What monitoring, reporting & verification (MRV) systems can reduce costs and enhance scalability of carbon farming?

With the growing emphasis on results-based payments in environmental monitoring of agricultural practices, developing reliable and cost-effective monitoring, reporting, and verification (MRV) systems has become critical. This holds particularly for carbon farming, where existing methods to monitor soil carbon storage are often roughly estimated or prohibitively expensive. This paper examines the factors driving MRV costs for results-based payments in carbon farming. We develop a cost model for three MRV systems: decision support tools, process-based models and direct soil measurement. Using scenario and sensitivity analyses, we estimate substantial cost variations depending on the monitoring approach, project design, and protocol standards, indicating potential burdens to farmers. While process-based models may emerge as the standard in future carbon markets, concerns about economic viability and labour demands persist. Innovations like digitalisation or relying on long-term experimental sites hold promise for reducing costs, but policy support is likely required to ensure the scalability of MRV systems, especially for smaller farms. Our findings are relevant to ongoing policy discussions, such as the European Union's Carbon Removal Certification Framework. From a methodological perspective, our generic cost model can be extrapolated to estimate the MRV costs of carbon farming across various contexts.