £50 m assuming a cost of £400 per hectare of land taken out of production.

Inventory

2022 Tonnage (kt CO2e)

MMs 100% in inventory Nil

MMs partially in inventory Indirectly through reduced N fertiliser; sequestration element would not be captured.

Verification:

Verification level 2022 Tonnage (kt CO2e)

118

Outcome based (EU ETS) 0

National Carbon Budgets Based on IPCC emissions figures for nitrous oxide

Implementation based (high confidence)

896 (896)

Total verified abatement 896

Cross Compliance (b) MMs that would require negotiation in EU

Regulatory Current Abatement potential = 1,491 kt CO2e

Rationale for the instrument: Cross compliance is a requirement for those claiming Single Farm Payment (currently up to 2013). This obliges farmers to meet a number of Good Agricultural and Environmental Condition (GAEC) standards largely relating to the protection of soils, habitats and landscape features and Statutory Management Requirements (SMR), which are either pre-existing legislative requirements or those that Member States must implement under EU law. It includes an independent audit process (1% sample) which can enforce penalties readily by deducting an element of Single Payment at source. It has been shown to be very effective at driving change in farm practices, albeit with some negative impact on farmer attitudes due to the perceived risk of penalties.

The policy is already in place but does not target GHGs directly; there is scope to extend current impacts by bringing in abatement methods listed below that can be linked to water quality (N use) and biodiversity (ES options). The nutrient management methods included represent actions beyond the NVZ baseline in NVZ areas and relate to fertiliser/manure use a crop level rather than field level and the timing of application. Outside the NVZ area, the methods represent an alternative to the extension of the NVZ rules and as such obviate the requirement for additional manure storage and closed spreading periods; instead they allow capture of the benefits of optimising timing and rate of application. These practices would be evidenced through additional records e.g. manure analysis reports, field records for application of fertiliser/manure.

ES options in the form of 6m buffer strips next to watercourses is expected to be introduced in targeted locations next to some arable land via a voluntary scheme to offset the loss of water protection benefits previously gained through set aside. There has been considerable opposition to inclusion of such measures and efforts to recapture the benefits of set-aside in habitat creation into cross compliance; however the legal framework allows these measures to be incorporated as additional GAECs. This PI also includes methods relating to covering slurry tanks and lagoons although these would require negotiation in EU to secure agreement.

Methods that are cost negative (N use) will have a net benefit to farmers but the loss of land for production (ES options) will incur income loss and investment in covers for covering slurry tanks and lagoons could represent a substantial one-off cost. There will also be administrative costs to keep records to demonstrate GHG abatement.

119

Scope of policy instrument and how it will work

Scope: Cross compliance applies to all of those in receipt of Single Farm Payment, which covers 90% of the England farmed area. The mitigation methods relate to new actions and are additional to land already in buffer strips or field corners under Cross Compliance and ES.

Implementation: The new standards would be added to the existing list as a new GAEC and promoted to the industry via the existing media (website, booklets, workshops etc.). With a nutrient management plan, follow up auditing will be needed together with associated advice to ensure mitigation is realised. An increase in the number of standards will lead to increased inspection costs and there may also be a need for an enhanced advisory function (e.g. under the Farm Advisory System).

Risks: Any increase in requirements for Cross Compliance may affect Environmental Stewardship agreements as it represents the baseline for these schemes. This is particularly so if current ES options are made mandatory (without compensation), as under this policy. An analysis of the proposal to include 6m buffer strips next to watercourses on all arable land indicated that Natural England would incur one-off costs for renegotiating the 69% of ES agreements that would be affected by such a change. The need to invest in covers for slurry tanks and lagoons could prove unpopular and in view of the limited GHG emission benefits, may be difficult to justify.

The policy also relies on continued payment of a significant element of farmer subsidy under Pillar I direct payments. A recent impact assessment estimates that the costs to farmers of instating buffer strips on cultivated land next to watercourses under cross-compliance would be substantial (£35.5million for arable farmers).

Timing: Most of the methods in this PI could potentially be introduced by 2012 as no changes in regulations are needed for water quality and biodiversity actions; however, the introduction of covers for slurry tanks and lagoons would not be in place until after 2012. As a regulatory measure, full uptake percentages for all methods are assumed for 2017 and 2022.

Mitigation methods targeted

% of MM MTP the PI could achieve

Comments

Coverage Uptake

Crops-Soils-Avoid N Excess

90% of land area

90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are required to plan and record fertiliser use under NVZ regulations and will have both commercial incentives (input saving and avoidance of penalties under Cross Compliance) to do so.

Full Manure

90% 90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are required to plan and record fertiliser use under NVZ regulations and will have both commercial incentives (input saving and avoidance of penalties under Cross Compliance) to do so.

120

Mineral N Timing

90% 90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are required to plan and record fertiliser use under NVZ regulations and will have both commercial incentives (input saving and avoidance of penalties under Cross Compliance) to do so.

Organic N Timing

90% 90% This takes into account farmers that will be required to plan and record fertiliser use under NVZ regulations and observe closed spreading periods. They may incur significant investment on storage but will need to comply to avoid penalties under Cross Compliance.

Buffer strips

1.5% of cultivated land area

90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are already required to use 2 m buffers along hedges and 1-2m buffer strips next to watercourses which could readily be extended in width to 6 m. This will lead to loss of revenue (income forgone) but it will be in farmers‟ interest to comply for avoidance of penalties under Cross Compliance.

Field corners

1.1% of cultivated land area

90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are already required to manage land out of agricultural production, including field corners (GAEC 12); this PI assumes that the area of land taken out of production as field corners is extended. This will lead to limited private cost as loss of revenue (income forgone) but it will be in farmers‟ interest to comply for avoidance of penalties under Cross Compliance.

