Table of Contents 1.Introduction 2.Background to the intervention 3.Implementation/State of play 3.1.Relevant Pillar I measures 3.2.Relevant Pillar II measures 4.Method 4.1.Short description of methodology, tools and definitions 4.2.Limitations and robustness of findings 5.Analysis 5.1.Effectiveness 5.2.Efficiency 5.3.Coherence of CAP measures 5.4.Relevance to needs 5.5.EU added value 6.Conclusions ANNEX 1: PROCEDURAL INFORMATION

Annex 2: Synopsis report on the stakeholder consultation Annex 3: Methodology Annex 4: CAP climate measures - coherence and added value



Glossary AECM Agri-Environment-Climate Measure ANC Areas facing Natural Constraints CAP Common Agricultural Policy CH4 Methane CO2 Carbon dioxide CO2eq CO2 equivalent EAFRD European Agricultural Fund for Rural Development EAGF European Agriculture Guarantee Fund ECA European Court of Auditors EEA European Environment Agency EFA Ecological Focus Areas EIP European Innovation Partnership ESPG Environmentally Sensitive Permanent Grassland

EU European Union EUR Euro, Eurozone currency FA Focus Area FADN Farm Accountancy Data Network FAS Farm Advisory System GAEC Good Agricultural and Environmental Condition GHG Greenhouse Gas Ha Hectare ILUC Indirect Land Use Change IPCC Intergovernmental Panel on Climate Change LU Livestock Unit LUC Land Use Change LULUCF Land Use, Land Use Change and Forestry M Measure MFF Multiannual Financial Framework N2O Nitrous oxide NGO Non-Governmental Organisation NH3 Ammonia R&D Research and Development SAPS Single Area Payment Scheme

SFS Small Farmers Scheme SMR Statutory Management Requirement UNFCCC United Nations Framework Convention on Climate Change VCS Voluntary Coupled Support WFD Water Framework Directive WTO World Trade Organisation 1.Introduction Most climate change scenarios predict a minimum increase in average global temperatures of 2°C above pre-industrial levels by 2050. Such a rise is expected to alter ecosystems, changing long-term trends in localised temperatures and rainfall patterns, and increasing the frequency and intensity of extreme weather events such as storms, droughts and intense precipitation, with far-reaching socio-economic implications. Climate change is therefore a threat to the wellbeing of our society and the functioning of our economy, affecting our ecosystems and our natural and socio-economic environment. The agricultural and forestry sectors are among the most vulnerable to the effects of climate change, as they directly depend on climatic conditions and healthy ecosystems. Although agriculture contributes to climate change through the release of greenhouse gases (GHG) into the atmosphere, the sustainable management of land results in removals of carbon from the atmosphere. EU agricultural activities, including emissions and removals from land use and land use change (i.e. from the management of grassland and cropland) created 12% of total EU-28 GHG emissions in 2018 , making it the fifth biggest contributor to GHG emissions in the EU, after the energy, transport, residential and commercial sectors. The EU is addressing climate change through ambitious policies and in close cooperation with international partners. The EU is on track to meet its GHG emissions reduction target for 2020 , with estimates showing that, in 2018, EU GHG emissions were 23% below the 1990 level, exceeding the 20%. However, in view of the climate emergency, the Commission is aiming to boost efforts and ambition through the European Green Deal to make Europe the first climate-neutral continent by 2050. One result is the Commission’s proposal for a higher emission reduction target by 2030 (-55% compared to 1990 ). While EU non CO2 GHG emissions from agriculture have fallen by more than 20% since 1990, they have stagnated since 2010, highlighting the need for agriculture to accelerate its transition to more climate-friendly practices. The 2013 reform of the common agricultural policy (CAP) aimed to improve the targeting, efficiency and coherence of policy instruments to address the long-term objectives of sustainable management of natural resources and climate action, along with viable food production and balanced territorial development. This was laid down in Article 110(2) of Regulation (EU) No 1306/2013 (‘Horizontal Regulation’) . The legal context of the evaluation is set out in Article 110(5) of the Horizontal Regulation that requires the Commission to present a report on the performance of the CAP to the European Parliament and the Council by 31 December 2021. The findings and lessons learned from this evaluation will feed into that report. Accordingly, the purpose of this evaluation is to assess, notably through counterfactual analysis, the net impact of the relevant policy instruments of the CAP 2014-2020 on adaptation to climate change and GHG emissions, regardless of whether or not the measures were specifically designed to address climate action. The measures covered by the evaluation are the relevant ones set out in the basic regulations of the CAP 2014-2020 regarding Direct Payments , Rural Development , and the Horizontal Regulation. Besides helping to meet the legal reporting obligation, the evaluation has contributed to other performance reporting requirements, including the Commission’s annual budget discharge exercise. Its preliminary results, particularly on effectiveness and efficiency, were available for the preparation of the impact assessment accompanying the 2018 legislative proposals on the ‘CAP beyond 2020’, presented by the Commission on 1 June 2018 . The evaluation is also particularly relevant to the objectives of the European Green Deal. The geographical scope of the evaluation is the European Union of 28 Member States, including the UK. In-depth empirical analysis was carried out through case studies in 10 Member States. The evaluation covers the period following the implementation of the 2013 CAP reform, notably the period after 1 January 2015 for direct payments and after 1 January 2014 for other measures. The evaluation covers all the evaluation criteria, assessing the effectiveness of the relevant measures, with respect to their climate impact, as well as their efficiency, relevance, coherence and EU added value. This staff working document is primarily based on the corresponding external evaluation support study and draws from additional analysis and data from internal Commission and external sources. In the subsequent chapters, any reference to analyses, interviews, findings, etc. should be interpreted as coming from the evaluation support study, unless otherwise indicated and referenced. 2.Background to the intervention

Agriculture is one of the sectors that contributes most to global GHG emissions. There are three powerful greenhouse gases that are the by-products of agricultural activity, but the non-CO2 greenhouse gases have a much bigger global warming potential than CO2: ·methane (CH4) from livestock digestion processes (enteric fermentation), manure management and rice cultivation; ·nitrous oxide (N2O) from the use of organic and mineral nitrogen fertilisers and from manure management; ·carbon dioxide (CO2) from agricultural soil and biomass, as a result of land management activities, ploughing, conversion of land uses, e.g. from grassland to cropland, resulting in a mineralisation of the soil organic carbon to CO2 emitted in the atmosphere, and from fossil energy consumption . Agriculture can mitigate climate change not only by reducing GHG emissions but also by avoiding further carbon losses, increasing removals through the sequestration of carbon in vegetation (e.g. hedges) and soils and increasing the contribution towards renewable energy production. Agricultural activities in the EU-28 generated 486 million tonnes of CO2 equivalents (CO2eq) in 2013 (at the time of developing the CAP 2014-2020), corresponding to about 10% of total GHG emissions. Emissions from agriculture decreased consistently for two decades between 1990 and 2010, notably due to declines in herds. However, emissions have stagnated under the CAP 2014-2020. Due to the parallel decrease in emissions in other sectors of the economy, the share of total EU emissions that can be attributed to the agricultural sector has increased. In 2018, the agricultural sector emitted 487 million tonnes of CO2eq in the EU-28, corresponding to 12% of total EU GHG emissions. At the same time, agricultural production increased by 9% in volume, highlighting a significant increase in production efficiency (i.e. a reduction of emissions per unit produced). Figure 1: Development of GHG emissions and agricultural production (Index, 2005 = 100) Source: DG Agriculture and Rural Development Moreover, agriculture is highly vulnerable to the impacts of climate change (e.g. crop failures and tree dieback from droughts, storms, floods, or pest and disease outbreaks) and is facing increasing climate-related risks. The farming sector needs to adapt to climate change (by, for example, improving soil quality and water management, establishing hedge rows, planting more resilient crop varieties, and adopting more diverse crop rotation practices) to secure future yields. Therefore, the CAP has considerable potential to support climate mitigation and adaptation by guiding and requiring how individual farmers choose to manage their land, crops and livestock and how they use inputs, including energy, fertilisers and water, and their by-products, wastes, residues and other non-food raw materials. In the 2017 public consultation on ‘modernising and simplifying the CAP’ , 37% of respondents (other than farmers and organisations) replied that the most relevant Commission priority for the future CAP was ‘mitigating and adapting to the impact of climate change and providing renewable energy’. At the time of developing the CAP 2014-2020, EU climate policy was mainly defined by the ‘EU 2020 climate and energy framework’, which introduced three key targets for 2020: to reduce GHG emissions by 20% from 1990 levels, to increase the share of renewable energy to 20% and to improve energy efficiency by 20%. These targets became legally binding through the ‘EU climate and energy package’ in 2009 . Agriculture is one of the sectors covered under the Effort Sharing Decision, by which EU countries have taken on binding annual targets until 2020 to reduce GHG emissions compared to 2005 . This Decision does not set a sector-specific emission reduction target for agriculture, but rather requires Member States to achieve a target that covers several sectors. Emissions and removals from land use and land use change, including in cropland and grassland, are not part of the 2020 climate framework. However, the Land Use, Land Use Change and Forestry (LULUCF) Decision requires Member States to provide information on emissions and removals through cropland and grassland management and to provide national reports on mitigation actions in these sectors. EU climate policy in the 2014-2020 period was also shaped by the EU strategy on adaptation to climate change. It encouraged Member States to adopt comprehensive adaptation strategies, to build up their adaptation capacities and to take adaptation action in key vulnerable sectors, including agriculture (through insurance against natural and man-made disasters, for instance). Furthermore, it helped address the existing knowledge gaps on adaptation in the agricultural sector. On 24 February 2021 the Commission announced a new, even more ambitious EU Strategy on Adaptation to Climate Change, which commits the EU and Member States to make continuous progress to boost adaptive capacity, strengthen resilience and reduce vulnerability to climate change. Climate action is an integral part of the CAP 2014-2020 general objectives, notably the objective on ‘sustainable management of natural resources and climate action’, with a focus on GHG emissions, climate adaptation, biodiversity, soil and water. The 2013 CAP reform also sought to align the CAP with the goals of the Europe 2020 strategy on smart, sustainable and inclusive growth . The Commission’s proposal for the 2014-2020 Multiannual Financial Framework (MFF) introduced climate mainstreaming of the EU budget, with a general target of at least 20% to be spent on climate-related measures. In addition, a specific target of a minimum of 30% of the European Agricultural Fund for Rural Development (EAFRD) has been reserved for measures relevant to climate change mitigation and adaptation and the environment . Furthermore, with the introduction of the ‘greening payment’, a 30% share of the budget for direct payments is provided to farmers adopting or maintaining mandatory climate and environment-friendly practices. Farmers who do not comply with greening receive reduced direct payments. Beyond the general objective of the CAP 2014-2020 on climate action, the two pillars of the CAP contain specific objectives and a broad range of instruments and measures to address climate mitigation and adaptation. The Pillar I specific objective on climate action refers to providing public goods (mainly environmental) and pursuing climate change mitigation and adaptation. This objective is pursued mainly through the ‘greening payment’ and the cross-compliance standards for Good Agricultural and Environmental Conditions (GAECs) linked to CAP payments (see below). Cross-compliance rules supplemented by greening help to provide a foundational level of action on the environment and climate (as well as other concerns of EU citizens). Other direct payments could also have indirect effects on mitigation and adaptation, as described in the next chapters.

