Estimating Potential Economic Net Carbon Flux from U.S. Agriculture Using a High Resolution, Integrated, Socioeconomic-Biogeophysical Model

Estimation of the carbon abatement potential of a national carbon market upon U.S. agricultural lands is needed by climate analysts, policymakers, and carbon market brokers. A high resolution, integrated, socioeconomic-biogeophysical model is developed in this research by linking the economics of land management with spatial data on soils and land use. The economic component of the model functions at the county level with biophysical data at the sub-county level of resolution. The model is used to estimate changes in net carbon flux induced by incentives for conservation tillage on nine major crops. The economic potential reduction in net carbon flux at incentives of $500 per metric ton carbon (MtC) is estimated to be 18.92 million metric tons carbon (MMtC) below baseline, and 12.6 MMtC below baseline at an offered incentive of$125 per MtC. Results indicate that the Northern Great Plains, northern Corn Belt, and Mississippi Delta have the greatest economic potential for carbon abatement. Regions with significant amounts of acreage in hay have the greatest potential for gains in net soil carbon. Application of incentives based on soil sequestration potential leads to “leakage” in some regions where land is reallocated from low input practices to higher input practices. This analysis created an ideal opportunity to study the interactions of data resolution and analytical scale. When analyzing carbon abatement at the national scale, abatement estimations were similar using either high or low resolution data. But, if regional estimation is a goal, the geographic resolution of data must match or surpass the geographic scale of analysis, otherwise estimation errors will be large. Although validation using field-level data indicates that model results are not appropriate for fieldlevel estimation, it also indicates that the high resolution methodology developed here results in much smaller errors than lower resolution versions. Results indicate that there are many challenges to implementation, but if policymakers decide to implement a carbon abatement program using conservation tillage, either through a market-based mechanism or through government ‘green payments’, the methodology developed here could help reduce uncertainty in estimating regional abatement quantities

A Farm-Level Evaluation of Conditions Under Which Farmers Will Supply Biomass Feedstocks for Energy Production

This study evaluated the risk management potential of including biomass crops as a diversification strategy for a grain farm in northwest Tennessee. Results indicate that adding biomass crops to the farm enterprise mix could improve mean net revenues and reduced net revenue variability.Resource /Energy Economics and Policy,

Land Use Implications of Expanding Biofuel Demand

The Renewable Fuel Standard mandates in the Energy Independence and Security Act of 2007 will require 36 billion gallons of ethanol to be produced in 2022. The mandates require that 16 of the 36 billion gallons must be produced from cellulosic feedstocks. The potential land use implications resulting from these mandates were examined using two methods, the POLYSYS model and a general equilibrium model. Results of the POLYSYS analysis indicated that 72.1 million tons of corn stover, 23.5 million tons of wheat straw, and 24.7 million acres would be used to produce 109 million tons of switchgrass in 2025 to meet the mandate. Results of the CGE analysis indicated that 10.9 billion bushels of corn grain, 71 million tons of corn stover, and 56,200 tons of switchgrass is needed to meet the mandate.cellulosic ethanol, corn stover, grain ethanol, renewable fuel standard, switchgrass, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy, Q15, Q42,

U.S. Billion-ton Update: Biomass Supply for a Bioenergy and Bioproducts Industry

The Report, Biomass as Feedstock for a Bioenergy and Bioproducts Industry: The Technical Feasibility of a Billion-Ton Annual Supply (generally referred to as the Billion-Ton Study or 2005 BTS), was an estimate of “potential” biomass within the contiguous United States based on numerous assumptions about current and future inventory and production capacity, availability, and technology. In the 2005 BTS, a strategic analysis was undertaken to determine if U.S. agriculture and forest resources have the capability to potentially produce at least one billion dry tons of biomass annually, in a sustainable manner—enough to displace approximately 30% of the country’s present petroleum consumption. To ensure reasonable confidence in the study results, an effort was made to use relatively conservative assumptions. However, for both agriculture and forestry, the resource potential was not restricted by price. That is, all identified biomass was potentially available, even though some potential feedstock would more than likely be too expensive to actually be economically available. In addition to updating the 2005 study, this report attempts to address a number of its shortcoming

