Carbon rich peat soils
The open land in Denmark is dominated by agricultural production. More than half – roughly 60 percent of the landscape – is cultivated, which leads to annual greenhouse gas emissions of around 9 million tons CO2-equivalents (hereafter CO2e). But there are large differences across Danish agricultural soils and their effect on the climate. The majority consists of mineral soils with low carbon contents, which do not emit very much CO2 when cultivated. Just under 7 percent of the cultivated area consists of carbon rich peat soils. Peat soils are originally formed in wetlands like bogs and wet meadows and have a high content of carbon from old plant residues. When peat soils are oxygenated by drainage and plowing, the carbon rots and emits gases, primarily as CO2. In principle, this corresponds to the burning of fossil fuels although it happens more slowly. Hence, draining of peat soils contributes to increasing the atmospheric concentration of greenhouse gases thereby intensifying global warming.
Rewetting of peat soils can contribute significantly to achieving Denmarks climate- and environmental targets
The total area of cultivated peatlands in Denmark is currently estimated to just over 170,000 ha. In 2018, these peat soils emitted around 4.8 million tons CO2e based on the emission factors that are presently used for the inventory of Denmark’s greenhouse gas emissions reported to the EU and UN. Thereby, carbon rich peat soils contribute with more than half of the total emissions related to cultivation of the soil in Denmark, although they only constitute 7 percent of the agricultural area. The annual emissions from the peat soils correspond to the annual CO2-emissions from roughly 1.8 million petrol- and diesel cars – corresponding to approximately 70 percent of Denmark’s total, private car fleet.
If all carbon rich peat soils in Denmark were rewetted, the total Danish greenhouse gas emissions would drop by up to 4.1 million tons CO2e annualy, when calculated with the knowledge we have today. The emissions do not cease completely due to the fact that the rewetting of peat soils leads to a minor increase in the emissions of methane. Methane is also a greenhouse gas and must be reported to the UNFCCC along with other greenhouse gas emissions. Rewetting of peat soils can concretely be achieved by disconnecting existing drain pipes and -ditches, presently draining the soils. However, different environmental and technical barriers may imply that the economically attractive and environmentally sound reduction potential is somewhat less than the specified technical reduction potential of 4.1 million ton CO2e each year. However, there is not sufficient information to calculate exactly how much smaller the economic and environmentally sound reduction potential is compared to the technical reduction potential.
If all peat soils were rewetted, a fifth of the way towards achieving the Danish goal of 70 percent reduction in total greenhousegas emissions relative to 1990 would be reached. Denmark can thus realize a large climate gain by rewetting all, or at least a large share, of the carbon rich peat soils. It is therefore important to design effective policies and measures that give the landowners incentives to rewet the soils and at the same time are socio-economically cost-effective.
Rewetting, and with it cessation of the use of fertilizer on the peat soils, is also an effective instrument in reducing the leaching of nitrogen to the aquatic environment. If all peat soils are rewetted, the reduced nitrogen leaching will potentially be able to meet almost 2/3 of the total, mandatory reduction target, which the EU Water Framework Directive requires by 2027. Thus, eewetting benefits both the climate and the aquatic environment.
The technical reduction potentials are described in more detail in chapter 2, while the socio-economically attractive reduction potentials are discussed in chapter 3.
A new rewetting scheme is needed
The massive emissions from drained peat soils are not new knowledge, and for the period 2016-2020 a rewetting scheme has targeted these emissions. As of January 1st 2020 this scheme had, however, only led to rewetting of approximately 1,200 ha. The Danish Agricultural Agency estimates the climate effect to be 0.024 million ton CO2e each year. This is less than 1 percent of the total reduction potential from peat soils. The limited effect is, in part, due to complexity, with many negative as well as positive side effects associated with rewetting. An additional DKK 2 bn has been earmarked in the Government Budget over ten years for a new peat soil scheme of which DKK 600 million is expected to be set aside for the years 2020-2022 in a new executive order about climate peat soil projects.
This analysis is to be seen as the Danish Council on Climate Change’s contribution to and recommendations towards, how rewetting of peat soils in the best possible way can contribute to achieving Denmark’s 70 per cent reduction target in 2030, including recommendations for the design of the new peat soil scheme.
Rewetting is cheap climate action in socio-economic terms and the risk of carbon leakage is small
Rewetting of peat soils entails different costs: It can lead to a production loss for the individual farm, affect the water drainage on the neighboring lands and lead to other negative side effects that will be described in the next section. Nevertheless, a significant share of these costs are offset by positive (non-climate) environmental side effects. In particular, much less nitrogen will be leached and much less ammonia will be emitted because rewetting, to a large extent, is expected to also lead to a stop for cultivation and fertilization. The analyses of the Danish Council on Climate Change indicate average socio-economic costs of rewetting of peat soils in the order of DKK 20-138 per ton CO2e, depending on the socio-economic price of nitrogen reduction used. Even for peat soils with high-value crops such as potatoes, the socio-economic cost of rewetting is less than DKK 200 per ton CO2e. Thus, rewetting of peat soils is a socio-economically cheap measure compared to other potential reduction measures in Danish climate policy, even though it is recognised that individual landowners may suffer significant losses. It is noted, however, that these are average figures, and that the figures for the individual peat soils and farms, therefore, can deviate significantly both positively and negatively.
The socio-economic calculations of the Danish Council on Climate Change include estimates of operating losses, costs to maintain the agricultural area in a state suitable for grazing or cultivation, average costs for loss of area proportioned to nitrogen and phosphorous deposits and project costs, including expenses for interruption of drainage and certain remedial measures. Furthermore, avoided costs from reductions in nitrogen leaching and ammonia emissions are included. However, costs for solving potential issues of increased phosphorous emissions or problems related to flooding of neighbouring fields are not included as no systematic estimates are available. The Danish Council on Climate Change recommends that these costs are explored in more detail. If it turns out, in connection with individual projects, that very large costs are related to mitigating negative side effects, the socio-economic reduction potential will be smaller.
At the same time, the Danish Council on Climate Change has assessed the risk of carbon leakage. In order for rewetting to be a relevant climate action, it is important that the emissions are not just displaced to other countries. Once soils are rewetted, cultivation is largely expected to stop. Hence, there is a risk that parts of the present production on the Danish peat soils move to other countries. This is, however, not expected to lead to considerable, additional emissions outside of Denmark’s borders – so called carbon leakage. This is due to the fact that a potential replacement production most likely will be cheapest on mineral soils that have significantly lower emissions per ha than the ceased production on the Danish carbon rich peat soils. In other words, the carbon leakage is expected to be low, even if the production was to move outside of Denmark’s borders.
Chapter 3 presents the socio-economic consequences of rewetting the peat soils, including sensitivity analyses regarding the calculations. Furthermore, the risk of carbon leakage and employment effects of rewetting are discussed.