The greening measures have already been the object of a separate evaluation and comprise: ·maintenance of permanent grassland, particularly for carbon sequestration, with two components: (i) maintaining the ratio of permanent grassland to agricultural area – the ratio of permanent grassland compared to the total agricultural area is set and monitored by Member States at national or regional level with a 5% margin of flexibility (i.e. no decrease above 5%); (ii) protecting the most environmentally sensitive permanent grasslands (ESPG) from ploughing-up and converting in order to support carbon sequestration, biodiversity and soil protection; ·crop diversification, to improve soil quality: this covers farms with 10 to 30 hectares, or more than 30 hectares, of arable land, which have to grow at least two or three types of crops respectively. The main crop may not cover more than 75% of the land, although there are exemptions to the rules, e.g. farmers with a large proportion of grassland, which is in itself environmentally beneficial; ·ecological focus areas (EFA): primarily in order to safeguard and improve biodiversity on farms and entailing an obligation to dedicate at least 5% of the arable land exceeding 15 hectares as an EFA, comprising a combination of areas or landscape features as set out in the relevant regulation and selected by Member States as a menu of choices for farmers. The requirement to maintain permanent grassland is very important for protecting existing carbon stocks and sequestering carbon from the atmosphere. The possibility for greater crop diversity also has positive implications for carbon sequestration and a greater variety of crops makes soil and ecosystems more resilient. EFA, such as trees, hedges or land left fallow, are mostly beneficial for biodiversity and habitats, but also have co-benefits for climate mitigation and adaptation. Voluntary coupled support (VCS) is intended for certain sectors or regions where specific types of farming or specific agricultural sectors, that are particularly important for economic, environmental and/or social reasons, experience certain difficulties. The eligible animal-based sectors and the protein crops sector are the largest VCS beneficiaries in the EU. It may have a positive or negative impact on the climate depending on which activity and under which conditions the support is granted. The relevant Pillar II climate-specific objectives (also referred to as ‘priorities for rural development’) include: ·promoting resource efficiency and supporting the shift towards a low-carbon and climate-resilient economy in the agriculture, food and forestry sectors (priority 5); and ·restoring, preserving and enhancing ecosystems dependent on agriculture and forestry (priority 4). On top of this, three cross-cutting objectives were defined for rural development, namely innovation, environment, and climate change mitigation and adaptation. These three objectives should be integrated/reflected in Member States’ strategies and choices of instruments. All the rural development priorities are broken down into specific areas of intervention, known as ‘focus areas’. The rural development programmes set quantified targets under the focus areas and outline the programme measures and their allocated funding that will be used to reach the targets. The most climate-relevant focus areas under priorities 4 and 5 aim to: ·increase efficiency in water use by agriculture (focus area 5A – addressing both mitigation and adaptation); ·increase efficiency in energy use in agriculture and food processing (focus area 5B); ·facilitate the supply and use of renewable sources of energy (focus area 5C); ·reduce GHG and ammonia emissions from agriculture (focus area 5D); ·foster carbon conservation and sequestration in agriculture and forestry (focus area 5E); ·prevent soil erosion and improve soil management (focus area 4C); ·improve water management, including management of fertilisers (focus area 4B – addressing both mitigation and adaptation). Some of the CAP Pillar II measures have an ‘explicit intervention logic’ towards climate change mitigation or adaptation, i.e. the EAFRD Regulation refers to climate-relevant objectives for these measures. These include agri-environment-climate commitments, forest-environment-climate commitments, cooperation, forest investments, investments in physical assets, advisory farm management and relief services and disaster risk reduction (see Table 1 ). One of the highest profile climate-relevant rural development measures is the agri-environment-climate measure (AECM, measure 10). This voluntary measure for farmers promotes a potentially wide range of practices (designed by Member States/regions within their rural development programmes) which go beyond the baseline of mandatory requirements, including those of cross-compliance . The beneficiaries are compensated for additional costs and income foregone due to implementing the commitment. AECMs can cover all the key issues of climate change, water, soil, air, biodiversity and landscapes (sub-measure 10.1), as well as genetic diversity (sub-measure 10.2). Measure 10 is mandatory and thus included in all rural development programmes.

Support for investments in physical assets (measure 4) explicitly addresses not only economic but also environmental improvements, mainly in the farming and food sectors. Relevant interventions offer considerable mitigation potential – in relation to manure management, support for renewable energies and energy efficiency improvements, and improvements to the natural value of a given area. Measure 4.4 provides support for non-productive investments linked to the achievement of agri-environment-climate objectives. This can include, for instance, the planting of hedges or the restoration of wetlands or peatland. Looking beyond farming, forestry is covered specifically by two measures which, between them, have area-based and investment-based components – investments in forest area development (measure 8) and forest-environmental and climate services and forest conservation (measure 15). These serve both to establish new forests (agroforestry systems as well) and to improve the environmental and economic value of existing forests, including better protection against fires and other disasters, and thus contribute to climate change mitigation and adaptation. Rural development policy supports the development of physical as well as human capital – in ways that can be linked to the environment and climate. Support for more individually tailored advice and other services can come through the measure on ‘advisory services, farm management and farm relief services’ (measure 2), which can also be used to set up the farm advisory system (FAS) (see section 2.2.). The cooperation measure (measure 16) has a very broad scope and is an important vehicle for funding innovation through the European Innovation Partnership for Agricultural Productivity and Sustainability (EIP-AGRI). The EIP is based on the ‘interactive innovation model’ and seeks to involve farmers actively in the co-creation of innovative solutions to practical problems. Various parties with complementary knowledge – farmers, advisers, researchers, businesses, NGOs and others – work together on projects in ‘operational groups’ to develop such solutions and communicate their results widely. Another climate-relevant rural development measure is measure 5, which aims to support agricultural holdings’ resilience to climate change through better risk reduction. Measure 5 supports preventive actions through sub-measure 5.1, as well as restoration after damage through sub-measure 5.2. Some measures were not designed with explicit climate-relevant objectives, but can contribute significantly towards more environmentally friendly practices that help meet climate objectives, such as: ·The organic farming measure (measure 11), which supports farmers in converting to and maintaining organic agriculture . The measure can contribute to carbon sequestration in particular, thanks to the specific methods and land management practices of organic farming, such as organic fertilisation and crop rotation. Moreover, greenhouse gas emissions from the production of artificial fertiliser are avoided in organic farming ·Natura 2000 and Water Framework Directive payments (measure 12), which support farmers and foresters in areas subject to disadvantages and restrictions resulting from implementing relevant directives . Such payments can support the conservation of wetland and peatland, or conversion from arable land to grassland (e.g. in floodplains), thus contributing to carbon sequestration and climate change adaptation. Measure 17 supports risk management and improves farms’ economic resilience to shocks linked to the effects of climate change (increased incidence of climatic hazards, price volatility, etc.). The measure can support crop, animal and plant insurance premiums (sub-measure 17.1), the creation of mutual funds for adverse climatic events, animal and plant diseases, pest infestations and environmental incidents (sub-measure 17.2) and the introduction of an income stabilisation tool (sub-measure 17.3). These aim to compensate farmers for revenue losses due to extreme events; however, unless there are specific conditions attached to the underwriting of these tools to help farmers adapt their production systems to climate change (e.g. diversification of production), they do not guarantee the long-term resilience of production systems. Payments to areas facing natural or other specific constraints (measure 13) compensate farmers for difficulties arising from the inherent biophysical constraints in mountain areas and other areas facing natural or other specific constraints (related to altitude, climate, soil and steep slopes as designated in Article 32 of Regulation (EU) 1305/2013). However, the measure does not require any change in land management practices beyond mandatory requirements and its contribution to climate objectives is not certain. Other rural development measures which can be relevant for climate objectives, depending on how they are designed and targeted, include knowledge transfer and information actions (measure 1), quality schemes (measure 3), support for farm and business development (measure 6), basic services in rural areas (measure 7) and LEADER (M19). In addition to the interventions covered by the two pillars, a number of cross-cutting measures help to address climate targets. Cross-compliance is a mechanism that links elements of both pillars of the CAP to farmers’ compliance with various basic standards and their application of fundamental good practice. It aims to help agriculture develop sustainably and to link the CAP better to other EU policies, including environmental and climate policies. It includes two types of obligations: ·Statutory management requirements (SMRs), which are 13 packages of requirements arising from non-CAP EU legislation on the environment, food safety, animal and plant health and animal welfare (e.g. nitrates, birds and habitats), and which are applicable to all farmers whether or not they receive CAP income support. ·Standards for GAECs, which have their legal basis within the CAP. The seven EU standards relate to management of water, soil and carbon stocks, and landscape features. Member States must translate these EU standards into national standards, taking into account local needs and situations. GAEC 6 (maintenance of soil organic matter, including the ban on burning arable stubble) contributes to climate mitigation by preventing the direct release of CO2 into the atmosphere. GAEC 4 (minimum soil cover) and GAEC 5 (site-specific conditions limiting erosion) may have an impact on climate change adaptation and mitigation by limiting soil erosion, protecting water courses, improving resilience against floods and improving water retention. Through the provisions of cross-compliance, when farmers who receive Pillar I direct payments (with the exception of payments under the small farmers scheme) or Pillar II area-based payments do not respect the standards concerned, their payments under these schemes can be reduced. Another set of cross-cutting provisions concerns the Farm Advisory System (FAS), which all Member States are required to set up/designate (this can be done with the support of a rural development measure). In general terms, the FAS should help CAP beneficiaries become more aware of the relationship between farm practice and management, and of various standards . Regarding climate-relevant CAP measures, it is important to point out that only some of the interventions that are covered by this evaluation have been specifically designed to include intended environmental and climate impact objectives. However, several measures that lack an explicit intervention logic towards climate action may still have relevant climate effects, for example the management of EFA.



