Least Cost Control of Agricultural Nutrient Contributions to

Least Cost Control of Agricultural Nutrient Contributions to

Least Cost Control of Agricultural Nutrient Contributions to Local Waters and the Gulf of Mexico Dead Zone Sergey Rabotyagov, Todd Campbell, Manoj Jha, Philip W. Gassman, Jeffrey Arnold, Lyubov Kurkalova, Silvia Secchi, Hongli Feng, and Catherine L. Kling. Center for Agricultural and Rural Development, Department of Economics Iowa State University Outline Intro to water quality issues in the U.S. midwest Local water quality Gulf of Mexico hypoxic zone Agricultural conservation practices and nonpoint source pollution Economic problem of finding least cost

solution to this nonpoint problem Empirical results of applying evolutionary algorithm with hydrologic simulation model 3 The UMRB: local water quality 189,000 square miles in seven states, dominated by agriculture: 67% of total area, > 1200 stream segments and lakes on EPAs impaired waters list, highest concentrations of phosphorous found in the world 4 Local Water Quality Nutrients (esp. phosphorous) and sediment primary source Agriculture accounts for over 50% of impairments (EPA) Multiple conservation practices can ameliorate (Land retirement, conservation tillage, grassed waterways,

5 Hypoxia = Dead Zone 165 Hypoxic zones worldwide Naturally occurring, but far larger due to anthropogenic sources of nutrients Depleted oxygen creates zones incapable of supporting most life Potential evils: commercial fishing, recreation, ecosystem effects, habitat, etc. Effects quite poorly documented, information 6 Hypoxic zone in the Gulf of Mexico. Summertime satellite observations of ocean color from MODIS/ Aqua show highly turbid waters which may include large blooms of phytoplankton extending from the mouth of the Mississippi River all the way to the Texas coast. When these blooms die and sink to the bottom, bacterial decomposition strips oxygen from the surrounding water, creating an

environment very difficult for marine life to survive in. Reds and oranges represent high concentrations of phytoplankton and river sediment. Image taken by NASA and provided 7 Gulf of Mexico Hypoxia Now, second largest worldwide 4000 22,000 sq km Source: Dr. Nancy Rabalais Universities Marine Consortium 10 Gulf Hypoxia: Emission Sources Causes: nutrients from Mississippi river, nitrates and phosphorous, Limiting nutrient may now be P (scientific debate continues) Major Contributors: UMRB (1+2) = 43%N, 41%P Ohio-Tennessee (6+7) = 41%N, 59%P http://toxics.usgs.gov/pubs/of-2007-1080/

11 Examples of conservation practices Terraces: an earth embankment, or a combination ridge and channel, constructed across the field slope (USDA-NRCS) Grassed waterways: natural or constructed channel with suitable vegetation Contour farming: tillage, planting, and other farming operations performed on or near the contour of the field slope No-till: managing the amount, orientation and distribution of crop and other plant residue on the soil surface year round while limiting soil-disturbing activities to only those necessary to place nutrients, condition residue and plant crops Land retirement (CRP): remove land from working production, plant with perennial grasses or other appropriate vegetation

Nutrient management: reduced fertilization, N 12 Conservation practices Photos courtesy of USDA NRCS 13 Integrated Economic, Land use, and Water Quality Model for the UMRB Couple large-scale, spatially-detailed watershed model with economic model to study costs and water quality changes of conservation policy Focus on agricultural land use decisions cropland Use NRI as basis for both economics and watershed model (110,000 total points and expansion factors, 37,500 cropland observations)

Purpose of modeling system is to provide policy level information Consider both upstream water quality (within the UMRB), and downstream effects (Gulf of Mexico) 15 Key Watershed Features Features of the 4 Digit HUCs 7010 7020 4 Digit HUC 7030 7050 7040 7070 7090 7060 7100 7080 7120 7130 7110 7140

Average CRP rental rates Total area % total Total NRI millions of area points acres cropped 7010 8954 1.2 18 52 7020 7797 0.92 69 91

7030 4113 0.46 10 35 7040 6495 0.65 33 78 7050 3847 0.55 11 40 7060

5930 0.55 42 122 7070 5141 0.66 14 73 7080 14965 1.46 67 128 7090

7167 0.66 56 121 7100 8375 0.9 64 116 7110 5883 0.59 44 69 7120 7661

0.63 55 116 7130 9745 1.13 72 129 7140 7776 0.79 44 79 17 Least Cost Problem

One fields pollution damage affected by choices on other fields no exogenous delivery coefficients non-mutually exclusive CPs can be implemented on any field, different effectiveness and costs precludes simple spatial optimization schemes Brute force using hydrologic model, analyze all the feasible scenarios, picking cost-efficient solutions But, if there are N conservation practices possible for adoption on each field and there are F fields, this implies a total of possible NF configurations to compare 30 fields, 2 options over 1 billion possible scenarios 19

