Conservation Reserve Program: Environmental Benefits Update

This paper presents the methodology, assumptions, and data used to generate regional and national environmental benefit estimates of the USDA’s Conservation Reserve Program (CRP). It’s assumed that, without the program, production and conservation practices on CRP lands would be the same as those used on surrounding lands. When range and forest lands are (are not) included as land-use options, 54 (71) percent of the CRP land would be in crop production—which is consistent with past analyses. Soil erosion would be 222 to 248 million tons per year—about 11 percent—higher than the current level. Benefits are estimated by applying environmental benefit models, estimated in previous analyses, to the CRP’s estimated effect on erosion and wildlife habitat. Nationally, the CRP is estimated to provide $1.3 billion in annual benefits, which represents 75 to 80 percent of the program’s cost. In seven of the 10 USDA Farm Production Regions, the CRP’s environmental benefits exceed costs. Thus, reallocating acreage to these regions could increase net program benefits. However, because many benefits could not be estimated, one cannot conclude that regional and national benefits do not exceed costs.Resource /Energy Economics and Policy,

Restoration of Wetland Services: Economic Gains to the Farmland Owner

The objective of this analysis is to describe and, if possible, measure gains that farmland owners may have seen because of the public's demand for wetland services. To do so, we first consider landowners' ability to directly sell onsite (hunting, fishing, wildlife viewing) and offsite (water quality, groundwater recharge, etc.) wetland services. We found little evidence that landowners sell wetland services. We then consider farmland owners' gains from the mitigation banking system. We found that, with less than 200 approved mitigation banks on farmland, farmland owners had some but limited opportunities to participate in mitigation markets. Finally, we consider landowners' gains from the sale of wetland easements through the USDA's Wetland Reserve Program (WRP). Although we are unable to quantify any gains, the popularity of the program suggests that landowners do gain by participating - since the mid-1990's, more landowners have tried to enroll than program limits allow. Furthermore, two factors suggest that WRP gains are widespread. First, WRP easements have been sold in every State. And second, easement prices have increased over time which may indicate that owners of higher-valued lands may be seeing opportunities to participate.Land Economics/Use,

The Viability of Creating Wetlands for the Sale of Carbon Offsets

This analysis estimates the profitability of restoring wetlands for the sale of carbon offsets. Results indicate that about 7% to 12% of the recently restored grassed wetlands of the prairie pothole and high plains regions and 20% to 35% of the forested wetlands of the Mississippi alluvial valley and Gulf-Atlantic coastal flats regions could have carbon offset values that exceed the cost of restoring the wetland and the opportunity cost of moving the land out of agricultural production. Given the uncertainties, the analysis applies conservative estimates of wetlands’ costs, offset prices, and wetlands’ effects on greenhouse gases.carbon markets, carbon sequestration, offsets, wetland restoration, Environmental Economics and Policy, Land Economics/Use,

INCREASED RESERVOIR BENEFITS: THE CONTRIBUTION OF SOIL CONSERVATION PROGRAMS

The objective of this research is to value soil conservation's impact on reservoirs. Using a model based on replacement cost, we estimate the benefits gained by marginal decreases in soil erosion for more than 75,000 reservoirs across the contiguous States. We aggregate benefits across the reservoirs within each of the 2,111 U.S watersheds in order to produce regional benefit estimates. Results show that a one-ton reduction in soil erosion provides benefits ranging from zero to $1.67. Our estimated model can be used to assess conservation benefits. For example, the lower level of soil erosion in 1997, relative to the 1982 level, preserved$139 million in reservoir benefits.Environmental Economics and Policy,

Better Targeting, Better Outcomes

A multitude of design decisions influence the performance of voluntary conservation programs. This Economic Brief is one of a set of five exploring the implications of decisions policymakers and program managers must make about who is eligible to receive payments, how much can be received, for what action, and the means by which applicants are selected. The particular issue addressed here is options for targeting program payments to where they can yield the greatest gain.Agricultural and Food Policy, Environmental Economics and Policy,

VALUING MARGINAL CHANGES IN THE QUALITY OF AN ENVIRONMENTAL ASSET

We present a model that extends the replacement cost theory to cases where benefits are restored for multiple years. Our theoretical framework derives a functional relationship between investments expenditures and environmental benefits. By extending the investment framework, we model reservoir benefits as a function of marginal changes in soil erosion.Environmental Economics and Policy,

Economic Valuation of Environmental Benefits and the Targeting of Conservation Programs: The Case of the CRP

The range of environmental problems confronting agriculture has expanded in recent years. As the largest program designed to mitigate the negative environmental effects of agriculture, the Conservation Reserve Program (CRP) has broadened its initial focus on reductions in soil erosion to consider other landscape factors that may also be beneficial. For example, preserving habitats can help protect wildlife, thus leading to more nature-viewing opportunities. This report demonstrates how nonmarket valuation models can be used in targeting conservation programs such as the CRP.Environmental Economics and Policy,

Estimation of the marginal values of water as an instream resource for recreational fishing: a national analysis

Streamflow throughout the U.S. may be put to a variety of uses, some that involve the water\u27s consumption (e.g., irrigation, municipal consumption, etc.) and others that use water as a public good (e.g., white water rafting, fishing, etc.). As consumptive water demands have grown and water has been allocated towards meeting these demands, the public use demands for water have also been growing. To insure the efficient allocation of our limited water supply, consideration must be given to water\u27s value in each of its alternative uses.;This study focuses on estimating water\u27s public use value as a fisheries resource. Though there are other public uses of streamflow, these, usually, are not improved after minimal flows are met. Therefore, benefits to the stream fisheries are expected to be the most significant marginal gain to society for an increase in streamflow.;Because water is a flow resource, the benefits generated by an acre-foot of water are as widespread as the course of the river. Thus, a household production model is formulated to describe the recreational fishing commodity production by households throughout the U.S. A tobit analysis of the household\u27s commodity production (proxied by days fishing) indicates that the stream fishing resources are a very significant factor in the households\u27 commodity production. The total population response (measured in days fishing) to an acre-foot change in streamflow for each drainage basin is derived by totaling the reactions of the affected individuals. With estimates on the value of a day of recreational fishing derived in previous analyses, the value of an acre-foot of water is derived for each river basin