Balancing trade-offs in climate smart-agriculture: will selling carbon credits offset potential losses in the net yield income of small-scale soybean (Glycine max L.) producers in the mid-southern United States?

Authors: CONTASTI, ADRIENNE - Department Of Fish And Wildlife; FIRTH, ALEXANDRA - Department Of Fish And Wildlife; BAKER, BETH - Department Of Fish And Wildlife; Brooks, John; Locke, Martin; MORIN, DANA - Department Of Fish And Wildlife

Submitted to: Decision Analysis
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 5/28/2023
Publication Date: 5/22/2023
Citation: Contasti, A.L., Firth, A., Baker, B.H., Brooks, J.P., Locke, M.A., Morin, D.J. 2023. Balancing trade-offs in climate smart-agriculture: will selling carbon credits offset potential losses in the net yield income of small-scale soybean (Glycine max L.) producers in the mid-southern United States?. Decision Analysis. 20(4):243-344. https://doi.org/10.1287/deca.2023.0478.
DOI: https://doi.org/10.1287/deca.2023.0478

Interpretive Summary: Climate-smart agriculture (e.g., no-till, cover crops) was designed to reduce erosion, reduce carbon emissions, and promote soil organic carbon storage, and there is growing incentive for producers to adopt these methods with the rise of voluntary carbon markets. However, the dynamics of soil carbon and yield under climate-smart actions are not well known, making it difficult for producers to judge whether utility from carbon credits will offset potential losses to yield utility. Balancing these trade-offs calls for decision making under uncertainty and risk, and the Bayesian Decision Theory framework used in this study can help to inform agricultural producers who are considering climate-smart management to increase annual yield utility by selling carbon credits. We demonstrate how to balance trade-offs between yield and risk to carbon credit utility that arise from tillage and winter cover crops in a soybean production system in Mississippi, USA. Identifying trends in yield utility and risks to soil organic carbon storage can guide producers and policymakers toward agricultural actions that simultaneously meet carbon neutrality goals while having minimum impact on human livelihoods.

Technical Abstract: Many of the world’s sustainability issues are related to agricultural production. Climate-smart agriculture (no-till, cover crops) was designed to improve soil health, reduce erosion, reduce carbon emissions and promote soil organic carbon (SOC) storage, and there is growing incentive for producers to adopt these methods with the rise of voluntary carbon markets. However, the dynamics of soil carbon and yield under climate-smart actions are not well known, making it difficult for producers to judge whether utility from carbon credits will offset potential losses to yield utility. Balancing these trade-offs calls for decision making under uncertainty and risk. We designed a Bayesian Decision Theory framework to inform producers who are considering switching to climate-smart actions with the objective of increasing annual yield utility by selling carbon credits. For each action, our framework models change to yield and SOC storage and estimate the probability of positive and negative outcomes. We demonstrate how to balance trade-offs between yield and risk to carbon credit utility that arise from tillage and winter cover crops (rye, Secale cereal L., crimson clover, Trifolium incarnatum L.) in a soybean (Glycine max L.) production system in Mississippi, USA. Identifying trends in yield utility and risks to SOC storage can guide producers and policymakers toward agricultural actions that simultaneously meet carbon neutrality goals while having minimum impact on human livelihoods.