Beef Manure cover slurry lagoons

90% 90% This method requires capital expenditure for the installation of a cover for slurry lagoons; while this represents a net cost to farmers, the method is very visible and easy to inspect at audit.

Beef Manure cover slurry tanks

90% 90% This method requires capital expenditure for the installation of a cover for slurry tanks; while this represents a net cost to farmers, the method is very visible and easy to inspect at audit.

Dairy Animals cover slurry lagoons

90% 90% This method requires capital expenditure for the installation of a cover for slurry lagoons; while this represents a net cost to farmers, the method is very visible and easy to inspect at audit.

Other considerations

Degree of certainty High given the regulatory approach and established enforcement process.

Degree of flexibility Low do to regulatory approach

121

Degree of permanence High for emissions avoided on an annual basis such as those relating to N use and covers but for the ES methods, any carbon sequestration would be subject to later losses.

Policy cost

Initial set up cost Already covered by compliance through RPA unit.

Annual operational cost - public

£1.7m Rural Payments Agency with one-off cost for Natural England could be over £1 m in the year of establishment (from current IA of changes to Cross Compliance).

Annual operational cost - private

Increased time spent on establishing buffers/field corners but annual operational costs would be limited to income forgone once the buffers/field corners have been established; this is estimated at £50 m assuming a cost of £400 per hectare of land taken out of production.

Inventory

2022 Tonnage (kt CO2e)

MMs 100% in inventory 120

MMs partially in inventory 83

Verification:

Verification level 2022 Tonnage (kt CO2e)

Outcome based (EU ETS) 0

National Carbon Budgets Based on IPCC emissions figures for nitrous oxide

Implementation based (high confidence) 1,491 (1,338)

Total verified abatement 1,491

Nitrate Vulnerable Zone (a) Extend to 100% of England

Regulatory Current Abatement potential = 50 kt CO2e

Rationale for the instrument The Nitrate Vulnerable Zone (NVZ) Action Plan applies to 68% of England. It is based on reducing diffuse nutrient pollution through setting limits to total N applied and closed periods for application of slurries and manures. The current NVZ is within the SAC baseline and has also been assumed in the revised SAC (ADAS) MTP estimates. By extending it to 100% of England, the policy will potentially apply to all farms. While this will include some high output livestock farms where nutrients may be in surplus and storage insufficient to avoid land spreading during periods, the area also includes extensive upland and hill farms where there is little fertiliser use.

While the NVZ Action Programme does not target GHGs directly, it does deliver some mitigation (see Impact Assessment for extending NVZ to 70% of England) and extending the area covered by the policy would deliver additional abatement. No additional MMs would be implemented (the MMs on nutrient management assume an NVZ baseline) and the estimate of abatement here is based on the (incomplete) assessment of GHG impacts in the Impact Assessment for extending NVZs from 55% to 70% of England of 28-36 kt CO2e. While moving from 68% to 100% represents a doubling of the land area increase compared to moving from 55% to 70%, the scope for reduction in emissions is less and the abatement is estimated at 50 kt CO2e.

122

Scope of policy instrument and how it will work

Scope: Currently, 68% of England is already subject to the NVZ Action Programme, so to extend the area to 100% should be relatively straightforward. The policy will apply to all of England but will be enforced through Cross Compliance and as such, only applies to those farms claiming Single Payment (90% of the land area). The additional area covered by the policy will therefore be 90% of 32% = 29%. This should be further reduced to allow for the fact that fertiliser application is not relevant to all this area; 83% of the England Moorland lies within the non-NVZ area. On this basis the area is 25% of England.

Implementation: Roll out the NVZ Action Programme to those farms outside the existing NVZ and add them to the inspection process.

Risk: While the more limited NVZ policy is already in place, it has just been extended from 55% of England (fully implemented by 2012) and there is some level of negative attitude to need for investment in manure storage and closed spreading periods. There is a risk of leakage as farmers reduce livestock numbers to meet the regulations or biodiversity / landscape impacts if farmers move away from housed livestock to very extensive systems.

The Cross Compliance policy relies on continued payment of a significant element of farmer subsidy under Pillar I direct payments, NVZ rules would continue to be enforced by the Environment Agency in future.

Timing: Should be in place by 2012 if a decision is made to implement.

Mitigation methods targeted

% of MM MTP the PI could achieve

Description and justification

Coverage Uptake

None. Application of NVZ rules only.

Other considerations

Degree of certainty Certainty of uptake is relatively high from this regulatory PI. Farmers risk loss of a proportion of their Single Payment and have a commercial incentive to use organic and mineral fertilisers efficiently. The 32% of England not presently covered by the NVZ is the theoretical target but the spatial distribution of emission sources is not known, so the figure has been adjusted downwards. Given that this area was not cost effective to include in the current NVZ with respect to diffuse pollution, this may also apply to some extent to GHG emissions.

Degree of flexibility Low as this is a regulatory PI

Degree of permanence For N management, emissions avoided are on an annual basis; there is no carbon sequestration element that would be subject to later losses.

Policy cost

Initial set up cost Limited set up cost to bring the remaining farmers into the scheme and promote awareness of rules.

123

Annual operational cost - public

Based on the Impact Assessment for extending NVZ to the current 68% (estimated cost £2.4m for inspection costs), a pro rata increase for the additional 32% would be 2.5 times the increase to 68%, so we have assumed £4.9m. Despite the fact that only 25% of the land area may be relevant, all farmers would need to be targeted and inspected.

Annual operational cost - private

For the extension of the NVZ area to 68%, costs were estimated in the Impact Assessment at £36.1m to £46.9m with EU derogation to 250kg N, not including costs of obtaining planning permission for capital works such as slurry stores. In the additional 32% we have assumed pro rata costs of £75m to £112m on the same basis.

