Nonpoint source nitrogen runoff from agriculture is a significant contributor to eutrophication in the Chesapeake Bay. The state of Virginia has developed several market and incentive-based water quality credit trading programs to meet federal water quality objectives. In theory, these programs offer a mechanism to achieve environmental goals at least cost. However, in practice these programs face ongoing challenges arising from limited participation by farmers who supply water quality credits and, as a result, often fail to achieve cost efficiency. We build a flexible, accessible, and modular bioeconomic modeling system as a proof-of-concept to evaluate economic-environmental tradeoffs farmers face in an effort to support program participation and achieve environmental goals. We couple a biophysical nitrogen mass-balance model with an agricultural production model and apply the tool to study diverse agroforestry practices. We evaluate the relative efficiency of these practices by empirically estimating a production possibility frontier. We then use our bioeconomic modeling results to define the minimum willingness to accept of farmers, in terms of water quality credit prices, to adopt agroforestry practices that deliver water quality improvements. We extend our model results to estimate water quality credit premiums to compensate risk-averse farmers for undertaking production practices subject to relatively volatile prices in niche fruit markets. We demonstrate that the model generally simulates real-world credit prices, and highlight potential improvements in design for Virginia's trading program. In particular, quality credit trading programs could be more effective and efficient if credits awards reflect heterogeneity in the environmental benefits associated with nuanced land-use alternatives. Our modeling tool offers a framework to support incentive programs that are both economically sound and biophysically grounded. / Master of Science / High levels of nitrogen in the Chesapeake Bay have become an environmental concern for regulatory agencies. A significant portion of nitrogen pollution in the Chesapeake Bay comes from agricultural activities in the Chesapeake Bay watershed. Agricultural nitrogen pollution is not directly regulated at the federal level, so some states have adopted market-based mechanisms to curb emissions. However, some of these programs are seeing less farmer participation than expected. We suggest that part of the low participation rates may be due to program design, and the impact risk plays in farmer decision-making. In an effort to better understand participation in the programs, we develop a method to model these programs’ environmental and economic outcomes. Our method couples a mechanistic model of nitrogen pollution with an agricultural production model and evaluates tradeoffs between economic and environmental values. We find that the modeling method shows promise as a tool for policymakers, researchers, and farmers interested in pollution abatement programs. As a proof-of-concept, we apply the model to a Virginia market-based program and test our low-participation hypotheses. We find that the programs may be more effective if they recognize a greater diversity of farming practices. Our modeling tool offers a framework to support pollution abatement programs that are both economically feasible and environmentally effective.
| Identifer | oai:union.ndltd.org:VTETD/oai:vtechworks.lib.vt.edu:10919/93406 |
| Date | 05 September 2019 |
| Creators | Scott, Samuel George |
| Contributors | Forest Resources and Environmental Conservation, Cobourn, Kelly M., Munsell, John F., Stephenson, Stephen Kurt, Strahm, Brian D. |
| Publisher | Virginia Tech |
| Source Sets | Virginia Tech Theses and Dissertation |
| Detected Language | English |
| Type | Thesis |
| Format | ETD, application/pdf |
| Rights | In Copyright, http://rightsstatements.org/vocab/InC/1.0/ |
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