Economic Impact of Tennessee Forest Product Exports in 2021

U.S. forest product exports were negatively impacted by the U.S. trade war with China in 2018 and 2019, and the COVID-19 pandemic in 2020. Muhammad and Taylor (2020) note that the pandemic had a significant impact on U.S. and Tennessee forest product exports due to supply and demand disruptions in the global market for finished wood products (e.g., furniture) and the interrelated market for raw materials and inputs (e.g., logs and lumber). These effects were in addition to the negative impact of China’s retaliatory tariffs on U.S. timber (Muhammad et al., 2022). In 2021, U.S. companies expected a recovery due to the U.S. Phase One Trade Agreement with China signed on January 2020, which included exemptions from related retaliatory tariff for forest products shipped to China (Inouye, 2020). In addition, the lifting of pandemic-imposed measures such as port closures and shutdowns in construction and manufacturing suggested a recovery for U.S. exports overall (Susskind and Vines, 2020). In this report, we focus on the post-pandemic period and its impacts on Tennessee forest product exports. We examine the export changes in 2021 (relative to 2020) across destination countries and product categories, and further assess the full economic impact of export sales on income and jobs at the state level. The impacts of the trade war and the COVID-19 pandemic on U.S. and Tennessee forestry exports have been discussed in previous reports (Muhammad and Taylor, 2020; Muhammad and Smith, 2020; and Muhammad et al., 2022). Forest product exports from 2018 to 2021 at the national, regional and state level are reported in Table 1. From 2018 to 2020, U.S. forest product exports decreased by $2.2 billion. In 2021, however, exports increased by$2.1 billion when compared to the previous year. The increase was mostly in southern states ($829 million), followed by Western states ($677 million). The gains in 2021 were a welcomed recovery from the decrease in exports the previous years

Economic Impact of the COVID-19 Pandemic on Tennessee Forest Product Exports

In 2020, the COVID-19 pandemic spread across the globe and had severe impacts on the global economy. As the pandemic began to spread across the U.S., businesses closed and individuals were asked to comply with shelter-in- place and stay-at-home orders (Baker et al., 2020). Countries around the globe imposed similar measures, which negatively affected the global economy beyond anything experienced in nearly a century (Jackson et al., 2020; Sarkodie and Owusu, 2021). Consequently, the pandemic had a negative impact on U.S. forestry exports at the national and state level. Lower global economic activity and disruptions to transportation networks decreased international timber trade. Early in the pandemic, foreign ports were closed, which curtailed timber shipments, and worldwide shutdowns in construction and manufacturing weakened international demand for logs, lumber and other forest products (Riddle, 2020). In this report, we assess the impact of the COVID-19 pandemic on Tennessee forest product exports. We examine export losses in 2020 by destination countries and forest product category and further assess the full economic impact of decreased export sales on income and jobs at the state and county level. According to Muhammad and Taylor (2020), the COVID-19 pandemic had a significant impact on Tennessee’s forest product exports in 2020 due to supply and demand disruptions in the global market for finished wood products markets (e.g., furniture) and the interrelated market for raw materials and inputs (e.g., logs and lumber). In 2020, U.S. forest-product exports were down by more than $670 million when compared to the previous year. Geographically, the decline in export sales was mostly in southern states ($240 million), followed by western states ($217 million). Losses in 2020 were in addition to losses in 2019, due to the trade war between the U.S. and China. In 2020, the decrease in export sales for Tennessee was$38 million. Given the state’s dependence on foreign export sales of hardwoods, losses for Tennessee in percentage terms (22 percent in 2020 and 46 percent since 2018) exceeded national and regional averages (see Table 1) (USDA-FAS, 2021). The impacts of the trade war on U.S. and Tennessee forest product exports have been discussed in previous UT Extension reports (Muhammad and Taylor, 2020; Muhammad and Smith, 2020). The analysis in this report is based on the decrease in export sales in 2020, which has been mostly attributed to the pandemic (Riddle, 2020)

INCENTIVES FOR SWITCHING AGRICULTURAL LAND TO CARBON SEQUESTERING NO-TILLAGE: WHAT DURATION ARE INCENTIVES NECESSARY?

Fourteen long term side-by-side tillage practice experiments were studied to analyze if no-tillage yields improved through time allowing incentives to decline. In the majority of cases, no significant increase in no-till yield is evident. Incentives may need to be permanent if switched acres are to remain using no-tillage practices

Economic Competitiveness of Bioenergy Production and Effects on Agriculture of the Southern Region

The economic competitiveness of biobased industries is discussed by comparing the South relative to other regions of the United States and biomass as a feedstock source relative to fossil fuels such as coal and petroleum. An estimate of the biomass resource base is provided. Estimated changes in the agricultural sector over time resulting from the development of a large-scale biobased industry are reported, and a study on the potential to produce electricity from biomass compared with coal in the southern United States is reviewed. A biobased industry can increase net farm income and enhance economics development and job creation

A Farm-Level Evaluation of Conditions Under Which Farmers Will Supply Biomass Feedstocks for Energy Production

This study evaluated the risk management potential of including biomass crops as a diversification strategy for a grain farm in northwest Tennessee. Results indicate that adding biomass crops to the farm enterprise mix could improve mean net revenues and reduced net revenue variability