Inventory

Tonnage (kt CO2e)

MMs 100% in inventory N/A

MMs partially in inventory N/A

Verification:

Verification level Tonnage (kt CO2e)

Outcome based (EU ETS) Nil

National Carbon Budgets Based on IPCC emissions figures for nitrous oxide

Implementation based 50

Total verified abatement 50

124

Nitrate Vulnerable Zone (b) Extend to 100% of England and Enhance

Regulatory Existing Abatement potential = 602 kt CO2e

Rationale for the instrument The Nitrate Vulnerable Zone (NVZ) Action Plan applies to 68% of England. It is based on reducing diffuse nutrient pollution through setting limits to total N applied and closed periods for application of slurries and manures. The current NVZ is within the SAC baseline and has also been assumed in the revised SAC (ADAS) MTP estimates. By extending it to 100% of England, the policy will potentially apply to all farms. While this will include some high output livestock farms where nutrients may be in surplus and storage insufficient to avoid land spreading during periods, the area also includes extensive upland and hill farms where there is little fertiliser use.

The estimate of abatement for extension of the NVZ area is based on the (incomplete) assessment of GHG impacts in the impact assessment for extending NVZs from 55% to 70% of England of 28-36 kt CO2e. While moving from 68% to 100% represents a doubling of the land area increase compared to moving from 55% to 70%, the scope for reduction in emissions is less and is estimated at 50 kt CO2e.

In addition to extending the area covered by NVZ rules, this PI will engage the following MMs - avoiding application of excess nitrogen, making full use of organic manures and correctly timing application of organic and mineral nitrogen. It will also require farmers to install covers on slurry lagoons or tanks.

125

Scope of policy instrument and how it will work We have assumed extending the NVZ to 100% as with option (a) but use of additional mitigation methods for managing nutrient application and covering slurry stores and tanks. This will require a higher level of inspection to ensure compliance and we have suggested a rate of 5% as with the CRC. It may also mean that as with the CRC, all establishments need to be inspected in the first year to ensure record keeping systems are in place and being kept accurately and up to date.

Scope: Currently, 68% of England is already subject to the NVZ Action Plan, so to extend the area to 100% should be relatively straightforward. The policy will apply to all of England but will be enforced through Cross Compliance and as such, only applies to those farms claiming Single Payment (90% of the land area). The area covered by the policy will therefore be 90% of 32% = 29%. This should be further reduced to allow for the fact that fertiliser application is not relevant to all this area; 83% of the England Moorland lies within the non-NVZ area. On this basis the area is 25% of England. The additional MMs will apply across all the NVZ area.

Implementation: This will require rolling out the NVZ Action Programme to those farms outside the existing NVZ and adding them to the inspection process. In addition to the current NVZ requirements, additional N use MMs will apply (field level nutrient limits and limits on timing of application) and the enhanced NVZ policy will require farmers to cover slurry stores and tanks. While potentially expensive for farmers, the covers are a very visible item and would be readily enforced through Cross Compliance inspection. The N use MMs will be largely audited through inspection of records.

Risk: While the more limited NVZ policy is already in place, it has just been extended from 55% of England (fully implemented by 2012) and there is some level of negative attitude to need for investment in manure storage and closed spreading periods. There is a risk of leakage as farmers reduce livestock numbers to meet the regulations or biodiversity / landscape impacts if farmers move away from housed livestock to very extensive systems. This will be greater than for NVZ policy (a).

The Cross Compliance policy relies on continued payment of a significant element of farmer subsidy under Pillar I direct payments, NVZ rules would continue to be enforced by the Environment Agency in future.

Timing: Existing rules should be in place by 2012 if a decision is made to implement, but the inclusion of enhanced NVZ rules on N use and the need to use covers would require negotiation with the EU and would not be in place until 2017.

Mitigation methods targeted

% of MM MTP the PI could achieve

Description and justification

Coverage Uptake

Beef manure cover lagoons

100% 90% This method requires capital expenditure for the installation of a cover for slurry lagoons; while this represents a net cost to farmers, the method is very visible and easy to inspect at audit.

Beef manure slurry tanks

100% 90% This method requires capital expenditure for the installation of a cover for slurry lagoons; while this represents a net cost to farmers, the method is very visible and easy to inspect at audit.

Avoid N excess

90% of land 90% This takes into account farmers that will be required to plan and record fertiliser use under NVZ regulations and will have both commercial incentives (input saving and avoidance of penalties under cross compliance) to do so.

126

Full manure 90% 90% This takes into account farmers that will be required to plan and record organic manure use under NVZ regulations and will have both commercial incentives (input saving and avoidance of penalties under cross compliance) to do so.

Mineral N timing

90% 90% This takes into account that farmers will be required to meet Cross Compliance standards. As part of this they are required to plan and record fertiliser use under NVZ regulations and will have both commercial incentives (input saving and avoidance of penalties under Cross Compliance) to do so.

Organic N timing

90% 90% This takes into account farmers that will be required to plan and record fertiliser use under NVZ regulations and observe closed spreading periods. They may incur significant investment on storage but will need to comply to avoid penalties under Cross Compliance.

Dairy Manure Cover slurry lagoons

100% 90% This method requires capital expenditure for the installation of a cover for slurry lagoons; while this represents a net cost to farmers, the method is very visible and easy to inspect at audit.

Other considerations

Degree of certainty

Certainty of uptake is relatively high from this regulatory PI. Farmers risk loss of a proportion of their Single Payment and have a commercial incentive to use organic and mineral fertilisers efficiently. The 32% of England not presently covered by the NVZ is the theoretical target but the spatial distribution of emission sources is not known, so the figure has been adjusted downwards. Given that this area was not cost effective to include in the current NVZ with respect to diffuse pollution, this may also apply to some extent to GHG emissions.

