An Assessment of the Economic Effects of Ozone on U.S. Agriculture

Past attempts to measure the economic consequences of ozone on agriculture have been based on limited plant science information. This paper reports on an economic assessment of ozone on U.S. agriculture using recent crop response data from the National Crop Loss Assessment Network (NCLAN). The results are derived from a U.S. agricultural sector model that includes major crop and livestock production as well as domestic consumption, livestock feeding and export uses. The economic effects of four hypothetical ambient ozone levels are investigated. The analysis Indicates that the benefits to society of moderate (25%) ozone reductions are approximately $1.7 billion. A 25% Increase in ozone pollution results in costs (negative benefits) of $2.1 billion. These estimates do not reflect compliance costs of achieving the ozone changes and hence are not net benefits.     

Managing the nitrogen cycle to reduce greenhouse gas emissions from crop production and biofuel expansion

Public policies are promoting biofuels as an alternative to fossil fuel consumption in order to mitigate greenhouse gas (GHG) emissions. However, the mitigation benefit can be at least partially compromised by emissions occurring during feedstock production. One of the key sources of GHG emissions from biofuel feedstock production, as well as conventional crops, is soil nitrous oxide (N₂O), which is largely driven by nitrogen (N) management. Our objective was to determine how much GHG emissions could be reduced by encouraging alternative N management practices through application of nitrification inhibitors and a cap on N fertilization. We used the US Renewable Fuel Standards (RFS2) as the basis for a case study to evaluate technical and economic drivers influencing the N management mitigation strategies. We estimated soil N₂O emissions using the DayCent ecosystem model and applied the US Forest and Agricultural Sector Optimization Model with Greenhouse Gases (FASOMGHG) to project GHG emissions for the agricultural sector, as influenced by biofuel scenarios and N management options. Relative to the current RSF2 policy with no N management interventions, results show decreases in N₂O emissions ranging from 3 to 4 % for the agricultural sector (5.5–6.5 million metric tonnes CO₂?eq.?year^?1; 1 million metric tonnes is equivalent to a Teragram) in response to a cap that reduces N fertilizer application and even larger reductions with application of nitrification inhibitors, ranging from 9 to 10 % (15.5–16.6 million tonnes CO₂?eq.?year^?1). The results demonstrate that climate and energy policies promoting biofuel production could consider options to manage the N cycle with alternative fertilization practices for the agricultural sector and likely enhance the mitigation of GHG emissions associated with biofuels.     

Changes in electrical generator cooling systems: Are they cost-effective sources of water now and under climate change?

In the United States, thermal power plant electrical generators (EGs) are large water diverters and consumptive users who need water for cooling. Retrofitting existing cooling systems to dry cooling and building new facilities with dry cooling can save water and reduce EG's vulnerability to drought. However, this can be an expensive source of water. We estimate that the cost of water saved by retrofitting cooling in existing EGs ranges from $0.04/m³ to $18/m³ depending on facility characteristics. Also water savings from building new EGs with dry cooling ranges in cost per unit water from $1.29/m³ to $2.24/m³. We compare costs with that for water development projects identified in the Texas State Water Plan. We find the water cost from converting to dry cooling is lower than many of the water development possibilities. We then estimate the impact of climate change on the cost of water saved, finding climate change can increase EG water use by up to 9.3% and lower the costs of water saved. Generally, it appears that water planners might consider cooling alterations as a cost competitive water development alternative whose cost would be further decreased by climate change.     

AN EVALUATION OF THE 1997 EDWARDS AQUIFER IRRIGATION SUSPENSION1

ABSTRACT: In early 1997, the Texas Edwards Aquifer Authority implemented a pilot Irrigation Suspension Program with the objectives of increasing springflow and providing relief to municipalities during drought. Irrigators were paid an average of $234 per acre to suspend water use, a price higher than regional land rental rates. Auction theory and program implementation details suggest that the program implementation partially caused inflated bids. The Irrigation Suspension Program is also compared to two alternative programs: (1) subsidizing more efficient irrigation technology and (2) buying land. The irrigation suspension is found to be more cost‐effective relative to subsidizing improved irrigation efficiency because it can be put in place only when aquifer levels are low. Land purchase is a cheaper alternative if the bid levels remain at the levels observed.     

Integrating agricultural and forestry GHG mitigation response into general economy frameworks: Developing a family of response functions

An econometrically estimated family ofresponse functions is developed forcharacterizing potential responses togreenhouse gas mitigation policies by theagriculture and forestry sectors in theU.S. The response functions are estimatedbased on results of anagricultural/forestry sector model. Theyprovide estimates of sequestration andemission reductions in forestry andagriculture along with levels of sectoralproduction, prices, welfare, andenvironmental attributes given a carbonprice, levels of demand for agriculturalgoods, and the energy price. Sixalternative mitigation policiesrepresenting types of greenhouse gasoffsets allowed are considered. Resultsindicate that the largest quantity ofgreenhouse gas offset consistently appearswith the mitigation policy that pays forall opportunities. Restricting carbonpayments (emission tax or sequestrationsubsidy) only to aff/deforestation or onlyto agricultural sequestration substantiallyreduces potential mitigation. Highercarbon prices lead to more sequestration,less emissions, reduced consumer and totalwelfare, improved environmental indicatorsand increased producer welfare.     

Climate change effects on pesticide usage reduction efforts: a case study in China

China has announced plans to stabilize its pesticide use by 2020. Yet, future climate change will possibly increase the difficulty of meeting this goal. This study uses econometric estimation to explore how climate impacts Chinese pesticide usage and subsequently to project the future implications of climate change on pesticide use. The results indicate that both atmospheric temperature and precipitation increase pesticide usage. Under current climate change projections, pesticide usage will rise by +1.1 to 2.5% by 2040, +2.4 to 9.1% by 2070, and +2.6 to 18.3% by 2100. Linearly extrapolating the results to 2020 yields an approximately 0.5 to 1.2% increase. Thus, to achieve stabilization, more severe actions are needed to address this increase. Possible actions to achieve the reductions needed include using better monitoring and early warning networks so as to permit early responses to climate change-stimulated increases, enhancing information dissemination, altering crop mix, and promoting nonchemical control means. Additionally, given that increased pesticide usage generally increases health and environmental damage, there may be a need to more widely disseminate safe application procedure information while also strengthening compliance with food safety regulations. Furthermore, pest control strategies will need to be capable of evolving as climate change proceeds. Globally, efforts could be made to (1) scale up agrometeorological services, especially in developing countries; (2) use international frameworks to better align the environmental and health standards in developing countries with those in developed countries; and (3) adapt integrated pest management practices to climate change, especially for fruits and vegetables.     

Adaptation to climate change: changes in farmland use and stocking rate in the U.S.

This paper examines possible adaptations to climate change in terms of pasture and crop land use and stocking rate in the United States (U.S.). Using Agricultural Census and climate data in a statistical model, we find that as temperature and precipitation increases agricultural commodity producers respond by reducing crop land and increasing pasture land. In addition, cattle stocking rate decreases as the summer Temperature-humidity Index (THI) increases and summer precipitation decreases. Using the statistical model with climate data from four General Circulation Models (GCMs), we project that land use shifts from cropping to grazing and the stocking rate declines, and these adaptations are more pronounced in the central and the southeast regions of the U.S. Controlling for other farm production variables, crop land decreases by 6 % and pasture land increases by 33 % from the baseline. Correspondingly, the associated economic impact due to adaptation is around ?14 and 29 million dollars to crop producers and pasture producers by the end of this century, respectively. The national and regional results have implications for farm programs and subsidy policies.