Adoption Subsidies and Environmental Impacts of Alternative Energy Crops

Bruce Alan Babcock, Philip W. Gassman, Manoj K Jha () and Catherine Louise Kling ()

Staff General Research Papers from Iowa State University, Department of Economics

Abstract: We provide estimates of the costs associated with inducing substantial conversion of land from production of traditional crops to switchgrass. Higher traditional crop prices due to increased demand for corn from the ethanol industry has increased the relative advantage that row crops have over switchgrass. Results indicate that farmers will convert to switchgrass production only with significant conversion subsidies. To examine potential environmental consequences of conversion, we investigate three stylized landscape usage scenarios, one with an entire conversion of a watershed to switchgrass production, a second with the entire watershed planted to continuous corn under a 50% removal rate of the biomass, and a third scenario that places switchgrass on the most erodible land in the watershed and places continuous corn on the least erodible. For each of these illustrative scenarios, the watershed-scale Soil and Water Assessment Tool (SWAT) hydrological model (Arnold et al., 1998; Arnold and Forher, 2005) is used to evaluate the effect of these landscape uses on sediment and nutrient loadings in the Maquoketa Watershed in eastern Iowa.

Keywords: adoption subsidy; cellulosic ethanol; energy crops; land use; SWAT; switchgrass; water quality. (search for similar items in EconPapers)
Date: Written
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