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Schmitz, C., Lotze-Campen, H., Gerten, D., Dietrich, J. P., Bodirsky, B., Biewald, A., et al. (2013). Blue water scarcity and the economic impacts of future agricultural trade and demand. Water Resource Research, 49(6), 3601–3617.
Abstract: An increasing demand for agricultural goods affects the pressure on global water resources over the coming decades. In order to quantify these effects, we have developed a new agroeconomic water scarcity indicator, considering explicitly economic processes in the agricultural system. The indicator is based on the water shadow price generated by an economic land use model linked to a global vegetation-hydrology model. Irrigation efficiency is implemented as a dynamic input depending on the level of economic development. We are able to simulate the heterogeneous distribution of water supply and agricultural water demand for irrigation through the spatially explicit representation of agricultural production. This allows in identifying regional hot spots of blue water scarcity and explicit shadow prices for water. We generate scenarios based on moderate policies regarding future trade liberalization and the control of livestock-based consumption, dependent on different population and gross domestic product (GDP) projections. Results indicate increased water scarcity in the future, especially in South Asia, the Middle East, and north Africa. In general, water shadow prices decrease with increasing liberalization, foremost in South Asia, Southeast Asia, and the Middle East. Policies to reduce livestock consumption in developed countries not only lower the domestic pressure on water but also alleviate water scarcity to a large extent in developing countries. It is shown that one of the two policy options would be insufficient for most regions to retain water scarcity in 2045 on levels comparable to 2005.
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Stevanović, M., Popp, A., Lotze-Campen, H., Dietrich, J. P., Müller, C., Bonsch, M., et al. (2016). The impact of high-end climate change on agricultural welfare. Sci. Adv., 2(8), e1501452.
Abstract: Climate change threatens agricultural productivity worldwide, resulting in higher food prices. Associated economic gains and losses differ not only by region but also between producers and consumers and are affected by market dynamics. On the basis of an impact modeling chain, starting with 19 different climate projections that drive plant biophysical process simulations and ending with agro-economic decisions, this analysis focuses on distributional effects of high-end climate change impacts across geographic regions and across economic agents. By estimating the changes in surpluses of consumers and producers, we find that climate change can have detrimental impacts on global agricultural welfare, especially after 2050, because losses in consumer surplus generally outweigh gains in producer surplus. Damage in agriculture may reach the annual loss of 0.3% of future total gross domestic product at the end of the century globally, assuming further opening of trade in agricultural products, which typically leads to interregional production shifts to higher latitudes. Those estimated global losses could increase substantially if international trade is more restricted. If beneficial effects of atmospheric carbon dioxide fertilization can be realized in agricultural production, much of the damage could be avoided. Although trade policy reforms toward further liberalization help alleviate climate change impacts, additional compensation mechanisms for associated environmental and development concerns have to be considered.
Keywords: ftnotmacsur
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Wang, X., Biewald, A., Dietrich, J. P., Schmitz, C., Lotze-Campen, H., Humpenöder, F., et al. (2016). Taking account of governance: Implications for land-use dynamics, food prices, and trade patterns. Ecol. Econ., 122, 12–24.
Abstract: Highlights • Governance impacts on land use dynamics are modeled at the global scale with an agro-economic dynamic optimization model. • Improved governance performance lowers deforestation, reduces cropland expansion and increases agricultural yield. • Good governance makes a decisive difference in investment for increasing yields in developing regions. • Weak governance increases food prices, particularly in Sub-Saharan Africa and Southeast Asia. • Improving governance performance has significant impacts on poverty reduction. Abstract Deforestation, mainly caused by unsustainable agricultural expansion, results in a loss of biodiversity and an increase in greenhouse gas emissions, as well as impinges on local livelihoods. Countries’ governance performance, particularly with respect to property rights security, exerts significant impacts on land-use patterns by affecting agricultural yield-related technological investment and cropland expansion. This study aims to incorporate governance factors into a recursive agro-economic dynamic model to simulate governance impacts on land-use patterns at the global scale. Due to the difficulties of including governance indicators directly into numerical models, we use lending interest rates as discount rates to reflect risk-accounting factors associated with different governance scenarios. In addition to a reference scenario, three scenarios with high, low and mixed divergent discount rates are formed to represent weak, strong and fragmented governance. We find that weak governance leads to slower yield growth, increased cropland expansion and associated deforestation, mainly in Latin America, Sub-Saharan Africa, South Asia and Southeast Asia. This is associated with increasing food prices, particularly in Sub-Saharan Africa and Southeast Asia. By contrast, strong governance performance provides a stable political and economic situation which may bring down deforestation rates, stimulate investment in agricultural technologies, and induce fairly strong decreases in food prices.
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Lotze-Campen, H., von Lampe, M., Kyle, P., Fujimori, S., Havlik, P., van Meijl, H., et al. (2014). Impacts of increased bioenergy demand on global food markets: an AgMIP economic model intercomparison. Agric. Econ., 45(1), 103–116.
Abstract: Integrated Assessment studies have shown that meeting ambitious greenhouse gas mitigation targets will require substantial amounts of bioenergy as part of the future energy mix. In the course of the Agricultural Model Intercomparison and Improvement Project (AgMIP), five global agro-economic models were used to analyze a future scenario with global demand for ligno-cellulosic bioenergy rising to about 100 ExaJoule in 2050. From this exercise a tentative conclusion can be drawn that ambitious climate change mitigation need not drive up global food prices much, if the extra land required for bioenergy production is accessible or if the feedstock, for example, from forests, does not directly compete for agricultural land. Agricultural price effects across models by the year 2050 from high bioenergy demand in an ambitious mitigation scenario appear to be much smaller (+5% average across models) than from direct climate impacts on crop yields in a high-emission scenario (+25% average across models). However, potential future scarcities of water and nutrients, policy-induced restrictions on agricultural land expansion, as well as potential welfare losses have not been specifically looked at in this exercise.
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Biewald, A., Rolinski, S., Lotze-Campen, H., Schmitz, C., & Dietrich, J. P. (2014). Valuing the impact of trade on local blue water. Ecol. Econ., 101, 43–53.
Abstract: International trade of agricultural goods impacts local water scarcity. By quantifying the effect of trade on crop production on grid-cell level and combining it with cell- and crop-specific virtual water contents, we are able to determine green and blue water consumption and savings. Connecting the information on trade-related blue water usage to water shadow prices gives us the possibility to value the impact of international food crop trade on local blue water resources. To determine the trade-related value of the blue water usage, we employ two models: first, an economic land- and water-use model, simulating agricultural trade, production and water-shadow prices and second, a global vegetation and agricultural model, modeling the blue and green virtual water content of the traded crops. Our study found that globally, the international trade of food crops saves blue water worth 2.4 billion US$. This net saving occurs despite the fact that Europe exports virtual blue water in food crops worth 3.1 billion US$. Countries in the Middle East and South Asia profit from trade by importing water intensive crops, countries in Southern Europe on the other hand export water intensive agricultural goods from water scarce sites, deteriorating local water scarcity. (C) 2014 Elsevier B.V. All rights reserved.
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