Ionospheric Faraday rotation distorts satellite radar observations of
the Earth's surface. While its impact on radiometric observables is well
understood, the errors in repeat-pass InSAR observations and hence in
deformation analysis are largely unknown. Because Faraday rotation
cannot rigorously be compensated for in non-quad-pol systems, it is
imperative to determine the magnitude and nature of the deformation
errors. Focusing on distributed targets at L-band, we assess the errors
for a range of land covers using airborne observations with simulated
Faraday rotation. We find that the deformation error may reach 2 mm in
the co-pol channels over a solar cycle. It can exceed 5 mm for intense
solar maxima. The cross-pol channel is more susceptible to severe
errors. We identify the leakage of polarimetric phase contributions into
the interferometric phase as a dominant error source. The polarimetric
scattering characteristics induce a systematic dependence of the
Faraday-induced deformation errors on land cover and topography. Also
their temporal characteristics, with pronounced seasonal and
quasi-decadal variability, predispose these systematic errors to be
misinterpreted as deformation. While the relatively small magnitude of
1-2 mm is of limited concern in many applications, the persistence on
semi- to multi-annual time scales compels attention when long-term
deformation is to be estimated with millimetric accuracy. Phase errors
induced by uncompensated Faraday rotation constitute a non-negligible
source of bias in interferometric deformation measurements.