Exposure of the Upper Midwest to Invasive & Noxious Weeds Fueled by Renewable Energy Mandates. David J. Smith Applied Economics

Transcription

1 Exposure of the Upper Midwest to Invasive & Noxious Weeds Fueled by Renewable Energy Mandates David J. Smith Applied Economics 1

2 Integra8ve Graduate Educa8on and Research Traineeship (IGERT) Risk Analysis for Introduced Species & Genotypes PhD DissertaGon Willingness of Farmers to Supply Biomass and Ecosystem Services through Perennial Crop Produc8on 2

3 Lowering the Cost of Bio- energy Feedstocks while Providing Environmental Services A Win- Win Opportunity Renewable Development Fund 3

4 Research Idea Tribal Renewable Energy Research Workshop May, 2010 at the University of Washington Yakama Na8on Natural Resource Manager Russian Olive Management as biomass source High Yields per acre Forestry Industry 4

5 Economics in Risk Assessment Assessment Endpoint economic impact of invasive species Exposure & Effects Economic analysis to determine exposure & non- economic effects Recrea8onal Boater Behavior (IGERT Symposium February Spring 2011) Agricultural Hor8culture 5

6 Exposure Risk of Invasive and Noxious Weeds from Perennial Bioenergy Produc8on Renewable Energy Mandates Exposure Assessment Climate History of Invasion Regula8on Economics 6

7 Renewable Energy Mandates Cellulosic Ethanol The Energy Independence and Security Act of 2007 Biopower & Bioheat State Renewable Por]olio Standards (RPS) Minnesota Renewable Por]olio Standard (25% by 2025), Xcel (30% by 2020) Wisconsin Energy Efficiency and Renewable Act (10% by 2015) 7

8 Cellulosic Ethanol Mandates 40.0 SecGon 202 The Energy Independence and Security Act of 2007 (Revised 2009) Billion Gallons Year Conven8onal Renewable Fuels Cellulosic Biomass- Based Diesel Other Advanced Biofuels 8

9 Bioheat & Biopower Examples 9

10 A Few Biomass Sources Conven8onal Crop Residuals (Corn Stover) Perennials Trees Forestry Short Rota8on Woody Crops Grasses 10

11 Why are we concerned about perennial bioenergy crops? Conven8onal Row Crops Annuals Dependent on Agronomic Inputs Varie8es which maximize Grain produc8on Biomass Crops Perennials Not Dependent on Agronomic Inputs Similar to natural varie8es Maximizing cellulosic material 11

12 Agronomic/invasive characteris8cs (Barney 2008) Life History Perennial High yielding (aboveground biomass) Grows at high densi8es Rapid growth rate Physiology Drought tolerant High water- use efficiency Tolerates soil disturbance C4 Photosynthesis (Grasses) Hosts few pests/diseases Reallocates nutrients to perenna8ng structures 12

13 Land Used for Produc8on 10 Billion Gallons Ethanol = 30 Million Acres of Corn (30%) 16 Billion Gallons of Cellulosic Ethanol by 2025 =? #!!" 20+$()*+&,(!"#$%&'(-345)1( +!" *!" )!"!"#$%&'()*+&,(-./""/0$,1( (!" '!" &!" %!" $!" #!"!" #+*!" #+*'" #++!" #++'" $!!!" $!!'" $!#!",-./"0-123",-./"4152/-3" 13

14 Ini8al List Global Invasive Species Program Watch List Journal Ar8cles State Invasive Species Lists MN, WI Grasses, Short Rota8on Woody Crops DATA USDA Plants Database 14

15 Present in Geographical Range Yes Known to be Invasive In Range Yes Very High Risk No Yes No Frost Free Days & Minimum Temperature Yes Precipita8on Known to be Invasive Yes High Risk No No No Low Risk Low Risk Medium Risk 15

16 Plan8ng Poten8al Medium or High Drought Tolerance Moderate or Rapid Aker Harvest Growth Rate Rapid Growth Rate Medium or Low Moisture Use C4 Photosynthesis 16

17 State Laws: MN Minnesota Noxious Weed Laws PROHIBITED RESTRICTED Glossy buckthorn (Frangula alnus) Common Buckthorn (Rhamnus cathar0ca) SECONDARY

18 State Laws: WI Wisconsin's Invasive Species Iden8fica8on, Classifica8on and Control Rule (Chapter NR 40) Prohibited (P) Princess tree (Paulownia tomentosa) Sawtooth oak (Quercus acu0ssima) Japanese sglt grass (Microstegium vimineum) Tall or Reed manna grass (Glyceria maxima) Lyme grass or Sand ryegrass (Leymus arenarius) Restricted (R) Russian olive (Elaeagnus angus0folia) Autumn olive (Elaeagnus umbellata) Glossy buckthorn (Frangula alnus) Common Buckthorn (Rhamnus cathar0ca) Common Reed (Phragmites australis) Narrow- leaved cavail (Typha angus0folia) Hybrid cavail (Typha x glauca) Cau8on (C) 18