Degree of flexibility

Low as this is a regulatory PI

Degree of permanence

For N use MMs, emissions avoided are on an annual basis; there is no carbon sequestration element that would be subject to later losses.

Policy cost

Initial set up cost

Limited set up cost to bring the remaining farmers into the scheme and promote awareness of rules. Extending the scope of the NVZ rules would incur a significant policy cost in terms of scheme design and consultation.

Annual operational cost - public

Enhancement of NVZ on all of England would add pro rata to inspection costs on the basis of the Impact Assessment for the NVZ extension.

127

Annual operational cost - private

Based on the Impact assessment for the extended NVZ, we have assumed additional costs to the industry of 20%, i.e. £15m to £20m with EU derogation to 250kg N, not including costs of obtaining planning permission for capital works such as slurry stores.

Inventory

Tonnage (kt CO2e)

MMs 100% in inventory 120

MMs partially in inventory 83

Verification:

Verification level Tonnage (kt CO2e)

Outcome based (EU ETS) Nil

National Carbon Budgets Based on IPCC emissions figures for nitrous oxide

Implementation based (high confidence)

602 (449)

Total verified abatement 602

128

Environmental Stewardship (ES)

Economic Current Abatement potential = 647 kt CO2e

Rationale for the instrument. This PI is already in place and represents a key tool for Government to deliver environmental policy objectives. While not targeting GHGs directly it is having some impact; ES delivers abatement of between 0.44% to 0.49% total UK 1990 baseline emissions (BD2302) in its current state. ES options are based upon payments for income foregone by farmers and land managers but participation is voluntary. ES has had a high level of uptake and is relatively popular with farmers; current uptake is 65% with a target for 2010 of 70% of land within the scheme.

Options identified in BD2305 that can deliver significant abatement are in four main groups; buffer strips, field corners, woodland edges and creation of new woodland. However, management of buffer strips in grassland is difficult to verify and woodland edges will have a significant coincidence with field edge buffer strips, so their inclusion may involve some double counting. Creation of woodland is dealt with in a separate project, so is not included here. This PI will cover only arable buffer strips or arable field corners.

Options for 2m, 4m and 6m arable buffer strips and field corners currently represent 0.5% of arable land and abatement of 194kt CO2e. The abatement detailed in this PI is additional to this and to buffer strips required under GAEC14 of Cross Compliance. The latter require the farmers not to cultivate or apply fertilisers or pesticides to land within 1 metre of the top of the bank of a watercourse or field ditch or within 2 metres of the centre of a hedgerow, watercourse or field ditch.

These options can also deliver on a range of levels including improved biodiversity, GHG reduction, water protection, soil erosion, landscape and access.

There would be a need for more encouragement in ES for the promotion of these options to increase levels of uptake beyond what they are now. In order to achieve this, there may need to be additional funding specifically for them, possibly through inclusion of a special tier for GHG mitigation in ES. However, if ES funding remains at present levels, less funding would be available for other options. This might require a re-prioritisation of ES options and associated payment rates or moving some options into Cross Compliance.

129

Scope of policy instrument and how it will work.

Scope: The mitigation methods relate to new actions and are additional to land already in buffer strips or field corners under Cross Compliance and ES. Farmers will create 6 metre buffer strips and take field corners out of production (up to 10% of field area) across 25% and 12.5% of their arable land respectively, in return for ES payments (based on income forgone). They will be required not to cultivate or apply fertilisers or pesticides to this land buffers but may use it creatively to deliver additional environmental outcomes e.g. enhanced biodiversity, public access or site next to watercourses; in this instance it may attract an enhanced payments.

Implementation: The effective MM is no fertiliser with abatement rates taken from BD2302 for 5 years after establishment.

Buffer strips: These are areas of varying width along one edge or more of a field that receive no fertilisers or other inputs and are not cultivated. They may be cut at intervals depending on the habitat creation required. Abatement is 7.13t/ha CO2e after five years.

Field corners: As above, but abatement up to 8.85 t/ha CO2e after five years.

Abatement will be of two types, firstly, that arising from not using inputs or cultivating, which is an annual abatement and secondly, from sequestration by not disturbing the land. The latter may be reversed if and when the land is disturbed.

Risks: Provided payment rates are at least 100% of income forgone, substantial abatement may be possible but a new tier may need to be created to encourage uptake. Without additional funding, this policy instrument will displace existing options. The PI also relies on the current cross compliance baseline not being extended through inclusion of an environmental management GAEC using similar methods.

Timing: We assume this policy can be in place by 2017 following the new RDPE programme beginning 2014.

Mitigation methods targeted

% of MM MTP the PI could achieve

Description and justification

Coverage Uptake

Buffer strips

65% 25% This takes into account those farmers already engaged in the ES scheme are responsive to the PI and that uptake is limited by the lack of enthusiasm to leave land out of production (ref evaluation of Cross Compliance). The potential area of land in buffer strips (cultivation benefits on arable land only) allows for the 1 m strip required for GAEC14 of Cross Compliance). Farmers will be encouraged to take up this method through active promotion of environmental benefits and the need to avoid a mandatory scheme for „environmental management‟ within cross compliance. Any loss of revenue (income forgone) will be offset by the ES payment.

130

Field corners

65% 12.5% This takes into account those farmers already engaged in the ES scheme are responsive to the PI and the current ratio of land in field corners under the ES scheme relative to buffer strips. The potential area of land in field corners is limited to arable land only for reasons of verification. Uptake is limited by the lack of enthusiasm to leave land out of production but field corners are often difficult to manage. Farmers will be encouraged to take up this method through active promotion of environmental benefits and ES payments for loss of revenue (income forgone).

Other considerations

Degree of certainty

Moderate and needs to be actively promoted as well as some threat of regulation for buffer strips and land for environmental management.

