land use change in a biofuels hotspot: the case of iowa, usa

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  • hbDepartment of Economics and Finance, Ener

    NC 27411, USAcCenter for Agricultural and Rural DevelopmdDepartment of Economics, Iowa State Unive

    of time has generated a relatively large and fast growing body

    of literature. The debate has mostly focused on the overall

    carbon footprint of biofuels [1e5], because one of the ratio-

    nales of policies promoting biofuels is that they reduce

    included other environmental indicators, such as effects on

    spatially explicit analyses of the environmental impacts,

    mostly because of the complexity and the integrated nature of

    the modeling efforts necessary. Such an analysis, however, is

    vital if we want to understand whether there are

    * Corresponding author. Tel.: 1 618 453 1714.E-mail addresses: ssecchi@siu.edu (S. Secchi), lakurkal@ncat.edu (L. Kurkalova), pwgassma@iastate.edu (P.W. Gassman),

    Avai lab le a t www.sc iencedi rec t .com

    .co

    b i om a s s a n d b i o e n e r g y 3 5 ( 2 0 1 1 ) 2 3 9 1e2 4 0 0chart@iastate.edu (C. Hart).The environmental impacts of the large scale production of

    biofuels are a topic of vigorous debate, which in a short period

    nitrogen, phosphorus, and pesticide use (see for example

    [1,2,4]). Until recently, most of the literature did not includemargin, while nitrogen losses increase less. Returning CRP land into production has

    a vastly disproportionate environmental impact, as non-cropped land shows much higher

    negative marginal environmental effects when brought back to row crop production. This

    illustrates the importance of differentiating between the intensive and extensive margin

    when assessing the expansion of biofuel production.

    2010 Elsevier Ltd. All rights reserved.

    1. Introduction greenhouse gas emissions. However, several studies have alsoa r t i c l e i n f o

    Article history:

    Received 11 July 2008

    Received in revised form

    12 August 2010

    Accepted 18 August 2010

    Available online 26 September 2010

    Keywords:

    Land use change

    Economic analysis

    Environmental Impact

    Energy crop production

    Corn-soybean rotation

    Land set-aside0961-9534/$ e see front matter 2010 Elsevdoi:10.1016/j.biombioe.2010.08.047gy and Environmental Systems program, North Carolina A&T State University, Greensboro,

    ent, Iowa State University, 578 Heady Hall, Ames, IA 50011-1070, USA

    rsity, 260 Heady Hall, Ames, IA 50011-1070, USA

    a b s t r a c t

    This study looks at the land use impact of the biofuels expansion on both the intensive and

    extensive margin, and its environmental consequences. We link economic, geographical

    and environmental models by using spatially explicit common units of analysis and use

    remote sensing crop cover maps and digitized soils data as inputs. Land use changes are

    predicted via economic analysis of crop rotation choice and tillage under alternative crop

    prices, and the Environmental Policy Integrated Climate (EPIC) model is used to predict

    corresponding environmental impacts. The study focuses on Iowa, which is the leading

    biofuels hotspot in the U.S. due to intensive corn production and the high concentration of

    ethanol plants that comprise 28% of total U.S. production. We consider the impact of the

    biofuels industry both on current cropland and on land in the Conservation Reserve

    Program (CRP), a land set-aside program. We find that substantial shifts in rotations

    favoring continuous corn rotations are likely if high corn prices are sustained. This is

    consistent with larger scale analyses which show a shift of the current soybean production

    out of the Corn Belt. We find that sediment losses increase substantially on the intensiveaDepartment of Agribusiness Economi

    Carbondale, IL 62901, USAthern Illinois University, Agriculture Building e Mailcode 4410, 1205 Lincoln Drive,cs, SouSilvia Secchi a,*, Lyubov Kurkalova b, Philip W. Gassman c, Chad Hart dLand use change in a biofuels

    ht tp : / /www.e lsev ierier Ltd. All rights reservedotspot: The case of Iowa, USA

    m/loca te /b iombioe.