Table 1: The main climate-relevant CAP measures Measure (M)/instrument Objective in the Regulation Measures targeting Mitigation Adaptation Pillar I - 1 Greening measure (permanent grassland ratio) Environmental benefits (carbon sequestration) Yes No 2 Greening measure (environmentally sensitive permanent grassland) Environmental benefits (carbon sequestration) Yes No Horizontal measures/standards 3 GAEC 4 (minimum soil cover) Limit soil erosion, protect water courses and improve resilience against floods and water retention Yes Yes 4 GAEC 5 (site-specific conditions limiting erosion) Yes Yes 5 GAEC 6 (maintenance of soil organic matter) Prevent the direct release of CO2 into the atmosphere Yes Yes 6 Farm advisory system Awareness raising about farm practices and environmental and other standards Yes Yes Pillar II – Rural development 7 M1: Knowledge transfer and information actions Spread knowledge and improve access to information Yes Yes 8 M2: Advisory farm management and relief services Improve access to advice Yes Yes 9 M4: Investments in physical assets Support provision of physical infrastructure Yes Yes 10 M5: Disaster risk reduction Support to reduce probable consequences of natural disasters; investments to restore land and production potential No Yes 11 M7: Basic services and village renewal Investments in small-scale infrastructure, (also renewable energy and energy saving) Yes No 12 M8: Forest investments Extend and improve forest resources (including agroforestry) as climate-friendly land use; support investment and management (resilience and fire prevention) Yes Yes 13 M10: Agri-environment-climate commitments Support agricultural practices beneficial for the environment and climate (going beyond the baseline of legal requirements) Yes Yes 14 M11: Organic farming Support organic farming practices relevant to carbon sequestration Yes Yes 15 M12: Natura 2000 and Water Framework Directive Support, notably, conservation of wetland and peatland Yes Yes 16 M15: Forest-environment-climate commitments Support for forest land and thus carbon stocks Yes Yes 17 M16: Cooperation Support joint actions to secure greater environmental and climate benefits Yes Yes

Source: DG Agriculture and Rural Development 3.Implementation/State of play Under the Multiannual Financial Framework 2014-2020, a total of EUR 408.3 billion is earmarked for the CAP, of which EUR 308.7 billion is allocated to Pillar I via the European Agriculture Guarantee Fund (EAGF); the remaining EUR 99.6 billion is allocated to Pillar II via the European Agricultural Fund for Rural Development (EAFRD). The rural development policy of the CAP is implemented over a seven-year period, through rural development programmes designed by national or regional managing authorities. Overall, 118 rural development programmes have been implemented in the 28 Member States over the 2014-2020 period. Adding the co-funding by national, regional and private resources, the total amount of funding for the CAP’s rural development policy is EUR 161 billion. Based on the climate tracking methodology defined for the current programming period , in line with the OECD’s ‘Rio markers’ , the CAP’s contribution to climate actions is estimated at 26%, or EUR 102.8 billion, i.e. well above the 20% commitments. 3.1.Relevant Pillar I measures In 2018, 154 million hectares (86%) of all EU agricultural land was supported under the direct payment scheme and therefore subject to compliance with the relevant practices that Member States have established under good agricultural and environmental conditions (GAECs) and statutory management requirements (SMRs). Member States have translated the core obligations of the three GAECs aimed at protecting soil and carbon stocks in different ways that fit their own circumstances. Under GAEC 4 (minimum soil cover), all Member States must have minimum soil cover, with a particular focus on areas with a high risk of erosion and on setting time-specific rules; Member States have differed in the way they identify land under this obligation. Under GAEC 5 (minimum land management reflecting site specific conditions to limit erosion), the main measures set by Member States tackled land with high slopes, usually defined as more than 10% slope. More than half (15) of Member States have cultivation requirements (transversal to the contour of the slope and minimal tillage), a third (8) limit the crops to be planted (crops with a small canopy, e.g. potato), and a few (3) ban ploughing during a certain period (generally winter). Three Member States add additional requirements related to improving/maintaining drainage systems, soil vegetation cover, banning tillage on waterlogged and flooded soils, promoting preservation of terraces, stonewalls and ditches, banning overgrazing or requiring inter-row green cover for permanent crops. All Member States implement the main measure of the ban on stubble burning under GAEC 6 (maintenance of soil organic matter level through appropriate practices, including a ban on burning arable stubble, except for plant health reasons). A few Member States go beyond this core requirement by requiring a soil analysis with possible corrective actions, soil coverage with nitrogen-fixing crops, incorporation of crop residues, crop rotation, and a ban on cultivation in species-rich and semi-natural habitats. In 2019, 142 million hectares of agricultural areas, corresponding to 80% of EU agricultural land, was subject to one or more greening obligations. Around 3.8 million hectares, covered by Small Farmer Scheme (SFS) and 9.6 million hectares of organic areas were exempted from greening. Compared to 2015, the area under the SFS exemption halved and organic areas increased by two thirds. In 2015, the area of declared permanent grassland amounted to 48.5 million hectares, compared to 44.3 million hectares in 2012, which served as a reference year for establishing greening obligations (excluding Croatia, which has 2013 as a reference). The change between 2012 and 2015 was due to several factors: the effects of the 2013 admission of Croatia as an EU Member State; expansion of the areas eligible as permanent grassland in the current period to include, for example, shrubs and trees that can be grazed; creation and conversion of permanent grassland; and changes in the population benefiting from direct payments. The situation differed between Member States; while some saw little or no change in additional permanent grassland areas, others registered a substantial increase (by more than half in Spain, Italy, Lithuania, Croatia and Bulgaria, and ten times more in Finland). The new definition of permanent grassland influenced especially the southern Member States characterised by agro-pastoralism. Some of the amendments introduced in the ‘Omnibus Regulation’ in 2018 allowed for a narrower definition of ‘permanent grassland’. For example, nine Member States (Bulgaria, Croatia, Cyprus, Germany, Greece, Italy, Lithuania, Slovakia and Spain) decided to apply the newly introduced criterion, according to which grassland is not classified as permanent grassland if it has been ploughed within a period of 5 years. Other Omnibus amendments to the definition allowed for its scope to be expanded. For example, Member States could expand areas with shrubs and/or trees which produce animal feed, provided that the grasses and other herbaceous forage remain predominant. In 2019, overall, 51.7 million hectares of permanent grassland was declared under the direct payment scheme, reflecting the changes to land use in Member States but also the effects of the above-mentioned amendments. It represents 85% of the total EU permanent grassland reported in the annual land use survey . In accordance with greening rules, almost all Member States decided to manage the ratio of permanent grassland at national level. Only four (Belgium, France, Germany and the UK) opted to calculate the ratio at regional level. At EU level, the area of permanent grassland under the greening ratio obligation amounted to 44.0 million hectares in 2015 and increased by 8% to 46.7 million hectares in 2019. The figures under the greening ratio do not include exempted areas of the SFS and organic producers. Between 2015 and 2019, 16 Member States registered an increase in the annual ratio, while seven Member States and 19 regions (in the case of the four Member States that made regional calculations) saw reduced annual ratios in 2019 compared to the figures for 2015. For the comparison of annual ratios to the 2015 reference ratio (‘the comparison ratio’), the mechanism of reconversion was activated four times in two Member States (Cyprus, in 2015 and 2016, and Estonia, in 2016 and 2018) to reverse the more than 5% drop in the annual ratio. As of 2019, the comparison ratio registered negative values in nine Member States and 10 regions of the four Member States that made regional calculations, but none exceeded the 5% threshold. However, in most cases the changes in national/regional annual ratios under greening and in the ‘comparison ratio’ resulted from a reallocation of permanent grassland areas within the terms of the ratio rather than their actual decrease. Between 2015 and 2019, permanent grassland increased in 17 Member States, with a relative +/- 1% stabilisation in eight Member States and a decrease of more than 1% in two Member States (Estonia and the UK). Instead, the figures reflected the combined effects of a substantial increase of/conversion to organic permanent grassland and, to a lesser extent, of decreasing permanent grassland under the SFS. It was also affected by changes to agricultural areas. While seven Member States deemed such situations sufficient to adapt the reference ratio, others did not do so, resulting in lower or negative figures for the ‘comparison ratio’. In 2019, of 16.6 million hectares of permanent grassland in Natura 2000 areas, 9.3 million hectares (56%) were designated as ESPG and 5.7 million hectares (34%) were declared by farmers. Compared to 2015, while the area of Natura 2000 permanent grasslands remained stable (16.5 million hectares in 2015), the designated and declared ESPG areas rose by more than 1 million hectares (8.2 million hectares of designated and 4.4 million hectares of declared ESPG in 2015). This translates to 18% of all permanent grassland declared under the direct payments scheme being designated as ESPG (ranging from 0.2% in Portugal to just above 57% in Cyprus), and thus protected from ploughing. These figures reflect differences in delineating/selecting Natura 2000 areas when implementing the underlying Nature and Birds Directives and Member States’ decisions to designate permanent grassland within Natura areas. Eight Member States designated all permanent grasslands within Natura 2000 as ESPG, while others designated only a proportion. The lowest proportions of permanent grassland in Natura areas designated as ESPG in 2019 were in Portugal (1.3%) and Ireland (4.0%). In terms of ESPG declared by farmers, these ranged from 0.1% of permanent grasslands in Natura 2000 in Portugal and 2% in Austria to 100% in Greece and in Sweden. Four Member States (Belgium, Czechia, Italy and Latvia) also designated permanent grasslands outside Natura 2000 areas as ESPG, protecting an additional 0.6% of all EU permanent grasslands under the CAP. In 2019, 69% of EU arable land fell under the EFA obligation (72.4 million hectares). This reflected the exemptions from the EFA obligation (Small Farmers’ Scheme, organic farmers and farmers with less than 15 hectares of arable land) and the additional specific exemptions added by the Omnibus Regulation for certain types of farms. The selection of EFA areas and features differed between Member States, with some opening the whole range of EFA types and others only a narrow range. Between 2015 and 2019, Member States’ choices remained relatively stable. The major change from 2018 onwards came from the Omnibus Regulation, which added three EFA types and increased weighting factors for nitrogen-fixing crops and short rotation coppice, and from the delegated legislation that restructured some types of landscape features and banned the use of plant protection products on fallow land and productive EFA types (such as protein crops).

