Enhanced agricultural carbon sinks provide benefits for farmers and the climate

The global food system contributes roughly one-third of anthropogenic GHG emissions, with AFOLU responsible for about 11.9 ± 4.4 GtCO2e yr−1 (2010–2019). Agriculture is a key driver of tropical deforestation and a major source of current and projected emissions, making rapid and ambitious mitigation in this sector critical to meeting the 1.5 °C target. Despite cost-effective abatement potential, countries have been reluctant to adopt price-based mitigation in agriculture due to governance challenges, high transaction and MRV costs, food security and poverty concerns, particularly in the Global South. Climate-smart agricultural practices (enhanced soil carbon, biochar, silvo-pastures) can create substantial carbon sinks with co-benefits for productivity and resilience, yet they have been underrepresented in global mitigation pathways and assessed largely in isolation from market dynamics. This study aims to quantify the economic and mitigation potential of agricultural CO2 sequestration options, their integration within AFOLU portfolios, and their socio-economic implications using coupled global land-use and forest models under alternative GHG price and bioenergy demand scenarios.

Prior bottom-up assessments indicate large technical and economic potentials for agricultural soil carbon enhancement, biochar application, and agroforestry at carbon prices up to ~100 USD2015 tCO2e, with co-benefits for yields and resilience, especially on degraded soils. However, AR6 mitigation pathway reviews did not integrate these agricultural CO2 sequestration options, and most studies evaluate them in isolation without considering cross-sector market feedbacks, rebound effects, and opportunity costs. Barriers documented in the literature include governance capacity, high MRV and transaction costs, food security risks, and equity concerns. Evidence also highlights large degraded grassland areas, substantial technical adoption potential for conservation agriculture (≈38–81% of arable land), and significant agroforestry potential where agricultural lands have low tree biomass stocks. These insights motivate integrated economic assessments to avoid over- or underestimation of potentials and costs and to enable representation in IAMs.

The study enhances the GLOBIOM global recursive dynamic partial equilibrium land-use model with explicit agricultural CO2 sequestration options and links it to the Global Forest Model (G4M) to capture AFOLU interactions. Three agricultural CO2 options are represented: (1) soil organic carbon (SOC) enhancement on cropland and pastures (e.g., improved tillage, fertilizer and residue management, cover cropping), (2) biochar application on cropland, and (3) silvo-pasture systems on grassland. Agroforestry on cropland was excluded to avoid crop production trade-offs. Scenarios: Baseline follows SSP2 under historical climate. Mitigation scenarios apply linearly increasing AFOLU GHG prices from 2030 to 2050 (converted ex post to USD2022) across: agricultural non-CO2 (CH4, N2O), agricultural CO2 (removals on agricultural land), and FOLU CO2 (emissions/removals from land-use change and forestry). Scenario matrix: default (no agricultural CO2 pricing), agCO2 (includes agricultural CO2), default_bio and agCO2_bio (with enhanced 1.5 °C-compatible bioenergy demand). Cost-effective potentials are derived endogenously via adoption decisions triggered by GHG price signals and co-benefits. Sensitivity analyses vary adoption costs (doubling), maximum adoption ceilings, sequestration duration/saturation times, silvo-pasture tree coverage (15–25%), and future livestock demand (diet changes), as well as higher bioenergy demand (BIO+). Representation of options: SOC sequestration coefficients (2020–2050 annualized) from Roe et al.; saturation after 20 years; yield co-benefits on degraded lands parameterized by region (Africa, Latin America, Asia) per Lal and Smith et al. Adoption cost curves (quadratic) calibrated to Roe et al. (max adoption: 90% cropland, 60% grassland; 90%/60% adoption at 100 USD2000 tCO2). Biochar emission factors from Roe et al., sequestration saturation after 30 years; costs for pyrolysis, storage, and application from Homagain et al.; feedstock conversion efficiencies from Griscom et al.; biochar competes with energy/material uses for biomass (crop residues, forestry residues, short-rotation plantations). Crop residue supply potentials parameterized with residue-product ratios (Holmatov et al.) assuming 50% sustainable removal; costs for baling/recovery/transport rescaled by regional GDP per capita; residues also demanded by livestock and energy sectors. Silvo-pasture modeled via 3-PGmix growth simulations (species selected by climate, primarily Eucalyptus spp. and Populus spp.), coupled with Yasso20 soil model for N dynamics. Two silvo-pasture variants: (a) for biomass/biochar (10-year rotation, ~25% of pasture area in alleys at 1,250–2,500 trees ha−1; harvested biomass to bioenergy/biochar; equilibrium in biomass carbon after 10 years; establishment/maintenance/harvest costs from literature) and (b) for carbon sequestration (30-year rotation, lower density ~400–600 trees ha−1; accumulation over 30 years; only establishment/maintenance costs ≈8% of biomass variant). Conservative assumption: no pasture productivity increase; 25% reduction in grazing biomass supply where trees occupy 25% of area. Adoption of silvo-pasture limited to 50% of pasture area. AFOLU mitigation and economic outcomes include land use, emissions/removals, prices, trade, production, and ex post calculations of producer turnover, GHG tax payments, and carbon subsidy revenues. Economy-wide feedbacks (GHG price, GDP effects) assessed via MESSAGEix-GLOBIOM where noted.