  • induced by the bioenergy expansion are likely to affect crop

    b i om a s s an d b i o e n e r g y 3 5 ( 2 0 1 1 ) 2 3 9 1e2 4 0 02392disproportional effects in some areas, and to help direct

    policy. Some recent papers have incorporated carbon effects

    at a global scale [6,7] by linking large scale economic and

    environmental models, again with a carbon focus. This paper

    takes a regional scale approach, closer to ones used by geog-

    raphers and land use scholars (see for example [8e10]). Our

    modeling approach consists of a field-level discrete economic

    model of crop rotation and land use management that

    predicts the impacts of alternative policy scenarios on land

    use shifts, which in turn are input into a field-level environ-

    mental model to estimate environmental implications, such

    as erosion, nutrient losses and carbon sequestration in the

    soil. The economic and environmental models are interfaced

    using common geographical units of analysis. Because of the

    regional scale at which the models operate, the price of crops

    and energy sources are given. This bottom-up approach is

    complementary to large, top down modeling efforts that

    predict global land use and environmental impacts at a coarse

    resolution.

    The study focuses on the Midwestern U.S. state of Iowa,

    which is the leading biofuel hotspot in the U.S. due to inten-

    sive corn production and the high concentration of ethanol

    plants that comprise over 25% of total U.S. production. Rapid

    shifts in crop production are occurring in the state due to

    increasing demand for ethanol production. Between 2006 and

    2007, corn production in Iowa increased by 26%, bringing the

    current Iowa corn crop to 19% of total U.S. production.

    Iowa is a very intensively managed agricultural state. The

    greatmajority of the land is in the private sector, and it is used

    for row crop production. Nevertheless, the state has around

    three quarter of a million hectares in the Conservation

    Reserve Program (CRP), a land set aside program instituted by

    the U.S. federal government. We consider two types of land

    use changes: 1) on currently cropped land, because cropland

    could be farmedmore intensively to produce more feedstocks

    for biofuel production e specifically, in the case of the U.S.,

    corn; and 2) on land currently out of agricultural production

    (CRP). We refer to the first type of change as a change on the

    intensivemargin, because increases in corn production in this

    case would not increase the land allocated to crop production,

    but would just increase the production of corn per acre, and to

    the second as the extensivemargin, because CRP land is in set

    aside and using it for crop production again would increase

    the area used for agricultural production.

    It is important to include both types of effects separately

    because, while the initial goal of the CRP program in 1985 was

    to reduce crop supply, in more recent years land has been

    targeted by the program for its environmental vulnerability.

    Indeed, the analysis on the beneficial effects of CRP on the

    environment has been wide-ranging, including studies that

    have calculated the effects of CRP on sediment losses [11],

    carbon sequestration [12], and bird populations [13e15]. While

    previous studies have relied on the Natural Resources Inven-

    tory database [12] and remote sensing imagery [16,17] to

    determine the location of CRP land, we have used the actual

    Conservation Reserve Program parcel data obtained from the

    Farm Service Agency.

    Previous work [18] has also detailed the likely impact of thebiofuel industrye via high crop pricese on thismarginal land,

    and the impact on the CRP program. These estimates suggestand rotation choices and, indirectly, tillage choices. Some

    recent studies have started to assess the impacts that an

    increase in corn production could have on surface water

    quality in the U.S. Donner and Kucharik [19] assess such

    impacts for the whole MississippieAtchafalaya River Basin

    using spatially explicit modeling at a county-level scale. The

    models are not driven by economics, and there are no differ-

    ential impacts of CRP and current cropland. Simpson et al. [20]

    differentiate between CRP and current cropland, but do not

    use economic analysis to assess how production will respond

    to prices, and their study does not include a spatially explicit

    analysis. However, all these elements e the responsiveness to

    prices, the differentiation of types of land use, and the

    spatially explicit analysis, are important to policymakers who

    need to assess the environmental impacts of biofuels andwho

    devise agricultural, conservation and energy policy. Our

    contribution to the literature is to simultaneously include all

    these considerations in the analysis.

    The paper is structured as followed. First, in the materials

    and method section, we detail the datasets used to construct

    a baseline land use for Iowa and baseline environmental

    indicators. We then construct an economic model that is

    based on production costs by tillage and crop rotation and use

    forecast prices to predict future land use scenarios. We look at

    three price-based scenarios, representing a range of future

    market conditions. The land use change maps of these

    simulations and their environme

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