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

Abstract

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.

Authors:
ORCiD logo [1]; ORCiD logo [1];  [1]
  1. Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
Publication Date:
Research Org.:
Pacific Northwest National Lab. (PNNL), Richland, WA (United States)
Sponsoring Org.:
USDOE
OSTI Identifier:
1630110
Report Number(s):
PNNL-SA-142333
Journal ID: ISSN 2010-0078
Grant/Contract Number:  
AC05-76RL01830
Resource Type:
Accepted Manuscript
Journal Name:
Climate Change Economics
Additional Journal Information:
Journal Volume: 11; Journal Issue: 01; Journal ID: ISSN 2010-0078
Publisher:
World Scientific
Country of Publication:
United States
Language:
English
Subject:
54 ENVIRONMENTAL SCIENCES; Land use modeling; land heterogeneity; conversion cost; Ricardian model; climate impact; welfare

Citation Formats

Zhao, Xin, Calvin, Katherine V., and Wise, Marshall A. The Critical Role Of Conversion Cost And Comparative Advantage In Modeling Agricultural Land Use Change. United States: N. p., 2020. Web. https://doi.org/10.1142/S2010007820500049.
Zhao, Xin, Calvin, Katherine V., & Wise, Marshall A. The Critical Role Of Conversion Cost And Comparative Advantage In Modeling Agricultural Land Use Change. United States. https://doi.org/10.1142/S2010007820500049
Zhao, Xin, Calvin, Katherine V., and Wise, Marshall A. Sat . "The Critical Role Of Conversion Cost And Comparative Advantage In Modeling Agricultural Land Use Change". United States. https://doi.org/10.1142/S2010007820500049. https://www.osti.gov/servlets/purl/1630110.
@article{osti_1630110,
title = {The Critical Role Of Conversion Cost And Comparative Advantage In Modeling Agricultural Land Use Change},
author = {Zhao, Xin and Calvin, Katherine V. and Wise, Marshall A.},
abstractNote = {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.},
doi = {10.1142/S2010007820500049},
journal = {Climate Change Economics},
number = 01,
volume = 11,
place = {United States},
year = {2020},
month = {2}
}

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