Carrot or Stick? OECD Finds Most Land-Use Policies Rely on Subsidies

New PIMA‑AFOLU data show two‑thirds of roughly 1,500 measures worldwide use financial incentives, prompting debate over whether subsidies can deliver rapid, verifiable emissions cuts.


Tue 04 Nov 25

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The vast majority of policies aimed at cutting greenhouse gas emissions in agriculture, forestry, and other land uses rely on subsidies rather than regulatory mandates. That is according to new data supplied by the OECD, which, days before the start of COP30, reveals that two-thirds of more than 1,500 global policies lean on financial instruments rather than research and development, regulation, and standards.

Published by the OECD yesterday, the Policy Inventory for Mitigation Actions in the Agriculture, Forestry, and Other Land Use sectors, otherwise known as PIMA-AFOLU, compiles data from OECD members, EU countries, G20 nations, and a range of emerging economies. Built largely from policies introduced over the past two decades, the database maps the tools governments are using to reduce emissions of carbon dioxide, methane, and nitrous oxide, as well as to increase carbon sequestration in soils and forests.

Wood Central understands that economic incentives dominate because they change the costs and rewards facing farmers, foresters, and land managers. Direct payments for conservation practices, subsidies for low-emission technologies, and tax adjustments are among the most commonly recorded instruments. The remainder of the inventory comprises regulatory measures and a smaller set of research, development, and capacity-building initiatives.

Brazilian President Luiz Inácio Lula da Silva during the Opening Session of the Meeting on the Tropical Forests Forever Fund (TFFF) at United Nations Headquarters in the United States on Tuesday, September 23, 2025. (Photo Credit: Brazil Photo Press/Alamy Live News)
Carrot or stick? Tackling emissions in forestry will be a key focus of COP30 with Brazilian President Luiz Inácio Lula da Silva set to launch the Tropical Forests Forever Fund (TFFF) later this month in Belém, Brazil. (Photo Credit: Brazil Photo Press/Alamy Live News)

Policymakers say incentives can be easier to design and deploy and tend to attract less resistance from producers than mandatory limits. Critics, however, counter that an incentive-heavy approach risks delivering only incremental change and may fall short of the rapid, verifiable emissions cuts that climate models indicate are necessary. The PIMA‑AFOLU database also highlights how some policies intended for other environmental goals can yield climate benefits. Restrictions on nutrient runoff, designed to protect water quality, for example, can lead to lower nitrous oxide emissions by reducing fertiliser use, offering mitigation as a co-benefit rather than a primary objective.

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  • Wood Central is Australia’s first and only dedicated platform covering wood-based media across all digital platforms. Our vision is to develop an integrated platform for media, events, education, and products that connect, inform, and inspire the people and organisations who work in and promote forestry, timber, and fibre.

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