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The opportunity cost of land use and the global potential for greenhouse gas mitigation in agriculture and forestry

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  • Golub, Alla
  • Hertel, Thomas
  • Lee, Huey-Lin
  • Rose, Steven
  • Sohngen, Brent

Abstract

This paper analyses the role of global land management alternatives in determining potential greenhouse gas mitigation by land-based activities in agriculture and forestry. Land-based activities are responsible for over a third of global greenhouse gas emissions, yet the economics of land-use decisions have not been explicitly modeled in global mitigation studies. In this paper, we develop a new, general equilibrium framework which effectively captures the opportunity costs of land-use decisions in agriculture and forestry, thereby allowing us to analyse competition for heterogeneous land types across and within sectors, as well as input substitution between land and other factors of production. When land-using sectors are confronted with a tax on greenhouse gas emissions, we find significant changes in the global pattern of comparative advantage across sectors, regions, and land types. Globally, we find that forest carbon sequestration is the dominant strategy for GHG emissions mitigation, while agricultural-related mitigation comes predominantly from reduced methane emissions in the ruminant livestock sector, followed by fertilizer and methane emissions from paddy rice. Regionally, agricultural mitigation is a larger share of total land-use emissions abatement in the USA and China, compared to the rest of the world, and, within agriculture, disproportionately from reductions in fertilizer-related emissions. The results also show how analyses that only consider regional mitigation, may bias mitigation potential by ignoring global market interactions. For example, USA-specific analyses likely over-estimate the potential for abatement in agriculture. Finally, we note that this general equilibrium framework provides the research community with a practical methodology for explicit modeling of global land competition and land-based mitigation in comprehensive assessments of greenhouse gas mitigation options.

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Bibliographic Info

Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 31 (2009)
Issue (Month): 4 (November)
Pages: 299-319

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Handle: RePEc:eee:resene:v:31:y:2009:i:4:p:299-319

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Web page: http://www.elsevier.com/locate/inca/505569

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Keywords: Climate change Land use change Non-CO2 greenhouse gas Marginal abatement cost Computable general equilibrium Forest carbon sequestration;

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References

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  1. Klepper, Gernot & Peterson, Sonja, 2006. "Marginal abatement cost curves in general equilibrium: The influence of world energy prices," Open Access Publications from Kiel Institute for the World Economy 3775, Kiel Institute for the World Economy (IfW).
  2. Eickhout, Bas & van Meijl, Hans & Tabeau, Andrzej & Stehfest, Elke, 2008. "The Impact of Environmental and Climate Constraints on Global Food Supply," GTAP Working Papers 2608, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  3. W. Jill Harrison & J. Mark Horridge & K.R. Pearson, 2000. "Decomposing Simulation Results with Respect to Exogenous Shocks," Computational Economics, Society for Computational Economics, vol. 15(3), pages 227-249, June.
  4. Schneider, Uwe A. & Kumar, Pushpam, 2008. "Greenhouse Gas Mitigation through Agriculture," Choices, Agricultural and Applied Economics Association, vol. 23(1).
  5. Brent Sohngen & Robert Mendelsohn, 2003. "An Optimal Control Model of Forest Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 448-457.
  6. Darwin, Roy & Tsigas, Marinos & Lewandrowski, Jan & Raneses, Anton, 1996. "Land use and cover in ecological economics," Ecological Economics, Elsevier, vol. 17(3), pages 157-181, June.
  7. Pushpam Kumar & Uwe A. Schneider, 2008. "Greenhouse gas emission mitigation through agriculture," Working Papers FNU-155, Research unit Sustainability and Global Change, Hamburg University, revised Feb 2008.
  8. Keeney, Roman & Thomas Hertel, 2005. "GTAP-AGR : A Framework for Assessing the Implications of Multilateral Changes in Agricultural Policies," GTAP Technical Papers 1869, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  9. Ianchovichina, Elena & Darwin, Roy & Shoemaker, Robbin, 2001. "Resource use and technological progress in agriculture: a dynamic general equilibrium analysis," Ecological Economics, Elsevier, vol. 38(2), pages 275-291, August.
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