Nutrient pollution from agricultural sources has been a large contributor to the decline in the health of the Chesapeake Bay. U.S. Environmental Protection Agency (EPA) developed the Chesapeake Bay Total Maximum Daily Load (TMDL) which sets pollution limits at 185.9 million pounds of nitrogen. However, the EPA estimates that over 250 million pounds of nitrogen are carried into the Chesapeake Bay in a year with average rainfall. Replacing row crops with perennial bioenergy feedstocks can reduce nitrogen runoff into the bay and therefore provide ecosystem services benefits in addition to those from producing the bioenergy itself. We investigate how payments for the ecosystem service of reduced nutrient loading could facilitate the growth of the bioenergy industry in the region by increasing the price paid to farmers for producing feedstocks. Specifically, ongoing work is looking at the costs and benefits of nitrogen reduction by a) replacing maize with switchgrass and b) by establishing riparian buffers. The switchgrass analysis determines the nitrogen loading reduction from replacing maize with switchgrass and the estimated payment (in terms of reduced nitrogen runoff) that would incentivize farmers to convert to switchgrass. The riparian buffer analysis examines using a Nutrient Credit Trading Program as a revenue producing mechanism to incentivize buffer adoption by farmers. The variation in geographic location, buffer type and size, and farming practices in nitrogen credit trading profits were evaluated to determine the feasibility of nitrogen credits as an adequate incentive for buffer establishment. Nitrogen credit trading is compared to alternative buffer incentive programs such as the Conservation Reserve Enhancement Program (CREP).
This project is supported by an Agriculture and Food Research Initiative Competitive Grant no. 2011-68005-30407 from the USDA National Institute of Food and Agriculture (NIFA).