Research Note 94-18 - Cost of ozone damage to California crops
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No. 94-18
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October 1994
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| RESEARCH NOTES |
| California Environmental Protection Agency |
Brief Reports to the Scientific and Technical |
| Air Resources Board |
Community |
| Research Division, John R. Holmes, Ph.D.,
Chief |
P.O. Box 2815, Sacramento CA 98512 |
Estimated Cost of Ozone
Damage to California Crops
Under the Atmospheric Acidity
Protection Program, the Air Resources Board conducted this special study
of the effects of ozone and acidic deposition on agriculture in the San
Joaquin Valley. While acidic deposition at current levels was not projected
to adversely affect crop yields, ambient levels of ozone were postulated
to cause significant yield losses in a variety of species. The California
Agricultural Resources Model (CARM) was used to estimate the economic impact
of ozone on crop yields in the State. It was estimated that total benefits
to consumers and producers would be $490 million per year if long-term
average ozone levels were reduced to 0.04 ppm during the growing season.
The results of this project indicate that economic impacts of ozone are
significant and that ozone poses a threat to the profitability of the agricultural
industry in the State and can impose additional costs on consumers. This
study was performed by the University of California, Davis.
| Background: |
California leads the nation in agricultural
production, generating over $14 billion in revenues on an annual basis.
A large portion of the revenues results from the sale of agricultural crops,
many of which are known to be adversely affected by ozone. As part of the
Atmospheric Acidity Protection Program, the Air Resources Board conducted
a special study of the impacts of ozone and acidic deposition on agriculture
in the San Joaquin Valley. Two air quality scenarios, using data from 1990,
were examined to assess the effects of incremental reductions in ambient
ozone concentrations. |
| Methods: |
The California Agricultural Resources Model
(CARM) was used to estimate the economic impact of ozone on crops in the
San Joaquin Valley based on 1990 ambient levels. The basic operating assumption
of the CARM is that crop producers will try to maximize their profits,
subject to the constraints of land, water, capital, labor contracts, and
government programs. In this study, data on crop sensitivity to ozone and
acidic deposition, and data on agricultural markets, were used to estimate
the potential economic benefits of lowering ambient air pollutant concentrations.
The reaction of producers to any changes in resource availability was modeled
by incorporating the costs of production and water and estimates of expected
yield. Long-term adjustments by producers to changes in ozone air quality
were modeled by considering four elements of agricultural production: (1)
the price of the crop, (2) the cost of water relative to other inputs,
(3) capital investment per unit of water, and (4) regional cropping patterns.
In the past few years, seven-hour average concentrations of ozone in the
San Joaquin Valley have typically ranged from 0.045 to 0.055 ppm, and 0.07
ppm in the South Coast Air Basin. These ambient ozone levels were used
as a baseline to assess the economic impacts of reducing ozone levels in
the State. To evaluate the potential economic benefits of cleaner air,
the CARM estimated crop yields under two ozone reduction scenarios: (1)
reduction of ozone levels in growing regions to achieve a three-month average
of 0.04 ppm, and (2) reduction of ozone levels across the State to a uniform
level of 0.025 ppm. An ozone concentration of 0.025 ppm is characteristic
of background levels in remote locations in the world. This level was used
to estimate the benefits of very clean air quality throughout the State.
The three-month average 0.04 ppm scenario was used to simulate a moderate
improvement in growing season ozone levels. |
| Results: |
Under the 0.04 ppm three-month average ozone
scenario, increases in yield were estimated to range from zero to 15 percent
for 14 crops. The crops that appeared to benefit most, showing an increase
of 10 percent or greater, were beans, cantaloupe, citrus, and grapes. Moderate
increases (5 to 9 percent) could be expected for alfalfa hay, onions, and
wheat. On the basis of growing region, the highest yield increases would
be expected in the San Joaquin Valley, the Imperial Valley, South Coast,
and the southeast region (the Great Basin Valleys and San Bernardino County).