In absolute terms, 9.5 million hectares were declared as EFA in 2019, representing 13.7% of arable land under obligation. In terms of uptake by farmers, the most frequently declared EFA types in 2019 were those linked to land lying fallow (21%) and to productive EFA: catch crops (55%) and nitrogen-fixing crops (22%). However, the composition of EFA areas changed compared to 2015: in 2015, areas under catch crops and nitrogen-fixing crops both represented about a third of all EFA areas, and the share of fallow land was higher, corresponding to a quarter of all EFA areas. In contrast, EFA areas under landscape features increased in this period, both in physical terms and, as a share of the total, to 2%. In 2019, 74% of EU arable land fell under the crop diversification obligation (77.7 million hectares), compared to 75% in 2015 (80.5 million hectares). This reflected changes to the areas benefiting from direct payments, changes to areas exempted from the obligation (SFS, organic farms and exemptions specific to crop diversification) and the additional exemptions specific to crop diversification that were added by the Omnibus Regulation for certain types of farms. Of the farms applying crop diversification, 87% of arable land was under the obligation to have at least three crops and the remaining 13% under the obligation to have at least two crops, though the figures differ between Member States depending on the average size of the arable land of farms. While six Member States (Bulgaria, Estonia, France, Latvia, Slovakia and the UK) have 95% or more of arable land under the three-crop obligation, three Member States have a more balanced distribution, with around half (Slovenia and Finland) or more (Greece) of arable land under two crops. In Malta, all farms follow the two crops rule only. Member States can allocate up to 8% or, in the case of some Member States, up to 13% of their national ceiling for direct payments to voluntary coupled support (VCS). Funding can be increased by a further 2% to support protein crops. In 2018, the most supported sectors in the EU-28 were: (i) beef and veal (23 Member States, 41% of all payments effected under VCS); (ii) milk and dairy products (19 Member States, 20%); (iii) sheep and goat meat (21 Member States, 12%); (iv) protein crops (15 Member States, 11%); (v) sugar beet (11 Member States, 4%); (vi) fruit and vegetables (19 Member States, 4%). Germany is the only Member State not applying VCS. 3.2.Relevant Pillar II measures For the period 2014-2020, EUR 68.6 billion and EUR 6 billion were programmed under priorities 4 and 5 respectively, which corresponds to 45.6% and 6.4% of the total planned public expenditure on rural development (EUR 151 billion). At the end of September 2020, the EU-28 had executed 76% (under Priority 4) and 46% (under Priority 5) of the planned public expenditure. It is worth pointing out that many environment/climate measures programmed under Priority 4 also contribute to climate action, but the budget can be allocated to one priority only. It explains in part the low budget allocated to Priority 5, which has the most climate-relevant focus areas (5D and 5E). The main measures programmed under Priority 4 are the support for areas facing natural constraints and agri-environment-climate commitments. Under Priority 5, three quarters of the budget is programmed under investments, included in forestry under focus area 5E. Several climate-relevant measures were entirely or close to 100% programmed under these two priorities: agri-environment-climate commitments, Natura 2000 payments, support for organic farming, ANC payments and support for forests. By contrast, less than 50% of the planned advice budget, around 30% of knowledge transfers and 20% of investments aimed to address climate change and protect natural resources. Table 2: Measures programmed (total public) under priorities 4 and 5 Priority 4 Priority 5 Share of the measure programmed under priorities 4 and 5 Measures EUR million % EUR million % M01 Knowledge transfer/information 363 1% 125 1% 34% M02 Advisory services 305 0.4% 62 0.6% 46% M04 Investments in physical assets 2 119 3% 4 767 50% 20% M06 Farm business and development 0% 146 2% 2% M07 Basic services and village renewal 1 398 2% 258 3% 16% M08 Forest investments 3 055 4% 2 487 26% 92% M10 Agri-environment-climate 24 021 35% 1 193 12% 100% M11 Organic farming 11 549 17% 131 1% 100% M12 Natura 2000 808 1% 7 0% 100% M13 Areas facing natural constraints 24 226 35% 221 2% 97% M15 Forest-environment-climate 286 0.4% 3 0% 100% M16 Cooperation 427 1% 208 2% 25% Total 68 558 100% 9 608 100% 52% Source: DG Agriculture and Rural Development At the beginning of the programming period, Member States fixed targets for a series of common result indicators, so their progress in implementing their rural development programmes can be followed. The achievements of the EU-28 in implementing measures planned under priorities 4 and 5 up to the end of 2018 can be summarised as follows: ·focus area 5A - increasing efficiency in water use by agriculture: by the end of 2018, 5% of irrigated land had been switched to more efficient irrigation systems, achieving 40% of the target; ·focus area 5B - increasing efficiency in energy use in agriculture and food processing: 18% of the target planned for 2023 (EUR 1.04 billion) was achieved in terms of total investment in energy efficiency; ·focus area 5C - increasing the supply and use of renewable sources of energy, and of by-products, wastes and residues, for the purpose of bio-economy: 17% of the target planned for 2023 (EUR 1.19 billion) was achieved in terms of total investment in renewable energy production; ·focus area 5D - reducing GHG and/or ammonia emissions: in 2018, around 2% of agricultural land was under management commitments that aimed to reduce GHG and/or ammonia emissions, and more than 80% of the target was achieved. Less than 1% of EU livestock units were concerned by investments to reduce emissions, achieving 61% of the target; ·focus area 5E - carbon sequestration and conservation: less than 1% of EU agricultural and forest land was under management that contributed to carbon sequestration and conservation, achieving close to 90% of the target; ·focus area 4B - water quality (covering fertiliser management): 12% of agricultural land and 0.1% of forest land were under contracts to improve water management by the end of 2018. While 84% of the target was achieved for agricultural land, only 14% was achieved for forest land; ·focus area 4C - prevention of soil erosion and improvement of soil management: 11% of agricultural land and 0.22% of forest land were under management contracts to help prevent soil erosion and improve soil management in 2018. While 85.9% of the target was achieved for agricultural land, only 16.9% was achieved for forest land; ·focus area 3B - farm risk prevention and management: the share of farms participating in risk management schemes was close to 6% in 2018, achieving 28.3% of the target. Member States went far beyond the regulatory obligation to reserve at least 30% of the Pillar II budget for measures addressing climate and environmental objectives, achieving almost 55% on average. However, it is worth noting that payments for areas facing natural or other specific constraints, whose actual contribution to the climate objectives is weak, are the largest contributor to this target (20%). They are followed by the agri-environment-climate measures (17%) and organic farming (10%).

