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The Kyoto Protocol: Economic Effects of Energy Prices on Northern Plains Dryland Grain Production

Published online by Cambridge University Press:  15 September 2016

John M. Antle ,
Susan M. Capalbo ,
James B. Johnson  and
Dragan Miljkovic
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Abstract

This study examined possible economic impacts on Northern Plains grain producers of policies that could be undertaken by the United States to comply with the Kyoto Protocol. The paper begins with a discussion of the potential effects of the Kyoto Protocol on prices of energy and inputs used in agricultural production. The next section describes the data and econometric models that were used to develop a field-scale, stochastic simulation model of the crop production system typical of the Northern Plains. This model is based on econometric production models estimated with a spatially referenced, statistically representative sample of farmers in Montana. The simulation analysis shows that the impacts of higher energy prices would tend to discourage the use of fallow, raise variable costs of production by 3 to 13%, and reduce net returns above variable cost by 6 to 18% in the case of spring wheat grown on fallow. Under the higher cost scenarios assumed in an analysis conducted by the Farm Bureau, production costs for spring wheat on fallow would increase by 15 to 27% and net returns would decline by 15 to 24%.

Type
Agricultural and Resource Dimensions of Global Environmental Change
Information
Agricultural and Resource Economics Review , Volume 28 , Issue 1 , April 1999 , pp. 96 - 105
Copyright
Copyright © 1999 Northeastern Agricultural and Resource Economics Association 

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