- At a GHG price reaching 160 USD2022 tCO2e by 2050, agricultural CO2 sequestration on cropland and grassland provides up to 2.8 (1.6–2.5 at 80/240) GtCO2e yr−1 by 2050, representing 36–41% of AFOLU mitigation needs (≈7–8 GtCO2e yr−1) in 1.5 °C pathways. At 240 USD, total is smaller due to earlier uptake. - Composition of 2050 potential at 160 USD: SOC enhancement 1.1 GtCO2e yr−1 (39%), biochar 1.0 GtCO2e yr−1 (35%), silvo-pasture 0.7 GtCO2e yr−1 (26%). - Regional distribution: 73% of cost-effective mitigation in the Global South (largest in sub-Saharan Africa), 27% in the Global North. - Adoption scale by 2050 (160 USD): ~780 Mha silvo-pastures established (≈43% of managed grassland), conservation agriculture on ~900 Mha (≈53% of cropland), improved grassland SOC management on ~1,100 Mha (≈60% of managed grassland). - Mitigation efficiency (global averages): biochar ≈2.1 tCO2e ha−1 yr−1, silvo-pasture ≈0.9 tCO2e ha−1 yr−1, SOC practices ≈0.5–0.6 tCO2e ha−1 yr−1. - Sensitivity: varying sequestration duration, adoption ceilings, and costs reduces potentials by ~27–50%. Diet shifts lowering livestock consumption in Western countries reduce agricultural CO2 sequestration (cropland SOC −18%, grassland SOC −21%, silvo-pasture −15%); combining diet shifts with 1.5 °C-compatible bioenergy demand reduces total agricultural CO2 sequestration by −29%. Higher bioenergy demand nearly halves biochar’s economic mitigation potential due to feedstock competition/prices. - Net zero AFOLU role: With agricultural CO2 options and 1.5 °C-compatible bioenergy (agCO2_bio), AFOLU emissions reach −1.6 GtCO2e yr−1 by 2050 at 160 USD (vs +0.4 GtCO2e yr−1 without these options). Contributions in 2050: FOLU removals 5.9 GtCO2e yr−1 (57%), agricultural land CO2 sequestration 2.3 GtCO2e yr−1 (23%), agricultural non-CO2 reduction 2.1 GtCO2e yr−1 (20%). Even at 80–120 USD, AFOLU reaches ≈0.6 to −0.9 GtCO2e yr−1 by 2050, compatible or below many 1.5 °C scenarios. - Cumulative mitigation 2020–2050 at 160 USD: SOC (cropland+grassland) ≈24 GtCO2e; silvo-pasture ≈18 GtCO2e; biochar ≈5 GtCO2e. At prices >160 USD, agricultural CO2 sequestration increases further while some FOLU sinks saturate; at 325 USD, agricultural CO2 sequestration provides 65% higher mitigation than the FOLU sink. - Regional portfolio shares (160 USD): agricultural CO2 options account for ≈18% of AFOLU mitigation in the Global South (≈11% Latin America; ≈21% Africa) vs ≈44% in the Global North. Inclusion of agricultural CO2 options retains more land in production, improves GHG-efficiency of pasture-based systems, and reduces pasture abandonment/reforestation by ≈210 Mha (≈85% in Latin America and sub-Saharan Africa). - Farmer economics under carbon pricing: At 160 USD, agricultural GHG tax payments ≈675 billion USD2022 in a scenario without agricultural CO2 subsidies (default_bio), leading to net producer turnover losses ≈325 billion USD2022. With agricultural CO2 subsidies, farmers earn ≈125/375 billion USD2022 (at 80/160 USD) in carbon credits. After deducting adoption costs ≈55/140 billion USD2022, net producer revenues from sequestration are ≈70/235 billion USD2022. Overall net losses shrink to ≈55 billion USD2022 at 80 USD, and net effects turn slightly positive (≈+15 billion USD2022) at 160 USD. Regional winners include livestock producers in Oceania (+43%), Europe (+13%), sub-Saharan Africa (+9%) and crop producers in North America (+14%). - Government budgets: Net GHG tax revenues fall from ≈675 billion USD2022 (without agricultural CO2 subsidies) to ≈265/315 billion USD2022 (with subsidies at 80/160 USD). In sub-Saharan Africa, subsidies exceed tax revenues (≈−17 billion USD2022 at 160 USD), underscoring need for climate finance. - Economy-wide effects: Including agricultural CO2 options in 1.5 °C no-overshoot scenarios reduces GHG prices by ≈48% by 2050 and raises global GDP by ≈0.6% relative to scenarios without these options.

