Avoided Land Degradation and Enhanced Soil Carbon Storage: Is There a Role for Carbon Markets? - Soil Carbon: Science, Management and Policy for Multiple Benefits - page 361

(Chapters 15 and 18, this volume). There is
thus a challenge of balancing the long-term
on-farm benefits of enhancing SOM with
short-term opportunity costs of foregoing
more profitable, SOM-depleting practices.
In economic analysis, this temporal trade-off
depends on discount rates of future costs
and benefits, and thus on security of tenure,
risk preferences and farmers' future out-
look. Discussions on this trade-off in terms
of soil fertility go back at least 2000 years to
the Roman books on agriculture by Marcus
Porcius Cato and Marcus Terentius Varro
(Winiwarter, 2000; even though soil organic
matter and carbon were not known in cur-
rent terms, the terms used, calidus (hot) or
frigidus (cold), as descriptors of fertile and
infertile soil were the same as described from
local ecological knowledge in South-east Asia,
but with opposite meanings). The recent
concern on increases in the greenhouse gas
effect may, however have opened new ways
to resolve this age-old issue by providing a
basis for economic incentives to let the
long-term farmer benefits of enhanced soil C
storage coincide with the public interest in
mitigating climate change.
The carbon content of SOM is relevant in
the global C balance and in efforts to contain
the rapid increase of atmospheric CO 2 con-
centrations that contributes to global climate
change (Chapters 9 and 20, this volume). The
economic value of maintaining and enhan-
cing soil carbon derives from a comparison
with other activities that increase or decrease
atmospheric CO 2 concentrations but are con-
strained by the institutional framework of
rights and obligations that is formed to imple-
ment the ultimate objective of the UN Frame-
work Convention on Climate Change (UNFCC)
(UN, 1992). This objective is to:

In this chapter, we review to what extent
'markets' can and already are linking the
global significance of soil C storage to the
land-use decisions that otherwise might opt
for degradation of soil carbon. Soil C loss is
related to between-categories changes in
land cover (e.g. forest-to-agriculture conver-
sion), and to details of land management
within a category. Any economic incentives
for soil carbon management interacts with
rights-based approaches to nudge the deci-
sions of land users in a direction desirable
by external stakeholders, as well as with
the direct economic benefits derived from
land use. Incentives can target the primary
actors ('land users', 'farmers'), as well as the
underlying drivers and conditioning factors
(Fig. 31.1 ).
We will discuss the concept of mar-
kets in the broader context of economic in-
centives that can apply at multiple scales,
linking plot-level land-use decisions by
farmers and other land managers to global
stakeholders. Markets essentially are feed-
back mechanisms that relate current and
expected future supply and demand, and
the elasticity of production and demand,
to prices, perceived risk and transaction
costs. Markets require buyers and sellers,
and often involve brokers, as basic levels of
trust are needed to link 'pay-for-what-you-get'

Drivers

Actors

Direct benefits
from land use

Land cover change
and soil management
SOC and environ-
mental services

ES
markets

External
stakeholders

stabilize greenhouse gas concentrations in
the atmosphere at a level that would prevent
dangerous anthropogenic interference
with the climate system. Such a level
should be achieved within a time-frame
sufficient to allow ecosystems to adapt
naturally to climate change, to ensure that
food production is not threatened and to
enable economic development to proceed
in a sustainable manner.

Fig. 31.1. External stakeholders of soil carbon,
beyond the on-farm effects of soil organic matter,
can use rights-based approaches (land-use
planning, access rights) and economic instruments
('environmental service markets') to influence
decision making by the primary actors and/or the
underlying drivers. (From van Noordwijk et al .,
2011.) LU, land use; ES, ecosystem services; SOC,
soil organic carbon.

(UN, 1992)