Agriculture Reference
In-Depth Information
about climate change. But the unwillingness to pay may also have resulted from the
smallness of the potential emission reductions—just 0 to 1.2%—based on the crop
systems proposed in the 2008 Crop Management and Environmental Stewardship
Survey. Ordinarily, economists expect that people will pay more to buy more. But
statistical tests showed that willingness to pay was unaffected by the level of pro-
posed reduction in greenhouse gas emissions. Hence, overall mean willingness to
pay for reduced emissions was zero. Among the 40% of households that were con-
cerned about climate change, however, the mean household would pay $141 per
year for a 1% reduction, compared to year 2000 greenhouse gas emission levels.
Scaling up to the 1.52 million Michigan households that were concerned about
climate change, this would amount to $214 million annually for a 1% reduction in
greenhouse gas emissions, compared to the year 2000 level.
Linking Demand and Supply for Ecosystem Services from
Agricultural Stewardship
KBS LTER research into how people judge the economic value of ecosystem ser-
vices from agriculture in the region around KBS has reached a critical stage for
establishing value at the equilibrium between supply and demand. On the supply
side, the results clearly document the willingness of corn and soybean farmers in
Michigan to change their cropping practices so as to generate more ecosystem ser-
vices if paid to do so. Farmers would expand both the complexity of management
practices and the acreage under improved stewardship in response to rising pay-
ment levels—generating a supply of land under management for enhanced eco-
system services. On the demand side, state residents are willing to pay for reduced
numbers of eutrophic lakes and—some residents at least—for reduced greenhouse
gas emissions.
Bringing together the supply and demand sides presents two major challenges.
First, the supply units need to be converted from all land area under a given prac-
tice to land area
under changed management that provides additional ecosystem
services
. Resident taxpayers expect to buy
increases
in ecosystem services, not
simply to express gratitude to environmentally minded farmers who were already
providing those services. When the land area under stewardship practices offered
by farmers is meticulously recalculated to ensure that it refers to practices that bring
additional
ecosystem services, the proportion of enrolled farms that newly adopt
each practice may be small—our study revealed just 7% for chisel plow. But for
other cropping practices, it may be quite large: 89% for pre-sidedress nitrate test,
96% for cover crop, 70% for adding wheat to a corn-soybean rotation, and 72% for
reducing nitrogen fertilization by one-third (Ma 2011).
Second, a bridge is needed to connect the units of supply of ecosystem services
with those of demand. Under the hypothetical payment-for-environmental-services
program included here (which was modeled on existing U.S. farm programs such as
the Environmental Quality Incentives Program, Conservation Reserve Enhancement
Program, and Conservation Stewardship Program), farmers were offered payments
to supply land under changed practices, not to supply changes in specific ecosystem
services. Residents expressed a willingness to pay for enhanced levels of specific
