Estimating the economic potential for agricultural soil carbon sequestration in the Central United States using an aggregate econometric-process simulation model


The purpose of this paper is to develop and apply a new method to assess economic potential for agricultural greenhouse gas mitigation. This method uses secondary economic data and conventional econometric production models, combined with estimates of soil carbon stocks derived from biophysical simulation models such as Century, to construct economic simulation models that estimate economic potential for carbon sequestration. Using this method, simulations for the central United States show that reduction in fallow and conservation tillage adoption in the wheat-pasture system could generate up to about 1.7 million MgC/yr, whereas increased adoption of conservation tillage in the corn–soy–feed system could generate up to about 6.2 million MgC/yr at a price of $200/MgC. About half of this potential could be achieved at relatively low carbon prices (in the range of $50 per ton). The model used in this analysis produced estimates of economic potential for soil carbon sequestration potential similar to results produced by much more data-intensive, field-scale models, suggesting that this simpler, aggregate modeling approach can produce credible estimates of soil carbon sequestration potential. Carbon rates were found to vary substantially over the region. Using average carbon rates for the region, the model produced carbon sequestration estimates within about 10% of those based on county-specific carbon rates, suggesting that effects of spatial heterogeneity in carbon rates may average out over a large region such as the central United States. However, the average carbon rates produced large prediction errors for individual counties, showing that estimates of carbon rates do need to be matched to the spatial scale of analysis. Transaction costs were found to have a potentially important impact on soil carbon supply at low carbon prices, particularly when carbon rates are low, but this effect diminishes as carbon prices increase.

This is a preview of subscription content, log in to check access.


  1. Anselin L, Bongiovanni R, Lowenberg-DeBoer J (2004) A spatial econometric approach to the economics of site-specific nitrogen management in corn production. Am J Agric Econ 86(3):675–687

    Article  Google Scholar 

  2. Antle JM (1983) Testing the stochastic structure of production: a flexible moment-based approach. J Bus Econ Stat 3:192–201

    Article  Google Scholar 

  3. Antle JM, Capalbo SM (2001) Econometric-process models for integrated assessment of agricultural production systems. Am J Agric Econ 83(2):389–401

    Article  Google Scholar 

  4. Antle JM, McCarl BA (2002) The economics of carbon sequestration in agricultural soils. In: Tietenberg T, Folmer H (eds) The international yearbook of environmental and resource economics 2002/2003. Edward Elgar Publishing, Cheltenham, UK and Northampton, MA, pp278–310

    Google Scholar 

  5. Antle JM, Capalbo SM, Mooney S, Elliott ET, Paustian KH (2001) Economic analysis of agricultural soil carbon sequestration: An integrated assessment approach. J Agric Resour Econ 26(2):344–367

    Google Scholar 

  6. Antle JM, Capalbo SM, Mooney S, Elliott ET, Paustian KH (2003) Spatial heterogeneity, contract design, and the efficiency of carbon sequestration policies for agriculture. J Environ Econ Manage 46(2):231–250

    Article  Google Scholar 

  7. Brenner J, Paustian K, Bluhm G, Killian K, Cipra J, Dudek B, Williams S, Kautza T (2002) Analysis and reporting of carbon sequestration and greenhouse gases for conservation districts in Iowa. In: Kimble JM, Lal R, Follett RF (eds) Agriculture practices and policies for carbon sequestration in soil. Lewis Publishers, CRC Press, Boca Raton, Florida, pp127–140

  8. Daly C, Neilson RP, Phillips DL (1994) A statistical–topographic model for mapping climatological precipitation over mountainous terrain. J Appl Meteorol 33:140–158

    Article  Google Scholar 

  9. ERS (Economic Research Service) (1997) Cropping practices survey data—1995, U.S. Department of Agriculture, Washington, DC.

  10. ERS (Economic Research Service) (2003) Ag chemical and production technology, U.S. Department of Agriculture, Washington, DC.

  11. Feng H, Kurkalova LA, Kling CL, Gassman PW (2004) Environmental conservation in agriculture: land retirement versus changing practices on working land. Working Paper 04-WP 365, Center for Agricultural and Rural Development, Iowa State University, June.

