Modeling the economic value of ecosystem services of rural land

A spatially-explicit economic model was developed to target areas within a region where the greatest disconnect occurred between current and alternative land values. The model used land cover and soils data in combination with discounted cash flow analysis to determine the Bare Land Value (BLV) of a variety of land uses and market scenarios. The scenarios included emerging markets for carbon, wetland, stream, and nitrogen credit trading. The model was applied to three counties, Mississippi, New Madrid, and Scott, located in southeast Missouri. The area is a highly productive region of the Lower Mississippi Alluvial Valley (LMAV) that is dominated by row crop agriculture. The model was calibrated to a reasonable degree of accuracy using county and regional level data on productivity and land values.;The study had three objectives. The first objective was to develop the capability to target areas within a region for various uses. The study demonstrated this capability by creating maps that indicated potential locations for wetland mitigation banking, carbon credit generation, and Wetland Reserve Program easements. The second objective was to perform a sensitivity analysis to determine which factors contributed to the optimal land use within the region. The sensitivity analysis indicated that agricultural prices had the greatest impact on land use and that additional conversion to cropland and hay production could be expected in the future. The analysis also indicated that significant amounts of acreage existed for participation in ecosystem service markets. The last objective was to determine what areas had the greatest potential for land use change, based on economic returns. The results indicated that low lying areas, areas along the Mississippi River not protected by levees, and areas along Crowley's Ridge had the highest potential for land use conversion.