19 Example Invasive Perennial Crop Miscanthus Rapid Growth High Yield 19

20 Profit Maximizing Farm Max(π 1 (p 1,c 1,CPI), π 2 (p 2,c 2,CPI),, π c (p c,c c,cpi) π c =p c y c - c c π c =Profit P c =Price Y c =Yield c c =Cost y c =a c +b c CPI CPI=Crop Produc8vity Index 20

21 Economic Determinants Prices Agricultural Commodi8es Corn Soybeans Wheat Biomass Inputs Oil Capital Seed Chemicals Rent Environmental Services Land Produc8vity (CPI) Government Policies Subsidies CRP!"#$%&'%"&()*+%,&!)%#""$!)"#""$!(#""$!'#""$!&#""$!%#""$!"#""$ %"""$ %"")$ /0%".1%&!"#$%&2%$%#0%3&45&6."7%"&89:;/<& %""%$ %""*$ %""&$ -%."&./01$ 2/345617$ 8956:$ %""+$ %""'$ %"",$ %""($ %""-$ 21

22 Economic Determinants Prices Agricultural Commodi8es Corn Soybeans Wheat Biomass Inputs Oil Capital Seed Chemicals Rent Environmental Services Land Produc8vity (CPI) Government Policies Subsidies CRP!"#$%&'%"&()*+%,&!)%#""$!)"#""$!(#""$!'#""$!&#""$!%#""$!"#""$ %"""$ %"")$ /0%".1%&!"#$%&2%$%#0%3&45&6."7%"&89:;/<& %""%$ %""*$ %""&$ -%."&./01$ 2/345617$ 8956:$ %""+$ %""'$ %"",$ %""($ %""-$ 22

23 !%"#""$ %#)$9/1=$!"#$%&'(")&*"+#)&,-./0%12&!+#""$!*#""$!)#""$!(#""$./01$C<0481F$ A8=:419;B=$CD8/E4==F$,$9/1=$!&#""$!%#""$ 3455/6$ 7689:;<04==$CD8/E4==F$ 23

24 !%"#""$!-#""$!,#""$!+#""$ "#+)$6/1;$!"#$%&'(")&*"+#)&,-./0%12&!*#""$!)#""$!(#""$!'#""$ <:==/4$ :;;$CF5/G:;;D$ &#)$6/1;$ A5;7:168B;$CF5/G:;;D$ 24

25 '!" /"*1&/;*#$%&<*35;%"0&=>& &#" &!"!"#$%&'()*&+#*,(--./*"0& %#" %!" 6781"9A80-1?";""<27=>8"9B-7C0..?" $!" #" 6781"9A80-1?" 6781"9A80-1?"78"" <27=>8"9B-7C0..?"!"!" $!" %!" &!" '!" #!" (!" )!" *!" +!" $!!" /"*1&!"*23$)4#56&702%8&9/!7:&,-./ "9:80-1;<27=>8?" 25

26 Farmers Willingness to Supply Soil Conserva8on Demographics Water Quality Invasive Perennial Plants Invasive Species Risk Artudes and Percep8ons Environmental Services Invasive Species 26

27 Agricultural Landowner Survey 15,000 Farmland Owners 800 Surveys Fall

28 Farm Household Max U(x,ES,IS) Subject to p x x=π c (p c,c c,cpi)+w π c =Profit P c =Price c c =Cost p x =Price of household goods x=consump8on of household goods w=nonfarm income U is increasing in Environmental Services (ES) U is decreasing in Invasiveness (IS) 28

29 Crop Choice with Environmental Services and Invasiveness concerns!,#""$!+#""$!*#""$ //:$!"#$%&'(")&*"+#)&,-./0%12&!)#""$!(#""$!'#""$!&#""$ Desire for increased Environmental Benefits Percep8ons of High Financial Risk -./012345/$67.891//:$ Nega8ve View of poten8ally Invasive and Noxious Weeds!%#""$!"#""$!"$!&"$!("$!*"$!,"$!%""$!%&"$!%("$!%*"$!%,"$!&""$!"#$%&-#(3+//&,4()2& 29

30 Economics in Risk Assessment Risk Assessments can benefit from economics in es8ma8ng exposure and effects Iden8fy economic condi8ons which have a higher risk of invasion Lower Corn Prices Higher Biomass Prices Iden8fy landscapes that have a higher risk of invasion. Low Produc8vity 30

31 Future Research Further develop climate matching, invasion, and plan8ng poten8al components of model Analyze survey results GIS model of exposure risk of the Upper Midwest. 31

32 Thank You Dr. Frances Homans (Applied Economics) Academic Advisor and Reviewer Dr. K. William Easter (Applied Economics) Research Advisor Dr. Dean Current (CINRAM) Research Advisor 32