Valuing environmental externalities from rice-wheat farming in the lower reaches of the Yangtze River

Environmental externalities generated by agriculture are attracting considerable attention. However, most research has focused either on environmental services that agriculture provides as a distinct ecosystem or the negative environmental impacts that agriculture imposes. Therefore, there is a great need to re-evaluate the all-round environmental roles of agriculture, to optimize environmental performance of agriculture and non-trade concerns in World Trade Organization (WTO) negotiations. By valuing the environmental externalities of agriculture, this article aims to heighten awareness of the environmental roles of agriculture to stimulate its implication in agricultural policy-making. The study presents estimates of economic values of environmental externalities from rice-wheat farming system in Zhenjiang, in aspects of greenhouse gas emissions, non-point source pollution, carbon sequestration and water containing capacity. We provide a step-by-step analytic procedure, with each step including measurement of physical dimensions and monetary evaluation. The former is based on a large-scale literature review, which provided a vital foundation for the monetary valuation. The results reveal that the values of greenhouse gas emissions from agricultural land, agricultural non-point source pollution, carbon sequestration by crop and soil, and the flood control function provided by agricultural land are estimated as: − US$3.61 × 107 a− 1, − US$4.59 × 106 a− 1, + US$2.30 × 109 a− 1 and + US$2.21 × 107 a− 1, respectively. The net value of environmental externalities is as high as + US$2.28 × 109 a− 1, representing 17.87% of local GDP and 4.12 times the total agricultural output value in 2006. The results suggest that crops and soil in Zhenjiang are the most important carbon sinks, and that agriculture in Zhenjiang has huge positive environmental externalities, although both greenhouse gas emissions from agricultural land and agricultural non-point sources pollution have negative environmental impacts.