Secchi, Silvia (Iowa State Univ., Dept. of Economics - CARD, 260 Heady Hall, Ames, IA, 50011; Phone: 515-294-6173; Email: ssecchi@iastate.edu)

Measuring Carbon Co-Benefits of Agricultural Conservation Policies: In-stream vs. Edge-of-Field Assessments of Water Quality

P.W. Gassman, H.F. Hennessy, M. Jha, S.L. Kling, L. Kurkalova, S. Secchi *

Researchers studying carbon sequestration in agricultural soils have raised the important point that activities that generate carbon sinks also have other, generally beneficial, environmental effects. These effects have been termed “co-benefits” and include water quality, bio-diversity, habitat preservation, and a range of other environmental goods. Water quality co-benefits are particularly important because of the impairment of many waterways, and the on-going process of developing total Maximum Daily Loads to improve them. Water quality impacts of conservation policy can be difficult to assess, because identical conservation practices put in place on two different tracts of land can have widely divergent water quality effects. Proximity to surface water, differing hydro-geologic settings, variation in rainfall, and other factors contribute to these differences. In general, policy assessments have largely been based on edge-of-field models, stopping short of linking conservation practices to ambient water quality and have often included only a single conservation practice or fairly simple biophysical models that do not fully incorporate the complex interactions in a watershed between conservation practices on different parcels within the same watershed. In this project, we estimate the water quality benefits of a conservation policy that would allow producers to choose between two important, but fundamentally distinct types of conservation practices to sequester carbon: (1) retirement of their land from agricultural production (akin to the CRP) or (2), adoption of low tillage practices that keep their land in active production. Both practices have the potential to improve water quality by reducing sediment loading, but at rates and costs that vary considerably across space. Further, the in-stream water quality effects may differ even more dramatically. We integrate economic models that predict the willingness of producers to adopt one of these two conservation practices with two biophysical models: , the Environmental Policy Integrated Climate (EPIC) model which predicts erosion losses and other edge-of-field environmental impacts, and the Soil and Water Assessment Tool (SWAT) model which predicts changes in ambient surface water quality. We do this for the Upper Mississippi River Basin, a large, spatially heterogeneous watershed, using the National Resource Inventory database, containing some 113,000 points in the area, to capture the heterogeneity of the costs, land, soil, and weather characteristics across the region. The carbon benefits are estimated at the NRI point level using the EPIC model. This study illustrates the importance of properly accounting for co-benefits by simultaneously estimating water quality and carbon sequestration. The assessment of the co-benefits is critical for both federal and state policy makers interested in conservation policy since it allows for more accurate cost-benefit assessment of programs. In cases in which several programs co-exist that target different environmental impacts, such analysis allows for the proper accounting of program interactions and overlaps.