Browsing by Author "Das, Emon"

The European Union aims to be climate-neutral by 2050, and Finland targets to be carbon-neutral by 2030. There is progress towards the goal, but the current measures are inadequate. Therefore, a new technology is the need of the hour. Biochar has been considered one of the most affordable negative emission technologies. Biochar has a considerable potential to mitigate climate change by adding carbon to the soil. Additionally, it is a beneficial soil amendment that improves soil properties and controls nutrient runoff from agricultural land. Therefore, biochar is a promising carbon farming tool for achieving climate goals. Although the climate benefits of biochar are pretty well known, economic studies on biochar amendments in agriculture are lacking. The thesis aims to investigate the economic profitability of investing in biochar for private farmers. Additionally, this study focuses on determining whether biochar benefits society. The objective is to provide farmers with a cost-effective solution to earn a private profit from biochar, which benefits society when net greenhouse gas emissions and nutrient runoff are accounted for. This thesis performs a cost-benefit analysis as a method. Analytical and numerical models are developed to calculate the net present values of farmers' private profit and social welfare. Mathematica is used for simulations. As a case study, the thesis focuses on Finnish boreal agricultural soil cultivated with barley, with a 5 t/ha biochar application rate. The thesis finds that the net present value of profit with biochar becomes positive in ten years but never exceeds that of without biochar. However, the net present value of social welfare with biochar becomes positive and surpasses that of without biochar within 4 to 6 years. As biochar application is beneficial for society but not profitable for farmers, two policy instruments are studied: a fertilizer tax to lower the privately optimal fertilization to the socially optimal level and an investment subsidy to make biochar use profitable. Simulation shows that with 100% investment subsidies, both policies make the investment in biochar profitable for the farmers within 0 to 1 year. A 90% investment subsidy makes biochar profitable within 3 to 6 years, whereas an 80% investment subsidy generates profit with biochar within 6 to 11 years. There is minimal economic research on biochar. As the European Council is giving importance to carbon farming, carbon storage and carbon addition, there is an immense opportunity in future to work on this topic.