4.Method The evaluation builds on the external support study conducted in 2015-2017, complementing it with internal (DG Agriculture and Rural Development) analysis based on more recent data and information, and including relevant findings from available external analyses and assessments. Considering the wide range of topics under evaluation, the methodological approach of the evaluation support study combines theoretical and empirical approaches and includes a variety of methods, both quantitative and qualitative. Due to the complexity, the robustness of the evaluation faces a number of limitations. 4.1.Short description of methodology, tools and definitions The starting point for the evaluation was the development of the intervention logic (see Annex 4). This was the basis for assessing the potential impact of each measure on climate action and for analysing budget allocations for climate action across the CAP. The impact of CAP measures was quantified where appropriate and feasible, given the suitability and reliability of data available to the study. This is based in part on measure uptake data submitted by Member States in their annual implementation reports for the EAFRD (the reports for 2015 and 2016 for the support study, complemented with figures for 2017-2019). However, given the low implementation level at the beginning of the programming period, an accompanying qualitative review of CAP measures addresses gaps in the analysis where quantification of GHG impacts was not possible. This strengthens the understanding of causality between the use of measures and the impact in terms of climate mitigation, and provides information relating to potential emission leakage effects. The qualitative assessment is also used to understand better the combined impact of CAP measures. The evaluation support study used a simulated quantification of GHG emissions and removals. For the GHG simulation, the ‘GAINS’ (Greenhouse gas – Air Quality Interaction and Synergies) quantitative model was used to establish the baseline for simulating emission reductions and removals associated with the individual CAP measures according to their mitigation potential. This was based on uptake data reported by Member States (for 2015-2017) with relevant emission pathways and factors from literature. A variety of tools and techniques were used to develop the evaluation support study, such as: ·Stakeholder consultations, including: a public consultation on modernising and simplifying the CAP ; consultation of the relevant Civil Dialogue Groups; interviews with stakeholders and operators in the agri-food supply chain; consultation with relevant academics. The synopsis report of the stakeholder consultation is provided in Annex 2. ·A survey of farmers and farm advisers about their experience of climate pressures and relevant CAP instruments. This was also used to gain information from farm advisers on the extent of uptake of different types of innovation. ·Documentary research, literature review, statistical data analysis (measure uptake data reported by Member States in their annual implementation reports). This also included data from the Farm Accountancy Data Network (FADN) and expenditure data derived from the EU out-turn budget and Member States’ financing plans. ·Case studies were carried out to gather detailed information about CAP implementation and climate action in 10 Member States that represent a range of farming systems, biogeographical conditions and climate challenges. ·Cost-effectiveness analysis of budget allocations for climate action across the CAP. The EU’s climate tracking methodology was used to track climate spending in the EAGF and European Structural and Investment Funds, including the EAFRD. The calculation used to estimate the contribution of the CAP to climate funding is based on allocating one of three possible climate markers (0%, 40% or 100%) to each item of expenditure . ·Coherence matrix and scoring: to analyse coherence between regulations and/or intervention logics and assess the internal and external coherence of the CAP measures. Emissions leakage The occurrence of GHG emissions outside the boundary of the local agricultural production system, as a result of local change (e.g. implementation of an agricultural measure to modify environmental impact), may be referred to as ‘leakage’. The term is used to describe net emission change, including emissions, mitigation of emissions, and removals (removals from the atmosphere of GHGs, also called ‘sequestration’) outside the system boundary. Hence, to fully account for GHG emissions and removals which result from changes to agricultural systems within the EU caused by the CAP, there is a need to consider any resultant GHG emissions elsewhere. Many CAP measures change or influence production at a local level, which will have an economic and market influence beyond the agricultural system concerned. The main pathway for leakage considered in the evaluation support study is the net change in GHG emissions outside of the Member State implementing the measure that is induced by a change in production. Production changes include: ·changes in crop production for food, livestock feed, energy and fibre; ·changes in production from livestock farming, predominantly production of food.

The net change in emissions elsewhere (the leakage) is a mix of emissions from production systems and from land use change. For further details on the methodology and estimation of leakage, see Annex 3. 4.2.Limitations and robustness of findings The limitations of the analysis affect the robustness of findings due to the limited availability of accurate, detailed and homogenous data, the very limited observation period when the support study was carried out and the limited evidence to establish the link between CAP measures and climate mitigation. The first year of implementing the direct payments scheme was 2015 and the rural development programmes for 2014-2020 were approved by the Commission between December 2014 and November 2015. Consequently, the evaluation support study could only rely on 2 years (2015-2016) of data from Eurostat and 1 year (2015) of data from the FADN and the Clearance of Audit Trail System (CATS). A key limitation has been the impossibility to quantify the overall net impact of all the CAP measures on emissions. It is also difficult to deliver an overall assessment of the individual CAP 2014-2020 measures against their desired climate objectives, particularly at EU level, because of the wide range of implementation choices by individual Member States. The limitations implied that the emission effects of some measures could not be assessed quantitatively. The quantitative method used in the evaluation support study to estimate the impact of CAP measures on emissions is limited. It is questionable whether the impact of a measure on emissions is suitable for quantification at all. Even when uptake figures are available for a certain measure, sometimes there is not a direct enough link between the use of the measure and the impact it has, if any, on climate change mitigation or adaptation. For example, there is not a direct enough link between the provision of advice to farmers and any changes they may make in their land management practices to assess the impact of advice measures on the reduction of emissions to be quantified. The main limitations of the method, due to lack of data (short period of implementation) and the impossibility to construct counterfactual situations for all measures , can be summarised as follows: ·the impossibility of quantifying the overall net impact of direct payments on emissions. Direct payments, including coupled support to extensive livestock systems, prevent land abandonment and contribute to the maintenance of permanent grasslands. When the land is abandoned, the mitigation impact depends on the alternative use of this land: on one hand it is negative if the land is ploughed, kept bare-fallow or constructed (soil sealing), on the other hand it is positive if the land is afforested or left for spontaneous revegetation; ·the difficulty of establishing the extent to which the CAP measures support mitigation actions, due to the lack of a counterfactual situation , the level of detail in some uptake data, the wide range of potential biogenic emissions and the difficulties aggregating GHG emissions reported at project level; ·the lack of specific indicators for the individual measures with respect to their impact on mitigation and adaptation, and the fact that complementary result indicators (see Chapter 3) were not available in time for the evaluation support study; ·the difficulty of assessing the effectiveness of the permanent grassland ratio and measures to protect environmentally sensitive permanent grassland , isolating this from the effectiveness of other measures such as Natura 2000; ·the difficulty of constructing the counterfactual situation in case of no support and analysing what would happen to fallow land; ·the scarcity of available data with which to assess the effect of innovations on climate action, meaning it was not possible to assess the overall impact of innovations on climate objectives; ·the lack of evidence with which to assess the impact of ‘soft’ measures, such as advisory measures, or training and advice. With these caveats, the contractor nevertheless has developed a GHG simulation according to the mitigation potential of CAP measures. As regards adaptation, the assessment of the measures’ impact was particularly difficult, as there are no legally binding or concrete, quantified objectives for adaptation, apart from the budget requirements mentioned in Chapter 2. The requirement to allocate 30% of EAFRD funds in each rural development programme to measures addressing environment and climate objectives has not been an effective driver since, in most cases, most of this support went to measure 13 - areas facing natural constraints, which could have little relevance to adaptation. Furthermore, it was also difficult to derive a robust general picture from the opinions presented in the case studies, given the very different situations and particularly the implementation choices in the Member States covered by the case studies. Despite the lack of some data, the solid methodology, particularly the modelling analysis and the in-depth case studies, ensured the validity of the main findings of the evaluation.

5.Analysis 5.1.Effectiveness

This chapter aims to assess the extent to which the relevant CAP 2014-2020 measures are effective in contributing to climate change mitigation and adaptation. Trend of GHG emissions and the evidence base for assessing the CAP’s impact In 2018, the agricultural sector emitted 486 million tonnes of CO2eq in the EU-28 (of which 435 million tonnes were non-CO2 GHG), corresponding to 12% of total GHG emissions . Emissions decreased significantly between 1990 and 2010 and have stagnated under the CAP 2014-2020. In view of the EU climate targets, the agricultural sector will need to step up its efforts to contribute to the EU’s climate ambition. In 2018, 44% of EU-28 agricultural non-CO2 emissions were related to enteric fermentation of ruminant livestock (methane - CH4), 37% to fertilisation of agricultural soils (nitrous oxide - N2O and, to a lesser extent, CO2), 14% to the management of manure (CH4 and, to a lesser extent, N2O); the management of cropland and grassland together resulted in net emissions of 64 million tonnes of CO2eq. Overall, within the agricultural sector CH4 represents 55% and N2O 43% of GHG emissions. The agricultural sector is responsible for 54% of total EU CH4 emissions (6% of the total EU GHG emissions) and for 79% of total EU N2O emissions (4% of the total EU GHG emissions). These data show that reduction efforts must focus as much on N2O as on CH4. Furthermore, the role of agriculture in protecting carbon stocks and providing carbon sequestration should also be enhanced. 5.1.1.CAP measures’ effectiveness in contributing to climate change mitigation Results of the simulation on GHG emission reductions Only some CAP measures are expected to have a direct quantifiable impact on GHG emissions and only certain CAP measures had suitable uptake indicators available for the purpose of the simulation. Therefore, only a selection of CAP measures could be included in the simulation. Notable omissions include fallow land (EFA), for which the simulation cannot calculate a single year’s impact on emissions, the permanent grassland ratio and most direct payments. In the evaluation support study, three simulations were carried out, reflecting the impact of a low, medium and high scenario in terms of emission factors, i.e. the potential of measures to reduce emissions. In addition, for Pillar II, the simulation was based on 2016 uptake; however, to take into account the fact that uptake is increasing over time, an additional 2020 simulation was run, simulating an uptake at target level . At best, based on 2016 uptake, the reduction in emissions reaches 8.8% compared to the simulated baseline without the CAP, with a medium scenario at 4.7% and a low at 0.3%. Pillar I contributes most to this reduction, via greening and, more specifically, protection of environmentally sensitive permanent grasslands (ESPG) and the ecological focus areas (EFA). In the medium scenario, in the absence of these two measures, emissions from agriculture would have been 3.5% higher (19.8 million tonnes CO2eq).



