PRODUCER RESPONSES TO CARBON SEQUESTRATION INCENTIVES IN THE NORTHERN GREAT PLAINS

Agricultural lands can be used as a terrestrial sink for atmospheric CO2 by changing their management and/or use. The goal of this study was to evaluate the economic potential of carbon sequestration on cropland in the spring wheat producing region of the northern Great Plains. In order to provide a more realistic assessment of the economic potential for agricultural carbon sequestration, this study reflects regional trends in land management practices, incorporates the value of co-products from the conversion of cropland to permanent grass, and considers producer differences in crop production profitability. The economic model compared the expected net present value of (1) maintaining current farm practices, (2) switching tillage practices, or (3) converting cropland to permanent grass over a 20-year time horizon. Six different carbon prices ($10, $25, $50, $75, $100, and $125 per metric ton) were used to gauge producer/landowner response to incentive payments. A carbon price of $25 per metric ton led to a 29% increase over the baseline level of C sequestration, representing 49% of the study area's technical storage capacity. The study area's technical capacity to store C was fully attained when the price of C was increased to $125 per metric ton.