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.