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Balancing Bio-Energy Cropping Benefits and Water Quality Impacts: A Dynamic Optimization Approach

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  • Mark E. Eiswerth
  • G. Cornelis van Kooten

Abstract

"The relationship between bio-energy feedstock production and water quality has received little attention from economists. Here, an optimal control model is used to determine the optimal amount of land to convert to the production of energy feedstocks, specifically ethanol corn, taking into account potential impacts on water quality. Based on comparative static analyses of an optimal control model, and a numerical application, we find that the optimal proportion of land to shift into bio-energy production from a baseline use, such as the Conservation Reserve Program, depends on key model parameters, specifically the rate of degradation of the pollutant and the link between the intensity of bio-energy feedstock production and the rate of change in the pollutant stock. Yet, there is a limit to how much land should optimally be converted as society must trade-off its desire to mitigate climate change against its willingness to accept a decline in water quality." Copyright (c) 2010 Canadian Agricultural Economics Society.

Suggested Citation

  • Mark E. Eiswerth & G. Cornelis van Kooten, 2010. "Balancing Bio-Energy Cropping Benefits and Water Quality Impacts: A Dynamic Optimization Approach," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(s1), pages 463-480, December.
    • Handle: RePEc:bla:canjag:v:58:y:2010:i:s1:p:463-480
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    References listed on IDEAS

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    1. Searchinger, Timothy & Heimlich, Ralph & Houghton, R. A. & Dong, Fengxia & Elobeid, Amani & Fabiosa, Jacinto F. & Tokgoz, Simla & Hayes, Dermot J. & Yu, Hun-Hsiang, 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from Land-Use Change," Staff General Research Papers Archive 12881, Iowa State University, Department of Economics.
    2. C. G. Plourde, 1972. "A Model of Waste Accumulation and Disposal," Canadian Journal of Economics, Canadian Economics Association, vol. 5(1), pages 119-125, February.
    3. Silvia Secchi & Bruce A. Babcock, 2007. "Impact of High Crop Prices on Environmental Quality: A Case of Iowa and the Conservation Reserve Program," Center for Agricultural and Rural Development (CARD) Publications 07-wp447, Center for Agricultural and Rural Development (CARD) at Iowa State University.
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    Cited by:

    1. Elwin G. Smith & Mark E. Eiswerth & Terrence S. Veeman, 2010. "Current and Emerging Water Issues in Agriculture: An Overview," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(s1), pages 403-409, December.

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