Trading Water for Carbon? Groundwater Management in the Presence of GHG Mitigation Incentives for...
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Transcript of Trading Water for Carbon? Groundwater Management in the Presence of GHG Mitigation Incentives for...
Trading Water for Carbon? Groundwater Management in the Presence of GHG
Mitigation Incentives for AgricultureJustin Baker
Research AnalystCenter on Global Change, Duke University
Doctoral Candidate
Agricultural Economics, Texas A&M University
Background. . .
• Policy efforts could make GHG mitigation in forestry and agriculture a reality
– Decreased management intensity
– Terrestrial sequestration
– Biofuels as low-carbon alternatives for transportation (debatable)
– Use of agricultural residues for bioenergy
Meanwhile. . . • Groundwater accounts for 41% of all irrigation supplies
• Effective groundwater management increasingly difficult – Increased Competition– Emerging agricultural markets (biofuels)– Higher energy prices– Threats of Climate Change– Degraded Quality – Threatened ecosystem services
• How will climate mitigation incentives and groundwater management interact?
Managing Water AND GHGs
• There are trade-offs to consider
– Why the ambiguity?• Regional considerations, input substitutability, and leakage impacts are
important
Water Implications GHG Potential
Land-based Mitigation Activity
Consumption Quality Net Emissions
Biofuels + - + or -
Bioelectricity + or - + or - -
Soil Sequestration
+ or - + or - -
Afforestation + or - + or - -
Non-CO2 Emissions
+ or - + -
Example: Renewable Fuels Standard
• Mandating biofuels can have adverse consequences – Simulation Results using FASOMGHG model confirm this:
Environmental Measures (National)
0
2
4
6
8
10
2005 2010 2015 2020 2025
Year
Perc
ent C
hang
e fro
m
2005
Bas
elin
e
Water Use Nitrogen Phosphorous
• By 2015, bioenergy offsets account for 86.5 Million Tonnes CO2 Eq.
•Additional water use 13.8 MAF/year
•6.26 T CO2/AF
•Worthy trade-off?
Research Objectives
• Two part project~1) Theoretical modeling
• Is it possible to manage groundwater extraction, water quality, and GHG emissions conjunctively?
– Small spatial scale– Are welfare gains possible? – Simple illustration, limitations, future development
2) Empirical Case Study• Ogallala Aquifer- Assessment of groundwater
resources under exogenous climate policy shocks– Co-benefit, or co-costs?
Simple Groundwater Management System
Groundwater Extracted, Wt
Applied Nitrogen, nt
Production: y=f(Wt,nt)
Nitrate concentration of rechargeNR=h(Wt,nt,Rt)
Natural Recharge Rt
Groundwater Stock, St Nitrate Stock, NS
GHG Emissions, G=g(Wt,nt)
Local environmental damagesD=d(Wt,nt,St,NS)
*Both St and NS are state variables, and depend on the choice of Wt and nt.
*also depends on land use
decisions
Basic Model- Aquifer and Pollution
Dynamics • Groundwater dynamics
• Pollution Dynamics (using nitrate concentration)
.t tS R W
:
( , )
S R St t
Rt t t
N N N
where
N h W n
Social Planner’s Problem
• Maximizing returns to production and benefits of GHG mitigation
• The choice of Wt, nt will dictate extraction rate and pollution concentration dynamics
• Subject to equations of motion
,max ( ( , ) ( , ) ( ) )t t
ty t t c t t n t t t
W no
p f W n p g W n c n c S W e dt
Model Features
• Incorporates some social costs of water use and fertilizer application
• If GHG emissions are targeted, stock depletion and nitrate accumulation are slowed (Wt, nt ).
– Proposition: Managing GHG emissions in isolation could provide a “second-best” policy option for improving groundwater management
Numerical Illustration (parameters)
• Production function parameters f() (Larson, et al 1996)
• Leaching parameters NR (Larson, et al 1996)
• Decay in Nitrates (Yadav, 1997)
• IPCC default values for GHG emissions (IPCC 2007)
• Price and biophysical data (various sources)
• GAMS used for optimal control simulation
Graphical Results Nitrate Concentration
1 25 49
Time
Nit
rate
Co
ncen
trati
on
Common Property . GHG Policy .
•Very Preliminary
•Water quantity gains are minimal
•Quality gains more substantial
•GHG benefits:
•At $35/T CO2 Only 3.2 T CO2 saved over 50 years
•~0.064 T CO2ha-1 yr-1
Optimal Extraction
-30
-25
-20
-15
-10
-5
0
1 25 49
Time
Wat
er T
able
Baseline GHG Pricing
Extensions of the Model
1) Managing GHG emissions from production intensity will yield minimal benefits– Alternative GHG mitigation/offset activities to be
included
2) Climate Policy to be determined exogenously to the agricultural system– Policy decisions and systematic shock
uncertainty matter – Pertinent case study needed
Ogallala (High Plains) Aquifer• Area- Approximately 170,000 miles2
– Roughly ¼ of US agricultural land base
– Spans eight states (Colorado, Kansas, Nebraska, New Mexico, Oklahoma, South Dakota, Texas, Wyoming)
– Varying management institutions
Empirical Modeling Approach• Exploration of groundwater dynamics in
prominent agricultural region under exogenous climate policy shocks – Addition of consistent hydrologic features of the
Ogallala Aquifer to a national agricultural/forestry sector partial equilibrium model (FASOMGHG)
• FASOMGHG is an ideal model to expand for this study– Land use competition,– Comprehensive GHG accounting– Full suite of mitigation/offset activities
• (bioenergy, biological sequestration, etc.)
Why should this region be concerned?
Grain Ethanol Production (Million Gallons)
CROP_ETHAN
0
40
3970
4840
6360
36 BGY scenario (Total = 15 BGY)
Cellulosic Ethanol Production (Million Gallons)
CELL_ETHAN
Current FASOMGHG Spatial Scope
Currently:11 major regions67 subregions
After Additions:12 additional Ogallala sub-regions79 Final Regions
Dealing with Heterogeneity• Aquifer levels subject to
variability
• FASOMGHG too large to attempt geographic mapping at fine spatial scale
• Ogallala sub-regions to be empirically distributed under initial saturated thickness condition
– Approach is superior to taking regional averages
Other Operational Procedures
• Improved GHG accounting for alternative irrigation systems
• Improved life-cycle water accounting (especially for biofuels)
• Yield potential for deficit irrigation practices
Data Collection• Literature search
– Determination of ideal geographical boundaries• Differences in Geophysics,• Management institutions
• Saturated thickness levels for initial stock/lift – (TTU, NU, KSU, USGS, TWDB)
• MODFLOW data for recharge, heterogeneity
• Estimates of NO3, other concentrations
• Agricultural statistics for sub-regional differences in management– (USDA-NASS, KSU and TX Extension Services, etc.)
Expected Results
• Depletion effects and optimal extraction over time– Long-term sustainability concerns
• Comparison of varying institutions under exogenous systematic pressures
• Carbon-for-Water trade-offs– (or carbon-and-water co-benefits)– Social Implications
Conclusion
• Theory of conjunctive GHG and groundwater management warrants further attention
• Interactions of exogenous climate policy and regional water resource management are important
• Extensive, national scale modeling effort needed to assess various social trade-offs in agricultural GHG mitigation opportunities