Degree of flexibility

High as farmers have a choice of where to opt for buffer strips and/or field corners.

Degree of permanence

High where emissions avoided are on an annual basis (reduced inputs), but carbon sequestration benefits from unfarmed land may be reversed at a future date.

Policy cost

Initial set up cost

ES infrastructure and administration already in place via Natural England.

Annual operational cost - public

Will require additional funding to drive uptake, assuming other options are not displaced. The latter is particularly relevant under the Entry Level Scheme, whereby farmers choose from a range of options to meet a points target.

Annual operational cost - private

For ELS, increased time spent on record keeping to meet scheme requirements: if carried out by farm secretary, may be two days per year, i.e. 16 hours @ £15/hr. £240. Time for initial recording and application would be one to three days on-farm measuring and two days paperwork, say four days at £300/day, £1,200.

For HLS costs would be proportionately higher, perhaps by a factor of = or >2.

Inventory

2022 Tonnage (kt CO2e)

MMs 100% in inventory Nil

MMs partially in inventory Indirectly through reduced N fertiliser; sequestration element would not be captured.

Verification:

Verification level 2022 Tonnage (kt CO2e)

Outcome based (EU ETS) Nil

National Carbon Budgets Nil

131

Implementation based (high confidence)

647 (647)

Total verified abatement 647

Catchment Sensitive Farming (CSF) (a) Extend to all England

Voluntary Existing Abatement potential = 200 kt CO2e

Rationale for the instrument: The PI is already in place and although not targeting GHGs directly, there is some coherence with GHG policy objectives. CSF is a good model with which to pilot new ideas because it has proved popular with farmers and to link with water and soil. The England Catchment Sensitive Farming Delivery Initiative (ECSFDI) is part of Defra‟s approach to tackle diffuse water pollution from agriculture (DWPA) in order to meet the objectives of the Water Framework Directive (WFD). The ECSFDI also contributes to the achievement of domestic and international environmental targets, in particular 2010 PSA targets for SSSIs. The initiative was initially rolled out in April 2006 and will continue to at least 2010-11. In addition to the initial 40 priority catchments, a further 10 were added in October 2008 due to its success. This PI provides the twin benefit of mitigating diffuse pollution and GHGs.

Scope of policy instrument and how it will work

Scope: This PI relates to extending Catchment Sensitive Farming to all of England. It is currently being applied to some 50 target catchments comprising around 33% of England at risk of not meeting water quality requirements under the Water Framework Directive.

Implementation: At present, CSF comprises an information and demonstration events, backed by support from Catchment Sensitive Field Officers (CSFOs) and limited grant aid assistance for minor works such as fencing alongside watercourses. It fits with a number of MMs as shown below.

Risks: Limited as many of the diffuse pollution (DP) abatement methods include nutrient reductions that have implications for GHG emissions, especially the treatment of slurries and manures as well as artificial fertilisers. Re-focusing CSF to cover GHG emissions more effectively could significantly improve their abatement.

Timing: As a voluntary MM, uptake would start by 2012 and increase steadily towards 2022

Mitigation methods targeted

% of MM MTP the PI could achieve

Description and justification

Coverage Uptake

Crops-Soils-Avoid N Excess

67% of area

20% This takes into account farmers that will not become fully engaged and the routine nitrogen use at recommended rates in the absence of assessing soil nitrogen status. Uptake takes into account that without regulation or incentive, farmers will not become fully engaged with the opportunity

Crops-Soils-Drainage

67% 5% Some land may need to be drained in order to reduce emissions. However, this is a high capital intensive operation and not expected to be attractive in achieving abatement, hence a low uptake.

132

Crops-Soils-Full Manure

67% 20% The recent significant increases in N fertiliser prices have meant that all farmers are acutely aware of the cost of mineral N fertiliser. For those with access to organic manures, greater use has become an economic necessity. Uptake takes into account that without regulation or incentive, farmers will not become fully engaged with the opportunity

Improved N use plants

67% 10% Only oilseed rape is currently available, but uptake may be slow due to market perception.

Crops-Soils-Mineral N Timing

67% 20% CSF includes an advisory component, which will help to ensure good practice

Crops-Soils-Organic N Timing

67% 10% Practical issues can limit spring application, so a certain amount will always be spread on stubbles in the autumn.

Crops-Soils-Reduced till

67% 10% This is a widespread technique, which is less costly than full plough tillage systems.

Dairy Maize Silage

67% 20% Forage production using maize requires less nitrogen fertiliser, so reducing emissions compared with grass production, although potential is limited by soil type and climate. Maize will not grow well on heavy soils or in the colder parts of the UK. However, there remains ample scope to increase the area of crop grown. Farmers are likely to introduce maize for many other reasons, hence a low uptake.

Other considerations

Degree of certainty

High based on positive response to current CSF initiative.

Degree of flexibility

High due to the wide range of options available to farmers

Degree of permanence

High for most MMs - emissions avoided are on an annual basis involving no carbon sequestration that would be subject to later losses.

Policy cost

Initial set up cost

Limited additional cost to recruit new resource and provide initial awareness material –.

Annual operational cost - public

Current CSF comprises National team, £600,000, technical support, £320,000 and CSFOs £2,600,000 per annum. If expanded, small increases may be necessary in national team and technical support, but there would be a pro rata increase in CSFOs.

Annual operational cost - private

Increased management time, planning rotations and field operations, say £2/ha.

