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Assessing costs of soil carbon sequestration by crop-livestock farmers in Western Australia

Listed author(s):
  • Kragt, Marit E.
  • Pannell, David J.
  • Robertson, Michael J.
  • Thamo, Tas

Carbon sequestration in agricultural soil has been identified as a potential strategy to offset greenhouse gas emissions. Within the public debate, it has been claimed that provision of positive incentives for farmers to change their land management will result in substantial carbon sequestration in agricultural soils at a low carbon price. However, there is little information about the costs or benefits of carbon sequestration in agricultural soils to test these claims. In this study, the costeffectiveness of alternative land-use and land-management practices that can increase soil carbon sequestration is analysed by integrating biophysical modelling of carbon sequestration with wholefarm economic modelling. Results suggest that, for a case study model of a crop-livestock farm in the Western Australian wheatbelt, sequestering higher levels of soil carbon by changing rotations (to include longer pasture phases) incur considerable opportunity costs. Under current commodity prices, farmers would forego more than $80 in profit for every additional tonne of CO2-e stored in soil, depending on their adoption of crop residue retention practices. This is much higher than the initial carbon price of $23t−1 in Australia’s recently legislated carbon tax. This analysis does not incorporate the possibility that greenhouse gas emissions may increase as a result of including longer pasture phases. Accounting for emissions may substantially reduce the potential for net carbon sequestration at low carbon prices.

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File URL: http://www.sciencedirect.com/science/article/pii/S0308521X1200090X
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Article provided by Elsevier in its journal Agricultural Systems.

Volume (Year): 112 (2012)
Issue (Month): C ()
Pages: 27-37

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Handle: RePEc:eee:agisys:v:112:y:2012:i:c:p:27-37
DOI: 10.1016/j.agsy.2012.06.005
Contact details of provider: Web page: http://www.elsevier.com/locate/agsy

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  1. Lyubov Kurkalova & Catherine Kling & Jinhua Zhao, 2006. "Green Subsidies in Agriculture: Estimating the Adoption Costs of Conservation Tillage from Observed Behavior," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 54(2), pages 247-267, 06.
  2. David J. Pannell, 2006. "Flat Earth Economics: The Far-reaching Consequences of Flat Payoff Functions in Economic Decision Making," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 28(4), pages 553-566.
  3. Andrew J. Plantinga & JunJie Wu, 2003. "Co-Benefits from Carbon Sequestration in Forests: Evaluating Reductions in Agricultural Externalities from an Afforestation Policy in Wisconsin," Land Economics, University of Wisconsin Press, vol. 79(1), pages 74-85.
  4. Probert, M. E. & Dimes, J. P. & Keating, B. A. & Dalal, R. C. & Strong, W. M., 1998. "APSIM's water and nitrogen modules and simulation of the dynamics of water and nitrogen in fallow systems," Agricultural Systems, Elsevier, vol. 56(1), pages 1-28, January.
  5. Schneider, Uwe A. & Kumar, Pushpam, 2008. "Greenhouse Gas Mitigation through Agriculture," Choices, Agricultural and Applied Economics Association, vol. 23(1).
  6. Uwe A. Schneider & Pete Smith, 2008. "Greenhouse Gas Emission Mitigation and Emission Intensities in Agriculture," Working Papers FNU-164, Research unit Sustainability and Global Change, Hamburg University, revised Jul 2008.
  7. Dustin L. Pendell & Jeffery R. Williams & Scott B. Boyles & Charles W. Rice & Richard G. Nelson, 2007. "Soil Carbon Sequestration Strategies with Alternative Tillage and Nitrogen Sources under Risk," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 29(2), pages 247-268.
  8. Ludwig, Fulco & Asseng, Senthold, 2006. "Climate change impacts on wheat production in a Mediterranean environment in Western Australia," Agricultural Systems, Elsevier, vol. 90(1-3), pages 159-179, October.
  9. Douglas J. Miller, 1999. "An Econometric Analysis of the Costs of Sequestering Carbon in Forests," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 812-824.
  10. Pushpam Kumar & Uwe A. Schneider, 2008. "Greenhouse gas emission mitigation through agriculture," Working Papers FNU-155, Research unit Sustainability and Global Change, Hamburg University, revised Feb 2008.
  11. Kingwell, Ross S., 2009. "The Carbon Challenge for Mixed Enterprise Farms," 2009 Conference, August 27-28, 2009, Nelson, New Zealand 97169, New Zealand Agricultural and Resource Economics Society.
  12. Antle, John M. & Capalbo, Susan Marie & Mooney, Sian & Elliott, Edward T. & Paustian, Keith H., 2001. "Economic Analysis Of Agricultural Soil Carbon Sequestration: An Integrated Assessment Approach," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 26(02), December.
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