UC Merced

Abstract: The prominent role of agriculture in greenhouse gas (GHG) emissions has increased global interest in biochar. This carbonaceous biomass product has emerging efficacy for GHG emissions reduction. While a growing body of literature indicates positive economic impacts of biomass-related products, scant evidence exists about the potential regional economic impacts of biochar production. Since biochar is a new industry and there is no North American Industry Classification System (NAICS) code for biochar, we modified the available industries in the IMPLAN database to estimate the direct, indirect, and induced economic impacts of six potential biochar pricing and production opportunities in Central Valley, California. Results suggest that depending on the biochar price and conversion rates, biochar would create between 16.56 and 17.69 new full- and part-time jobs per year that would contribute between $1.2 and $5.75 million per year to labor income. Biochar production would add to the Gross Domestic Product (GDP) about $106,295 ($5.2 million) per year with a conversion rate of 15% (35%) and a biochar price of $280 ($2,512) per metric ton. Similarly, biochar’s impacts on gross output would be positive, regardless of the biochar conversion rate and price, which suggests the need for more investment in the sector. We find that all regions would benefit in terms of employment, labor compensation, value addition, and gross output though Madera County would have the least economic returns. Meanwhile, Fresno County with the most biomass would have the most economic impacts, suggesting that policy should be directed at encouraging biomass production and marketing in areas with the most biomass.