133

Inventory

Tonnage (kt CO2e)

MMs 100% in inventory

20

MMs partially in inventory

47

Verification:

Verification level Tonnage (kt CO2e)

Outcome based (EU ETS)

Nil

National Carbon Budgets

Nil

Implementation based (high confidence)

200 (170)

Total verified abatement

200

Catchment Sensitive Farming (CSF) (b) Enhanced

Voluntary Existing Abatement potential = 333 kt CO2e

Rationale for the instrument: The PI is already in place, although not targeting GHGs directly. CSF is a good model with which to pilot new ideas because it has proved popular with farmers and to link with water and soil. The England Catchment Sensitive Farming Delivery Initiative (ECSFDI) is part of Defra‟s approach to tackle diffuse water pollution from agriculture (DWPA) in order to meet the objectives of the Water Framework Directive (WFD). The ECSFDI also contributes to the achievement of domestic and international environmental targets, in particular 2010 PSA targets for SSSIs. The initiative was initially rolled out in April 2006 and will continue to at least 2010-11. In addition to the initial 40 priority catchments, a further 10 were added in October 2008 due to its success. This PI provides the twin benefit of mitigating diffuse pollution and GHGs.

134

Scope and application of policy instrument:

Scope: This PI relates to extending Catchment Sensitive Farming to all of England. It is currently being applied to some 50 target catchments comprising around 33% of England at risk of not meeting water quality requirements under the Water Framework Directive.

Implementation: At present, CSF comprises an information and demonstration events, backed by support from Catchment Sensitive Field Officers (CSFOs) and limited grant aid assistance for minor works such as fencing alongside watercourses. It fits with a number of MMs as in CSF (a) but could also encourage uptake of key Environmental Stewardship options with GHG benefits if promoted through incumbent CSF resources.

Risks: Limited as many of the diffuse pollution (DP) abatement methods include nutrient reductions that have implications for GHG emissions, especially the treatment of slurries and manures as well as artificial fertilisers. Re-focusing CSF to cover GHG emissions more effectively could significantly improve their abatement.

Timing: As a voluntary MM, uptake would start by 2012 and increase steadily towards 2022

Mitigation methods targeted % of MM MTP the PI could achieve

Description and justification

Coverage Uptake

Crops-Soils-Avoid N Excess

67% of area

20% This takes into account farmers that will not become fully engaged and the routine nitrogen use at recommended rates in the absence of assessing soil nitrogen status. Uptake takes into account that without regulation or incentive, farmers will not become fully engaged with the opportunity

Crops-Soils-Drainage

67% 5% Some land may need to be drained in order to reduce emissions. However, this is a high capital intensive operation and not expected to be attractive in achieving abatement, hence a low uptake.

Crops-Soils-Full Manure

67% 20% The recent significant increases in N fertiliser prices have meant that all farmers are acutely aware of the cost of mineral N fertiliser. For those with access to organic manures, greater use has become an economic necessity. Uptake takes into account that without regulation or incentive, farmers will not become fully engaged with the opportunity

Improved N use plants 67% 10% Only oilseed rape is currently

available, but uptake may be slow due to market perception.

135

Crops-Soils-Mineral N Timing 67% 20% CSF includes an advisory

component, which will help to ensure good practice

Crops-Soils-Organic N Timing

67% 10% Practical issues can limit spring application, so a certain amount will always be spread on stubbles in the autumn.

Crops-Soils-Reduced till 67% 10% This is a widespread technique,

which is less costly than full plough tillage systems.

Dairy Maize Silage

67% 20% Forage production using maize requires less nitrogen fertiliser, so reducing emissions compared with grass production, although potential is limited by soil type and climate. Maize will not grow well on heavy soils or in the colder parts of the UK. However, there remains ample scope to increase the area of crop grown. Farmers are likely to introduce maize for many other reasons, hence a low uptake.

Buffer strips

2% of land (existing

ES farms)

5% This takes into account those farmers that are already engaged in the ES scheme (approx 50%) and the potential area of land in buffer strips (cultivation benefits on arable land only). Uptake is limited by the lack of enthusiasm to leave land out of production beyond the existing 2 m strip required for Cross Compliance. Farmers will be encouraged to take up this method through active promotion of environmental benefits and the need to avoid a mandatory scheme for „environmental management‟ within cross compliance. Any loss of revenue (income forgone) will be offset by the ES payment.

136

Field corners

1.3% of land

(existing ES farms)

2.5% This takes into account those farmers that are already engaged in the ES scheme (approx 50%) and the potential area of land in field corners (all land). Uptake is limited by the lack of enthusiasm to leave land out of production but field corners are often difficult to manage. Farmers will be encouraged to take up this method through active promotion of environmental benefits and ES payments.

Other considerations

Degree of certainty High based on positive response to current CSF initiative.

Degree of flexibility High; a wide range of options is available to farmers

Degree of permanence High for most MMs - emissions avoided are on an annual basis involving no carbon sequestration that would be subject to later losses.

Policy cost

Initial set up cost Limited additional cost to recruit new resource and provide initial awareness material –.

Annual operational cost - public Current CSF comprises National team, £600,000, technical support, £320,000 and CSFOs £2,600,000 per annum. If expanded, small increases may be necessary in national team and technical support, but there would be a pro rata increase in CSFOs.

Annual operational cost - private Increased management time, planning rotations and field operations, say £2/ha.

Inventory

Tonnage (kt CO2e)

MMs 100% in inventory 20

MMs partially in inventory 47

Verification:

Verification level Tonnage (kt CO2e)

Outcome based (EU ETS) Nil

National Carbon Budgets Nil

Implementation based (high confidence) 333 (303)

Total verified abatement 333

137

Farm assurance public procurement

Voluntary New Abatement potential = 6 kt CO2e

Rationale for the instrument The nation‟s hospitals, schools, higher and further education establishments, police, prisons, local authorities, and Ministry of Defence establishments are estimated to procure food supplies to an annual value of between £1.7 and £2.2 billion. Insofar as these services are procured by the public sector, they represent an opportunity to target expenditure in ways that will support wider Government policy. According to the Department for Environment Food and Rural Affairs (Defra): “the Government wants buyers and their internal customers to use this buying power to help deliver the principle aims of the Government‟s Strategy for Sustainable Farming and Food in England.”

