Key issues to be considered in the design of funding instruments

Funding climate-friendly soil management: Risks and key issues

  • Dr. Franziska Wolff
  • Hugh McDonald
  • Ana Frelih-Larsen
  • Aaron Scheid
  • Andreas Gattinger
  • Wiebke Niether

This report summarises key aspects that should be accounted for in the design of policy instruments to support the implementation of climate-friendly soil management measures. It outlines overarching aspects that need to be considered for any type of policy instruments, including land use competition, impacts on soil health, biodiversity impacts, ownership and rights to use of soils and social impacts. Furthermore, aspects that are relevant for all types of results-based funding schemes are elaborated upon, including additionality, determining the SOC content of soils, determining baselines avoiding carbon leakage, addressing non-permanence, jurisdictional vs. project-based approaches and ex-ante vs. ex-post crediting. Particular risks exist for transfer-based mechanisms which are a subset of result-based payment approaches. These challenges must be considered and addressed for policy instruments to deliver robust mitigation through soil carbon.