Professor Alan Matthews:

I will take Deputy's Cronin's question on market mechanisms. The key issue here is putting a value on emissions in order that farmers take them into account in their decision-making. This is entirely a matter for policymakers to decide, but it can be done through regulation, subsidies or through taxes or levies. The appropriate choice will depend on distributional impacts, administrative feasibility and so on. Cap and trade is not something that would potentially be available in an immediate sense. There certainly are much more direct instruments we can use.

We are saying to farmers or groups of farmers that if they can show us that they can reduce their overall greenhouse gas emissions, be that nitrous oxide, methane or carbon in their soil, we are prepared to pay them to do that. That is putting a value on the action. It immediately changes the incentive structure for farmers and they will change their behaviour as a result. I do not see that as something that will necessarily work against the interests of, for example, smaller farms. It may well be that they are more attracted into such a scheme than other farms. My advice is to put a value on the emissions and farmers will respond.