Abstract: Perennial energy crops for biofuels are appealing because they can be grown productively on marginal land and provide various ecosystem services, including soil carbon sequestration and reduction in nitrogen leaching and run-off. However, their production involves production risks, high establishment costs, and long-term commitment of land without the coverage of crop insurance potentially available for conventional crops. This can create disincentives for farmers that are risk averse, loss averse, and present-biased to convert land from annual crops to perennials.

This presentation will analyze the evidence on behavioral drivers of farmer decisions to produce perennial energy crops and its implications for the price of biomass and the spatial pattern of production of these energy crops in the rainfed region of the United States. This seminar will also examine the efficacy of various market and policy incentives needed to induce production of these crops.

Bio: Madhu Khanna is the ACES Distinguished Professor of Environmental Economics in the Department of Agricultural and Consumer Economics and Associate Director of the Institute for Sustainability, Energy, and Environment at the University of Illinois at Urbana-Champaign. She received her Ph.D. from the University of California at Berkeley. Her research examines the incentives for adoption of efficiency-enhancing technologies, their potential for protecting the environment, and the design and implications of alternative policies to induce adoption. Her research has focused on studying the economic and environmental impact of agro-environmental technologies, such as precision agriculture and biofuels, and the efficacy of voluntary approaches and other policies for cost-effective environmental protection in agriculture and industry.