Under the 0.025 ppm scenario, increases in yield were calculated to range
from zero to 70 percent. In some growing regions, crops such as beans,
cantaloupe, citrus, and grapes were projected to exhibit yield increases
two to four times higher than in the 0.04 ppm scenario. The largest estimated
increase was determined for cantaloupes grown in the South San Joaquin
Valley (14.6 percent at 0.04 ppm vs. 70 percent at 0.025 ppm); specifically
located crops, such as grapes in the south San Joaquin Valley, beans in
the South Coast area, and cantaloupes in the southeast, were projected
to exhibit increases of slightly lower magnitude. |
| Significance and Application:
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On a statewide basis, the CARM analysis indicates
that if ozone levels were reduced to an average of 0.04 ppm, the annual
benefits to consumers would be $275 million due to higher product availability
and lower crop prices (see Table 1). Producers would be expected to benefit
by $215 million per year due to higher crop production volumes and lower
unit costs of production. The total direct benefit (consumer plus producer)
would be $490 million per year; however, since at least one-third of the
value of California crop production is exported, this value may overestimate
the net benefits to the State. The total direct benefit projected from
the 0.025 ppm scenario was approximately three times higher ($1.5 billion
per year), and the benefit to producers (52 percent) was estimated to be
greater than that for consumers (48 percent). Estimates of the economic
effects of reductions in acidic deposition levels provided no data to suggest
that acidic deposition alone would cause major crop yield reductions in
California. Because critical uncertainties exist with respect to the interactive
effects of acidic deposition and ozone on crops, a more complete understanding
of the range of responses that could occur is needed before reliable estimates
of regional-scale losses can be developed. Thus, for purposes of this assessment,
the economic impact of acidic deposition combined with ozone on crops in
the San Joaquin Valley was postulated to be similar to the impact of ozone
alone. |
| Related Projects: |
Since 1984, the Air Resources Board has supported
the Crop Loss Assessment Program at the University of California, Riverside.
Recent reports for contract nos. A733-108, A833-138, and A933-190/A033-074
contain assessments for years 1989, 1990, and 1991, respectively. A previous
project using the CARM was sponsored under contract no. A5-105-32 and summarized in Research Note 90-5. |
Table 1. Statewide Economic
Impact of Improving Ozone Air Quality
| Ozone Scenario |
Benefits to Consumers |
Benefits to Producers |
Total |
| I. Estimated Value
of Crops Sold Statewide ($ Millions) |
| 1990 Ozone Levels |
$4,533 |
$7,114 |
$11,647 |
| Reduced to 0.04 ppm |
$4,808 |
$7,329 |
$12,137 |
| Reduced to 0.025 ppm1 |
$5,245 |
$7,893 |
$13,138 |
| II. Net Benefits of
Improving Ozone Air Quality ($ Millions) |
| 0.04 ppm vs. 1990 |
$275 |
$215 |
$490 |
| 0.025 ppm vs. 1990 |
$713 |
$779 |
$1,492 |
1
An
ambient concentration of ozone at 0.025 ppm is characterisitic of background
levels in unpolluted locations throughout the world. It may not be
possible to achieve this level of air quality in California.
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This
research was conducted under contract with University of California, Davis (ARB contract no. A132-151).
Comments or questions can be directed to the contract manager, Brent Takemoto, by
mail, FAX (916) 322-4357, phone (916) 324-2981, or e-mail: btakemot@arb.ca.gov.
For an index of Research Notes, call (916) 445-0753 or FAX (916) 322-4357. |
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| Copies of the research report
upon which this Note is based can be ordered from: |
National
Technical Information Service
5285 Port Royal Rd
Springfield VA 22161
Request NTIS No. PB93-217511 |
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Title: Economic Assessment of Acid Deposition and Ozone Damage on the San Joaquin Agriculture |
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Authors: Richard Howitt and Randall G. Mutters |
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