Hostname: page-component-77c89778f8-gq7q9 Total loading time: 0 Render date: 2024-07-18T13:57:58.822Z Has data issue: false hasContentIssue false
  • English
  • Français

Modeling Interactions of a Carbon Offset Policy and Biomass Markets on Crop Allocations

Published online by Cambridge University Press:  26 January 2015

Michael Popp  and
Lawton Lanier Nalley
Michael Popp
Affiliation:
Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville, Arkansas
Lawton Lanier Nalley
Affiliation:
Department of Agricultural Economics and Agribusiness, University of Arkansas, Fayetteville, Arkansas
Get access Rights & Permissions [Opens in a new window]

Abstract

Arkansas cropping pattern changes at the county level were estimated under various scenarios involving a likely decline in water availability, the development of a biomass market for renewable energy production, and the potential of a widely used carbon offset market. These scenarios are analyzed separately and jointly to determine which of the three scenarios is expected to have the largest impact on net (emissions - sequestration) greenhouse gas (GHG) emissions, renewable fuels feedstock supply, and producer net returns. Land use choices included conventional crops of rice, cotton, soybean, corn, grain sorghum, pasture, and hay. Specialty crops of loblolly pine and switchgrass were modeled for their respective potential to sequester carbon and provide feedstock for renewable fuels. GHG emissions were measured across an array of production methods for each crop. Soil and lumber carbon sequestration was based on yield, soil texture, and tillage. Using the concept of additionality in which net GHG emissions reductions compared with a baseline level were rewarded at a carbon price of $15 per ton along with $40 per dry ton of switchgrass, baled at field side, revealed that irrigation restrictions had the largest negative impact on producer net returns while also lowering net GHG emissions. Introducing the higher carbon price led to minor positive income ramifications and greatly reduced net GHG emissions. Biomass production returns were higher than the returns from the carbon offset market, however, at the cost of greater net GHG emissions. The combination of all factors led to a significant increase in switchgrass and pine production. In this scenario, approximately 16% of the total income losses with lower nonirrigated yields were offset with returns from biomass and carbon markets. Lowest statewide net GHG emissions were achieved given least irrigation fuel use and a greater than 15% increase in carbon sequestration with pine and switchgrass.

