RECONCILING FOOD, ENERGY, AND ENVIRONMENTAL OUTCOMES: THREE ESSAYS ON THE ECONOMICS OF BIOMASS MANAGEMENT IN WESTERN KENYA A Dissertation Presented to the Faculty of the Graduate School of Cornell University in Partial Fulfillment of the Requirements for the Degree of Doctor of Philosophy by Julia Berazneva August 2015 c 2015 Julia Berazneva ALL RIGHTS RESERVED RECONCILING FOOD, ENERGY, AND ENVIRONMENTAL OUTCOMES: THREE ESSAYS ON THE ECONOMICS OF BIOMASS MANAGEMENT IN WESTERN KENYA Julia Berazneva, Ph.D. Cornell University 2015 This dissertation explores human-environment interactions, focusing on on-farm biological resources (biomass) and crop residues, in particular, and how they can meet the competing demands of food production, energy generation, and environmental conservation in Sub- Saharan Africa. The empirical setting is rural western Kenya, where maize residues, one of the largest sources of on-farm biomass, constitute a large portion of livestock diets, con- tribute to household energy needs, and are fundamental in maintaining and improving soil fertility. The three dissertation essays analyze the uses and value of crop residues in tropical smallholder agriculture from several di↵erent perspectives and using di↵erent methodological approaches, all based on data from the western Kenyan highlands. The first essay (Chapter 2) treats non-marketed crop residues as factors of household production, accounting for their long-term benefits when used for soil fertility management. Empirically, the essay estimates a household-level maize production function and calculates the shadow value of maize residues as suggested by the theoretical framework and empirical estimates. This estimated value is substantial—$0.06-08 per kilogram and $208 per average farm—and is higher for poorer households. The second essay (Chapter 3) analyzes crop residue use in an intertemporal setting and develops a dynamic bioeconomic model of agri- cultural households. The model combines an econometrically estimated production function and a calibrated soil carbon flow equation in a maximum principle framework to determine the optimal application rates of mineral fertilizer and crop residues. The results yield an estimated equilibrium value of soil carbon in the research area—$138 per metric ton—and highlight the significant local private benefits of soil carbon sequestration, and the potential to simultaneously increase food production and sequester carbon. Finally, the third essay (Chapter 4) considers one of the primary challenges in small-scale second-generation biofuel development—the provision of feedstocks. The essay estimates the potential availability and cost of purchasing maize residues from smallholder farmers and transporting them to a hy- pothetical small-scale pyrolysis-biochar plant in western Kenya. Feedstock provision costs depend on regionally specific agro-ecological and socio-economic conditions, with implica- tions for economic viability in Kenya and, by extension, other rural settings. BIOGRAPHICAL SKETCH Julia Berazneva was born in Minsk, Belarus. She graduated from the Belarusian Human- itarian Lyceum in Minsk in 1998 and the United World College of the Adriatic in Duino, Italy in 2000. After spending a year working at the British School of Lom´ein Togo, she attended Mount Holyoke College in South Hadley, MA, where she received her BA degree in 2004, majoring in Economics and minoring in Romance Languages. Julia also holds an MSc degree in Development Studies from the School of Oriental and African Studies in London, United Kingdom. iii To my parents, Tatiana and Alexander Beraznevy, who inspired my love of learning, supported all my endeavors, and encouraged me to aim high and trust I could achieve any goal I set for myself. iv ACKNOWLEDGEMENTS First and foremost, I would like to thank my Committee chair, David Lee, for the opportunity to work with the “Fueling Local Economies and Soil Regeneration: Biofuels and Biochar Pro- duction for Energy Self-sufficiency and Agricultural Sustainability” Project, which made this dissertation research possible. I will be forever grateful for his mentoring, guidance, trust, and encouragement to pursue my research interests and explore new questions and methods. I am also extremely grateful to my other Committee members—Jon Conrad, George Jakub- son, and Frank Place—for their advice, insights, and support, as they generously suggested approaches to addressing the many questions that arose during my research. Iwouldalsoliketothankthemanyotherswhomadevaluablecontributionstomywork. I am especially grateful to Johannes Lehmann for the opportunity to work with a remarkable multidisciplinary team of researchers at Cornell under the auspices of the David R. Atkinson Center for a Sustainable