A new open-access study published in Land Use Policy highlights the economic trade-offs and climate benefits of rewetting agriculturally used organic soils in Germany, offering important insights for EU climate and agricultural policy.
Led by researchers from Humboldt-Universität zu Berlin and the Thünen Institute of Farm Economics, the study provides the most detailed national assessment to date of the opportunity costs faced by farmers when peatlands are rewetted — a key measure to reduce greenhouse gas emissions.
Key findings
- Rewetting is cost-effective for climate mitigation
The study estimates mitigation costs of €24 to €91 per tonne of CO₂ equivalent, well below broader estimates of climate damage costs (~€237/t CO₂). This confirms that peatland restoration is an economically efficient climate action. - Costs vary widely across regions
Short-term opportunity costs range from €674/ha in Brandenburg to €2,726/ha in Lower Saxony, reflecting differences in land use, productivity, and livestock intensity. - Agricultural impact is significant but manageable
Around 1.3 million hectares of farmland in Germany lie on drained organic soils, accounting for over 40% of agricultural land-use emissions despite covering only 7% of agricultural land. - Policy support can bridge the gap — partly
Payments under the EU’s Common Agricultural Policy (CAP) can, in many cases, compensate farmers for income losses—especially when combined across measures. However, current schemes:- do not reflect strong regional variability in costs,
- typically offer only short-term commitments (around 7 years),
- may fall short in high-cost regions.
Why this matters
Rewetting peat soils stops the decomposition of soil carbon, making it one of the most impactful land-based climate mitigation options available. However, it requires farmers to abandon conventional production systems, raising concerns about income loss and long-term viability.
The study shows that while rewetting is economically justified from a societal perspective, targeted, long-term, and region-specific compensation mechanisms are essential to ensure uptake.
Policy implications
The authors highlight several priorities for policymakers:
- design regionally differentiated compensation schemes
- extend funding timelines to reflect the permanent nature of rewetting
- support the development of wet land-use alternatives, such as paludiculture
- align agricultural, climate, and carbon market instruments to incentivise transition
Contribution to BrightSpace
This research contributes to the evidence base of the BrightSpace project by quantifying the economic conditions under which climate mitigation measures in agriculture become viable. It supports ongoing discussions on how EU policies — particularly the CAP — can better align farm-level incentives with climate objectives.
🔗 Read the full article here: Domke, N., Gocht, A., Neuenfeldt, S., Tetteh, G. O., Yang, X., & Grethe, H. (2026). Opportunity costs of rewetting agriculturally used organic soils in Germany. Land Use Policy, 168, 108050. https://doi.org/10.1016/j.landusepol.2026.108050
Source: Thünen
