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Impacts of Agricultural Production on Water Quality and a Possible Policy Solution

Impacts of Agricultural Production on Water Quality and a Possible Policy Solution. Suzie Greenhalgh World Resources Institute Suzieg@wri.org. Many reasons, e.g., Perceived environmental gains Improved technology Improving the rural economy Decreased reliance on petroleum products

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Impacts of Agricultural Production on Water Quality and a Possible Policy Solution

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  1. Impacts of Agricultural Production on Water Quality and a Possible Policy Solution Suzie Greenhalgh World Resources Institute Suzieg@wri.org

  2. Many reasons, e.g., Perceived environmental gains Improved technology Improving the rural economy Decreased reliance on petroleum products National security Why Bio-based Products

  3. Water quality Coastal, freshwater and groundwater Soil Erosion, fertility Atmospheric GHG emissions/removals, ozone Wildlife Habitat, biodiversity Change in land-use or land management Environmental Concerns

  4. Water Quality: Nutrient Pollution Source Nitrogen Phosphorus Total non-point discharges 6,663 1,658 Total point sources 1,495 330 Total discharge (point + non-point) 8,158 2,015 Non-point as a percentage of total 82 84 Source: Carpenter et al., 1998 Units: ‘000 metric tons per year

  5. Water Quality: Hypoxia Source: USGS Fact Sheet, 2000

  6. U.S. Greenhouse Gas Emissions

  7. Demand/market for products/co-products Impact on overall crop prices Benefits to biomass producers Regional benefits employment, rural development, tax base Which regions benefit most Incentives needed (if any) On-farm subsidies, tax credits, market-based mechanisms Impact of agricultural community Market/product diversification, profitability Economic Concerns

  8. Environmental vs economic costs and benefits, e.g., starch-based ethanol ↑ corn production in monoculture ↑ prices (due to increased demand) ? ↑ farmer welfare (income) ? ↑ neg environmental impacts (corn production) ↑ pos environmental impacts (use of bio-based products replacing fossil fuel products) Tradeoffs

  9. Bio-based Technology Bio-based products industry based on 2 feedstocks - Starch and cellulose - Starch is the Present – Cellulose is the Future?

  10. Starch vs Cellulose • Corn and Stover: • Potential environmental/economic gains, e.g., • no ∆ water quality (less nutrient/pesticide losses) • no ∆GHG emissions (tillage, fertilizer) • no ∆ biodiversity • ? Soil fertility • ↑ farm income

  11. Starch vs Cellulose • Corn and Biomass: • Potential environmental/economic gains, e.g., • ↑ water quality (less nutrient/pesticide losses) • ↓ GHG emissions (tillage, fertilizer) • ? biodiversity (depends on biomass prodn system) • ↑Soil fertility • ? farm income

  12. Questions: Will bio-based products achieve the environmental gains we hope for? Is societal demand going to be sufficient to drive the development of the industry? OR Do we need policy initiatives? Promoting Bio-based Products

  13. Directly related, e.g., Energy bill/Farm Bill Energy Title MTBE legislation Renewable Fuel Standards Indirectly related, e.g., Water quality, e.g., TMDL’s Climate change, e.g., state/federal programs Farm bill, e.g., Commodity-based ag subsidies; Conservation Title Policy Incentives for Bio-based Production

  14. Agricultural Policy Options for hypoxia: Fertilizer Tax on Nitrogen Extension of CRP Conservation Tillage Subsidy GHG Trading Nutrient Trading Nutrient Trading with GHG Payments Possible Water Quality Policy Options

  15. Policy Impact: Farm Income

  16. Policy Impact: N delivered to the Gulf

  17. Policy Impact: Greenhouse Gas Emissions

  18. Policy Impact: P Lost to Water

  19. Policy Impact: Soil Erosion

  20. Regional Impacts: Farm Income

  21. Regional Impacts: Hypoxia

  22. Regional Impacts: Hypoxia

  23. Assessing Policy Impacts • Consider a suite of environmental parameters to evaluate policy performance • Assess tradeoffs between environmental parameters • Assess tradeoffs between the economics and environmental parameters • Assess national AND regional implications

  24. Example Energy Policy • E.g., Use of E10 Ethanol nationwide • All cars capable of using E10 today • 2005: no additional feedstock acres required • 2010→: require additional feedstock acres • Decreased reliance on imported oil and GHG savings • N.B. Assumes cellulose feedstocks not starch

  25. Use of E10 Ethanol Nationwide Source: Mindy Selman, 2003, preliminary assessment

  26. Where to Next? Where do we want the bio-based economy to go? Will it achieve the environmental benefits we desire? How do we best promote/encourage the bio-based economy? Technology is moving us forward -- Next: we need to carefully assess the implications of new technology and the policies that could be used to promote the bio-based economy.

  27. Thank You! Comments& Questions Suzie Greenhalgh (suzieg@wri.org)

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