Impact of crop rotation with legumes on nutrient loads and GHG emissions

Transcription

1 Go4Baltic Impact of crop rotation with legumes on nutrient loads and GHG emissions Presenter: Sanna Lötjönen Co-author: Markku Ollikainen University of Helsinki, Department of Economics and Management Work package 4

2 Background Sources of environmental benefits from legumes in crop rotations compared to cereal monocultures Biological nitrogen fixation Lower environmental effects compared to cereals Improving soil quality Mixed results on BNF leaching Economic effects Yield, fertilizer use, pesticide use Crop market price Lack of economic research on legumes and crop rotations with both nutrient and climate damages

3 Objectives Are crop rotations with legumes beneficial to water and climate compared to cereal monocultures? Do crop rotations outperform monocultures? Policy coherence (water and climate) How does including stochastic weather affect the results?

4 Framework Theory framework of crop rotation: how do relative prices, real interest rate and social valuation of runoff and climate damages matter in 3 scenarios: Free market optimum (no policy instruments) CAP policies (upper limit on fertilizer application, support payments, buffer strip; period ) Social optimum (buffer strip) Optimize either private profits (N fertilization) or social welfare (N fertilization + width of buffer strip) GHG emissions + nutrient loads as damages

5 Social welfare Welfare function to maximize: profit from cultivation damage from GHG emissions cost of establishment and maintenance of m = (1+ ) 1 1, h( ) interest rate buffer strip cultivation costs damage from nutrient runoff

6 Specifications of the response function Cereal crop monoculture Cereal crop monoculture Legume + BNF Legume ( ) residual effect + BNF Cereal crop ( ) residual effect

7 First order conditions cereal, : =0 legume : =0 legume : +[ ](1+ ) cereal : 1+ : ( ) =0 h + 1+ =0

8 Optimal policy measures Tax on nitrogen fertilizer + buffer strip subsidy Both include climate and water related effects = + >0 = 1+ >0

9 Studied crop rotations 5 period crop rotations + monocultures of each crop Period Legume in the rotation Red clovergrass mixture Pea-horse bean mixture wheat wheat red clover-grass red clover-grass wheat barley barley red clover-grass red clover-grass barley oats oats red clover-grass red clover-grass oats wheat wheat pea-horse bean pea-horse bean wheat barley barley pea-horse bean pea-horse bean barley oats oats pea-horse bean pea-horse bean oats

10 Results Crop rotation environmentally beneficial Potentials greater with pea-horse bean Economic performance better with clover Decrease mainly due to legumes lower average N runoff / GHG emissions Assuming 1,2 million ha cereals, 30 % to rotations with clover Possible decrease of 550 tons of leached nitrogen and tons of GHG emission in Finland

11 Policy coherence and optimal policies Water policies contribute much to GHG reduction, but not the other way round Optimal tax: uniform when only GHG counts, else differentiated by crops Buffer strip subsidy: differentiated by crops

12 Implications to CAP policies Uniform policies within different crops not optimal Optimal buffer strip wider than 3 meters in most cases Current agri-environmental scheme At least 3 crops Ecological area (legumes) Five-year crop rotation plan required

13 Monte Carlo sensitivity analysis How increased precipitation in late July and August affects yields and changes in annual runoff affect nitrogen runoff? Adding stochastic weather strengthens the case for crop rotations with legumes Compounded impact on social welfare

14 Nitrogen runoff Barley monoculture Clover-barley crop rotation

15 Barley yield Barley monoculture Barley in clover-barley crop rotation

16 Social welfare Barley monoculture Clover-barley crop rotation

17 Conclusions Rotations with legumes perform well in reducing both nutrient loads and GHG emissions Uncertainties regarding BNF and runoff of residual nitrogen Rotations profitable regarding social welfare Only rotations with red clover-grass profitable for farmer Need for policy instruments First-best policy accounts for both water and climate purposes Second-best policy should target water quality Including stochastic weather strengthens the case for crop rotations Does crop rotation with legumes provide an efficient means to reduce nutrient loads and GHG emissions? -> based on these results, yes

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