Table 3: Simulated impact on EU-28 GHG emissions (simulated Pillar I CAP measures, compared to the baseline of 1 000 t CO2eq/ year) CAP measure Scenario Emitted as CO2 Emitted as N2O % reduction compared to the baseline (net CO2eq) EFA (except fallow land) Low 19 152 0.0% Medium 20 4 005 0.7% High 21 7 858 1.4% ESPG Low 1 466 0 0.3% Medium 15 764 0 2.8% High 30 061 0 5.3% EFA + ESPG Low 1 486 152 0.3% Medium 15 784 4 005 3.5% High 30 082 7 858 6.7% Source: Evaluation support study Table 4: Simulated impact on EU-28 GHG emissions (selected Pillar II CAP measures, medium scenario, 2016 uptake, compared to the baseline of 1 000 t CO2eq/year) CAP measure (ranked by percentage reduction) CH4 CO2 N2O % reduction compared to the baseline (net CO2eq.) Baseline 287 394 38 677 240 201 Natura 2000 (measure 12.1) 0 3 881 0 0.7% Agri-environment-climate commitments (measure 10.1) 0.13 170 1 125 0.2% Organic (measure 11) 0 0 874 0.2% Forestry (measure 8) 0 367 0 0.1% Investments (measure 4) 13 0 0 0.0% Total Pillar II Low 6 812 432 0.2% Total Pillar II Medium 13 4 418 1 999 1.1% Total Pillar II High 20 8 024 3 566 2.1% Source: Evaluation support study The quantified results need to be treated with caution, because they may overestimate the emission reduction from some of the measures analysed. This is particularly the case for the environmentally sensitive permanent grassland (ESPG) measure, which assumes that all the benefit of protecting ESPG can be attributed to the greening measure (while 96% of the ESPG is in Natura 2000). It also uses an emission factor, established from literature, which relates to the GHG removal benefits arising from restoring wetlands and peatlands. The literature makes clear that such large removals are achievable in a limited range of circumstances, so that the ‘medium’ simulation result is very likely to be an overestimate. Where the Natura 2000 management plans already ban ploughing, the reductions in emissions cannot be attributed fully to the greening measure; however, greening enhances implementation of the ploughing ban, all the more in those Member States which translated the Habitat Directive into voluntary commitments in Natura 2000 areas (e.g. France). Pillar II measures for which the impact was quantifiable (i.e. investments in physical assets - measure 4, investments in forest area development - measure 8, agri-environment-climate - measure 10.1, organic farming - measure 11 and Natura 2000 payments – measure 12.1) have helped to reduce GHG emissions by ~6.4 million tonnes CO2eq/year. This corresponds to 1.1% of total emissions from agriculture based on the 2016 uptake of measures. Most of the reduction is associated with carbon sequestration due to Natura 2000 payments. Although the simulation result exaggerates the impact of this measure, which compensates farmers for the cost of complying with restrictions which are already in place, it is reasonable to associate some mitigation impact with the payment. In its absence, protection might have been more difficult to put in place due to farmers’ opposition, and management plans might have been less well complied with once they were in place. As the simulation could not account for such factors, the whole impact on GHGs associated with Natura 2000 protection has been attributed to Natura 2000 payments - measure 12.1. In addition, under the CAP, areas under greening cannot be compensated with Natura 2000 payments for the same restriction ; however, the simulation modelled each measure separately, implying some double counting with the modelling of the ESPG under greening.

Under the medium scenario, full uptake (at target level) of the measures that Member States have programmed would yield reductions equivalent to 1.5% (compared to 1.1% based on 2016 uptake). The extent of success should be considered alongside wider sectoral aspects, notably: ·Livestock production: CH4 emission reductions may be achieved by certain operations under the agri-environment-climate measure (10.1) with respect to manure management and feed, and investments in physical assets (measure 4) with respect to manure storage and livestock housing. ·Fertiliser use: N2O and CO2 emission reductions are only reported for agri-environment- climate commitments (measure 10.1) with respect to management of inputs. ·Preserving carbon sinks and enhancing carbon sequestration: CO2 reductions and removals may arise from practices that are supported by CAP measures included in the simulation but which are small in relation to wider reductions and removals in the sector. Figure 2: Simulated emissions impact of CAP measures by source, medium scenario (1 000 t CO2eq/year), 2016 uptake, compared to baseline Source: Evaluation support study As shown in Figure 2, the mitigation impact is dominated by the effects of CAP measures on change in soil carbon stocks (the balance of emissions mitigation and increased removal of carbon from the atmosphere) and change in N2O emissions from soil and manure. It is estimated that 15.8 million tonnes of the 19.8 million tonnes reduction in emissions of CO2eq in the medium scenario for Pillar I measures come from changes in soil and biomass carbon stocks; the corresponding figure for the simulated Pillar II measures is 4.4 million tonnes CO2eq out of a total emission reduction of 6.4 million tonnes (2016 uptake). N2O emissions from soil and manures across the EU-28 would have been 4 million tonnes CO2eq per year greater without the relevant Pillar I measures (0.71% of baseline emissions) and 2 million tonnes CO2eq per year higher without the Pillar II measures (0.35%) per year (2016 uptake). The agri-environmental commitments accounted fully for this result. Reductions in CH4 emissions - from enteric fermentation and manure management - do not feature highly in the simulation results. Other work has shown that livestock mitigation measures have low potential, due to the technical difficulty in reducing emissions in the livestock sector. As highlighted in the Farm to Fork Strategy and in the Methane Strategy, changes in consumption patterns towards more sustainable diets would also be an effective way to decrease livestock emissions, while avoiding any reduction in herds leading to increased GHG emissions outside the EU (leakage). CO2 emissions associated with energy consumption are higher in some sectors (especially horticultural farms and specialised dairy farms, poultry and pig meat farms), but the relevant mitigation actions are site-specific and could not be simulated. The effect of CAP measures on CO2 removals CO2 is of great importance in the agricultural sector’s GHG balance, because of the very large stock of carbon in soils. Soils in Europe are accumulating carbon: grassland and forest soils are, on average, a carbon sink that is estimated to grow by 80 million tonnes every year , and around 90% of this carbon sequestration takes place in forests. This amounts to approximately 0.1% of all EU soil stocks (75 billion tonnes), so a small increase relative to existing stocks would have a large effect on net GHG emissions from the agricultural sector. Agricultural soils in Europe are a carbon sink, but they are losing carbon. Looking at agricultural land across the EU, the combination of grassland and cropland had a net emission of 68 million tonnes CO2eq in 2018 according to GHG inventory reporting. These emissions have significantly decreased since 1990, when they were at around 90 million tonnes. However, it soil carbon is currently the ‘blind spot’ in the land/climate nexus, as its monitoring needs significant improvement and investment. Soils can be a net source or sink for atmospheric carbon, depending on land use and management. Decreases in soil organic carbon through cultivation can be mitigated by minimising soil disturbance and tillage, permanent soil organic cover, crop rotation practices, or with special practices on cultivated peatlands (carbon-rich soils). Removal of CO2 into soils, without changing land use, depends on the balance between carbon additions (crop residues and organic matter additions) and carbon losses, mainly through organic matter decomposition. The most effective means of removing CO2 is changing land use from annual crop production to perennial grassland and/or woodland. In the simulation, the main mitigating impact of the CAP is realised through CO2 removals. According to the simulation, CAP measures result in removals between 3.6% (with Pillar II 2016 uptake) and 4% (at target level) of net agricultural GHG emissions. Soils rich in organic matter and, consequently, in carbon are better suited to withstanding the impact of climate change because they are more resistant to erosion and retain water better, especially during extreme events such as droughts. An important initiative on soil carbon is the ‘4 per 1 000’ initiative , which aims to increase soil organic matter and carbon sequestration through agricultural practices adapted to local environmental, social and economic conditions, such as agro-ecology, agroforestry, conservation agriculture and landscape management. The initiative commits stakeholders to a transition towards productive and highly resilient agriculture, based on appropriate management of lands and soils, creating jobs and income and consequently promoting sustainable development. This project highlights the fact that the carbon stock in permanent grassland is close to its maximum (hence, the importance of maintaining it), but that there is significant potential to increase carbon stocks in arable land. Emission mitigation impacts across Member States There is no clear regional pattern to the pathways leading to net changes in GHG emissions; however, there are differences between Member States depending on their geography, farming systems and policy implementation choices. The majority of Member States’ CAP measures have had a similar mitigating effect on climate change to that for the EU-28 as a whole. Member States with little opportunity to establish or protect permanent grassland (e.g. Malta, Cyprus) have the lowest potential to decrease emissions, while Member States with a large area of permanent grassland (e.g. Spain, Italy, Romania, Czechia and Greece) have the highest potential to have an impact on GHG emissions. Lower emissions are attributable to the large areas of land designated as ESPG within certain Member States and the potentially high benefit resulting from protecting these carbon stocks. It can be concluded that mitigation will mainly be achieved by maintaining permanent grassland and thus carbon stocks. The main contribution from arable systems comes through EFA (nitrogen-fixing crops and, to a lesser extent, from catch and cover crops). Measures whose impact could not be simulated

