A spatial analysis of the economic returns to land-use change from agriculture to renewable energy production: Evidence from Ireland

Abstract

Countries are looking to reduce their agricultural sector's carbon footprint while encouraging economic and environmental sustainability. One proposed method of making agriculture more sustainable while maintaining farm incomes is through the production of bioenergy feedstocks. We examine the spatial aspect of the production of renewable energy feedstocks in Ireland. Two feedstocks are looked at—grass silage and short-rotation coppice (SRC) willow. Spatial microsimulation analysis is utilised to assess the spatial suitability for alternative land uses, simulating land-use change to compare economic returns with the current agricultural use. A farm-based carbon subsidy is modelled based on avoided agricultural emissions and carbon sequestered. We find that midlands counties, especially those in the north midlands, have the highest proportion of land where feedstocks would be more profitable than the current agricultural use. Counties on the western seaboard have the lowest proportion of land where feedstocks would give greater returns. The amount of land where feedstocks are more profitable increases as greater carbon subsidies are provided. Of the two feedstocks assessed, SRC willow cultivation is more profitable than grass silage production. The overwhelming majority of land where producing feedstocks would be more profitable has cattle farming as its current use.