Chapter 23 - Economic Outcomes of Greenhouse Gas Mitigation Options

Abstract

Economic outcomes of greenhouse gas (GHG) mitigation options are reviewed, including reductions in tillage intensity, diversifying crop rotation, and N fertilizer management. While reducing tillage can be a cost-effective GHG mitigation practice, results varied by region and even within regions, and costs of mitigation were sensitive to differences in profitability and C sequestration rates. One meta-analysis indicated regional mitigation costs ranging from $1.96 Mg −1 in the South to values approaching infinity for no-till wheat in the Prairies due to insignificant carbon storage. However, there are often complex interactions among tillage, rotation, and fertilizer management that affect economic performance of these practices and their GHG mitigation effects. There is evidence from some locations that farmers rotating crops are also likely to adopt conservation tillage, and that rotating crops and adopting conservation tillage seem to decrease N fertilizer rates in other locations. So, looking at impacts of individual practices may be misleading. Economic performance of these practices is also sensitive to changing market conditions. This is illustrated by the effect that rapid growth in bioenergy production has had on agricultural markets and the relative profitability of agricultural management alternatives. While economic and GHG effects of bringing non-cropped land into crop production have received much attention, the less studied effects of changing agricultural management practices on existing cropland could have substantial impacts on GHG mitigation. Given that we are in a bioenergy world, better understanding of the impacts of the growing biofuels market is needed for assessing economic outcomes of GHG mitigation options. As markets continue to change, research is needed to better anticipate changes in the relative profitability of GHG mitigation practices in response to changing farming input prices, crop prices, as well as to the constraints and incentives provided by conservation and energy policies.