USDA to Fund Analysis of How U.S. Businesses Approach Decarbonization

A team of researchers, led by two Penn State agricultural economists, will receive $650,000 over three years to study why, how and where U.S. businesses are developing and adopting renewable energy sources — a process known as decarbonization — and how these decisions could affect rural communities.

The project, funded by the U.S. Department of Agriculture’s (USDA) National Institute of Food and Agriculture, will be the first to use newly available federal data to examine decarbonization decisions at the level of individual firms, or for-profit enterprises. This firm-level perspective is critical for understanding how to support the transition to renewable energy, according to Stephan Goetz, professor of agricultural and regional economics and director of the Northeast Regional Center for Rural Development (NERCRD). Goetz is leading the project team, which includes researchers from Penn State, the USDA Economic Research Service and the Oak Ridge Institute for Science and Education.

“The industrial transition from fossil fuels to renewable energy is occurring one firm at a time. Therefore, it is precisely at the individual firm level, where owners and managers are making decisions, that decarbonization will succeed or fail,” Goetz said. “Our goal is to develop a research-based understanding of the adoption decisions businesses are making and the barriers they face, in order to inform the ongoing transition to a low-carbon economy.”

The researchers said they aim to identify the business characteristics associated with renewable-energy adoption and the community characteristics that either support or hinder its pursuit, and they plan to examine differences between urban and rural firms and communities.

“We’re particularly interested in the rural development implications of the shift to a low-carbon economy,” said Zheng Tian, assistant research professor at Penn State and a co-principal investigator. “On one hand, rural communities have the open space available to support renewable energy projects and they stand to benefit in multiple ways from this transition. On the other hand, we’re already seeing land-use conflicts, such as those emerging from so-called agrivoltaics, and there is a growing resistance to these energy projects in many rural areas.”

Agrivoltaics, the practice of combining solar panels with farming, seeks to optimize land use by producing food and energy simultaneously. While agrivoltaic installations are often sited on privately owned land, they can still provoke community opposition due to their visual impact and concerns related to how economic benefits are distributed, Tian said.

Goetz said the research could generate new insights into how U.S. businesses and communities are navigating the challenges associated with the new green infrastructure, which he and his collaborators plan to use to develop educational materials for local governments, federal agency personnel, entrepreneurs and other stakeholders.

In addition to Goetz and Tian, project team members include Timothy Wojan, an Oak Ridge Institute for Science and Education fellow at the National Center for Science and Engineering Statistics, U.S. National Science Foundation; Justin Winikoff, research agricultural economist with USDA Economic Research Service; and Luyi Han, postdoctoral scholar at the NERCRD.