Multiobjective optimization evolutionary algorithms provide a way to search for Pareto-optimal sets SPEA2 (Strength Pareto Evolutionary Algorithm 2) (Ziztler and Thiele, 2001) is used Of the three objectives (N, P, Cost), only cost can be easily computed for a particular scenario, nutrient loadings need to be simulated Combine: An evolutionary algorithm, SPEA2 Hydrologic model, Soil and Water Assessment Tool (SWAT) Sometimes referred to as simulation-optimization framework 24 One possible watershed

configuration d a a b a c a d a a b b a tic Algorithm lingo = gene tice options =allele set 13 Fields rshed configuration = individual (described 4 conservation practices by set of genes) lation = set of configurations 134=28561 possible configurations

25 Algorithm flow diagram Individual = watershed configuration = specific assignment of practices to fields Population = set of watershed configurations 26 Fitness assignment example Strength S(i)= # of individuals i dominates Raw fitness R(i)= sum of strengths of individuals that dominate i 29 Soil and Water Assessment Tool (SWAT) A hydrologic and water quality model

developed by the U.S. Department of Agricultures Agricultural Research Service (USDA-ARS) A long-term continuous watershed-scale simulation model that operates on a daily time step and is designed to assess the impact of different management practices on water, sediment, and agricultural chemical yields Gassman et al. (2007) identify over 250 publications using SWAT 32 The conservation practices set For each hydrologic unit in the watershed, consider 1 of 33 mutually exclusive options One is land retirement Obtain the rest of options by interacting 4 tillage types (CT, RT, MT, NT) with Practices:

Terraces Contouring Grassed Waterways 20% N fertilizer reduction Baseline conservation practices impose a set of constraints In this application, algorithm only allowed to add practices 33 Costs of practices Sources of information on the cost of CPs: Terraces, Grassed Waterways, Contouring, No-Till:

EQIP: Federal Conservation Program IFIP: State Conservation Program CRP: Federal Conservation Program Land retirement: 2007 Iowa Cash Rental Rates Survey Costs of CPs vary by subbasin in each watershed Develop a cost estimate for fertilizer reduction Approximate cost=Yield reduction*Corn price 34 Pareto frontier: UMRB 36 Tradeoffs of NPS control costs and water quality benefits Nitrate loadings at the outlet vs. costs Nitrate loadings at the outlet vs. costs

Empirical cost curve for nitrate reductions 2000 1800 Unconstrained cost curve Cost, % of baseline 1600 Binding constraint on 30% P reduction 1400 1200 1000 800 600 400 200 0 0 20 40 60 80

100 120 Nitrates, % of baseline Thus, if a policy seeks to reduce N by more than 20%, more than 30% reductions in P follow 38 Tradeoffs of NPS control costs and water quality benefits Phosphorus loadings at the outlet vs. costs Empirical cost curve for phosphorus reductions Cost, % of baseline 1800 1600 Unconstrained cost curve 1400 Binding constraint on 30% N

reduction 1200 1000 800 600 400 200 0 0 20 40 60 80 100 120 P loadings, % of baseline In this case, nitrate reduction constraint is binding up to a 50% reduction in P This suggests an asymmetry in the control of the two nutrients in

the UMRB 39 Tradeoffs between pollutants (Nitrates and P) reflects28complementarities embedded in land retirement Millions The frontier also highlights what nutrient reductions are feasible for a given budget As cost increases (to 10X the baseline), the scope of the tradeoff falls 26 24 P loadings, kg 1000 % baseline cost 22 500 % baseline cost

20 400 % baseline cost 300 % baseline cost 18 200 % baseline cost 16 14 12 220 270 320 370 420 Millions Nitrate loadings, kg 40 A closer look at the frontier The frontier is also useful in answering how one can

achieve specific pollution reduction targets For example, Requiring a 30% reduction in outlet NO3 automatically leads to a 35% reduction in outlet P But: requiring a 30% reduction in outlet P leads only to a 9% reduction in outlet NO3 The annual additional cost is estimated to be: $ 1.4 billion for reducing NO3 by 30% (more than quadrupling baseline cost) $ 370 million for reducing P by 30% (less than doubling the baseline cost) 44 What practices are selected? 4715: 30% N, 36% P Grassed Waterways

87% Reduced Fertilizer 89% Terraces 2% Reduced Tillage 58% Land Retirement 9% 3821: 9% N, 30% P Grassed Waterways 91% Reduced Fertilizer 7% Terraces 1% Reduced Tillage 66% Land Retirement 0% Cost = $1.4 billion/year Cost = $ 370 million/ 46 year Conclusions The approach Tries to fully account for the complexity of NPS pollution processes Searches for efficient solutions to quantify tradeoffs

Between cost and pollution reductions Between different pollutants As always, multiple caveats are in order But the method is flexible and amenable to improvement 49

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