Land-Based Climate Solutions: Variable Responses to Economic Incentives

Award Period
to
Award Amount
$506,000
Agency Name
Environmental Defense Fund
Award Number
SB220105
PI First Name
Robert
PI Last Name
Heilmayr
Area/s of Research
Marine Conservation, Policy and Education
Abstract

Greenhouse gas (GHG) emissions from rice farming add substantially to global warming. Emerging research indicates that managing fertilizer and water use in rice farming significantly influences methane and nitrous oxide emissions, which are potent greenhouse gasses (Kritee et al., 2019). However, policy interventions to reduce water or fertilizer use may have unanticipated effects such as inducing farmers to change technology, increasing crop burning, or expanding rice acreage. To model the effects of specific policy interventions, we require a robust model of the rice production system, including input substitution and technology adoption. Our proposed study aims to estimate the effects of electricity shocks and fertilizer price and availability on India's agricultural practices and livelihoods. The focus will be on understanding how alterations in electricity availability, water resources, and input prices influence farmer yields, profitability, wellbeing, and net GHG emissions from agricultural production. UCSB and EDF have identified three areas where research is needed. First, although recent work finds that electricity rationing affects water use in agriculture in the state of Rajasthan (Ryan and Sudarshan, 2020), this study does not evaluate how electricity rationing affects the use of other agricultural inputs. Second, this recent work does not consider how electricity rationing interacts with other input prices and weather shocks. Third, although there has been work evaluating GHG emissions from rice production (Kritte et al., 2018), there has been no national evaluation of the effect of fertilizer management and water availability using newly available remote sensing-derived spatial datasets estimating methane and nitrous dioxide. We propose to study how changes in water availability induced by electricity restrictions affected rice production, the use of other inputs and modeled output of greenhouse gasses. To undertake this study, we will use data to ask (1) if and how electricity rationing affected water use, (2) whether rationing affected the use of other inputs and yield, (3) how the changes in input use and production affect GHG emissions, and (4) how these factors affect the welfare of farmers and agricultural laborers. We will conduct econometric analyses that quantify the effect of electricity rationing on water use, fertilizer application, and greenhouse gasses from rice cultivation. The aim of this research is to inform Indian policymakers if and how policies affect farmer-level decisions and GHG emissions.