Document Type

Thesis - Open Access

Award Date

2023

Degree Name

Master of Science (MS)

Department / School

Economics

First Advisor

Deepthi Kolady

Keywords

carbon market, climate-smart agriculture, conservation practices, discrete choice experiment, farmers' perceptions, latent class analysis

Abstract

Reducing greenhouse gas (GHG) emissions is crucial to mitigate the impacts of climate change. Agricultural soil carbon sequestration holds great potential in reducing GHG emissions. No-till, conservation till and cover crops are some of the widely recognized carbon-sequestering agricultural conservation practices. However, farmers need to adopt these carbon-sequestering practices to realize the potential of agricultural soil carbon sequestration. Carbon payment or market programs are voluntary mechanisms that could incentivize farmers’ adoption of conservation practices that sequester carbon. However, there is limited knowledge of farmers’ preferences and willingness to accept (WTA) carbon payments for enrollment in such programs. This study investigates how farmers’ preferences and WTA carbon payments differ toward conservation practices, based on their current adoption behavior. This study also explores if there are different groups of farmers based on climate change perceptions and adverse weather experiences and examines how preferences and WTA for carbon market programs vary between these classes. Data for this analysis were collected through a primary mail-in survey of corn and soybean farmers in South Dakota, conducted from December 2021 to February 2022. The study employed a discrete choice experiment (DCE) and a random parameter logit (RPL) model to estimate farmers’ preferences and WTA carbon payments. A latent class model (LCM) was used to assess preference and WTA heterogeneity among farmers, based on their climate change perceptions and adverse weather experiences. Our study shows that farmers’ preferences and WTA carbon payments vary based on their adoption status of conservation practices and practice type. LCM results show there are four different groups of farmers based on their climate change perceptions and adverse weather experiences. There is the presence of heterogeneity in their preferences on carbon market attributes, and subsequently differences in WTA. The findings suggest that carbon market providers and policymakers should consider developing cost-effective targeted programs and policies that consider differences in farmers’ preferences toward carbon payments based on their current adoption status as well as other factors including climate change perceptions and adverse weather experiences. Furthermore, tailored extension and outreach activities focusing on climate change impacts could influence farmers’ perceptions and therefore change their behavior when adopting sustainable agricultural practices for mitigating the impacts of climate change.

Library of Congress Subject Headings

Farmers -- South Dakota -- Attitudes.
Carbon sequestration.
Climate change mitigation.
Carbon dioxide mitigation.
Agricultural conservation.

Publisher

South Dakota State University

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Rights Statement

In Copyright