Abstract: 2006 VanBuren LectureECONOMICS OF SOIL CARBON SEQUESTRATION THROUGH BIOMASS CROPS Madhu Khanna, Hayri Onal, Basanta Dhungana and Michelle Wander University of Illinois, Urbana-Champaign Growing concerns about global climate change has led to interest in using perennial grasses to generate bioenergy and to sequester carbon in agricultural soils. The purpose of this study is to evaluate the extent to which biomass crops can lower the costs of carbon sequestration while also providing bio-energy for electricity generation. We examine the allocation of land between bio-energy crops and row crops with conservation tillage to achieve given carbon sequestration targets. Additionally, we analyze the implications of alternative assumptions about the dynamics of soil carbon sequestration on the pattern of land use and costs of sequestration. A dynamic micro-economic model is applied at a county level in Illinois, to examine cost-effective land use allocation among alternative row crops and two bioenergy crops, Switchgrass and Miscanthus, over a 15 year period. A transportation module links power plants to least cost sources of bioenergy. We find that the extent to which biomass crops lower costs of sequestration varies directly but inelastically with the price of bioenergy. A linear carbon accumulation function leads to earlier switching of land to sequestration friendly uses, than a negative exponential function, leading to significantly higher marginal costs of sequestration. The potential to rely on bio-energy crops and conservation tillage to achieve sequestration targets varies spatially; bio-energy crops are more likely to be grown in counties that are closer to power plants while conservation-tillage is more likely in the northern and southern counties where there is either considerable capacity to sequester carbon or the returns from conservation tillage in the absence of carbon credits are low.
|