Analysis | Why Farmers Are Not Compensated For Climate Services? A Flaw In Carbon Accounting

ETV Bharat / opinion

Analysis | Why Farmers Are Not Compensated For Climate Services? A Flaw In Carbon Accounting

Recognising agriculture as a net sink would strengthen incentives for maintaining and enhancing soil carbon sequestration and other CDR practices.

A farm labourer working at a field in Bhatinda (ETV Bharat)

ByC P Rajendran

Published :June 28, 2026 at 7:01 AM IST

The international agencies increasingly recognise agriculture’s potential for carbon dioxide removal (CDR) through regenerative practices. However, a fundamental accounting injustice prevents the agricultural sector from receiving proper value for its climate services. This injustice stems from inconsistent greenhouse gas (GHG) accounting treatment of human metabolic emissions—respiration, excretion, and unavoidable food waste—which are incorrectly attributed to the agricultural sector.

Human metabolic emissions are fundamentally different from fossil fuel emissions. While fossil fuels release “new” carbon that had been locked underground for millions of years, metabolic emissions are part of the short-term biogenic carbon cycle—carbon recently captured by plants through photosynthesis and returned to the atmosphere within months or years.

These emissions, totalling approximately 0.54 tonnes of CO₂ equivalents per person annually (4.3 gigatonnes globally for 8 billion people), are unavoidable for human survival and cannot be reduced without compromising nutrition.

Infographics for Farmers and Carbon Accounting (ETV Bharat)

The GHG Protocol, the world’s most widely used climate accounting standard, defines three scopes of emissions. Scope 1 covers emissions directly controlled by an enterprise during production. The inconsistency arises because metabolic emissions are incorrectly assigned to Scope 1 of the agricultural sector, whereas fossil fuel combustion emissions are correctly attributed to downstream users rather than the petroleum sector. This misattribution penalises agriculture for facilitating the natural recycling of atmospheric carbon while giving the fossil fuel sector preferential treatment.

The case of India illustrates the magnitude of this accounting error. India’s 2023 GHG report states that agriculture emits 660 million tonnes of CO₂ annually while sequestering 228 million tonnes, yielding net emissions of 432 million tonnes (14% of national total). However, this calculation ignores that India’s 1.4 billion people emit 756 million tonnes of CO₂ through metabolism—currently misattributed to agriculture. When these emissions are correctly separated, India’s agriculture sector emerges as a net sink rather than a source, with gross CDR of 984 million tonnes and net sequestration of 324 million tonnes.

Infographics for Farmers and Carbon Accounting (ETV Bharat)

The financial implications are substantial. With carbon damage costs estimated at approximately $100 per metric tonne, India’s agriculture climate services are valued at an astounding $98.4 billion (Rs 8.1 lakh crore) annually. This translates to roughly Rs 52,000–67,000 per hectare per year for India’s 155 million hectares of arable land. Comparable calculations suggest that many nations with large agricultural sectors may similarly discover their farmlands function as net sinks—a reality obscured by current reporting conventions.

Other jurisdictions have begun recognising the need for differentiated treatment of biogenic emissions. New Zealand’s split-gas approach acknowledges the distinct behaviour of short-lived methane versus long-lived CO₂, while the EU Emissions Trading System exempts certain biogenic emissions from carbon pricing schemes.

Correcting this accounting flaw has profound policy implications. Under Article 6 of the Paris Agreement, nations can trade “Internationally Transferred Mitigation Outcomes” (ITMOs). If agriculture is formally recognised as a net sink, farmers could potentially receive carbon credits not merely for additional sequestration practices but for their existing role in maintaining the biogenic carbon balance sustaining the global food system.

The solution requires formal revision to national GHG inventory guidelines, reclassifying human metabolic emissions as a separate non-attributable category outside agriculture’s Scope 1 boundary. This “Human Metabolic Emissions” category would be reported for informational purposes but not assigned to any sector for mitigation obligations, recognising these emissions as non-reducible survival-linked processes. The Intergovernmental Panel on Climate Change (IPCC) Task Force on National Greenhouse Gas Inventories should develop methodological guidance enabling consistent application across all national inventories.

Critics may raise concerns about creative accounting or double counting, but these objections miss the point. Accurate accounting is prerequisite for effective policy, not a substitute for emission reductions. Recognising agriculture as a net sink would strengthen incentives for maintaining and enhancing soil carbon sequestration and other CDR practices. Farmers compensated for existing climate services gain both resources and incentives to provide more.

The current treatment of human metabolic emissions represents a structural flaw that systematically undervalues agriculture’s climate services. By conflating the short-term biogenic carbon cycle with fossil fuel emissions and forcing unavoidable human respiration into agriculture’s Scope 1 boundary, the existing framework penalises the sector most capable of delivering carbon removal at scale. Correcting this error is essential for climate justice, sound agricultural policy, and unlocking the land sector’s full potential in global climate stabilisation efforts.

(DISCLAIMER: The opinions and facts expressed in this article are those of the writer and do not reflect the views of ETV Bharat.)