Source: COLORADO STATE UNIVERSITY submitted to
INFERRING THE SUPPLY OF GREENHOUSE GAS ABATEMENT FROM US COMMODITY PRODUCERS IN THE CORN BELT USING OBSERVED PRACTICE CHOICES: IMPLICATIONS FOR CARBON OFFSET PROGRAMS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
EXTENDED
Funding Source
AFRI COMPETITIVE GRANT
Reporting Frequency
Annual
Accession No.
1026145
Grant No.
2021-67023-34490
Project No.
COL0-2020-06927
Proposal No.
2020-06927
Multistate No.
(N/A)
Program Code
A1651
Project Start Date
Apr 1, 2021
Project End Date
Mar 31, 2025
Grant Year
2021
Project Director
Manning, D.
Recipient Organization
COLORADO STATE UNIVERSITY
(N/A)
FORT COLLINS,CO 80523
Performing Department
Sponsored Programs
Non Technical Summary
Agricultural soils provide both private benefits and ecosystem services to the public. Soil organic carbon (SOC) increases productivity for producers and contributes to long-term food security, while building SOC stocks also reduces the amount of GHGs in the atmosphere. Further, climate change will harm agricultural producers, so GHG abatement can increase long-term productivity.This project will study the potential for agricultural producers in the US corn belt to increase SOC and reduceemissions through incentive-based programs by creating a GHG abatement supply curve that accounts for private benefits of SOC. We will make two key contributions. First, we will use parcel-level data to model heterogeneity in crop and practice choices using observed behavior. Second, we will integrate economic and biogeochemical models to examine how the supply curve may change over time. The GHG abatement supply curve will be used to characterize the scope of carbon mitigation initiatives that allow producers to receive payments for reducing emissions.The proposed research relates to two topics in the Environmental and Natural Resource Economics Area. Our integrated modeling approach will examine the relationship between agriculture, natural resource conservation, and the environment in order to study theeconomics of conservation and environmental policies. We will also examine the design of incentive mechanisms and policies that promote sustainability, with a particular focus on carbon offset programs. Our research will investigate the role of financial payments for incentivizing soil and land conservation by agricultural commodity producers that increase SOC and reduce emissions.
Animal Health Component
0%
Research Effort Categories
Basic
20%
Applied
80%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
60501993010100%
Knowledge Area
605 - Natural Resource and Environmental Economics;

Subject Of Investigation
0199 - Soil and land, general;

Field Of Science
3010 - Economics;
Goals / Objectives
The overarching goal of this research is toanalyze the potential for GHG emission abatement through agricultural management decisions that increase SOC stocks and/or reduce nitrous oxideemissions.To achieve this, the project has four specific research goals:1) Use field level data on crop and practice choice to determine how relative profitability affects the decisions. Importantly, we will incorporate environmental (weather and soil) heterogeneity into calculations of profitability.2) Characterize the supply curve for reduced net GHG emissions from farms in the study region, including soil organic carbon and nitrous oxide emissions. This includes a description of baseline changes and deviations from this at a range of payment levels.3) Determine the scope of a carbon offset market (or other payment mechanism such as a carbon bank).4) Explore the how the abatement supply curve responds to changes in climatic conditions as predicted by prominent climate models.
Project Methods
Our methods fall under four tasks.1) Use the Daycent model and NRI point data to estimate crop yields, SOC changes, and nitrous oxide emissions for crop and practice combinations. This includes observed practices as well as other alternatives used in the region but not chosen at a given point. From these simulations, we can estimate profitability and changes in SOC and emissions under alternative choices.2) Use the output of 1 to parameterize a structural discrete choice model of crop and practice choice that depends on parcel and practice characteristics, net revenue, SOC stocks, and producer and practice fixed effects.3) Use predicted probabilities from discrete choice model to predict practice and crop choices over space and time under a range of carbon prices, including 0, assuming a 10-year contract for payment for changes in net GHG emissions. This will be repeated 1000 times with draws from the predicted probabilities to characterize the uncertainty in our estimates.4) Repeat 3 for a 50-year time horizon, considering alternative climate change scenarios, to characterize the 50-year potential for agriculture to contribute to GHG abatement goals.

Progress 04/01/23 to 03/31/24

Outputs
Target Audience:We have focused on the academic community, both within agricultural and natural resource economics, and with the more general science audience related to soils and GHG abatement. We have also continued to communicate with USDA colleagues about our work. Changes/Problems:We have asked for a no-cost extension for this last year because data issues delayed the availability of the GHG assessment data we are using for estimating the econometric model and for simulating GHG abatement moving forward. What opportunities for training and professional development has the project provided?Our student, Ming Wang, has led the development of the integrated model and will attend the annual meeting this year on our behalf. This should provide valuable networking as she enters the job market this Fall. Also, Manning attended the annual meeting in DC last year. How have the results been disseminated to communities of interest?We have several papers either published or in the revision process. We have also presented our analysis at academic conferences. What do you plan to do during the next reporting period to accomplish the goals?For the remainder of the project, we will finalize the integrated model and use it to explore the supply of GHG abatement in the Midwest under climate change and with and without changing crop varieties.

