The Critical Role Of Conversion Cost And Comparative Advantage In Modeling Agricultural Land Use Change

Zhao, Xin; Calvin, Katherine V.; Wise, Marshall A.

doi:10.1142/S2010007820500049

Title: The Critical Role Of Conversion Cost And Comparative Advantage In Modeling Agricultural Land Use Change

Journal Article · 31 January 2020 · Climate Change Economics

DOI: https://doi.org/10.1142/S2010007820500049 · OSTI ID:1630110

^[1];

^[1]; Wise, Marshall A. ^[1]

Pacific Northwest National Lab. (PNNL), Richland, WA (United States)

The difference in land use modeling approaches is an important uncertain factor in evaluating future climate scenarios in global economic models. We compare five widely used land use modeling approaches: constrained optimization, constant elasticity of transformation (CET), the additive form of constant elasticity of transformation (ACET), logit, and Ricardian. We demonstrate that the approaches differ not only by the extent of parameter uses but also by the definition of conversion cost and the consideration of comparative advantage implied by land heterogeneity. We develop a generalized hybrid approach that incorporates ACET/logit and Ricardian to account for both conversion cost and comparative advantage. We use this hybrid approach to estimate future climate impacts on agriculture. We find a welfare loss of about 0.38–0.46% of the global GDP. We demonstrate that ignoring land heterogeneity or land conversion costs underestimates climate impacts on agricultural production and welfare.

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Research Organization:: Pacific Northwest National Laboratory (PNNL), Richland, WA (United States)

Sponsoring Organization:: USDOE

Grant/Contract Number:: AC05-76RL01830

OSTI ID:: 1630110

Report Number(s):: PNNL-SA-142333

Journal Information:: Climate Change Economics, Journal Name: Climate Change Economics Journal Issue: 01 Vol. 11; ISSN 2010-0078

Publisher:: World ScientificCopyright Statement

Country of Publication:: United States

Language:: English

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54 ENVIRONMENTAL SCIENCES
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