  12. Jones L, Antle JM (2004) Central United States data and documentation, September.

  13. Lewandrowski J, Peters M, Jones C, House R, Sperow M, Eve M, Paustian K (2004) Economics of sequestering carbon in the U.S. agricultural sector. Technical Bulletin No. (TB1909). U.S. Department of Agriculture, Economic Research Service, Washington, DC

  14. McCarl BA, Schneider UA (2001) The cost of greenhouse gas mitigation in U.S. agriculture and forestry. Science 294:2481–2482 (December 21)

    Article  Google Scholar 

  15. Mooney S, Antle JM, Capalbo SM, Paustian KH (2004) Design and costs of a measurement protocol for trades in soil carbon credits. Can J Agric Econ 52(3):257–287

    Article  Google Scholar 

  16. NASS (National Agricultural Statistics Service) (2000) Published Estimates Database, U.S. Department of Agriculture, Washington, DC.

  17. NASS (National Agricultural Statistics Service) (2004) Agricultural chemical usage: 2003 Field Crops Summary. Report Ag Ch 1 (04) a, U.S. Department of Agriculture, Washington, DC, May.

  18. Padgitt M, Newton D, Penn R, Sandretto C (2000) Production practices for major crops in U.S. Agriculture, 1990–97. Statistical Bulletin No. 969, Resource Economics Division, Economic Research Service, U.S. Department of Agriculture, Washington, DC, September, p 114

  19. Parton WJ, Schimel DS, Cole CV, Ojima DS (1987) Analysis of factors controlling soil organic matter levels in great plains grasslands. Soil Sci Soc Am J 51:1173–1179

    Article  Google Scholar 

  20. Parton WJ, Ojima DS, Cole CV, Schimel DS (1994) A general model for soil organic matter dynamics: sensitivity to litter chemistry, texture and management. In: Quantitative modeling of soil forming processes. Special Publication 39, Soil Science Society of America, Madison, Wisconsin, pp147–167

  21. Paustian K, Levine E, Post WM, Ryzhova IM (1997) The use of models to integrate information and understanding of soil C at the regional scale. Geoderma 79:227–260

    Article  Google Scholar 

  22. Paustian K, Brenner J, Killian K, Cipra J, Williams S, Elliott ET, Eve MD, Kautza T, Bluhm G (2002) State-level analyses of C sequestration in agricultural soils. In: Kimble JM, Lal R, Follett RF (eds) Agriculture practices and policies for carbon sequestration in soil. Lewis Publishers, CRC Press, Boca Raton, Florida, pp193–204

  23. Paustian K, Antle J, Sheehan J, Paul E (2006) Agriculture’s role in greenhouse gas mitigation. Pew Center on Global Climate Change, New York

    Google Scholar 

  24. Pindyck RS (1991) Irreversibility, uncertainty and investment. J Econ Lit 29:1110–1148

    Google Scholar 

  25. Schneider U (2000) Agricultural sector analysis on greenhouse gas emission mitigation in the United States. PhD Dissertation, Texas A&M University

  26. Taylor HH (1994) Fertilizer use and price statistics, 1960–93. Statistical Bulletin No. 893, Resources and Technology Division, Economic Research Service, U.S. Department of Agriculture, Washington, DC

  27. USDA (1966) Consumption of commercial fertilizers and primary plant nutrients in the United States, 1850–1964 and by States, 1945–1964. Statistical Bulletin No. 375, Statistical Reporting Service, U.S. Dept. of Agriculture, Washington, DC

  28. USDA (1981) Agriculture handbook 296 land resource regions and major land resource areas of the United States, Natural Resources Conservation Service, Washington, DC.

  29. U.S. Environmental Protection Agency (2005) Ecoregion maps and GIS resources, Washington, DC.

Download references

Author information



Corresponding author

Correspondence to John M. Antle.

Additional information

This research was supported in part by the Montana State Agricultural Experiment Station, by the EPA STAR Climate Change program and by the Consortium for the Agricultural Mitigation of Greenhouse Gases. Although the research described in this article has been funded wholly or in part by the United States Environmental Protection Agency through grant R-82874501-0 to Montana State University, it has not been subjected to the Agency’s required peer and policy review and therefore does not necessarily reflect the views of the Agency and no official endorsement should be inferred.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Antle, J.M., Capalbo, S.M., Paustian, K. et al. Estimating the economic potential for agricultural soil carbon sequestration in the Central United States using an aggregate econometric-process simulation model. Climatic Change 80, 145–171 (2007).

Download citation


  • Soil Carbon
  • Carbon Price
  • Supply Curve
  • Conservation Tillage
  • Soil Carbon Sequestration