Improving water quality in the Chesapeake Bay using payments for ecosystem services for perennial biomass for bioenergy and biofuel production

Replacing row crops with perennial bioenergy crops may reduce nitrogen (N) loading to surface waters. We estimated the benefits, costs, and potential for replacing maize with switchgrass to meet required N loading reduction targets for the Chesapeake Bay (CB) of 26.9 Gg y−1. After subtracting the potential reduction in N loading due to improved N fertilizer practices for maize, a further 22.8 Gg y−1 reduction is required. Replacing maize with fertilized switchgrass could reduce N loading to the CB by 18 kg ha−1 y−1, meeting 31% of the N reduction target. The break-even price of fertilized switchgrass to provide the same profit as maize in the CB is 111 $ Mg−1 (oven-dry basis throughout). Growers replacing maize with switchgrass could receive an ecosystem service payment of 148 $ ha−1 based on the price paid in Maryland for planting a rye cover crop. For our estimated average switchgrass yield of 9.9 Mg ha−1, and the greater N loading reduction of switchgrass compared to a cover crop, this equates to 24 $ Mg−1. The annual cost of this ecosystem service payment to induce switchgrass planting is 13.29 $ kg−1 of N. Using the POLYSYS model to account for competition among food, feed, and biomass markets, we found that with the ecosystem service payment for switchgrass of 25 $ Mg−1 added to a farm-gate price of 111 $ Mg−1, 11% of the N loading reduction target could be met while also producing 1.3 Tg of switchgrass, potentially yielding 420 dam3 y−1 of ethanol.