@article{3dee56b7017449e7a601a1481fb784c5,
title = "Dynamics and Uncertainty in Land Use Conversion for Perennial Energy Crop Production: Exploring Effects of Payments for Ecosystem Services Policies",
abstract = "Perennial energy crops like switchgrass that are used for biofuel production have the potential to generate various water quality benefits such as reduced nitrogen runoff. Yet the current expected returns to switchgrass are not profitable enough for these crops to be widely adopted by U.S. farmers due to relatively unstable yields, volatile revenues, and high costs of crop establishment. This study uses a dynamic economic model to investigate the uncertainties in the yields and costs of switchgrass production, in comparison with those of corn-soybeans in the Chesapeake Bay Watershed in Pennsylvania. Results indicate that farmers would be willing to convert corn-soybeans to switchgrass land use with the provision of payments for ecosystem services (PES). A targeted PES policy based on the environmental effectiveness of the crop land is found to be slightly more effective in providing nitrogen reductions than a uniform PES policy with cost savings of 8-19%. Moreover, switchgrass has the potential of providing energy supply while reducing greenhouse gases emissions.",
author = "Xiaogu Li and Zipp, {Katherine Y.}",
note = "Funding Information: This work was supported by the Aviation Sustainability Center (ASCENT) - the Federal Aviation Administration's (FAA) Center of Excellence for Alternative Jet Fuels and Environment - with funding under Award Number 13-C-AJFE-PSU-28. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of the FAA. This work was also supported by Department of Agricultural Economics, Sociology, and Education at the Pennsylvania State University and the USDA National Institute of Food and Agriculture and Multistate Hatch Appropriations under Project # PEN04631 and Accession # 1014400. The authors would like to thank Tom Richard and Armen Kemanian at Penn State for their support throughout the project, Jeff Sweeney at the United States Environmental Protection Agency for his help with the relative effectiveness of nitrogen reduction throughout the Chesapeake Bay, Laurence Eaton at the Oak Ridge National Lab for providing the switchgrass returns data, and Feng Song at Renmin University, Beijing, China and Scott Swinton at Michigan State University for sharing their code to estimate the dynamic optimization land use conversion model. We would also like to acknowledge helpful comments from audience members at the FAA ASCENT annual meetings, the Northeastern Agricultural and Resource Economics Association annual meetings, and the Agricultural and Applied Economics Association annual meetings. All data are publicly available (see Estimation and Data section and citations therein for details). Publisher Copyright: {\textcopyright} 2019 The Author(s).",
year = "2019",
month = aug,
day = "1",
doi = "10.1017/age.2019.3",
language = "English (US)",
volume = "48",
pages = "328--358",
journal = "Agricultural and Resource Economics Review",
issn = "1068-2805",
publisher = "Cambridge University Press",
number = "2",
}
