Grass leys as a multifunctional climate mitigation strategy in intensive cropping systems: Balancing environmental benefits and economic barriers

Agricultural production systems are under pressure to contribute to climate mitigation, biodiversity conservation, and resilient food production. This calls for multifunctional strategies, potentially including integrated biomass production in intensively farmed landscapes to generate renewable energy and positive environmental impacts as co-benefits. Despite this, broader implications of large-scale bioenergy crop incentives that consider both economic decision-making and system-wide consequences for ecosystem services and biodiversity remain insufficiently investigated. This study assessed the potential of increased grass ley cultivation for bioenergy as a multifunctional strategy in intensive agriculture in southern Sweden. By integrating agent-based economic modelling with environmental and ecological models, we evaluated how financial incentives that increase energy ley cultivation affected agricultural production, environmental indicators, and farmland bird diversity in a highly productive agricultural landscape. Our results show that increased adoption of energy leys can generate positive impact on the studied environmental indicators and biodiversity, but achieving substantial uptake required considerable financial incentives and reduced regional food production. Moreover, production of energy leys primarily increased at the expense of forage production, contributing to increased imports and a structural shift in livestock production towards fewer cattle and more granivores. Although only minor losses of semi-natural grasslands occurred in our modelled scenarios, a change in the type and amount of grazing cattle may pose a threat to their long-term conservation unless complemented by additional policies. This study offers new insights on bioenergy crops as a multifunctional climate strategy, highlighting potential environmental benefits and implications from large-scale incentivization of leys in high-productive arable landscapes. A better understanding of farm decisions and land use can help avoid unintended policy impacts on food production and biodiversity conservation.