Assessing uncertainty in the profitability of prairie biomass production with ecosystem service compensation

Noe, Ryan; Mcp, Nachman, Elizabeth R.,; Heavenrich, Hannah; Keeler, Bonnie L.; Hernández, Daniel L.; Hill, Jason

doi:10.1016/j.ecoser.2016.05.004

Cited by 17 publications

(10 citation statements)

References 28 publications

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“…Noe et al . () modeled profitability of prairie biomass production over commodity crops, but based the grain budgets on the most profitable years in recent history (2008–2012) and assumed cash rents for pasture on the marginal land selected for conversion. Our approach to project economic outcomes into the upcoming ten years and assume cash rents that result in breakeven corn/soybean production on average per county should be more useful for producers and decision makers as they reflect a more realistic planning horizon.…”

Section: Discussionmentioning

confidence: 99%

“…Dumortier et al (2017) and Jain et al (2010) used data aggregated to the county level, and therefore, their results do not account for differences on a subfield level. Noe et al (2016) modeled profitability of prairie biomass production over commodity crops, but based the grain budgets on the most profitable years in recent history (2008)(2009)(2010)(2011)(2012) and assumed cash rents for pasture on the marginal land selected for conversion. Our approach to project economic outcomes into the upcoming ten years and assume cash rents that result in breakeven corn/soybean production on average per county should be more Table 3) were converted to switchgrass.…”

Section: Discussionmentioning

confidence: 99%

“…However, the integration of perennial, low-input crops bears the potential of long-term environmental and socio-economic benefits that do not currently appear in an enterprise's accounting, such as water quality improvement, carbon sequestration, or recreational valorization. If externalities such as the economic value of ecosystem services resulting from the conversion to a perennial grass (Noe et al, 2016) were included, higher total (private and social) economic benefits could be expected. This is the first study to quantify an upper bound to the potential private economic benefits from converting targeted unfavorable corn/soybean cropland to switchgrass.…”

Section: Discussionmentioning

confidence: 99%

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Where can switchgrass production be more profitable than corn and soybean? An integrated subfield assessment in Iowa, USA

2018

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Perennial bioenergy crops are considered an important feedstock for a growing bioeconomy. However, in the USA, production of biofuel from these dedicated, nonfood crops is lagging behind federal mandates and markets have yet to develop. Most studies on the economic potential of perennial biofuel crops have concluded that even high‐yielding bioenergy grasses are unprofitable compared to corn/soybeans, the prevailing crops in the United States Corn Belt. However, they did not account for opportunities precision agriculture presents to integrate perennials into agronomically and economically underperforming parts of corn/soybean fields. Using publicly available subfield data and market projections, we identified an upper bound to the areas in Iowa, United States, where the conversion from corn/soybean cropland to an herbaceous bioenergy crop, switchgrass, could be economically viable under different price, land tenancy, and yield scenarios. Assuming owned land, medium crop prices, and a biomass price of US$ 55 Mg−1, we showed that 4.3% of corn/soybean cropland could break even when converted to switchgrass yielding up to 10.08 Mg ha−1. The annualized change in net present value on each converted subfield patch ranged from just above US$ 0 ha−1 to 692 ha−1. In the three counties of highest economic opportunity, total annualized producer benefits from converting corn/soybean to switchgrass summed to US$ 2.6 million, 3.4 million, and 7.6 million, respectively. This is the first study to quantify an upper bound to the potential private economic benefits from targeted conversion of unfavorable corn/soybean cropland to switchgrass, leaving arable land already under perennial cover unchanged. Broadly, we conclude that areas with high within‐field yield variation provide highest economic opportunities for switchgrass conversion. Our results are relevant for policy design intended to improve the sustainability of agricultural production. While focused on Iowa, this approach is applicable to other intensively farmed regions globally with similar data availability.

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Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

Section: Discussionmentioning

confidence: 99%

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Where can switchgrass production be more profitable than corn and soybean? An integrated subfield assessment in Iowa, USA

2018

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“…Moreover, uncertainty about the profitability of biomass production has mean that the market has not always been able to supply an optimal level of biomass [42]. As a result, there has been a generally recognized need for public intervention to correct for market imperfections.…”

Section: Case Studymentioning

confidence: 99%

Assessing the Opportunities and Challenges of Green Finance in Italy: An Analysis of the Biomass Production Sector

2019

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The present paper provides empirical evidence of the opportunities and challenges surrounding green finance (GF), looking at the financial issues that might prevent the investment decisions of green companies. To this end, we explore the case of Italian biomass producers by means of a discourse analysis supported by a survey administered to a pool of experts. Although our findings suggest that GF provides an opportunity for achieving environmentally sustainable innovation pathways, experts recognize that it does not actually prevent biomass producers from facing institutional and financial criticalities in funding their investment projects. Such criticalities include: uncertainty about government policies, the minimal involvement of financial suppliers in the biomass sector, the short-term orientation of financial instruments and the limited knowledge of financing options and technical expertise within companies. The results indicate that effective policy interventions should ensure that objectives are orientated towards the long term with the aim of reducing the risks perceived by financial institutions in funding biomass producers.

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“…A similar approach, though with a focus on ancillary effects of soil carbon management, was used by Glenk & Colombo (2011) in Scotland. Another study worth noting in this context is Noe et al (2016), who used a Monte Carlo analysis of SCC estimates to identify the value of carbon storage in Minnesota prairies; they found an average value of 73 USD per ha per year. In another study, Jerath et al (2016) estimated the economic value of carbon storage in the Everglades (US), showing that carbon storage in soils amounts to between 77 and 90 per cent of the overall value across study sites.…”

Section: Stated Preferencesmentioning

confidence: 99%

Potential of the economic valuation of soil-based ecosystem services to inform sustainable soil management and policy

Bartkowski

Bartke

Helming

et al. 2020

PeerJ

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The concept of ecosystem services, especially in combination with economic valuation, can illuminate trade-offs involved in soil management, policy and governance, and thus support decision making. In this paper, we investigate and highlight the potential and limitations of the economic valuation of soil-based ecosystem services to inform sustainable soil management and policy. We formulate a definition of soil-based ecosystem services as basis for conducting a review of existing soil valuation studies with a focus on the inclusion of ecosystem services and the choice of valuation methods. We find that, so far, the economic valuation of soil-based ecosystem services has covered only a small number of such services and most studies have employed cost-based methods rather than state-of-the-art preference-based valuation methods, even though the latter would better acknowledge the public good character of soil related services. Therefore, the relevance of existing valuation studies for political processes is low. Broadening the spectrum of analyzed ecosystem services as well as using preference-based methods would likely increase the informational quality and policy relevance of valuation results. We point out options for improvement based on recent advances in economic valuation theory and practice. We conclude by investigating the specific roles economic valuation results can play in different phases of the policy-making process, and the specific requirements for its usefulness in this context.

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Assessing uncertainty in the profitability of prairie biomass production with ecosystem service compensation

Cited by 17 publications

References 28 publications

Where can switchgrass production be more profitable than corn and soybean? An integrated subfield assessment in Iowa, USA

Where can switchgrass production be more profitable than corn and soybean? An integrated subfield assessment in Iowa, USA

Assessing the Opportunities and Challenges of Green Finance in Italy: An Analysis of the Biomass Production Sector

Potential of the economic valuation of soil-based ecosystem services to inform sustainable soil management and policy

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