The permanent grassland ratio may potentially have significant effects on carbon emissions or removals. Compared to the counterfactual scenario in which there are no CAP measures, the ratio could theoretically prevent up to 95% of the 36.1 million hectares of permanent grassland from being ploughed without reseeding as grassland. However, its impact could not be simulated due to the significant uncertainty relating to the management of permanent grassland, the soil types concerned and the age of the grassland. Unlike ESPG, where ploughing is banned and designation (should) guarantee that soil carbon is locked in and sequestration can continue, various types of management with very different consequences for mitigation are possible in the case of land which is not ESPG and which is only protected through the permanent grassland ratio . The European Court of Justice in 2013 made clear that land classed as permanent grassland can be ploughed and re-seeded without it losing its ‘permanent grassland’ status. Alternative scenarios are presented in the evaluation support study on the impact of converting soils to arable, ploughing them then reseeding as grassland, or not ploughing at all. These scenarios show that, for each percentage point of declared permanent grassland that remains unploughed, there will be an estimated avoidance of net CO2 emissions from soil of between 0.7 and 1.8 million tonnes CO2eq (depending on soil type and climate), compared to a situation where the soil would otherwise have been ploughed then reseeded. A greater avoidance of emissions (1.2 to 4.5 million tonnes CO2eq) is achieved if grassland would otherwise be converted to arable use. The above-described model could not simulate the GHG impact of most direct payments either (single payment scheme or single area payment scheme, the redistributive payment, the small famers’ scheme and payments to areas facing natural constraints). However, the results of another modelling study on the impact of direct payments on production using the CAPRI model show that, overall, direct payments are helping to keep land in agricultural production. While land abandonment occurs in practice, the modelled results suggest that more land would have been abandoned if direct payments had not been in place, and thus production and associated emissions would have been lower. Maintaining extensively managed farmland, particularly semi‐natural pastures, is key for conserving biodiversity and preserving the cultural landscape. Therefore, direct payments contribute to the provision of these public goods, but principally in marginal areas, since relatively productive land would be farmed in any case (i.e. even without the CAP). The higher agricultural output in marginal areas brought about by direct payments also causes higher levels of GHG emissions. These higher GHG emissions for the EU are, to some extent, moderated by lower emissions in the rest of the world. Nevertheless, the net effect of direct payments is slightly higher global GHG emissions. Determining the potential impact of the small farmers’ scheme in particular is further hindered by the fact that agricultural holdings under this scheme are exempt from greening obligations and from cross-compliance penalties. Therefore, the simulated reduction in emissions from the greening measure could have been larger without this exemption. In addition, since the impact of cross-compliance itself cannot be quantified, neither can the impact of not applying its sanctions to certain farms. Thus, depending on the effectiveness of these obligations, there is a risk of a missed opportunity to mitigate GHG emissions (this is also discussed in relation to the evaluation criteria for ‘coherence’). The evaluation support study concluded that the impact of measures supporting areas facing natural constraints on livestock production, the most usual type of farming in these areas, is difficult to establish. Since this payment is not coupled, the impact on production and thus GHG emissions is unlikely to be significant. As direct payments, the measure is intended to enable farming to continue in areas where it otherwise might not. There is potential for reducing GHG emissions if the abandonment of previously farmed land is followed by vegetation (herbaceous, shrub and wood) and forest. However, erosion effects with subsequent loss of soil carbon are also possible, and these can take a number of forms. For instance, in Scotland there have been instances where the replacement of sheep farming by uncontrolled grazing by wild deer has increased erosion. Elsewhere, in regions where soil is held in place on steeply sloping ground through terrace systems, the abandonment of such systems may result in the loss of significant soil carbon. For horizontal measures, the simulation could not quantify the impact of cross-compliance on GHG emissions due to the difficulty in determining the specific areas of land to which the often widely different rules set by Member States apply in practice. Member States have tended to set rules based on existing good practices and not beyond. Ensuring the ‘status quo’ is nevertheless important: by ensuring that there are no reversal trends, the carbon stock is protected. Although no simulation could be made, it is understood that ‘soft measures’ to support climate mitigation actions will indirectly contribute to GHG reductions by changing behaviour and improving capacity. The most common CAP measures used to improve capacity and uptake are the Farm Advisory System as a horizontal measure and the measures supporting knowledge transfer (measure 1) and advisory services (measure 2) under Pillar II. The CAP measure supporting knowledge sharing networks by establishing and running operational groups of the EIP for agricultural productivity and sustainability (measure 16) has led to a number of initiatives to support capacity for climate mitigation at farm level and helps research results to be translated in practice on the ground. Additional soft measures are identified in the literature review as having the potential to contribute to GHG reductions. These measures include: the use of business plans to support energy efficiency on farms and in rural businesses (via the farm and business development measure, measure 6); and support for operations (including local renewable energy production, community energy efficiency, localised food chains, sustainable mobility, etc.) under the community-led local development strategies (LEADER, measure 19). The impact of voluntary coupled support VCS is intended to aid certain production activities which experience difficulties and which are important for economic, social and/or environmental reasons. Its potential impact on GHG emissions varies according to the type of production supported and any eligibility requirements. Support to maintain ruminants contributes to keeping enteric emission levels, while helping to maintain permanent grassland and thus carbon stock. Support for protein crops could reduce emissions of N2O and increase sequestration compared to a counterfactual scenario in which other crops were grown. Academic and other literature does not present a clear picture of the impact of coupled support on production or GHG emissions. Using the CAPRI model, Jansson et al show that removing coupled support for ruminants would reduce beef production by 1% and total agricultural GHG emissions in the EU by 0.5%. However, about three quarters of this reduction would be cancelled out by emissions leakage (i.e. increased emissions outside the EU) due to an increase in imports from countries with relatively higher emissions per unit of product (emission intensities), like Brazil . This emissions leakage would significantly limit the positive impact on global warming that could come from removing coupled support in the EU. A reduction in direct emissions from livestock might also be accompanied by changes in land use whose impact is difficult to predict. Land previously used for grazing or for the production of feed could be abandoned, set aside or brought into another form of production (e.g. grassland could be converted into arable land or vice versa). If abandoned, the effect can be positive for climate (e.g. afforestation, conversion to grassland) or negative (e.g. conversion to settlements or increased soil erosion). The benefit of stopping livestock production therefore depends on how land is managed. With regard to production effects, in certain cases coupled payments support the continuation of agricultural activity on carbon-rich soils, which is less GHG-intensive than alternative uses for the land . An extensively grazed pasture which is no longer supported by coupled support might be ploughed and converted to arable production, releasing soil carbon and also emissions from the use of fertilisers. However, the extent to which such changes can occur is constrained by other policy instruments, notably by the permanent grassland ratio and the designation of environmentally sensitive permanent grassland, in addition to the physical characteristics of the land which may make it unsuitable for arable farming. Therefore, the evaluation support study could not conclude that reduced emissions from a reduction in livestock numbers would automatically be offset by increased emissions from ploughing. A smaller proportion (10%) of Member States’ coupled support budget has been set aside for protein crops, which can reduce GHG emissions. The EU protein crop area increased by close to 60% between 2013 and 2019, to 2.16 million hectares . Beside coupled support, market factors, the eligibility of protein crops for EFA and the crop diversification measure also contributed to this increase. The evaluation support study reports that reductions in direct GHG emissions from improved nitrogen efficiency of between 0.033 and 0.159 tonnes/hectare/year are achievable via nitrogen management measures, including the planting of protein crops. The overall net impact of coupled support on GHG emissions within the EU is difficult to judge. Additional enteric emissions and emissions from manure management associated with livestock numbers that are higher than would be expected in a counterfactual scenario must be balanced against the risk of emission leakage and any positive impacts from protecting sensitive soils, while also depending on its use and management. The small positive impact of additional protein crop production must also be taken into account. The scale of support for the livestock sector qualitatively suggests that negative impacts (i.e. increase in GHG emissions) are likely to outweigh positive impacts (i.e. climate change mitigation). However, model results also show that, due to leakage (increase of emissions outside the EU), the net-negative impact of VCS might be very small. The assessment of the impact of voluntary coupled support, decoupled direct payments and support for areas facing natural constraints highlights that the debate on livestock emissions cannot be simply narrowed down to reducing livestock numbers to a more sustainable level, but should also make a distinction between intensive and extensive livestock systems. This was highlighted in the Commission’s report on the ‘Future of EU livestock’: besides the risk of emissions leakage, it is important to consider that ruminants in extensive livestock systems maintain marginal land whose biomass is not mechanically harvestable (humid and dry mountain areas, humid zones, etc.), with positive effects on biodiversity and landscape management, such as on fire risk prevention, depending on site-specific conditions. In addition, to produce meat and milk ruminants use cellulose, which is not digestible for human beings. A holistic approach to livestock systems when assessing their impact is necessary, by also looking at relation with impact of feed production and unsustainable consumption patterns.

