Amid mounting concerns surrounding climate mitigation in the agriculture and forestry sectors, science-based evidence suggests a need for more effective, fair and coherent policy frameworks for cutting greenhouse gas emissions in the European Union and further afield.
International policies to protect the environment are at a crossroads: bold targets coexist with fragmented priorities, threatening the agenda. The debate is often dominated by the least effective measures, while high-impact solutions struggle to gain space and resources. Funding streams show only a faint prioritisation of green objectives, eroding the consistency of environmental action. These dynamics become especially evident in sectors where emissions are high and policies are numerous, yet strategic alignment and assessment remain scarce.
The Agriculture, Forestry and Other Land Use (AFOLU) sector, responsible for over 20% of global emissions, continues to fall through the cracks of climate policy. In the European Union, it is often described as “the missing piece in climate policy.” Yet, it continues to be regulated with several national and local initiatives, while suffering from weak coordination at the macro level (e.g. EU, multilateral agreements).
Calls for policy efficiency and multilateral climate governance
Despite a wide range of local and national initiatives targeting emissions reductions in the AFOLU sector, there remains a striking lack of assessment studies evaluating their real-world effectiveness.
Ex-post analyses, though far fewer in number, provide evidence-based insights that are key to refining future strategies. Many initiatives prioritise conventional agricultural goals (i.e income growth, yield improvement) over environmental ones. A recent OECD review on policy effectiveness, echoed by university researchers, warns of incoherence in political agendas when it comes to lowering emissions. The findings highlight differences in the performance of policy tools, raising the question: Are the most effective instruments being prioritised and funded within current policy agendas?
Russia’s invasion of Ukraine has triggered one of the largest increases in conflict-related food insecurity. The United Nations’ Food and Agriculture Organization (FAO) warns that, due to the war, millions of people could still be chronically undernourished by 2030. The crisis has pushed food security to the top of the political agenda, with the need to ensure food supply often putting environmental and climate priorities in the background.
On June 20 2025, the European Commission withdrew its Green Claims Directive, a planned crackdown on misleading environmental claims. In the EU Parliament, the move sparked strong criticism from Socialists and Liberals and marked a setback in the fight against greenwashing.
Ahead of COP30, the UN’s annual meeting for climate cooperation, held in the Amazonian city of Belém in November 2025, Brazil’s National Secretary for the Environment and Climate Change, Ana Toni, raised serious concerns about the world’s “uncertain” response to the climate crisis.
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One month before COP30, only one third of the nearly 200 countries had submitted plans to meet the requirements required by the 2015 Paris Agreement, while ongoing military and trade conflicts continued to divert attention and resources away from climate action.
India’s plans for one, still remain to be seen. Described as the world’s fifth largest economy and third biggest emitter of global greenhouse gases, the country was closely watched at the UN meeting.
Highest emitting economies are on the UN’s radar
COP30 absentees included China’s President Xi Jinping and US President Donald Trump. China and the US are the two biggest emitters of planet-warming gases. At the summit China came under the closest scrutiny as the world’s second-largest economy and the biggest emitter of greenhouse gases. What alarms analysts is that China approved 11.29 gigawatts (GW) of new coal-fired power plants in the first three months of 2025, already surpassing the 10.34 GW approved in the first half of 2024. Reducing coal use is essential for China to meet its targets of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060.
Meanwhile, last June, in the US, Donald Trump was already laying the groundwork to open up 58 million acres of national forest backcountry to road construction and development, rolling back protections that have been in place since 2001. In detail, the Trump administration announced plans to repeal the 2001 Roadless Rule (describing it as outdated) which had preserved the wild character of nearly one-third of the land in national forests across the United States.
These trends could ultimately be summed up in one sentence: a policy agenda whose attention toward the environment is slowly declining, despite the growing urgency of sustainability challenges.
The Environmental impact of agricultural policies: Beyond market instruments
The expectations on the debate about agriculture’s inclusion in the EU Emissions Trading System (ETS) may be exaggerated. Our research shows that similar policies (i.e. carbon taxes, emissions trading schemes, and subsidies) are barely effective and tend to reduce emissions by percentage as high as 9%.
