Model-based analysis of the impact of an eco-scheme premium on the climate protection potential of short rotation coppice in Baden-Württemberg

The Common Agricultural Policy (CAP) and its direct payments constitute an important instrument for achieving the European climate target set for agriculture. In this context, the promotion of agroforestry can contribute to its application as a greenhouse gas (GHG) reduction measure, for instance through carbon sequestration and fossil fuel substitution with fire wood. However, as this is a novel measure within the CAP, its contribution to climate mitigation objectives and the cost effectiveness of the current area payments under the eco-schemes are unclear. This study investigated the cost effectiveness of eco-scheme premiums within the CAP 2023, focusing on their potential to enhance climate protection through Short Rotation Coppice (SRC) in Baden-Württemberg (BW). We used a geospatial economic land use model with a life cycle assessment to evaluate the impact of varying premium levels on GHG emissions. Our findings suggested that increasing the premium to €400 ​ha⁻¹ ​yr⁻¹ could offset up to 1.5% of the current agricultural GHG emissions of BW. However, this effect did vary between 0.1% and 8% due to input uncertainties such as economic factors and mitigation potential. The resulting payments per ton of mitigated CO₂eq ranged from €70 to €454, averaging €140. These results indicated that higher eco-scheme premiums could effectively promote SRC as a climate mitigation strategy, but their cost effectiveness is highly variable. Despite uncertainties in our model framework, which may influence these evaluations, our study provided valuable insights into the potential of eco-scheme premiums for climate protection. Although our findings were specific to Germany, they offer relevant guidance for EU policymakers responsible for designing national CAP strategies and eco-schemes. Further research should explore the additional benefits of SRC, such as biodiversity enhancement and soil erosion control.