Nicholas Institute for Environmental Policy Solutions
March 2009

Set-Asides Can Be Better Climate Investment than Corn Ethanol

Set-Asides Can Be Better Climate Investment than Corn Ethanol

Although various studies have shown that corn ethanol reduces greenhouse gas emissions by displacing fossil fuel use, many of these studies fail to include how land-use history affects the net carbon balance through changes in soil carbon content. We evaluated the effectiveness of economic value of corn and cellulosic ethanol production for reducing net greenhouse gas emission when produced on lands with different land-use histories, comparing these strategies with reductions achieved by set-side programs such as the Conservation Reserve Program (CRP). Depending on prior land use, our analysis shows that carbon releases from the soil after planting corn for ethanol may, in some cases, offset carbon gains attributed to biofuel generation for at least 50 years. More surprisingly, based on our comprehensive analysis of 142 soil studies, soil carbon sequestered by setting aside former agricultural land was greater than the carbon credits generated by planting corn for ethanol on the same land for 40 years and had equal or greater economic net present value.