Agriculture in the EU is a significant source of greenhouse gas (GHG) emissions, being responsible for about 9 percent of total GHG emissions. However, these emissions include several gases (methane (CH4), nitrous oxide (N2O) and carbon dioxide (CO2)) and a range of sources that are only partly under farm management control. CO2 is released largely from microbial decay or burning of plant litter and soil organic matter. CH4 is produced when organic materials decompose under anoxic conditions, notably from fermentative digestion by ruminant livestock, stored manures, wetlands and rice grown under flooded conditions. N2O is produced by the microbial transformations of nitrogen (N) in soils and manures, and is often enhanced where available N exceeds plant requirements, especially under wet conditions. These greenhouse gas emissions may be reduced by lowering input intensities and thus often also farm productivity, through adoption of the efficiency measures that increase production per unit emissions, or through changes in land use, farm management or technologies that target reduction in GHG emissions. Different farm types may have very different options for emissions reductions depending on farm type, farm structure, agroecological conditions, infrastructure and available financing. The usual practice within the Common Agricultural Policy (CAP) in terms of incentivizing GHG emissions in agriculture is to support certain practices or technologies based on a list of approved measures. Whereas such a list in most cases would lead to emissions reductions, the costs may be relatively high, since the measures are not targeted local conditions, and also such a generalized list leaves little room for innovations in the sector to further reduce emissions. The emissions from the energy sector in the EU is regulated through the Emissions Trading System (ETS), which despite current problems with CO2 quota prices may be an efficient system for ensuring emissions reductions. The question therefore arises whether the emissions from agricultural sector could be regulated the ETS (Brandt and Svendsen, 2011), or whether other incentives that take a whole-farm perspective could be introduced based on a farm level GHG accounting system that also accounts for measures taken to reduce emissions.