The analysis shows that integrating agricultural CO2 sequestration options into AFOLU mitigation portfolios enables deeper, earlier, and more cost-effective decarbonization, supporting net zero AFOLU by mid-century at lower carbon prices than scenarios without these options. The results highlight important interactions and trade-offs: biomass competition reduces biochar potential in high-bioenergy pathways, and diet shifts alter land use and sectoral mitigation balances. Integrated modeling avoids overestimating standalone technical potentials by capturing market feedbacks and cross-option dependencies. Regionally, while absolute mitigation is concentrated in the Global South, agricultural CO2 options constitute a larger share of AFOLU mitigation in the Global North where deforestation abatement plays a smaller role. Paying for carbon sinks can offset producers’ tax burdens, improve distributional outcomes, and mitigate adverse socio-economic effects such as land abandonment in the Global South. Economy-wide benefits include substantially lower marginal abatement costs and modest GDP gains. However, permanence limits (saturation of soil and biomass carbon), MRV challenges, and policy implementation constraints require robust institutions and financing mechanisms to realize these benefits equitably and effectively.

Enhanced agricultural carbon sinks—SOC enhancement, biochar, and silvo-pastures—can deliver up to 2.8 GtCO2e yr−1 by 2050 at 160 USD2022 tCO2e, covering 36–41% of AFOLU mitigation needs in 1.5 °C pathways. Their inclusion enables net negative AFOLU emissions by 2050 at lower carbon prices, reduces economy-wide mitigation costs (≈48% lower GHG prices) and modestly increases GDP (~0.6%). Agricultural carbon credits can create sizable revenue streams for producers (up to ≈375 billion USD2022 at 160 USD), helping offset tax burdens. Nonetheless, potentials depend on adoption limits, sequestration durations, biomass competition, and socio-economic drivers. Policy implications include: fast-tracking robust MRV and institutional frameworks; integrating agricultural sinks into carbon pricing or crediting schemes with safeguards for permanence; prioritizing high-emission-intensity commodities (e.g., ruminants) and regions with capacity; leveraging supply-chain actors to reduce implementation costs; and coordinating across gases, sectors, and regions to minimize leakage and rebound. Future research should quantify climate impact feedbacks on sequestration, refine regional adoption cost and MRV estimates (including transaction and institutional costs), evaluate permanence and additionality risks, and explore equity-centered policy designs and financing mechanisms to enable scaling, especially in smallholder-dominated systems.

- Climate impacts and disturbances are not modeled; current climate is assumed. Potential effects (e.g., altered plant inputs, microbial processes, extreme events) could reduce sequestration and increase uncertainty. - Optimistic cost assumptions: transaction, institutional, and implementation costs are excluded; literature suggests these can be substantial (up to ~65–85% of total credit costs in some contexts), reducing cost-effectiveness, especially where sequestration rates are low. - Fertilization in silvo-pastures is assumed optimal; real-world nutrient constraints may limit performance. - Permanence and additionality risks for soil and biomass carbon are not fully resolved; sequestration saturates over time. - Adoption ceilings and saturation times are uncertain; results are sensitive to these parameters. - MRV challenges, land tenure issues, and institutional capacity constraints may impede large-scale adoption, especially among smallholders. - Global policy uptake in the short term is unlikely due to governance and implementation lags; time lags in land systems may delay benefits. - Biochar potential is contingent on biomass availability and competition with energy/material uses; 1.5 °C-compatible bioenergy demand notably reduces its economic potential.