5.1.2.CAP measures’ contribution to climate adaptation and climate resilience of the agricultural sector and society With close to 800 natural catastrophes worldwide in 2018 , the number of extreme events affecting agriculture is rising. Climate adaptation was an overarching objective of the five European Structural and Investment Funds for 2014-2020, including the EAFRD, and a cross-cutting objective of the CAP 2014-2020. However, there are no legally binding or concrete, quantified objectives for adaptation, apart from the budget requirements. The requirement to allocate 30% of EAFRD funds in each rural development programme to measures addressing environment and climate objectives has not been an effective driver, since much of this percentage was made up of measure 13 (support for areas facing natural constraints). This measure has little relevance for environment and climate objectives, including adaptation. Figure 3: Number of natural catastrophes worldwide Source: Münchener Rückversicherungs-Gesellschaft, Geo Risks Research, NatCatService Note: The graph refers to the natural catastrophes occurred in general and not only in agriculture. Member States’ national strategies include plans to adapt the agricultural and forestry sectors. The planning process for rural development programmes required Member States to integrate adaptation into their policies. Unfortunately, however, there were no such requirements under the Direct Payments and Horizontal Regulations. In Pillar II, very little reference is made in the programmes to risk assessments and even less to adaptation strategies and plans. Despite adaptation being considered as a relevant challenge in almost all rural development programmes, only eight addressed climate adaptation explicitly. Nevertheless, although overall the CAP measures were not primarily designed to address climate-related objectives and very few CAP measures make explicit reference to climate adaptation, several measures had some indirect effects on adaptation (see Table 1). Tracking expenditure on adaptation is very difficult, as there is no focus area dedicated specifically to adaptation. In addition, some measures which can address adaptation relate to several focus areas (investments in physical assets, agri-environment-climate commitments, organic farming). At EU level, EUR 7.8 billion have been allocated to support actions explicitly dedicated to preventing or minimising the damage that climate change can cause, corresponding to 5% of the total climate change allocation under the EAFRD. The main contributions are detailed below. Effects of the Horizontal Regulations on adaptation Cross-compliance GAEC standards can have unintended positive effects on adaptation and can also help to avoid cases of maladaptation, but the extent to which this happens depends on how Member States choose to define the standards. Interviewees in the case study countries pointed out that climate change adaptation had not been a significant driver of GAEC choices (Germany, Spain, except for GAEC soil in 2018, and Romania). In most case study countries, GAEC standards did not change significantly between the CAP 2007-2013 and the CAP 2014-2020, showing no strong commitment to furthering climate change adaptation. Overall, Member States have not directly tailored GAECs for adaptation purposes, so their potential is not fully used. As regards the standards most likely to benefit adaptation, for GAEC 6 (maintenance of soil organic matter ), most Member States (15) did not go beyond the EU minimum requirement, a ban on stubble burning. Furthermore, compared to the CAP 2007-2013, the number of Member States which defined additional requirements for the maintenance of soil organic matter decreased. These requirements include: restrictions on entering land when it is waterlogged or frozen; use of crop rotations; not growing successive crops with a high soil carbon demand; application and/or monitoring of organic matter; soil testing; and stubble management . Part of these requirements, previously under GAEC 6, are reflected in the CAP 2014-2020 in the crop diversification obligation under greening. GAEC 2, which concerns compliance with authorisation procedures for irrigation water, is mostly defined by Member States as a requirement to hold a permit for irrigation and, in some Member States, to have a water meter. The EU framework does not include any requirement to link the quantity of water used to the quantitative state of the water resource in the area, which would have been beneficial to avoid cases of poor adaptation. With regard to the Farm Advisory System (FAS), the advisers interviewed also reported on the high complexity in advising on adaptation given: 1) the uncertainty of climate change impacts; 2) the fact that knowledge of adaptation issues is still developing; and 3) the fact that the vulnerability of a given farming system is very dependent on its context and location. Although climate change has been included in the scope of the FAS from 2014, it is difficult to assess accurately to what extent climate change has been included in advice to farmers. Case study interviews hint that the situation varies across Member States and that the integration of climate-related actions has been low. There is thus room to improve how adaptation is incorporated into the FAS. Effects of the first pillar’s measures on adaptation Crop diversification is likely to have positive effects on adaptation by agricultural holdings and on territorial adaptation. Increased crop diversity and crop rotation promoted by the measure improve farms’ resilience to climatic events such as droughts and to economic shocks from price volatility. Crop rotation also helps to improve soil quality and resilience to pests, while diversifying into less water-demanding crops may lower dependence on water resources in traditionally irrigated areas. In 2016, 23% of farms in the EU had three crops or more. The crop diversification measure required changes of crop on less than 1% of EU arable land, but it encouraged farmers to maintain diversification. In 2016, 27% of EU farms had one crop only, and mono-cropping remains a dominant practice in a number of countries and regions in the EU (Italy, Romania, Spain, Poland, north-western Germany and south-western France). Nevertheless, the impact of crop diversification under greening was higher locally in areas with high levels of mono-cropping (e.g. 2.8% of the agricultural area had to be diversified in Spain). According to the evaluation support study on greening, most farmers that had to diversify mainly planted leguminous plants instead of cereals, and they mainly did it in rotation; both practices were identified as being positive for adaptation by favouring resilience to pests and droughts and improving soil structure. The permanent grassland ratio can improve adaptation, since permanent grass cover limits soil erosion and improves resilience to floods. It helps to maintain a level of diversity in farming systems, which has been identified as crucial for adaptation. In EFA, planting of catch/cover crops, adopted by many farmers to comply with the obligation, favours adaptation by improving soil organic carbon content and maintaining soil moisture, which is good for resilience to droughts, while also limiting the risk of soil erosion. The maintenance of (non-bare) fallow land and landscape elements is also beneficial for resilience to floods and protection from soil erosion. Direct payments can potentially facilitate investments necessary to adapt to new climate conditions, and hence facilitate a transition towards more resilient systems. They can also lower farmers’ economic sensitivity to shocks that may be directly or indirectly due to climate changes, such as climatic events or price volatility, by improving income stability. A fairer distribution of direct payments through the voluntary redistributive payment could favour adaptation by supporting farm diversity through support for smaller farms. However, the measure was implemented only in 10 Member States, which limited the potential benefits. VCS favours systems that are experiencing difficulties, which might relate to the resilience of a region (e.g. an important employer in a region already marked by high structural unemployment), and in doing so it promotes farm diversity more broadly. As Scenar 2030 shows, a ‘no CAP’ scenario would lead to more specialised systems, implemented on a smaller agricultural area, located in the most favourable places, thus reducing diversity.

Direct payments can also have unintended negative effects on adaptation. They may support the maintenance of vulnerable farms, slowing some structural changes that could be necessary for adaptation in some cases or supporting risk-prone behaviour. Such cases have been reported during the case study interviews in Spain, where interviewees pointed out that the basic payment scheme was still strongly linked to historical payments; for example, farmers working on irrigated systems located in arid zones continue receiving higher levels of CAP payments. However, these systems are going to be increasingly vulnerable to the effects of climate change and they may lead to higher vulnerability of the whole territory through their use of ground water from aquifers that are already quite depleted. Also in Spain, coupled support is available for rice and tomatoes, even though these irrigated crops require high levels of water consumption and are grown in areas facing water scarcity issues. However, rice is typically produced on areas near to the sea, where the salinity of the soil is so high that rice production often has no alternative. This highlights trade-offs between the different pillars of sustainability, in this case environmental versus social sustainability. All cases are very context-dependent and cannot be generalised, while the screening for maladaptations means considering socio-economic indicators in conjunction with natural resource indicators. Effects of the second pillar’s measures on adaptation Almost all rural development measures have intended or unintended effects on adaptation. However, assessing the effects of measures is rather difficult, as they not only support practices that are beneficial for adaptation but usually also encompass other actions or types of operation that are not relevant for adaptation. In addition, information on budget allocation and uptake are not available for different types of operation, so the adaptive effects are probably over-estimates in most cases. ·Soft measures Training (measure 1) and advisory services (measure 2): even though climate change adaptation is often mentioned as an objective of these measures, most supported actions focused primarily on economic or other environmental subjects. Furthermore, the effects of the measures have been hindered by a low level of programming and delays in implementation, which is problematic given the fact that, in several Member States or regions, there is no funding allocated to training activities beyond rural development support (e.g. in Romania). Cooperation (measure 16) can promote adaptation to climate change thanks to support for the development and diffusion of innovative practices, better planning of resource management and support for diversification of agricultural holdings’ activities; the measure has been programmed by most managing authorities. An example of using this measure for adaptation is the funding of operational groups, comprised of farmers and other stakeholders, created in the Agro-ecology project in France. They promote collective experimentation and knowledge exchange, facilitating a transition toward more sustainable practices. Measure 19 (LEADER): a review of LEADER projects supported in the previous programming period (2007-2013) across the EU-28 showed that, overall, climate-relevant projects mostly focused on capacity building and energy efficiency, with a limited focus on more explicit adaptation activities . ·Investment measures Measure 4 (investments in physical assets) has strong potential to support climate change adaptation, since investment in equipment and infrastructure can enable vulnerable farms and forest holdings to adapt to climate change through, for instance: ·improved resource efficiency for agricultural holdings (water efficiency, reduced soil tillage); ·storage facilities to increase water resource availability in agricultural holdings (including rain water collection); ·modernisation of livestock production units (recycling water or improving ventilation of buildings). Non-productive investments linked to the achievement of agri-environment-climate objectives are also very relevant for climate change adaptation. Support is available, for instance, for the planting of hedges and trees against erosion, or the restoration of wetlands or peatland. Interviewees in Spain (Andalusia) pointed out that the modernisation of irrigation systems improves the capacity of farmers to cope with droughts. However, it may also lead in some cases, in the long run, to poor adaptation in areas where the water resource is already depleted (as a result of increasing water demand with increases in irrigated areas, rather than changes in cropping patterns in these regions). Moreover, water savings that could be achieved by more efficient irrigation systems can be over-compensated by increasing the irrigated area or by switching to more water-intensive crops. Another example of potentially poor adaptation concerns support for high-cost investments (heavy machinery), which can lead to a high level of specialisation by farms (to achieve economies of scale) and can lock farmers into specific systems that are more challenging to adapt to climate change. In addition, farmers who are financially weakened by heavy investments are also more economically vulnerable to climate shocks. Measure 8 (forest management and investment) can also support a wide range of actions that are beneficial for adaptation of forests, and covers similar potential climate benefits to those of measure 4 (investment) and measure 5 (risk prevention). Through afforestation, it can: provide sustainable use of former agricultural land that would become marginal because of the effect of climate change; support agroforestry, which has multiple climate change adaptation benefits; improve forest resilience through improved risk mitigation (pest control, fire prevention, restoration); and improve the resilience of forests to climate change (introduction of adapted species, mixed stands, etc.). However, in few cases afforestation is done with fire-prone species such as eucalyptus, thus increasing the risk of fires and the potential damage caused by these fires. In most case study countries where the measure is implemented (seven out of eight), the measure is likely to have had some positive effect on farmers’ adaptive capacity. For instance, in Aquitaine (France) and in Andalusia (Spain) sub-measure 8.3 (promoting fire protection) has been widely used to build infrastructure to mitigate fire risk; however, it is used much less to promote preventive actions (planting of resilient species, etc.). Measure 7 (basic services and village renewal) has no intended effects on adaptation, but it may support various actions, such as the maintenance of pastoral activities (in Aquitaine), which are considered resilient to climate change. ·Risk management measures

Only a very low share of the EAFRD budget (0.8%) has been attributed to measure 5 - disaster risk reduction, which aims to support agricultural holdings’ resilience to climate change. This measure supports preventive actions, e.g. investments in drainage systems in northern regions where more rain is expected in the coming years, the establishment of flood plains, or the planting of trees against erosion, as well as restoration after damage to improve the resilience of farming systems to climate change. According to the case study analysis, measure 5 has probably helped to reduce the vulnerability of some farmers, foresters and/or territories in Saxony-Anhalt and Croatia, where some adaptation-relevant projects have been funded. Measure 17 supports risk management and thus improves economic resilience to shocks linked to the impact of climate change. However, this type of support may also have adverse effects on adaptation, by promoting risk-prone behaviour by farmers who feel protected. At least one risk management tool is available in the rural development programmes of Italy, France, Romania, Portugal, Hungary, Croatia, the Netherlands, Lithuania, Latvia and Malta, and of two regions: Castilla y León (Spain) and Flanders (Belgium). However, although CAP support for agricultural risk management ha