This paper develops a potential Payment for Ecosystem Services (PES) based agroforestry mechanism for removing nitrate contaminants from a groundwater plume. Under a PES arrangement, farmers are incentivized to grow nitrate removing poplar trees which yield timber revenues along with PES incomes for cleaning a contaminated aquifer. Optimal land use allocation decisions between a traditional agricultural crop and poplar based agroforestry are derived using a dynamic bio-economic model of groundwater nitrate assimilation in trees, where rate of biomass accumulation is influenced by the length of rotation, PES payments and revenues from poplar and wheat. Results, derived through an application of the model to Uttar Pradesh, India, suggest that the rate of nitrate removal from contaminated plumes can get constrained by the total land area dedicated to poplar farming as well as by the rotation length of poplar plantation. Revenues generated through poplar biomass sale play a crucial role in land use decisions in favor of poplar afforestation. In absence of biomass income, afforestation decisions become sensitive to PES price. Findings also indicate that nitrate remediation of highly contaminated aquifers would require large-scale conversion of farmlands and a long-term time frame, for which it is important to make PES-based agroforestry financially attractive to the farmers. (C) 2020 Elsevier Ltd. All rights reserved.
