Source: TEXAS A&M UNIVERSITY submitted to NRP
THE IMPACT OF CLIMATE CHANGE, CARBON MARKETS AND CLIMATE SMART AGRICULTURE AND FORESTRY PRACTICES ON U.S. AGRICULTURAL SECTOR AND MARKET
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
ACTIVE
Funding Source
Reporting Frequency
Annual
Accession No.
1030585
Grant No.
2023-67023-39814
Cumulative Award Amt.
$649,999.00
Proposal No.
2022-10003
Multistate No.
(N/A)
Project Start Date
Jun 1, 2023
Project End Date
May 31, 2026
Grant Year
2023
Program Code
[A1651]- Agriculture Economics and Rural Communities: Environment
Recipient Organization
TEXAS A&M UNIVERSITY
750 AGRONOMY RD STE 2701
COLLEGE STATION,TX 77843-0001
Performing Department
(N/A)
Non Technical Summary
Climate change has been found to have a negative impact on society. In the face of such impacts there are numerous efforts to reduce GHG net emissions to protect the future economy and environment. Adaptation is also essential as it will take time for mitigation to have an effect and agriculture is vulnerable. Climate smart agriculture and forestry (CSAF) practices address both adaptation and mitigation sometimes individually and sometimes jointly. Those practices also influence carbon and commodity markets along with effects of conservation programs. To the best of our knowledge, there is not a comprehensive integrated model that portrays climate change impacts covering crop and livestock impacts along with the implications of the wide array of potential CSAF practices plus associated policies as they influence the economic, environmental, geographic and temporal dimensions of agriculture. In this study, we will develop and use a modeling approach to evaluate carbon markets and CSAF practices oriented incentives and other policies. We will develop and use the model to do an integrated analysis with the consideration of interactions among climate effects, adopted CSAF practices, adaptation, regional, national, and international commodity markets, mitigation extent, and implications for regional incomes which has never been done in the literature. The characteristics of CSAF practices, such as permanence, leakage, uncertainty, additionality, and transactions cost will also be considered. We will also evaluate carbon market, carbon policy and conservation programs design and provide information for policy makers and farmer. Climate change has been found to have a negative impact on society. In the face of such impacts there are numerous efforts to reduce GHG net emissions to protect the future economy and environment. Adaptation is also essential as it will take time for mitigation to have an effect and agriculture is vulnerable. Climate smart agriculture and forestry (CSAF) practices address both adaptation and mitigation sometimes individually and sometimes jointly. Those practices also influence carbon and commodity markets along with effects of conservation programs. To the best of our knowledge, there is not a comprehensive integrated model that portrays climate change impacts covering crop and livestock impacts along with the implications of the wide array of potential CSAF practices plus associated policies as they influence the economic, environmental, geographic and temporal dimensions of agriculture. In this study, we will develop and use a modeling approach to evaluate carbon markets and CSAF practices oriented incentives and other policies. We will develop and use the model to do an integrated analysis with the consideration of interactions among climate effects, adopted CSAF practices, adaptation, regional, national, and international commodity markets, mitigation extent, and implications for regional incomes which has never been done in the literature. The characteristics of CSAF practices, such as permanence, leakage, uncertainty, additionality, and transactions cost will also be considered. We will also evaluate carbon market, carbon policy and conservation programs design and provide information for policymakers and farmer.
Animal Health Component
100%
Research Effort Categories
Basic
(N/A)
Applied
100%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6056110301070%
1020199107030%
Goals / Objectives
Climate change has been found to have a negative impact on society. In the face of such impacts there are numerous efforts to reduce GHG net emissions to protect the future economy and environment. Adaptation is also essential as it will take time for mitigation to have an effect and agriculture is vulnerable. Climate smart agriculture and forestry (CSAF) practices address both adaptation and mitigation sometimes individually and sometimes jointly. Those practices also influence carbon and commodity markets along with effects of conservation programs. To the best of our knowledge, there is not a comprehensive integrated model that portrays climate change impacts covering crop and livestock impacts along with the implications of the wide array of potential CSAF practices plus associated policies as they influence the economic, environmental, geographic and temporal dimensions of agriculture. In this study, we will develop and use a modeling approach to evaluate carbon markets and CSAF practices oriented incentives and other policies. We will develop and use the model to do an integrated analysis with the consideration of interactions among climate effects, adopted CSAF practices, adaptation, regional, national, and international commodity markets, mitigation extent, and implications for regional incomes which has never been done in the literature. The characteristics of CSAF practices, such as permanence, leakage, uncertainty, additionality, and transactions cost will also be considered. We will also evaluate carbon market, carbon policy and conservation programs design and provide information for policy makers and farmer. Climate change has been found to have a negative impact on society. In the face of such impacts there are numerous efforts to reduce GHG net emissions to protect the future economy and environment. Adaptation is also essential as it will take time for mitigation to have an effect and agriculture is vulnerable. Climate smart