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The Cost Of The Kyoto Protocol To U.S. Crop Production: Measuring Crop Price, Regional Acreage, Welfare, And Input Substitution Effects

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  • Konyar, Kazim
  • Howitt, Richard E.

Abstract

This study analyzes the impact of implementing carbon permit trading considered under the Kyoto Protocol, and the subsequent expected increase in energy and resource prices on U.S. crop production. The focus is on input substitution, net farm income, regional crop acreage, and crop prices. The analysis is carried out with a calibrated mathematical programming model which covers the major crops produced in the 48 contiguous states on a regional basis. The model accounts for both the variable inputs and the allocatable inputs of land and irrigation water, and it permits input substitution when farmers are faced with external shocks. The results suggest that when energy prices increase, the net cost to the crop-producing sector depends on the farmer's ability to substitute crop inputs and the elasticity of demand for the crops. The impacts of carbon tax cost increases differ significantly among crops and regions. Overall, crop acreage and output decrease, total net revenues increase in most regions, and consumer surplus declines.

Suggested Citation

  • Konyar, Kazim & Howitt, Richard E., 2000. "The Cost Of The Kyoto Protocol To U.S. Crop Production: Measuring Crop Price, Regional Acreage, Welfare, And Input Substitution Effects," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 0(Number 2), pages 1-21, December.
  • Handle: RePEc:ags:jlaare:30900
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    File URL: http://ageconsearch.umn.edu/record/30900/files/25020347.pdf
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    References listed on IDEAS

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    1. Gowdy, John M. & Miller, Jack L. & Kherbachi, Hamid, 1987. "Energy Use In U.S. Agriculture: Early Adjustment To The 1973-74 Price Shock," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 0(Number 2), pages 1-9, December.
    2. Debertin, David L. & Pagoulatos, Angelos & Aoun, Abdessalem, 1990. "Impacts of technological change on factor substitution between energy and other inputs within US agriculture, 1950-79," Energy Economics, Elsevier, vol. 12(1), pages 2-10, January.
    3. Lewandrowski, J. & Darwin, R. F. & Tsigas, M. & Raneses, A., 1999. "Estimating costs of protecting global ecosystem diversity," Ecological Economics, Elsevier, vol. 29(1), pages 111-125, April.
    4. Edwards, Brian K. & Howitt, Richard E. & Flaim, Silvio J., 1996. "Fuel, crop, and water substitution in irrigated agriculture," Resource and Energy Economics, Elsevier, vol. 18(3), pages 311-331, October.
    5. Tewari, Devi D., 1990. "Energy-price impacts modelling in the agriculture sector," Energy Economics, Elsevier, vol. 12(2), pages 147-158, April.
    6. Boyd Roy & Krutilla Kerry & Viscusi W. Kip, 1995. "Energy Taxation as a Policy Instrument to Reduce CO2 Emissions: A Net Benefit Analysis," Journal of Environmental Economics and Management, Elsevier, vol. 29(1), pages 1-24, July.
    7. Richard E. Howitt, 1995. "A Calibration Method For Agricultural Economic Production Models," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 147-159.
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    Citations

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    Cited by:

    1. Schneider, Uwe A. & McCarl, Bruce A., 2005. "Implications of a Carbon-Based Energy Tax for U.S. Agriculture," Agricultural and Resource Economics Review, Cambridge University Press, vol. 34(02), pages 265-279, October.
    2. Ifft, Jennifer E. & Spini, Pietro & Wilcox, Steven, 2018. "The distributional implications of carbon taxation for U.S. crop farms," 2018 Annual Meeting, August 5-7, Washington, D.C. 274423, Agricultural and Applied Economics Association.
    3. Heng-Chi Lee & Bruce McCarl & Uwe Schneider & Chi-Chung Chen, 2007. "Leakage and Comparative Advantage Implications of Agricultural Participation in Greenhouse Gas Emission Mitigation," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 12(4), pages 471-494, May.
    4. Kim, Hong Jin & Konyar, Kazim & Sargent, Keith, 2002. "Economic Viability Of Bt-Corn In The U.S," 2002 Annual meeting, July 28-31, Long Beach, CA 19772, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Konyar, Kazim, 2001. "Assessing the role of US agriculture in reducing greenhouse gas emissions and generating additional environmental benefits," Ecological Economics, Elsevier, vol. 38(1), pages 85-103, July.
    6. Szulczyk, Kenneth R. & McCarl, Bruce A. & Cornforth, Gerald, 2010. "Market penetration of ethanol," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 394-403, January.

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    Keywords

    Environmental Economics and Policy;

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