Several biofuel cropping scenarios were evaluated with an improved version of Soil and Water Assessment Tool (SWAT) as part of the CenUSA Bioenergy consortium for the Boone River Watershed (BRW), which drains about 2,370 km 2 in north central Iowa. The adoption of corn stover removal, switchgrass, and/or Miscanthus biofuel cropping systems was simulated to assess the impact of cellulosic biofuel production on pollutant losses. The stover removal results indicate removal of 20 or 50% of corn stover in the BRW would have negligible effects on streamflow and relatively minor or negligible effects on sediment and nutrient losses, even on higher sloped cropland. Complete cropland conversion into switchgrass or Miscanthus, resulted in reductions of streamflow, sediment, nitrate, and other pollutants ranging between 23-99%. The predicted nitrate reductions due to Miscanthus adoption were over two times greater compared to switchgrass, with the largest impacts occurring for tile-drained cropland. Targeting of switchgrass or Miscanthus on cropland ≥2% slope or ≥7% slope revealed a disproportionate amount of sediment and sediment-bound nutrient reductions could be obtained by protecting these relatively small areas of higher sloped cropland. Overall, the results indicate that all biofuel cropping systems could be effectively implemented in the BRW, with the most robust approach being corn stover removal adopted on tile-drained cropland in combination with a perennial biofuel crop on higher sloped landscapes. Editor's note: This paper is part of the featured series on SWAT Applications for Emerging Hydrologic and Water Quality Challenges. See the February 2017 issue for the introduction and background to the series.(KEY TERMS: SWAT; water quality; tile drains; switchgrass; Miscanthus; corn stover removal.) Includes switchgrass and Miscanthus revisions described by Cibin (2013) and Trybula et al. (2015), and corn stover removal revisions (R. Cibin, Purdue University, West Lafayette, Indiana, 2015, personal communication and in the Supporting Information).2

In this paper, we discuss the importance of developing integrated assessment models to support the design and implementation of policies to address water quality problems associated with agricultural pollution. We describe a new modelling system, LUMI-NATE, which links land use decisions made at the field scale in the Upper Mississippi, Ohio and Tennessee Basins through both environmental and hydrological components to downstream water quality effects and hypoxia in the Gulf of Mexico. This modelling system can be used to analyse detailed policy scenarios identifying the costs of the policies and their resulting benefits for improved local and regional water quality. We demonstrate the model's capabilities with a simple scenario where cover crops are incentivised with green payments over a large expanse of the watershed.

Abstract:The Intergovernmental Panel on Climate Change (IPCC) has predicted that changes in climate patterns (higher temperatures, changes in extreme precipitation events, and higher level of humidity) will adversely impact water quality. Given the implications of climate change on water and soil quality, it is important for watershed managers, stakeholders, and policymakers to understand not only the effectiveness of different conservation practices in improving water quality, but also the cost-effectiveness of a watershed-level policy program designed for implementing conservation practices. A system of points measuring the efficiency of five conservation practices in reducing nutrient (nitrogen [N] and phosphorus [P]) runoff are estimated using the Soil and Water Assessment Tool (SWAT) model in this study for the Boone River watershed (BRW) in north central Iowa. The points can be interpreted as indices of the environmental benefits associated with each conservation practice. Among the various market instruments proposed as resource and cost-revelation mechanisms, competitive biddings, also referred to as "reverse auctions" or procurement auctions, have come to the attention of researchers and policymakers. Competitive bidding mechanisms induce landowners to submit bids close to their opportunity costs, thus increasing the budgetary cost-effectiveness and revealing the true costs of adopting different conservation practices. This study considers the cost efficiency of reverse auction programs designed for improving water quality in the BRW, where the bids are constructed using the system of points.

Although climate change has largely been removed from the federal policy agenda of the United States in the near term, the continued reliance on fossil fuels as a dominant energy source leaves many analysts to conclude that climate policy will eventually reappear on that agenda. We present a review of recent research related to the design and implementation of one instrument for greenhouse gas (GHG) reduction: offsets. As these are implemented, policy makers must understand the way these programs work. In this review, we describe the basic features of carbon offset markets, along with the potential supply of offsets from agricultural sources and associated cost considerations. In this discussion we highlight the role of institutional design of contracts and transactions costs. We then turn to the benefits of including offsets in policies to reduce GHGs and complete the review with a discussion of the challenges in implementing the programs.

We assess empirically how agricultural lands should be used to produce the highest valued outputs, which include food, energy, and environmental goods and services. We explore efficiency tradeoffs associated with allocating land between food and bioenergy and use a set of market prices and nonmarket environmental values to value the outputs produced by those crops. We also examine the degree to which using marginal land for energy crops is an approximately optimal rule. Our empirical results for an agricultural watershed in Iowa show that planting energy crops on marginal land is not likely to yield the highest valued output.