agriculture and forestry (CSAF) practices address both adaptation and mitigation sometimes individually and sometimes jointly. Those practices also influence carbon and commodity markets along with effects of conservation programs. To the best of our knowledge, there is not a comprehensive integrated model that portrays climate change impacts covering crop and livestock impacts along with the implications of the wide array of potential CSAF practices plus associated policies as they influence the economic, environmental, geographic and temporal dimensions of agriculture. In this study, we will develop and use a modeling approach to evaluate carbon markets and CSAF practices oriented incentives and other policies. We will develop and use the model to do an integrated analysis with the consideration of interactions among climate effects, adopted CSAF practices, adaptation, regional, national, and international commodity markets, mitigation extent, and implications for regional incomes which has never been done in the literature. The characteristics of CSAF practices, such as permanence, leakage, uncertainty, additionality, and transactions cost will also be considered. We will also evaluate carbon market, carbon policy and conservation programs design and provide information for policy makers and farmer.
Project Methods
U.S. Forest and Agricultural Sector Optimization Model with Greenhouse Gas (FASOMGHG) and Soil and Water Assessment Tool (SWAT) are the two major models will be used in the project.SWAT modelhas a nutrient and carbon cycling algorithm that can be used to analyze GHG implications of CSAF practices. Previously, SWAT has shown success in simulating crop growth (Haney et al., 2018), soil carbon (Haney et al., 2018; Zhang, 2018; Zhang et al., 2013), nutrient cycling (Haney et al., 2018), and GHGs ( Gao et al., 2020; Huang et al., 2022) along with its ecohydrological modeling strengths. Considering SWAT's capabilities and wide success, the USDA is considering it as a core watershed model for applications in the Conservation Effects Assessment Project (CEAP) (Richardson et al., 2008) across watersheds in the United States.The HAWQS, a web-based interface for SWAT, will be implemented to develop SWAT projections under this objective. HAWQS integrates high-quality datasets such as multi-year crop incidence data to account for crop rotations, a modified National Hydrography Dataset Plus (NHDPlus) medium-resolution surface water network, hydrological calibration parameters, a soil database that combines the Soil Survey Geographic Database (SSURGO) and Digital General Soil Map of the United States (STATSGO2) datasets, and climate datasets giving historical (NCDC-NOAA/PRISM/NEXRAD) and future (CMIP5/CMIP6) scenarios.The hydrological calibrated SWAT models will be further calibrated for crop growth simulations. The multi-parameter calibrated SWAT projects will be further utilized to simulate land-based CSAF scenarios to assess the impacts of various CSAF practices on the soil hydrological properties, crop biomass and yields, soil organic matter, soil carbon and nutrient cycling, and GHG emissions.Figure 1: FASOMGHG model structure (Adams et al., 2005)The Forest and Agricultural Sector Optimization Model with Greenhouse Gases (FASOMGHG) will be employed to investigate the integrated effects of CSAF practices combined with climate change effects and adaptation effects FASOMGHG is a price endogenous, dynamic mathematical program that simulates US agricultural and forest production, input use, markets and GHG emission changes from agricultural and forest sector for every five years with the maximum time span from 2020 to 2100 (Adams et al., 2005). It models price endogenous markets for over 70 primary crops and 20 livestock commodities along with over 100 secondary food, feed and fuel products and byproducts based on the theoretical framework described in McCarl and Spreen (1980). The agricultural part of FASOMGHG simulates irrigated/dryland crop mix, livestock mix, livestock feeding, land use, water use, basic processing and management in a fashion that models some degree of farmer, processor, and consumer adaptation. The GHG emissions from agricultural management, production and processing are also counted in the model. The model structure summary is shown in Figure 1.FASOMGHG has been used to investigate the impact of climate change effects, adaptation and mitigation incentives on the U.S. agricultural and forestry sectors (Beach et al., 2008, 2015; Beach & McCarl, 2012; Fei et al., 2017, 2021). The current version of FASOMGHG already has the tillage management, and fertilizer management strategies embedded and has the capability to simulate CSAF adoption among tillage and fertilizer application options. The characteristics of FASOMGHG provide a framework to comprehensively evaluate the effects of more CSAF practices, and the impact of carbon markets and policies. In particular, FASOMGHG has: 1) the flexibility to add mitigation and adaptation strategies, and carbon market design rules into mitigation and adaptation evaluation. 2) the dynamic model feature can allow us to embed dynamic differences in carbon sequestration amounts and data on approach to equilibrium along with payment by practices to better evaluate the short- and longer-term implications of actions. 3) the model covers carbon dioxide, nitrous oxide and methane allowing consideration of the total GHG implications of CSAF actions; 4) the model has been adapted to simulate both a capped sector and a sector which can voluntarily opt in to provide offsets (Wang et al., 2021), which will be used to evaluate the carbon market and policy, 5) transactions costs are modeled causing gaps between farm and seller prices (Kim, 2011), 6) the price endogenous market procedure provides the opportunity to count the impact of mitigation and adaption on the market equilibrium and the producer's reaction to altered prices and 7) regional income commodity production, cost and GHG payments are also accounted by region allowing identification of how regions and commodity producer groups are differentially effected.

