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GTAP Resource #3811

"The economic assessment of changes in ecosystem services: an application of the CGE methodology"
by Bosello, Francesco, Fabio Eboli, Ramiro Parrado, Renato Rosa, Paulo A.L.D. Nunes and Helen Ding

The present study integrates Computable General Equilibrium (CGE) modelling with biodiversity services proposing a possible methodology to assess climate-change impacts on ecosystems. Therefore, in order to proceed, a selection of ecosystem services is translated into marketable items, and their changes translated into changes in the corresponding economic variables within the CGE model.
The evaluation focuses on climate change impacts on carbon sequestration services provided by European forest, cropland and grassland ecosystems and on the provisioning services, but provided by forest and cropland ecosystems only. To do this via a CGE model it is first necessary to identify the role that these ecosystem services play on marketable transactions; then how climate change can impact these services; finally how the economic system reacts to those changes by adjusting demand and supply across sectors, domestically and internationally.
The difference in GDP between a reference scenario, in our case a situation with climate change impacts, but excluding those on ecosystem services, and the perturbed scenario, a situation with climate change impacts including those on ecosystem, isolates the economic consequences of climate change on ecosystem services. This value, expressed in monetary terms, embeds all of the macro economic adjustments at play within the system.
As to the provisioning services, we showed first that agricultural land productivity in the EU is expected to decline in the next 50 years (max -6% in the Med EU in 2050 for a temperature increase of 3.1°C with respect to 2000) consequent of soil biodiversity loss, while forest timber productivity can decline in the Mediterranean, but increase in other EU areas, in particular the Northern part. Economically, this implies that in fifty years from now the Mediterranean EU can experience a higher Net Present Value (NPV) of GDP loss ranging from 9.7 to 32.5 billion US$ and the Eastern EU, ranging from 7.2 to 2...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland; Economía Agraria y Recursos Naturales
Date: 2011
Created: Bosello, F. (4/23/2012)
Updated: Bosello, F. (4/23/2012)
Visits: 1,797
- Dynamic modeling
- European Union

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