Impacts
What was accomplished under these goals? We have accomplished goals 1-3. This work is being revised for resubmission to AJAE. For goal 4, we are finalizing the integrated model that allows us to achieve this. The model infrastructure works. We are currently working to calibrate this model and implement policy scenarios under climate change.

Publications

  • Type: Journal Articles Status: Published Year Published: 2023 Citation: Ogle, Stephen, Richard T. Conant, Bart Fischer, Barbara K. Haya, Dale T. Manning, Bruce A. McCarl, and Tamara Jane Zelikova (2023). Policy Challenges to Enhance Soil Carbon Sinks: The Dirty Part of Making Contributions to the Paris Agreement by the United States. Carbon Management.
  • Type: Journal Articles Status: Published Year Published: 2023 Citation: Ogle, Stephen, F. Jay Breidt, Stephen Del Grosso, Ram Gurung, Ernie Marx, Shannon Spencer, Stephen Williams, and Dale Manning (2023). Counterfactual Scenarios Reveal Historical Impact of Cropland Management on Soil Organic Carbon Stocks in the United States. Scientific Reports.


Progress 04/01/22 to 03/31/23

Outputs
Target Audience:We have presented our research at a range of venues. Target audiences include other academic economists, other modelers working on GHGs and offsets, and economists and policymakers within the USDA. Changes/Problems:We were delayed in finalizing the dataset for the econometric model. This will likely delay model integration. We have preserved funds and anticipate requesting a no-cost extension to make sure all goals are accomplished. What opportunities for training and professional development has the project provided?We have hired 1 masters student who is defending his thesis using the econometric model later this semester. We also identified a PhDstudent to work on model integration (DayCent with econometrics) for the remainder of the project. How have the results been disseminated to communities of interest?We have presented this work in the following venues: 1) Regional meeting of W4133: Costs and Benefits of Natural Resources on Public and Private Lands: Management, Economic Valuation, and Integrated Decision-Making 2) AAEA summer conference 3) USDA ERS 4) Texas A&M seminar 5)nature-based carbon sequestration modeler forum, supported by ERS. What do you plan to do during the next reporting period to accomplish the goals?We will finalize econometric model specification(s) and climate and policy scenarios to run the integrated modeland begin to address goal 4. We will also expand to the whole Corn Belt region, and improve numerical efficiency to be able to do so.

Impacts
What was accomplished under these goals? We have accomplished goals 1-3for the state of Iowa and are currently working to expand this to the rest of the Corn Belt. Specifically, we have estimated an econometric model of crop and practice choice that includes corn and soy, and tillage and cover crop choices. Using the estimated parameters from the model, we simulate crop and practice choices under historical conditions and alternative carbon payment scenarios to quantify the potential for working lands to contribute to GHG mitigation efforts. To work towards goal 4, we have begun to link predicted probabilities and monte carlo-simulations from the econometric model with DayCent runs into the future. A prototype simulation is currently working. We have identified climate scenarios and are currently working to build in baseline crop adaptations that will influence the returns of the different crops and practices in the future.

Publications

  • Type: Conference Papers and Presentations Status: Published Year Published: 2022 Citation: Manning, D., Rad, M.R. and Ogle, S., 2022. Inferring the Supply of GHG Abatement from Agricultural Lands.


Progress 04/01/21 to 03/31/22

Outputs
Target Audience:Our key audiences include policymakers within USDA and other government agencies interested in incentivizing reductions in GHG emissions in agriculture, carbon market facilitators, producer groups, and academia. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?We have employed a student at Clemson to help with econometric modeling. How have the results been disseminated to communities of interest?We have submitted a conference paper and have presented the work at the W4133 annual regional research group meeting. The work will be presented at the 2022 AAEA summer conference. What do you plan to do during the next reporting period to accomplish the goals?We will obtain an updated dataset andexpand econometrics to include more practices and a larger part of the cornbelt region. The econometrics group will work closely with Ogle's team to integrate the econometric modeling into forward simulations using DayCent and the US GHG Inventory infrastructure.

Impacts
What was accomplished under these goals? We have developed the methods for accomplishing goals 1 and 2. This is the topic of our conference paper for the 2022 summer AAEA conference. We estimated an econometric model using data from Iowa and develop a simulation method for characterizing the GHG supply curve considering tillage practices in the state. We can use this simulation to address goal 3 as well. A new dataset is currently being finalized that will allow us to write a paper summarizing goals 1-3. Our summer meeting in June 2022 will focus on the methods for accomplishing goal 4. This involves integrating work to achieve goals 1-3 into the modeling infrastructure used to produce the US GHG Inventory from agriculture.

Publications

  • Type: Conference Papers and Presentations Status: Accepted Year Published: 2022 Citation: Manning, Dale, Mani Rouhi Rad, David Mansfield, and Stephen Ogle. Revealed Tillage Decisions and Implications for Agricultural GHG Abatement
  • Type: Journal Articles Status: Other Year Published: 2022 Citation: Manning, Dale, Mani Rouhi Rad, and Stephen Ogle. Increases in Soil Organic Carbon Associated with Higher Cropland Values (between submissions)