Thursday, May 17, 2007

Adoption Subsidies and Environmental Impacts of Alternative Energy Crops

Adoption Subsidies and Environmental Impacts of Alternative Energy Crops

Bruce A. Babcock, Philip W. Gassman, Manoj Jha, and Catherine L. Kling
Center for Agricultural and Rural Development (CARD), Iowa State University, Ames IA (Briefing Paper 07-BP 50)March 2007

Executive Summary
We provide estimates of the costs associated with inducing substantial conversion of land from production of traditional crops to switchgrass. Higher traditional crop prices due to increased demand for corn from the ethanol industry has increased the relative advantage that row crops have over switchgrass. Results indicate that farmers will convert to switchgrass production only with significant conversion subsidies. To examine potential environmental consequences of conversion, we investigate three stylized landscape usage scenarios, one with an entire conversion of a watershed to switchgrass production, a second with the entire watershed planted to continuous corn under a 50% removal rate of the biomass, and a third scenario that places switchgrass on the most erodible land in the watershed and places continuous corn on the least erodible. For each of these illustrative scenarios, the watershed-scale Soil and Water Assessment Tool (SWAT) hydrological model (Arnold et al., 1998; Arnold and Forher, 2005) is used to evaluate the effect of these landscape uses on sediment and nutrient loadings in the Maquoketa Watershed in eastern Iowa.

Bruce Babcock is a professor of economics and director of the Center for Agricultural and Rural Development (CARD). Philip Gassman and Manoj Jha are assistant scientists at CARD. Catherine Kling is a professor of economics and head of the Resource and Environmental Policy Division at CARD.

This paper was prepared for presentation at “Alternative Crops and Alternative Policies for Bioenergy,” an Iowa State University Extension program provided through Web cast to Extension offices.

This paper is available online on the CARD Web site: www.card.iastate.edu. Permission is granted to excerpt or quote this information with appropriate attribution to the authors.

Source
[http://www.card.iastate.edu/publications/DBS/PDFFiles/07bp50.pdf]

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