At its launch in 2003, the Defra “Public Sector Food Procurement Initiative” (PSFPI) was principally concerned with the potential for targeting expenditure towards UK, preferably locally sourced food, produced by small producers, using low input systems that could give additional environmental benefits. Much early attention was focussed on ways that this could be achieved within EU procurement rules. Considerable literature is available on the scope and benefits of this policy and there are several well profiled examples of the policy in practice. In practice however, progress is hampered by the cost and administration involved in public procurement of relatively small contracts for a wide range of produce at competitive prices, often to numerous sites at prescribed times.

Whilst this PI targets a small % of emissions, it is expected to act as a catalyst by Government showing leadership. This PI will link with other policies such as Act on CO2.

Scope of policy instrument and how it will work:

Scope: All of England but drawing on „English/British food‟. The limitation is the scale of the public procurement market and the limited number of suppliers willing to service this relatively low volume, low value market. The public sector accounts for 7% of UK catering sector which itself accounts for 30% of total expenditure on food (Relocalising the Food Chain: The Role of Creative Public Procurement Kevin Morgan & Adrian Morley 2002). PSFPI suggests c65% of public procurement is on domestically produced food. Hence 7% x 30% x 65% = 1.4%

Implementation: Suppliers to public sector customers will need to demonstrate good practice in GHG mitigation methods in a similar way that assurance schemes operate with the major retailers.

Risks: While administration costs may be low, the need for record keeping etc at farm level may deter some producers from supplying into these contracts and they will instead draw from existing farm assured suppliers.

Timing: The policy is unlikely to be a stand alone policy and should link with and be complimentary to other QA and value added schemes. As such it could be in place for 2012 and increase uptake to 2022.

Mitigation methods targeted

% of MM MTP the PI could achieve

Description and justification

Coverage Uptake

Beef improved Genetics

1.4% of food

produced.

10% The impetus provided by a public sector contract would encourage some farmers to invest in improved genetics in view of the commercial advantages.

138

Beef Probiotics

1.4% 10% These are currently legally available and similar to products in the human food chain. Uptake may be limited by the intangible nature of benefits and concern over consumer perception.

Crops-Soils-Avoid N Excess

1.4% 20% Recent increases in N fertiliser prices have increased the awareness of fertiliser use; fertiliser planning is an easy win

Full Manure 1.4% 20% Recent increases in N fertiliser prices have increased

the awareness of fertiliser use; fertiliser planning is an easy win

Improved N-Use Plants

1.4% 10% Only oilseed rape is currently available; limited relevance to PSFPI unless technology is extended to vegetables etc.

Mineral N Timing

1.4% 10% Recent increases in N fertiliser prices have increased the awareness of fertiliser use; improved timing of mineral N is an easy win

Organic N Timing

1.4% 10% NVZ rules limit autumn spreading window so limited scope for improved timing.

Reduced Till 1.4% 10% This is a widespread technique, which is less costly

than full plough tillage systems but limitations of soil type and concerns over weed control will limit uptake.

Dairy Improved Fertility

1.4% 10% Recent emphasis on milk yield at the expense of other traits has meant that many dairy cows are culled for infertility. An improvement in fertility needs to be realised within this context but this is recognised issue within the industry and a limited number farmers would respond to information.

Dairy Improved Productivity

1.4% 10% While increasing diary cow yield has been an industry focus for some time, there is still significant scope for improvement. Farmers would be receptive to information but a limited number would respond.

Dairy Probiotics

1.4% 10% These are currently legally available and similar to products in the human food chain. Uptake may be limited by the intangible nature of benefits and concern over consumer perception.

Dairy Maize Silage

1.4% 10% Forage maize growing is limited by soil type and climate but considerable scope remains to extend its use in the dairy sector. Specialist equipment for cropping and feeding will restrict potential uptake.

Other considerations

Degree of certainty

Low as the procurement process is localised and bureaucratic and contracts are small scale

Degree of flexibility

High as there are many options

Degree of permanence

Moderate as emissions avoided are mainly on an annual basis; some ES carbon sequestration that would be subject to later losses.

139

Policy cost

Initial set up cost

Limited as the procurement process is in place

Annual operational cost - public

See above

Annual operational cost - private

Minimal input relating to time plus attendance at events.

Inventory

Tonnage (kt CO2e)

MMs 100% in inventory 1

MMs partially in inventory 2

Verification:

Verification level Tonnage (kt CO2e)

Outcome based (EU ETS) Nil

National Carbon Budgets

Implementation based (high confidence)

6 (5)

Total verified abatement 6

Targeted Communications

Voluntary Existing Abatement potential = 212 kt CO2e

Rationale for the instrument This PI is already in place through Farming Futures and includes GHGs. Whilst it is having some impact, there is scope to prolong and extend at marginal cost. Communications can increase market awareness as well as the benefits of emissions reducing options. This provides scope to increase the level of relevant MMs, particularly those that are highly cost effective. Such activities would be most effective when designed to support other interventions.

140

Scope of policy instrument and how it will work

Scope: Currently, advisory material on GHG is available as part of a number of initiatives for farmers and landowners to take up. This initiative would give the GHG topic a higher profile and prompt relevant actions.

Implementation: Currently there is a presence at 80 livestock markets to deliver mitigation message. This is a need to revisit the focus for activities to promote the GHG issue to those who can respond most positively. A great deal of knowledge transfer (KT) is needed to achieve behavioural change so Knowledge Transfer Networks (KTNs) are relevant.

Risks: The MMs shown below target the abatement potential at negative cost and without significant capital expenditure but several are not explicitly associated with GHG emission reduction and this may be a difficult message to get across.

