Specific Objectives of the Project:
Evaluate efficiency, efficacy and equity impacts of policies of aimed at mitigating greenhouse gas emissions (nitrous oxide) from agricultural soils.

Summary of Results:
This grant was written to support a larger research program that is expected to produce several papers over several years. The grant this year supported progress on several fronts.

First, we used the funds to purchase a data enclave that gave us access to ARMS data. We are using this to calibrate variance in soil conditions and management practices so that we can quantify the heterogeneity in the emissions per ton of fertilizer, and for change in management practices, using the DAYCENT biogeochemical model. This work has begun but is ongoing.

Second, after having a series of conversations with relevant experts, we decided to pivot the theoretical attention of our project to focus on the role of voluntary carbon offsets as the policy instrument of interest. This shifts our attention from tax/pricing methods and required a new theoretical structure. Using the grant we developed a framework for analyzing agricultural carbon offsets using an adapted mechanism design framework. We believe this was an important step because the policy momentum in reducing ag emissions seems to be largely in the direction of these offset programs (in particular, there is zero interest in the policy community in taxing fertilizer application), but structuring incentives as offsets creates unique incentive problems because offsets have to be based on a counterfactual, which is hard to estimate and leads to inaccuracy and gaming. We are now using this framework to explain the incentive implications of using offsets for nitrous oxide mitigation.

Third, using the progress on the empirical modeling and the theory, we submitted a multi-year, full scale grant to the Agriculture and Food Research Program at the USDA earlier this year. To complete the full version of the DAYCENT modeling, we need a soil expert to help us, and we need outside funds for that.

Specific Objectives of the Project
The goal of this project is to analyze the efficacy, efficiency and equity of plausible regulatory policies that seek to reduce nitrogen emissions from agricultural soils.

Summary of Results
The research team used the funds to develop new understandings and create a research agenda around the use of biogeochemical models to perform policy analysis and an emissions inventory related to greenhouse gas emissions from synthetic fertilizer use in croplands.

We are actively collaborating with a social scientist at UC Berkeley to build a new tool based on the biogeochemical model, DayCent. We have (after some delay) gotten full approval to access the necessary survey data from the USDA. We have vetted our research questions with several experts. We are now building the computer code that will enable us to create the tool that will serve as the basis for our policy analysis and simulation. This ongoing work is being supported by a new Giannini grant, and we have identified several extramural grants to provide additional support.

In the meantime, we have some preliminary conclusions from our research pertaining to the magnitude of the greenhouse gas emissions costs from the use of fertilizers, which we are summarizing in a piece to be sent to ARE update this fall.

Specific Objectives of the Project:
The aim of this project is to apply a particular set of economic tools to analyze policies aimed at mitigating externalities from agriculture, using data from California.

Project Report/Summary of Results:
The goal of this project is applying the tools of public finance to evaluate policies aimed at mitigating externalities from California agriculture. The research team studied several possible applications and settled on the use of digesters to mitigate methane emissions from dairies. The team assembled data on the cost and location of all digesters in the state and used those data to estimate mitigation costs per ton of emissions. These costs vary substantially due to economies of scale and agglomeration effects, because cost depends on the proximity of each dairy to existing natural gas infrastructure and other dairies.

Given this distribution of costs, we can characterize the efficiency and distributional consequences of different regulatory policies (e.g., digester mandates versus digester subsidies versus a renewable natural gas feed-in tariff versus a tax on emissions or dairy products). In addition, we have identified direct measures of methane emissions tied to individual dairies from remotely sensed data collected by NASA’s Jet Propulsion Laboratory that provide a check on our modeled mitigation potentials.