Food systems are big in carbon markets but major farm emissions are being left behind

Food systems already account for a substantial share of carbon market activity. Yet the credits are concentrated in a small set of project types, leaving several major sources of food system emissions with little representation. 

A new CIFOR-ICRAF analysis by Christopher Martius and Nathanaël Pingault brings together 9,254 projects that had issued credits through UNFCCC mechanisms or major independent standards. Together, those projects represent 4.9 billion tonnes of carbon dioxide equivalent in issued credits. 

The authors recast these projects through a food systems lens, looking beyond agriculture and land use to include energy, refrigeration, waste, and other activities that run through food value chains. The analysis shows an uneven distribution of carbon market activity across food systems. While some activities attract substantial investment and generate large volumes of credits, several major sources of food system emissions remain underrepresented.  

Refrigeration and REDD+ dominate food system carbon credits 

Food system projects account for 23.3% of projects registered under the Clean Development Mechanism and 35.9% of the credits it has issued. Among the independent mechanisms covered by the Berkeley Carbon Trading Project database, their presence is larger still: 61.3% of projects and 58.6% of issued credits. 

But a lot of this volume comes from just a handful of activities. Of the 4,258 projects the study identifies as fully linked to food systems, those dealing with ozone-depleting substances used in refrigeration account for 25.2% of issued credits. REDD+ projects account for another 23.5%. 

In other words, nearly half (48.6%) of all food system-related credits in the combined dataset come from these two categories alone. Agriculture, despite its central place in the food system and its contribution to emissions, accounts for just 2.8%. 

The difference partly reflects project size. REDD+ and refrigerant projects can generate large volumes of credits from a single project. Many agricultural activities are smaller, while still carrying the fixed costs of project design, registration and monitoring. That makes participation comparatively expensive. 

The pattern is also observable across geographies. China, India and Brazil account for a considerable amount of the activities under the Clean Development Mechanism. Independent mechanisms reach a broader set of countries, though the United States, India and China still produce close to half of the credits in that dataset. Africa’s share remains comparatively small: 3.7% of credits under the CDM and 14.3% under the independent mechanisms examined in the study. 

Major sources of food system emissions remain largely outside carbon markets 

Some of the biggest sources of food system emissions remain on the margins of carbon markets. 

At the farm level, methane from livestock digestion (known as enteric fermentation) is the largest source of emissions in the paper’s comparison with FAOSTAT data. Manure management and rice cultivation are also significant contributors. Yet, compared with the scale of their emissions, all three appear only lightly in the carbon-project data. 

The gaps extend beyond the farm. Food is lost or wasted at almost every stage between production and consumption, creating emissions that the paper sees as another potential, yet underexplored, area for carbon projects. Household energy use and access to clean water are also closely tied to how food is prepared and consumed, but they have attracted far less carbon market activity than areas such as refrigeration. 

More projects, however, do not automatically mean more climate benefits. A carbon credit is only as credible as the emissions reduction behind it. Projects need to show that the reduction would not have happened without the intervention and that the results can be monitored. The same reduction cannot be claimed twice, and safeguards are needed to ensure that climate gains are not later reversed or achieved at the expense of people or ecosystems. 

Those standards become especially important as carbon markets move into new segments of the food system. Expanding the number of credits without strong accounting would enlarge the market on paper without necessarily delivering additional emissions reductions. 

Smallholder agriculture does not fit easily into existing carbon markets 

Food systems also pose a real-world challenge for carbon markets. Many projects involve thousands of smallholder farmers working in different landscapes, with different crops, livestock and production practices. Rules designed for large, relatively uniform projects can make participation expensive and complicated. 

The paper argues for methods better suited to these conditions. One option is to group many smaller activities under a single programme, allowing farmers or communities to share some of the costs of registration, monitoring and verification. The authors also call for more consistent accounting rules and greater compatibility between the different registries and standards used across carbon markets. 

But not every overlooked source of emissions necessarily belongs in a carbon market. In some cases, regulation, public investment or other forms of climate finance may be more practical or effective. The database can show where carbon market activity is concentrated (and where it is thin), but it cannot, by itself, determine which policy tool is best suited to each gap. 

Food systems have entered carbon markets, but only some activities have done so at scale. The next design choices will determine whether projects in smallholder settings and those targeting major farm emissions can participate without compromising credit quality.  

Authors: Ibukun Taiwo and Janelle Marie Sylvester (Alliance of Bioversity and CIAT) and Christopher Martius (CIFOR-ICRAF) 

This work is carried out with support from the CGIAR Climate Action Program. We would like to thank all funders who supported this research through their contributions to the CGIAR Trust Fund: https://www.cgiar.org/funders/