Spatially delineated carbon credit potential and implied nutrient reduction co-benefit: An assessment with integrated ecological and economic modeling framework

Issue

Nutrient reduction outcomes are affected both by initiatives that directly target nutrient losses such as cost-share programs for conservation practices and by initiatives that do not directly target nutrient losses such as the fast-developing carbon markets. Interests in carbon sequestration and greenhouse gas reduction in the agricultural sector have increased dramatically as the federal government and many communities and private companies set zero-carbon goals. The recent “Carbon Science for Carbon Markets” report identified as high-priority research areas to develop scenarios and case studies for farms in different crop reporting districts with diverse natural and human characteristics  to evaluate changes in practices in response to participation in carbon and environmental markets. 

Objective

The overall objective of this proposed cross-disciplinary project is to conduct scenario-based and case study-based assessment of the nutrient reduction potential of various carbon initiatives with integrated ecological and economic modeling that incorporates spatial-temporal variabilities and farmers' responses to different payment scenarios. In order to understand carbon credit potential and related nutrient impacts, the project will seek to understand:

1. how farm management practices respond to natural variables such as soil and weather conditions and socioeconomic setting. including crop prices and policy incentives;
2. key interactions of carbon and nitrogen in air-plant-soil-water continuum that affect plant growth and carbon and nutrient cycling; and
3. how the ecosystem processes and human decisions intertwine to regulate farm production and management systems and their eventual carbon and water quality outcomes.

Through this objective, the team aims to provide farmers and other stakeholders data-based and modeling-based information to facilitate more informed decisions in the pursuit of climate-smart agriculture.

Approach

Methods for the project are based on the objectives, including: 

• To analyze and predict the temporal and spatial characteristics of conservation practice adoption, focusing on responses to incentive payments, two types of data will be analyzed: (a) farmers’ use of incentive programs, and (b) farmers’ adoption of conservation practices both with and without incentive payments. Researchers will examine the spatial and temporal patterns of participation in incentive programs and the adoption of conservation practices, quantify the impacts of program participation on conservation practice adoption while disentangling their interaction effects and predict the adoption of conservation practices under alternative carbon payment mechanisms, with input from the biogeochemical model
• To estimate the adoption impacts of carbon incentive payments based on the panel data constructed and the project team’s extensive experience in the assessment of incentive programs. The process-based Dynamic Land Ecosystem Model will be used to quantify the spatial and temporal patterns of nutrient and carbon outcomes, including the impacts of cover crop and conservation tillage on riverine nitrogen loading, soil carbon stock changes and greenhouse gas fluxes based on the past 30 years of historical environmental forcing data and predict future trends. The modeled yield responses to cover crops and conservation tillage will be tested using experimental data from literature review and collaborators.
• To compare the theoretical and empirical characteristics of different carbon payment strategies and their impacts on farmers’ response. The project will compare three payments that are commonly discussed and used in various ecosystem services provision: practice-based payment (e.g., per-acre payment for the acres of conservation practices adopted), outcome-based payment (e.g., payment per pounds of nitrogen reduced or per tons of carbon sequestered) and commoditization of nutrient and carbon benefits (e.g., price premium for crops grown under certified climate-smart practices). All three payment mechanisms will be assessed under different decision paradigms with economic and simulation models that consider land conversion, insurance coverage and grazing practices.
• To develop scenarios, and quantify their regional carbon and nutrient outcomes, and economic impacts on farmers, funders and society. Researchers will compare scenarios that are based on different program goals (procuring the maximum amount of carbon versus combined carbon and nutrient benefits for a given fixed budget), payment schemes (e.g., practice-based vs outcome-based payment) and the combination of spatial targeting and practice/outcome-based targeting.