Estimating maximum land use change potential from a regional biofuel industry

Abstract

The maximum amount of land for growing switchgrass for ethanol is estimated for a region in the southeastern U.S. Breakeven capacities are calculated for land in row crops, hay, pasture and marginal land. Characteristics of land categories inform potential land use change impacts as well as switchgrass profitability. Variable yields within and across land categories are translated into distributions of switchgrass net revenue. Breakeven curves are generated for a range of switchgrass prices. These curves provide upper bounds for further analysis of actual switchgrass adoption in context of broader economic forces and possible policy mechanisms to minimize environmental impacts. A farm-gate price of $55Mg−1 is estimated for half of marginal and pasturelands to break even with switchgrass. At this price, only 20% of land in hay and a small fraction of row crop hectares break even. Half of hay and row crops hectares break even at approximately $90Mg−1 and $100Mg−1, respectively. At $60Mg−1, sufficient land area can profitably produce switchgrass for ethanol to displace approximately 10% of gasoline consumed in Georgia, North Carolina, and South Carolina; however, this price only indicates breakeven capacity implying that higher prices may be necessary to realize 10% displacement.