What are the carbon services from cover-crop adoption worth from farmers' perspective?

Abstract

We derive shadow prices of carbon services provided by cover crops relative to non-cover-crop agricultural practices, accounting for carbon sequestration and greenhouse gas (GHG) emissions. We model the agricultural technology by integrating crop production, carbon sequestration, and GHG emissions. We derive a novel function representation of our technology using a data envelopment analysis (DEA). We then calculate shadow prices based on the dual representation of the technology and compare shadow prices between cover-crop and non-cover-crop fields. We find that the carbon sequestration and the GHG emissions reduction services from cover-crop fields relative to non-cover-crop fields are worth USD 17.88 and USD 9.42 per acre, respectively. We compare shadow prices to payments from an incentive program aimed at promoting cover-crop adoption, thereby highlighting the economic feasibility and potential barriers to adopting sustainable practices.