Agriculture potentially becoming part of the ETS is a major topic in the current policy debate. However, turning this into action faces challenges. Denmark’s recent decision to introduce a carbon tax on agricultural emissions by 2030, aiming to cut emissions by up to 70%, shows the level of ambition.
Setting a price on emissions through a fair and balanced application of the polluter pays principle makes sense. It helps cleaner alternatives compete, raises money to support a fair transition, and makes polluters take financial responsibility for the damage they cause. But for a future agricultural ETS to truly work, it must be designed properly: it needs a strict emissions cap, no free pollution permits, and a fair and efficient use of the revenues.
In the current Common Agricultural Policy (CAP), the adoption of eco-scheme uptake has been poor. To make matters worse, CAP rules have been watered down, weakening several of the “good agricultural and environmental conditions” and giving EU member stateseven more flexibility in the approval process of their strategic plans. In this context, putting a price on pollution won’t change much if the rest of the system keeps supporting polluting practices. A carbon price only works if the broader framework stops rewarding emissions in the first place.
By co ntrast, non-market policies – i.e. Protected Areas (PA), Forest Management Programs (FMP), Payments for Environmental Services (PES), and Non-Tariff Measures (NTM) – often deliver better results, with stronger impacts on reducing emissions than market-based policies. PA, broadly adopted in Indonesia and Thailand, can achieve emission reductions of up to 60%, placing them among the most impactful policy instruments available. FMP and PES show encouraging results in land-use changes, such as the conversion of croplands into forests.
Research finds that FMP, widely adopted in Brazil, are the most effective in triggering substantial shifts in land use, with forest cover increasing to as much as 50%. One reason for this is that this type of policy makes it more appealing for farmers to transition: by conserving their land, they gain access to valuable resources such as timber and other ecosystem services. It’s a win-win, for the environment and for local communities.
While non-market-based policies demonstrate strong effectiveness in reducing emissions, they continue to face significant challenges. The EU Deforestation Regulation (EUDR) is an example of this. Although the EUDR was introduced as a landmark effort to curb global deforestation by ensuring that products sold in the EU are deforestation-free, it is now facing significant political pushback. Eighteen EU member states have called on the European Commission to ease the regulation, arguing that it imposes disproportionate and costly administrative burdens even on countries with negligible deforestation risk. They warn that the law, in its current form, could hurt competitiveness, drive up production costs, and disrupt supply chains; pressures that have already led to the postponement of its enforcement and risk diluting its environmental ambition before it is fully implemented.
Effective agricultural policy vs current funding priorities
If we are truly committed to climate goals, especially in the AFOLU sector, we must focus on policies that are direct, enforceable, and grounded on solid science. The research evidence illustrates that the most meaningful progress comes from mandatory rules-based approaches, such as PA.
According to the European Commission’s financial report for 2023, a total of €378.5 billion has been made available under the CAP since January 2021.
Of this, “The vast majority, around €283.9 billion, goes to direct payments and market measures through the European Agricultural Guarantee Fund (EAGF), primarily to support farmers’ incomes. Meanwhile, just €94.2 billion is allocated to rural development via the European Agricultural Fund for Rural Development (EAFRD), the branch of the CAP that funds environmental protection and biodiversity efforts, such as PA.”
In theory, the CAP aims to place environmental protection at the heart of its strategy. But when we follow the money, the picture is less balanced. Between 2021 and 2027, over €40 billion per year was directed to market-related expenditure and direct payments, while rural development, the pillar supporting green initiatives, receives less than half of that.
What’s the upshot?
Most of the funding still goes to policies that are least effective at protecting the environment, especially when it comes to cutting emissions, while the more impactful measures remain underfunded. It is a mismatch that risks undermining Europe’s climate and biodiversity ambitions.
This article was co-authored with Irene Maccarone, a Research Fellow at the University of Foggia (Italy).
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