Modeling land use in large scale global computable general equilibrium models: Preserving physical area of land

Modeling land use in a large-scale global CGE model is a challenging and important task. While several approaches were developed to accomplish this task, some GTAP based applications used Constant Elasticity of Transformation (CET) functions to allocate land across its alternative uses (Some applications are: Golub and Hertel (2012); Hertel et al. (2010); Taheripour et al (2010); Golub et al. (2017); and Taheripour et al. (2018)). This traditional approach provides a relatively simple method to move land from one application to another application, while it implicitly takes into account the opportunity costs of land transformation (van Tongeren et al. (2017). However, it is frequently argued that this approach fails to maintain the physical accounting of land area in balance. The GTAP based applications have used some yield adjustment factors to fix this problem and maintain the physical area of land in balance. Fujimori et al. (2014) used a logit function to preserve physical area of land. More recently, van der Mensbrugghe and Peters (2016)) introduced a new approach, named Additive CET (ACET), to keep physical area of land in balance. Zhao et al. (2017) argued that “there is a direct mapping between ACET and the logit approach” developed by Fujimori et al. (2014).