Keywords

carbon offsetsirrigation restrictionpineswitchgrassQ11Q15Q16Q18Q54
Type
Invited Paper Sessions
Information
Journal of Agricultural and Applied Economics , Volume 43 , Issue 3 , August 2011 , pp. 399 - 411
Copyright
Copyright © Southern Agricultural Economics Association 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Great Pacific Trading Company (GPTC). “Charts and Quotes.” Internet site: www.gptc.com/quotes.html (Accessed June 5, 2008).Google Scholar
Hardie, I.W. “Comparative Rents for Farmland and Timberland in a Subregion of the South.” Southern Journal of Agricultural Economics 16(1984):45–53.Google Scholar
Hill, J., Wailes, E., Popp, M., Popp, J., Smartt, J., Young, K., and Watkins, B. “Surface Water Diversion Impacts on Farm Income and Sources of Irrigation Water: The Case of the Grand Prairie in Arkansas.” Journal of Soil and Water Conservation 61(2006):185-91.Google Scholar
Hunneycutt, H., West, C., and Phillips, J. “Responses of Bermudagrass, Tall Fescue and Tall Fescue-Clover to Broiler Litter and Commercial Fertilizer.” Arkansas Experiment Station, Bulletin 913, 1998.Google Scholar
Moore, K.C. “Managing Beef Cow Feed Costs: Dry Matter Production Costs of Pasture, Hay and Stockpiled Pasture.” in 1997 American Forage and Grassland Council Proceedings. Georgetown, TX: American Forage and Grassland Council, 1997, pp. 228-32.Google Scholar
Nalley, L., and Popp, M. “Modeling the Effects of Cap and Trade and a Carbon Offset Policy on Crop Allocations and Farm Income.” Selected Paper. Agricultural and Applied Economics Association 2010 AAEA, CAES, & WAE A Joint Annual Meeting, Denver, CO, July 25-27, 2010. Internet site: http://ageconsearch.umn.edu/bitstream/60931/2/Nalley_Popp.pdf. (Accessed July 9, 2010).Google Scholar
Nalley, L., Popp, M., and Fortin, C. “The Impact of Reducing Green House Gas Emissions in Crop Agriculture: A Spatial and Production Level Analysis.” Agricultural and Resource Economics Review 40(2011):63–80.CrossRefGoogle Scholar
Popp, M., Nalley, L., Fortin, C., Smith, A., and Brye, K. “Estimating Net Carbon Emissions and Agricultural Response to Potential Carbon Offset Policies.” Agronomy Journal 103(2011):1132-43.CrossRefGoogle Scholar
Popp, M., Nalley, L., and Vickery, G. “Irrigation Restriction and Biomass Market Interactions: The Case of the Alluvial Aquifer.” Journal of Agricultural and Applied Economics 42,1(2010):69–86.CrossRefGoogle Scholar
Popp, M., Nalley, L., and Vickery, G. “Expected Changes in Farm Landscape with the Introduction of a Biomass Market.” Farm Foundation Proceedings Paper of the Transition to Bioeconomy: Environmental and Rural Development Impacts Conference, October 15–16, St. Louis, MO, 2008. Internet site: www.farmfoundation.org/news/articlefiles/401-Final_version_Farm_Foundation%20feb%2020%2009.pdf. (Accessed June 15, 2010).Google Scholar
Smith, A. “Carbon Sequestration Potential of Loblolly Pines in Arkansas: A Production Level Analysis.” Unpublished M.Sc. Thesis. Department of Agricultural Economics and Agribusiness, University of Arkansas. 2010.Google Scholar
United States Department of Agriculture, Census of Agriculture. “1992 Census of Agriculture-Arkansas State and County Data.” Volume 1, Geographic Area Series Part 4. Washington, DC, September.Google Scholar
United States Department of Agriculture, Census of Agriculture. “1997 Census of Agriculture—Arkansas State and County Data.” Volume 1, Geographic Area Series Part 4. Washington DC, March.Google Scholar
United States Department of Agriculture, Census of Agriculture. “2002 Census of Agriculture—Arkansas State and County Data.” Volume 1, Geographic Area Series Part 4. Washington, DC, June.Google Scholar
United States Department of Agriculture, Census of Agriculture. “2007 Census of Agriculture—Arkansas State and County Data.” Volume 1, Geographic Area Series Part 4. Washington, DC, June.Google Scholar
United States Department of Agriculture, National Agricultural Statistics Service (NASS). Internet site: www.nass.usda.gov/QuickStats/Create_County_Indv.jsp (Accessed June 7, 2008).Google Scholar
United States Department of Agriculture, Charts and Maps. “2008 Pasture Cash Rent by State.” Internet site: www.nass.usda.gov/Charts_and_Maps/Land_Values_and_Cash_Rents/past_rent_map.asp (Accessed December 19, 2008).Google Scholar
United States Geological Survey (USGS). “Water Levels and Selected Water-Quality Conditions in the Mississippi River Valley Alluvial Aquifer in Eastern Arkansas, 2006.” Scientific Investigations Report 2008-5092, 2008.Google Scholar
University of Arkansas Cooperative Extension Service (UACES). 2008. “Crop Production Budgets for Farm Planning.” Internet site: www.uaex.edu/depts/ag_economics/previous_budgets.htm. Accessed August 13, 2009.Google Scholar
University of Arkansas Cooperative Extension Service (UACES). 2010. “Timber Price Reporting for Arkansas.” Internet site: www.arnatural.org/News/Timber_Report/. (Accessed June 15, 2010).Google Scholar