We utilize a coupled economy-agroecology-hydrology modeling framework to capture the cascading impacts of climate change mitigation policy on agriculture and the resulting water quality cobenefits. We analyze a policy that assigns a range of United States government's social cost of carbon estimates ($51, $76, and $152/ton of CO2-equivalents) to fossil fuel-based CO2 emissions. This policy raises energy costs and, importantly for agriculture, boosts the price of nitrogen fertilizer production. At the highest carbon price, US carbon emissions are reduced by about 50%, and nitrogen fertilizer prices rise by about 90%, leading to an approximate 15% reduction in fertilizer applications for corn production across the Mississippi River Basin. Corn and soybean production declines by about 7%, increasing crop prices by 6%, while nitrate leaching declines by about 10%. Simulated nitrate export to the Gulf of Mexico decreases by 8%, ultimately shrinking the average midsummer area of the Gulf of Mexico hypoxic area by 3% and hypoxic volume by 4%. We also consider the additional benefits of restored wetlands to mitigate nitrogen loading to reduce hypoxia in the Gulf of Mexico and find a targeted wetland restoration scenario approximately doubles the effect of a low to moderate social cost of carbon. Wetland restoration alone exhibited spillover effects that increased nitrate leaching in other parts of the basin which were mitigated with the inclusion of the carbon policy. We conclude that a national climate policy aimed at reducing greenhouse gas emissions in the United States would have important water quality cobenefits.
