Nitrous oxide emission reductions from cutting excessive nitrogen fertilizer applications

Authors

• Francisco Rosas
• Bruce A. Babcock
• Dermot J. Hayes

Author Affiliations

• 1. Universidad ORT Uruguay and Centro de Investigaciones Económicas (CINVE), Montevideo, Uruguay
• 2. Department of Economics, Iowa State University, USA
• 3. Department of Economics, Iowa State University, USA

Abstract

Farmers may choose to apply nitrogen fertilizer at a rate that exceeds the average ex post agronomically optimal rate when the yield response to nitrogen varies across growing seasons. Negative environmental consequences such as nitrous oxide (N₂O) emissions and/or water pollution can result when all the applied nitrogen is not needed by the crop. Here we consider a nonlinear market instrument targeting farmers’ nitrogen use, and by solving for the optimal nitrogen reduction using a model of expected utility of farm profits, we evaluate the induced N₂O emission reductions that are consistent with the instrument introduced. The market instrument is nonlinear because of the expected nonlinear relationship between N₂O and nitrogen application rates. Our simulations show that, in cases where farmers apply N at rates which exceed recommendations and the N₂O response is likely to be non-linear, payments will induce participation in the program and will have a significant impact on both expected and actual N₂O emissions without significantly harming expected or actual yields. Failure to consider this nonlinearity would deviate the attention away from N₂O pollution because it would require large N reductions (and crop yields) to achieve equivalent N₂O abatement.

http://link.springer.com/article/10.1007/s10584-015-1426-y