Progress 06/01/24 to 05/31/25

Outputs
Target Audience:This project is currently in the research stage. We are dialoging with the USDA Office of the Chief Economists on modeling and issues. We didn't report anything specific to any group, but we expect to present detailed research results at the annual AAEA meeting next year. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?This project involves 1 graduate student and 2 research scientists majored in agricultural economics. One research scientist majored in Meteorology and Hydrology is also well involved. The scientists further sharpened their skills in SWAT model calibration, crop simulation parameter adjustments and other parts. The graduate student learned more knowledge about climate conditions, climate-smart agricultural practices, and sector modeling. The graduate student and scientists will also improve their writing and presentation skills in the future when more progress is made. This project is leveraged by another USDA project "Sustainable Agricultural Intensification and Enhancement Through the Utilization of Regenerative Agricultural Management Practices". So, we haven't submitted much cost. How have the results been disseminated to communities of interest? Nothing Reported What do you plan to do during the next reporting period to accomplish the goals?Include soil carbon outputs, provide annual outputs of crop yields, irrigation water usage, fertilizer usage, GHG emissions (CO2, NO2, CH4), soil carbon level for various crops and climate smart practices for further analysis. Besides the climate smart practices we completed, several more scenarios we are developing Adjusted planted date and harvest date - based on the heat unit required Detailed tillage practices related to depth Cover crops Wheat grazing Crop residue harvest for bioenergy Visualize the outputs Embed the SWAT results and the changes under various climate scenarios into FASOM for economic analysis. Start writing journal articles and presenting the results in academic meetings.

Impacts
What was accomplished under these goals? We established a baseline model in Arkansas-White-Red Region (Federal Watersheds Region 11) to calibrate the model to best represent irrigation and flow/ET simulation as a test case in Soil and Water Assessment Tool (SWAT). The economic and hydrological teams work together to build Python procedures to simulate the impact of climate smart agricultural practices (CSAP) on crop yields, water usage, fertilizer rate, soil quality and carbon level using SWAT. The CSAP strategies that we evaluate include: Fertilization alternatives (relative to base level from 20% to 120% by 10% segments) along with the use of a denitrification inhibitor plus possibly biochar Irrigation alternatives (relative to base level, from 20% to 120% by 10% segments) In the next period, we will also include practices, such as changing crop plant and harvest dates, cover crops, tillage method changes, grazing and land type conversion. We aligned the land use categories between SWAT and USDA. Then, we examined the annual yield of 17 crops, including: hay, cotton, barley, beans, canola, corn, oats, peanuts, peas, sorghum, potato, rice, rye, soybeans, sugar beets, tomatoes, various wheat species, under the different CSAP strategies on all types of agricultural land uses. Unsurprisingly, reducing fertilizer significantly impacts crop performance and reduce yield by 0.49 %-33.59 %, especially for nutrient-demanding crops. Sorghum shows the largest yield decline (−33.6%), followed by Corn (−12.9%) and Beans (−18.5%), while crops like Barley, Potatoes, and Sugar beets show minimal changes. Cotton slightly increases in yield, highlighting variation in crop responses. We used optimized irrigation assumptions in SWAT and found that the water demand changed slightly, suggesting fertilization has a limited direct impact on water use. The impacts on soil carbon and fertilizer usage are also simulated. Oppositely, increasing fertilizer level increases crop yields but at a very small scale, ranging from 0.01%-1.18 % for a 20% fertilizer usage increase for all crops. The irrigation water usage and soil carbon level also only changed little. Less irrigation results in large declines in yield, irrigation water, and fertilizer use for water intensive crops, while more irrigation produces substantial gains in those same metrics for those crops with little effect on drought resilient varieties. While increased irrigation strongly benefits high-water-demand crops (especially Sorghum), yielding substantial gains in yield, water application, and auto fertilizer use, drought tolerant crops remain unaffected. By now, the Python procedure that drives SWAT to "automatically" evaluate the CSAF practices and their impacts on the crop budget (changes in yield, water usage, fertilization rate and soil carbon level) has been programmed and tested. It can also generate the budget for the modeling usage. Meanwhile, the economic team worked on revising the US Forest and Agricultural Sector Optimization Model (FASOM) to add the CSAF practice module to allow the selection among the alternative CSAF operation to get ready for the economic evaluation. Once the new budgets for each CSAF practice are generated for the entire lower 48 states, we will embed them into FASOM to complete the study.

