You might want to talk with Ewe Schneider at Hamburg about the market impacts of these mitigation measures. In a US study he did, he found that agricultural markets took back some of the potential GHG reductions so that the simulated reductions in GHGs after accounting for market interactions was less than the "engineering" potential. He is doing a similar study for the EU. Other studies in the US show the same type of effects for carbon storage in forests and on cropland. There are numerous leakages due to market adjustments. Beating the market is hard. Incentives, unless they are extremely well-designed, make things even worse. In the EU you have the CAP to deal with. This distorts product and asset prices so much that it is not easy to predict what will actually happen. To add more distortions to encourage farmers to store carbon or reduce emissions will greatly increase welfare losses and may not affect business as usual as much as one would think. Get rid of CAP and you will get more carbon (crop land reverting to forest land) - that's for sure, unless EU agricultural suddenly becomes a lot more competitive as a result of dropping the subsidies, set-asides, etc.

Mac Callaway, Ph.D
UNEP-RISŲ Centre
PO 49
DK-4000 Roskilde
Denmark