The Value of Accurate, Field-Scale, Soil
Carbon Assessment Technology:
Conservation Tillage in Iowa
Lyubov Kurkalova, Catherine Kling, and Jinhua Zhao
Center for Agricultural and Rural Development
Department of Economics
Iowa State University
Paper presented at USDA Symposium on Natural Resource Management to
Offset Greenhouse Gas Emissions, Raleigh, NC, November 2002
Background
Agricultural practices can sequester carbon
Lots of excitement about potential
• To lower atmospheric concentrations of Carbon
• To provide an additional revenue source for farmers
Policy Possibilities
Carbon markets
• Voluntary, small scale
• US Mandate, akin to SO2 cap & trade
Direct payments of subsidies
• Conservation Security Program
• CRP
Subsidy Programs
Practice – Based
• Pay for adopting new practices
• Easy to observe, but ignores heterogeneity in land and potential C storage
Performance – Based (like a C market)
• Pay for C sequestered
• Either expected or measured
Hybrid: Can target land that yields most C benefits, but pay for practice
Role of Soil Carbon Measurement Technology in Policy Design and Implementation
Carbon Market
• Accurate, field-scale measures of incremental C storage to verify legitimacy of trades
Subsidy Programs
• Practice-based (no targeting) demands less accuracy
• Targeted or performance-based requires more accuracy
Our Paper: What are Cost Savings from Accurate Field Scale Measurements?
Use conservation tillage adoption model combined with EPIC to empirically study alternative targeting strategies in Iowa
Questions:
• What is the marginal cost of sequestering C if adoption occurs in most cost-effective locations first?
• What are the cost savings of having the information needed to identify the cost-effective locations? How much more would a straight practice-based system cost to get the same benefits?
• What are the cost savings of targeting at crop reporting districts, or counties, but not field-level?
Problem Facing Program Designer
Wants to minimize costs of achieving a given level of carbon sequestration
cn = cost of enrolling farm n (bids)
X = ΣXn = total amount of carbon from n farms
Which bids should be accepted? Compute cn/Xn = cost per ton of carbon sequestered
Rank order cn/Xn lowest to highest, enroll fields until you get your desired level of carbon
Performance-based subsidy or C market can achieve this
Simple Numerical Example
Region1 Cost/Ton Region 2 Cost/Ton
Point A 4 Point C 5
Point B 2 Point D 2Mean 3 3.5
Least Cost to Achieve 2 tons: Pt B, Pt D = $4
Cost with only means: Pt A, Pt B = $6
Conservation Tillage in Iowa
Econometric model of adoption of conservation till
EPIC for environmental indicators, including Carbon,
Adoption model and EPIC runs predict at NRI points (~13,000 points in Iowa)
0
50
100
150
200
250
300
0 100 200 300 400 500 600 700 800 900 1000
Carbon, 1,000 Metric Tons
Mar
gin
al C
ost
, $ p
er M
etri
c T
on
Field, median
Field, 2.5 percentile
Field, 97.5 percentile
Marginal Cost Under Field-Level Targeting
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1,000.0
Carbon, 1,000 Metric Tons
Co
st s
avin
gs,
%
State to Field, median
CRD to Field, median
County to Field, median
State to Field, 2.5 percentile
State to Field, 97.5 percentile
CRD to Field, 2.5 percentile
CRD to Field, 97.5 percentile
County to Field, 2.5 percentile
Couty to Field, 97.5 percentile
Cost Savings: From State -, CRD -, and County - Level to Field - Level Targeting
$0.00
$5.00
$10.00
$15.00
$20.00
$25.00
$30.00
0.0 100.0 200.0 300.0 400.0 500.0 600.0 700.0 800.0 900.0 1,000.0
Carbon, 1,000 Metric Tons
Co
st s
avin
gs,
$ p
er M
etri
c T
on
State to Field, median
CRD to Field, median
County to Field, median
State to Field, 2.5 percentile
State to Field, 97.5 percentile
CRD to Field, 2.5 percentile
CRD to Field, 97.5 percentile
County to Field, 2.5 percentile
Couty to Field, 97.5 percentile
Cost savings per ton of Improved Targeting
Final Remarks
Accurate field-scale measurement technology key for policy implementation
Value is high for field-scale measurement
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