Future, and in Kenya. My venture into the world of soils was encouraged and aided by David G¨uere˜na. Johannes Lehmann’s Soil Biogeochemistry and Soil Fertility Management Lab at Cornell, and especially David G¨uere˜na, Kelly Hanley, John Recha, Dorisel Torres-Rojas, Thea Whitman, and Dominic Woolf, helped me understand how soils work and provided valuable feedback during fieldwork and dissertation writing. Cheryl Palm, Jonathan Hickman, and Katherine Tully at the Agriculture and Food Security Center of the Earth Institute at Columbia University explained to me the complexities of the soil nitrogen cycle. Christopher Barrett and the participants of the AEM 7650 research seminar—Elizabeth Bageant, Leah Bevis, Paul Christian, Jennifer Cisse, Teevrat Garg, Kibrom Hirfrfot, Nathaniel Jensen, Linden McBride, Ellen McCullough, Vesall Nourani, Andrew Simons, Megan Sheahan, Joanna Upton, Kira Villa, and others—provided important collegial sup- port and invaluable feedback by including me in their research group during the last two years of my dissertation writing. v Arnab Basu, Dick Boisvert, Nancy Chau, Ariel Ortiz-Bobea, Brian Dillon, Rick Klotz, Joel Landry, Hope Michelson, Greg Poe, Marc Rockmore, and Peter Woodbury at Cornell generously o↵ered insights and encouragement. Linda Sanderson and Carol Thompson pro- vided excellent assistance and support with all things administrative. For valuable input and comments on early drafts of my dissertation essays, I thank seminar participants at Cornell University, Middlebury College, Georgetown University, the Agriculture and Food Security Center of the Earth Institute at Columbia University, the World Agroforestry Cen- ter (ICRAF) in Nairobi, the 2013 NAREA annual meeting, the 2013 and 2014 AAEA annual meetings, the 2015 MWIEDC, and the 2015 AERE summer conference. My fieldwork was generously supported by the David R. Atkinson Center for a Sustainable Future at Cornell and the World Agroforestry Centre (ICRAF). In particular, I would like to thank Yossie Hollander and the Fondation des Fondateurs for their generous support of our multidisciplinary project and my research. Frank Place at ICRAF in Nairobi and Georges Aertssen at ICRAF in Kisumu deftly handled fieldwork logistics so that I could focus on data collection. My deep gratitude extends to my field team—Georgina Achieng, James Agwa, Zablon Khatima, Azinapher Mideva, Manoah Ombwayo, Victor Onyango, William Osanya, Reymond Otieno, Justo Otieno Owuor, and Viddah Wasonga, and to the 350 farmers whom we visited to administer the household survey. I am very grateful to Dorisel Torres-Rojas for sharing data on biophysical measurements of maize grain and residues, David G¨uere˜na and Johannes Lehmann for the chronosequence data, and Stephanie Cadogan, Lilian O’Sullivan, Gregory Lane, and David Murphy for providing the commercial center and market data which was used in my research. I also want to express my thanks to Dominic Woolf, who developed the procedure used to calibrate the Rothamsted Carbon Model and estimate the equilibrium levels of soil carbon. In addition to the Atkinson Center, I would also like to acknowledge financial support for my research provided by the Peter Rinaldo Sustainable Development Fund, an Interna- tional Research Travel Grant from Cornell’s Mario Einaudi Center for International Stud- vi ies, a “Frosty Hill” International Travel Grant, a Richard Bradfield Research Award, and an Andrew W. Mellon Student Research Grant from the College of Agriculture and Life Sciences, a Cornell Graduate School Research Travel Grant, and a Luther G. Tweeten Scholarship from the Agricultural and Applied Economics Association. In addition, the chronosequence project had financial support from the U.S. National Science Foundation’s Coupled Natural and Human Systems Program of the Biocomplexity Initiative (under grant BCS-0215890) and Basic Research for Enabling Agricultural Development Program (under grant IOS-0965336), the Rockefeller Foundation (under grant No. 2004 FS 104), and the Presbyterian Fund of Ithaca. Finally, Joel, Joanna, Kira, Jumay, Beth, Levi, David, Alan, Marc, Christine, Rick, Sara, Megan, Graham, Linden, Anna, Nathalie, Sam, Elin, Teevrat, Elaine, and Ellen helped make the last seven years in Ithaca and Kisumu fun as well as productive. My family— Tatiana Berazneva, Evgeniya Berazneva, Janice Brodman, and Debbie Knapp—has always supported me in my adventures. Last, and most importantly, I thank Steven Knapp for being my amazing friend and partner. Thank you for the incredible journey. My work could not have succeeded without the help and support of all of those mentioned, and many others too numerous to list. Responsibility for any errors, however, is mine alone. vii TABLE OF CONTENTS Biographical Sketch .