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GTAP Resource #3645

"Extending the GTAP Family of Models: A Partial Equilibrium Approach to Measuring the Costs of Carbon Sequestration and Avoided Deforestation"
by Ohrel, Sara, Sukwon Choi and Brent Sohngen

Current estimates suggest forests could provide 1-3 billion t CO2 of annual carbon storage over the next half century. Many of these estimates are based either on static general equilibrium approaches, which cannot model forestry management and dynamics, or that focus explicitly on forestry rather than land use generally. Given increasing demands for agricultural products due to rising incomes and diversion of crops to the energy sector, the agricultural sector will continue to demand new land, much of which would be derived from forests. This paper develops a detailed partial equilibrium model of forestry and agriculture to examine the costs of carbon sequestration globally. The data for the model is also broken into 18 different regions in the world, and 18 agro ecological zones (AEZ) per region. Production in the crop and livestock sectors is modeled with a nested Constant Elasticity of Substitution production functions that aggregates the 18 AEZ-specific inputs. The nest structure includes production inputs such as capital, labor, and aggregated land inputs. The supply side of land market is modeled with a Constant Elasticity of Transformation function. We derive land supply function using CET function and rent maximization land owners problem. The capital and labor input data is utilized from GTAP 6 data and land use inventory is obtained from GTAP land use data base. The forest sector structure and the carbon cycling component is adopted from a forestry dynamic optimization model, which accounts for dynamic adjustment in forestry. For policy analysis, the authors will present three baselines which explore alternative scenarios about future technology change in the agricultural sector. We then examine the implications of these alternative baselines on carbon sequestration outcomes over the next century. The study will analyze how sequestration rates change with application of the DICE optimal price path followed by constant c price path sensitivities

Resource Details (Export Citation) GTAP Keywords
Category: 2011 Conference Paper
Status: Published
By/In: Presented at the 14th Annual Conference on Global Economic Analysis, Venice, Italy
Date: 2011
Created: Ohrel, S. (4/15/2011)
Updated: Ohrel, S. (6/16/2011)
Visits: 1,393
- Agricultural policies
- Technological change
- Climate change policy
- The GTAP Data Base and extensions

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