Climate Change Assessment and Agriculture in General Equilibrium Models: Alternative Modeling Strategies

Abstract

SummaryAgricultural sectors play a key role in the economics of climate change. Land as an input to agricultural production is one of the most important links between economy and the biosphere, representing a direct projection of human action on the natural environment. Agricultural management practices and cropping patterns have a vast effect on biogeochemical cycles, freshwater availability and soil quality. Agriculture also plays an important role in emitting and storing greenhouse gases. Thus, to consistently investigate climate policy and future pathways for the economic and natural environment, a realistic representation of agricultural land-use is essential. Computable General Equilibrium (CGE) models have increasingly been used to this purpose. CGE models simulate the simultaneous equilibrium in a set of interdependent markets, and are especially suited to analyze agricultural markets from a global perspective. However, modelling agricultural sectors in CGE models is not a trivial task, mainly because of differences in temporal and geographical aggregation scales. The aim of this study is to overview some proposed modelling strategies, by reviewing the available literature and highlighting the different trade-offs involved in the various approaches. Keywords AbstractAgricultural sectors play a key role in the economics of climate change. Land as an input to agricultural production is one of the most important links between economy and the biosphere, representing a direct projection of human action on the natural environment. Agricultural management practices and cropping patterns have a vast effect on biogeochemical cycles, freshwater availability and soil quality. Agriculture also plays an important role in emitting and storing greenhouse gases. Thus, to consistently investigate climate policy and future pathways for the economic and natural environment, a realistic representation of agricultural land-use is essential. Computable General Equilibrium (CGE) models have increasingly been used to this purpose. CGE models simulate the simultaneous equilibrium in a set of interdependent markets, and are especially suited to analyze agricultural markets from a global perspective. However, modeling agricultural sectors in CGE models is not a trivial task, mainly because of differences in temporal and geographical aggregation scales. The aim of this study is to overview some proposed modeling strategies, by reviewing the available literature and highlighting the different trade-offs involved in the various approaches.

Climate Change, Agricultural Production, and Poverty in India

“…However, in contrast to aggregative (structural) general equilibrium models, the partial equilibrium models are capable of producing quantitative analysis using specific factors of importance at the local or regional levels (Palatnik and Roson 2009). The contemporary empirical literature on estimating climate change-induced impacts on farming systems is rooted in three predominant approaches: crop simulation models, agronomic statistical models, and hedonic price models (Jacoby et al 2011;Hertel and Rosch 2010;Zhai et al 2009;Schlenker and Roberts 2009).…”

Climate–Human–Land Interactions: A Review of Major Modelling Approaches

“…The attention is restricted to agriculture and forestry, the two land covers to which almost one-third of global greenhouse gas (GHGs) emissions can be associated [8,9]. Readers interested in deepening their knowledge are invited to refer to specific studies (see, for example, [10] for exploratory land-use studies and their role in policy [11,12] for land use related to economic-based deforestation, [13] for a general review of the literature, [14] for land-use models based on economic theory, [14,15] for spatial and economic classifications of models, [16,17] for models of agricultural intensity, [18] for spatial, temporal, and human decision-making dimensions, [19] for Agent-Based Systems, [20] for mainly descriptive models, [21,22] for partial and general equilibrium models, [9,22] for continental and global land-use models, and [23] for econometric forest sector modelling in Europe).…”

Climate Change and Agriculture: An Integrated Approach to Evaluate Economy-Wide Effects for Turkey

“…The brief survey here will be limited to the studies that use similar approaches used in this study. A more detailed survey on integrated approach can be found in Hertel and Rosch (2010), Palatnik and Roson (2009) and Cretegny (2009). GCMs (Bosello & Zhang, 2005;Nelson et al, 2009;Rosegrant et al, 2008;Thurlow, Zhu, & Diao, 2012), stochastic drought and flood models (Pauw, Thurlow, & Van Seventer, 2010), global environmental models (Calzadilla et al, 2011) and agro-ecological models (Fernandes, Soliman, Confalonieri, Donatelli, & Tubiello, 2012) are used to project main physical impacts under different climate scenarios.…”