Publications


    Progress 06/01/23 to 05/31/24

    Outputs
    Target Audience:This project is currently in the research stage. We are dialoguing with the USDA Office of the Chief Economists on modeling and issues. We didn't report anything specific to any group, but we expect to present detailed research results at the annual AAEA meeting next year. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?This project involves 2 graduate students majoring in agricultural economics and 1 scientist focusing on hydrology to receive post-doc training. The scientist further sharpened her skills in SWAT model calibration, crop simulation parameter adjustments and other parts. The 2 graduate students learned more knowledge about climate change, climate-smart agricultural practices, and sector modeling. The graduate students and scientists will also improve their writing and presentation skills in the future when more progress is made. This project is leveraged by another USDA project "Sustainable Agricultural Intensification and Enhancement Through the Utilization of Regenerative Agricultural Management Practices". So we haven't submitted much cost. How have the results been disseminated to communities of interest?Dr. McCarl (PI) addressed the importance of climate change mitigation and the issues economists can help with in the AAEA 2024 Fellow Address. It generally covers the scope of this project. Other than that, we didn't make formal presentations or communicate with people outside of the team, as we are in the project's first year and in the early stages of the research. We plan to present our research results in a future AAEA meeting and the American Association for the Advancement of Science (AAAS) if selected. We will also talk with extension faculty members to disseminate the results to farmers and other related stakeholders when they are ready. What do you plan to do during the next reporting period to accomplish the goals? Include soil carbon outputs, provide annual outputs of crop yields, irrigation water usage, fertilizer usage, GHG emissions (CO2, NO2, CH4), soil carbon level for various crops and climate smart practices (no-tillage, reduced tillage, cover crops and others that can be simulated by SWAT) for further analysis. Embed the SWAT results and the changes under various climate scenarios into FASOM for economic analysis. Start writing journal articles and present the results in academic meetings.

    Impacts
    What was accomplished under these goals? Established a baseline model in an arid region with low precipitation (Texas high plains) to calibrate the model to best represent irrigation and flow/ET simulation as a test case in Soil and Water Assessment Tool (SWAT) The economic and hydrological team work together to build Python procedures to simulate the impact of climate smart agricultural practices (CSAP) and its impacts in SWAT Revise the US Forest and Agricultural Sector Optimization Model (FASOM) to increase the capacity to evaluate the CSAP strategies and the impact of policy designs on carbon emission reduction The CSAP strategies that we will evaluate include Tillage alternatives - conventional, conservation, no till Fertilization alternatives (relative to base level, 70%, 85%, 100%, 115%) along with the use of a denitrification inhibitor plus possibly biochar Cover crops for corn, cotton, sorghum, and wheat. Includes basic cover crop and mixed with a legume. Data include Basic cost, Fuel use, Extra sequestration, Extra fossil fuel emissions, Extra N2O emissions, Eligible mitigation acres, Current adaption of cover crops and potential AUMS of grazing Wheat grazing Crop residue harvest for bioenergy Land conversion to pasture Manure management Enteric Fermentation

    Publications