Timing: Should be in place for 2012, increasing in uptake towards 2022

Mitigation methods targeted

% of MM MTP the PI could achieve

Comments

Coverage Uptake

Beef improved Genetics

50% of farming

population

10% The impetus provided by a targeted communications initiative would encourage some farmers to invest in improved genetics in view of the commercial advantages.

Beef Probiotics

50% 10% These are currently legally available and similar to products in the human food chain. Uptake may be limited by the intangible nature of benefits and concern over consumer perception.

Crops-Soils-Avoid N Excess

50% 20% Uptake takes into account that without regulation or incentive, farmers will not become fully engaged with the opportunity

Full Manure

50% 20% Recent increases in N fertiliser prices have increased the awareness of fertiliser planning and farmers should be responsive to this opportunity.

Improved N-Use Plants

50% 10% Only oilseed rape is currently available but farmers should be responsive to the opportunity; uptake may be slow due to market perception.

Mineral N Timing

50% 10% Recent increases in N fertiliser prices have increased the awareness of fertiliser use; improved timing of mineral N is an easy win

Organic N Timing

50% 10% NVZ rules limit autumn spreading window so more limited scope for improved timing.

Reduced Till

50% 10% This is a widespread technique, which is less costly than full plough tillage systems but limitations of soil type and concerns over weed control will limit uptake.

141

Dairy Improved Fertility

50% 10% Recent emphasis on milk yield at the expense of other traits has meant that many dairy cows are culled for infertility. An improvement in fertility needs to be realised within this context but this is recognised issue within the industry and a limited number farmers would respond to information.

Dairy Improved Productivity

50% 10% While increasing diary cow yield has been an industry focus for some time, there is still significant scope for improvement. Farmers would be receptive to information but a limited number would respond.

Dairy Probiotics

50% 10% These are currently legally available and similar to products in the human food chain. Uptake may be limited by the intangible nature of benefits and concern over consumer perception.

Dairy Maize Silage

50% 10% Forage maize growing is limited by soil type and climate but considerable scope remains to extend its use in the dairy sector. Specialist equipment for cropping and feeding will restrict potential uptake.

Other considerations

Degree of certainty

Low as this is a voluntary PI

Degree of flexibility

High as there are many options

Degree of permanence

Moderate as emissions avoided are mainly on an annual basis; some ES carbon sequestration that would be subject to later losses.

Policy cost

Initial set up cost

Already in place. £150,000 pa to cover office, staff, leaflets and events plus in kind from partners – e.g. writing technical leaflets.

Annual operational cost - public

See above

Annual operational cost - private

Minimal input relating to time plus attendance at events.

Inventory

Tonnage (kt CO2e)

MMs 100% in inventory 42

MMs partially in inventory 54

Verification:

Verification level Tonnage (kt CO2e)

142

Outcome based (EU ETS) Nil

National Carbon Budgets

Implementation based (high confidence)

212 (193)

Total verified abatement 212

Voluntary Agreements

Voluntary Existing Abatement potential = 238 kt CO2e

Rationale for the instrument An example of a similar approach is found in LEAF, which covers 7% of the UK agricultural area.

This would be a voluntary funded agreement for farmers to implement MMs and reduce GHG emissions, a method of achieving behavioural change that has proven effective in many instances over many years. A proportion of farmers are generally willing to commit to a programme where they recognise wider public benefit. Voluntary emissions reduction efforts can draw on those businesses wishing to establish social responsibility credentials or could be the precursor to other schemes in establishing baselines should more formal incentive schemes be introduced at a later stage.

This is probably best implemented as an accompanying or precursor measure to other PIs.

Scope of policy instrument and how it will work:

Scope: These agreements would be made available for all farmers to change husbandry methods leading to significant GHG mitigation using limited funding.

Implementation: In a similar way to the targeted catchments in CSF, this could be targeted at specific agricultural areas where emitting enterprises are common, e.g. dairy farming areas. Alternatively, farms could voluntarily enable the reporting of emissions to registries to be piloted as a forerunner to emissions rights becoming tradable. Only cost negative methods with no capital expenditure have been included.

Risks: International evidence suggests that voluntary programmes in their own right have little discernable impact on emissions levels without a credible threat of pricing or regulatory action if voluntary targets are not met.

Timing: Not available until 2017 and increasing thereafter.

Mitigation methods targeted

% of MM MTP the PI could achieve

Comments

Coverage Uptake

Crops-Soils-Avoid N Excess

100% 20% Uptake takes into account that without regulation or incentive, farmers will not become fully engaged with the opportunity

Full Manure

100% 20% Recent increases in N fertiliser prices have increased the awareness of fertiliser planning and farmers should be responsive to this opportunity.

143

Improved N-Use Plants

100% 10% Only oilseed rape is currently available but farmers should be responsive to the opportunity; uptake may be slow due to market perception.

Mineral N Timing

100% 10% Recent increases in N fertiliser prices have increased the awareness of fertiliser use; improved timing of mineral N is an easy win

Organic N Timing 100% 10% NVZ rules limit autumn spreading window so

more limited scope for improved timing.

Other considerations

Degree of certainty Moderate as based on voluntary action. .

Degree of flexibility High due to large range of options for farmers to choose from

Degree of permanence

High as emissions avoided are mainly on an annual basis; carbon sequestration from ES options would be subject to later losses.

Policy cost

Initial set up cost Nil. Charitable organisation funded by donation.

Annual operational cost - public

See above

Annual operational cost - private

Farm assurance type costs as in LEAF audit, perhaps £1,000.

Inventory

Tonnage (kt CO2e)

MMs 100% in inventory 30

MMs partially in inventory 28

Verification:

Verification level Tonnage (kt CO2e)

Outcome based (EU ETS) Nil

National Carbon Budgets

Implementation based (high confidence)

238 (200)

Total verified abatement 238

144