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The Impact of Reducing Greenhouse Gas Emissions in Crop Agriculture: A Spatial- and Production-Level Analysis

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  • Nalley, Lawton Lanier
  • Popp, Michael P.
  • Fortin, Corey
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    Abstract

    With the Waxman-Markey Bill passing the House and the administration’s push to reduce carbon emissions, the likelihood of the implementation of some form of a carbon emissions policy is increasing. This study estimates the greenhouse gas (GHG) emissions of the six largest row crops produced in Arkansas using 57 different production practices predominantly used and documented by the University of Arkansas Cooperative Extension Service. From these GHG emission estimates, a baseline state “carbon footprint†was estimated and a hypothetical GHG emissions reduction of 5, 10, and 20 percent was levied on Arkansas agriculture using a cap-and-trade method. Using current production technology and traditional land use choices, results show that the trading of carbon-emitting permits to reduce statewide GHG emissions by 5 percent from the baseline would enhance GHG emissions efficiency measured as net crop farm income generated per unit of carbon emissions created. The 5 percent reduction in GHG emissions does cause marginal reductions in acres farmed and has marginal income ramifications. Beyond the 5 percent reduction target, gains in GHG emissions efficiency decline but remain positive in most counties through the 10 percent GHG reduction target. However, with a 10 percent GHG reduction, acreage and income reductions more than double compared to the 5 percent level. When GHG emissions are reduced by 20 percent from the baseline, the result is a major cropping pattern shift coupled with significant reductions in traditional row crop acreage, income, and GHG emissions efficiency.

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    File URL: http://purl.umn.edu/107092
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    Bibliographic Info

    Article provided by Northeastern Agricultural and Resource Economics Association in its journal Agricultural and Resource Economics Review.

    Volume (Year): 40 (2011)
    Issue (Month): 1 (April)
    Pages:

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    Handle: RePEc:ags:arerjl:107092

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    Web page: http://www.narea.org/
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    Related research

    Keywords: greenhouse gas emissions; carbon equivalents; sustainability; cap and trade; Environmental Economics and Policy; Resource /Energy Economics and Policy;

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    1. Beckman, Jayson & Hertel, Thomas, 2009. "Why Previous Estimates of the Cost of Climate Mitigation are Likely Too Low," GTAP Working Papers 2954, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    2. Wailes, Eric J. & Chavez, Eddie C., 2010. "Updated Arkansas Global Rice Model," Staff Papers 94347, University of Arkansas, Department of Agricultural Economics and Agribusiness.
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