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Dynamics and Uncertainty in Land Use Conversion for Perennial Energy Crop Production: Exploring Effects of Payments for Ecosystem Services Policies

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  • Li, Xiaogu
  • Zipp, Katherine Y.

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.

Suggested Citation

  • Li, Xiaogu & Zipp, Katherine Y., 2019. "Dynamics and Uncertainty in Land Use Conversion for Perennial Energy Crop Production: Exploring Effects of Payments for Ecosystem Services Policies," Agricultural and Resource Economics Review, Cambridge University Press, vol. 48(2), pages 328-358, August.
  • Handle: RePEc:cup:agrerw:v:48:y:2019:i:02:p:328-358_00
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    Cited by:

    1. Králík, T. & Knápek, J. & Vávrová, K. & Outrata, D. & Romportl, D. & Horák, M. & Jandera, J., 2023. "Ecosystem services and economic competitiveness of perennial energy crops in the modelling of biomass potential – A case study of the Czech Republic," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    2. Amandine Valérie Pastor & Joao Pedro Nunes & Rossano Ciampalini & Haithem Bahri & Mohamed Annabi & Mohamed Chikhaoui & Armand Crabit & Stéphane Follain & Jan Jacob Keizer & Jérôme Latron & Feliciana L, 2022. "ScenaLand: a simple methodology for developing land use and management scenarios," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 27(8), pages 1-29, December.
    3. Yana Vodiak & Yurii Tsapko & Anatolii Kucher & Vitaliy Krupin & Iryna Skorokhod, 2022. "Influence of Growing Miscanthus x giganteus on Ecosystem Services of Chernozem," Energies, MDPI, vol. 15(11), pages 1-12, June.
    4. Baral, Nawa Raj & Mishra, Shruti K. & George, Anthe & Gautam, Sagar & Mishra, Umakant & Scown, Corinne D., 2022. "Multifunctional landscapes for dedicated bioenergy crops lead to low-carbon market-competitive biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    5. Martinez-Valencia, Lina & Garcia-Perez, Manuel & Wolcott, Michael P., 2021. "Supply chain configuration of sustainable aviation fuel: Review, challenges, and pathways for including environmental and social benefits," Renewable and Sustainable Energy Reviews, Elsevier, vol. 152(C).

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