Economic Potential for Using Marginal Land for Bioenergy Crop Production in the US

In the US, there are a significant increase in production of biofuels but mostly corn ethanol that have raised concerns regarding the diversion of food crops to biofuel production leading to increasing food prices and conversion of native grassland to cropland, commonly known as indirect land-use change effect. On the contrary, cellulosic biofuels derived from crop and forest residues, and energy crops produced on marginal land is less likely to compete with cropland. Previous research assumes that marginal land will be the preferred land to use for bioenergy crop production and identify marginal land-based on biophysical characteristics. These studies assume that all land below the pre-defined threshold will never be used for conventional crop production and that this threshold is the same across regions and countries. Ignoring the fact that marginal land is the land that also has low profitability and which varies across time.

In this study, we examine the economic incentives for using different types of land (marginal and cropland) for energy crop production and the spatial variability in the pattern of land use. We aim to quantify the mix of energy crops and crop residues that will be produced at different biomass prices. Lastly, we determine the extent to which various levels of energy crop production will impact food crop prices. We develop a new definition of "marginal land" based on historical land-use change pattern, which accounts socioeconomic, biophysical, and environmental factors. We then calculate available marginal land and its spatial distribution in the contiguous US and determine the optimal supply of feedstock under alternative biomass price structure by employing Biofuel and Environmental Policy Analysis Model.

While previous studies that have assumed much larger availability of marginal land, our preliminary finding suggests that the amount of marginal land known with certainty is relatively small. Also, that marginal land is fairly productive, and so its opportunity costs are higher than assumed by previous studies, which may lead to the underestimation of the actual production costs of producing biomass. The results will generate discussion on the potential for using marginal land for bioenergy crops and the extent to which these crops can avoid competition for land with food crop production.