Water impacts of U.S. biofuels: Insights from an assessment combining economic and biophysical models

Biofuels policies induce land use changes (LUC), including cropland expansion and crop switching, and this in turn alters water and soil management practices. Policies differ in the extent and type of land use changes they induce and therefore in their impact on water resources. We quantify and compare the spatially varying water impacts of biofuel crops stemming from LUC induced by two different biofuels policies by coupling a biophysical model with an economic model to simulate the economically viable mix of crops, land uses, and crop management choices under alternative policy scenarios. We assess the outputs of an economic model with a high-resolution crop-water model for major agricultural crops and potential cellulosic feedstocks in the US to analyze the impacts of three alternative policy scenarios on water balances: a counterfactual 'no-biofuels policy' (BAU) scenario, a volumetric mandate (Mandate) scenario, and a clean fuel-intensity standard (CFS) scenario incentivizing fuels based on their carbon intensities. While both biofuel policies incentivize more biofuels than in the counterfactual, they differ in the mix of corn ethanol and advanced biofuels from miscanthus and switchgrass (more corn ethanol in Mandate and more cellulosic biofuels in CFS). The two policies differ in their impact on irrigated acreage, irrigation demand, groundwater use and runoff. Net irrigation requirements increase 0.7% in Mandate and decrease 3.8% in CFS, but in both scenarios increases are concentrated in regions of Kansas and Nebraska that rely upon the Ogallala aquifer for irrigation water. Our study illustrates the importance of accounting for the overall LUC and shifts in agricultural production and management practices in response to policies when assessing the water impacts of biofuels.