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Modelling land use, deforestation, and policy analysis: A hybrid optimization-ABM heterogeneous agent model with application to the Bolivian Amazon

Author

Listed:
  • Lykke Andersen
  • Ugur Bilge
  • Ben Groom
  • David Gutierrez
  • Evan Killick
  • Juan Carlos Ledezma
  • Charles Palmer
  • Diana Weinhold

Abstract

Policy interventions designed to simultaneously stem deforestation and reduce poverty in tropical countries entail complex socio-environmental trade-offs. A hybrid model, comprising an optimising, agricultural household model integrated into the �shell� of an agent-based model, is developed in order to explore the trade-offs of alternative policy bundles and sequencing options. The model is calibrated to the initial conditions of a small forest village in rural Bolivia. Heterogeneous farmers make individually optimal land-use decisions based on factor endowments and market conditions. Endogenously determined wages and policy provided jobs link the agricultural labour market and rural-urban migration rates. Over a simulated 20-year period, the policymaker makes �real-time� public investments and public policy that in turn impact welfare, productivity, and migration. National and local land-use policy interventions include conservation payments, deforestation taxes and international REDD payments that both impact land use directly and affect the policymaker�s budget. The results highlight trade-offs between reductions in deforestation and improvements in household welfare that can only be overcome either when international REDD payments are offered or when decentralized deforestation taxes are implemented. Yet, the sequencing of policies is also found to play a critical role in these results.

Suggested Citation

  • Lykke Andersen & Ugur Bilge & Ben Groom & David Gutierrez & Evan Killick & Juan Carlos Ledezma & Charles Palmer & Diana Weinhold, 2014. "Modelling land use, deforestation, and policy analysis: A hybrid optimization-ABM heterogeneous agent model with application to the Bolivian Amazon," GRI Working Papers 164, Grantham Research Institute on Climate Change and the Environment.
    • Handle: RePEc:lsg:lsgwps:wp164
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    References listed on IDEAS

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    1. Beatriz Muriel & Luis Carlos Jemio, 2010. "Mercado laboral y reformas en Bolivia," Capítulos de Libros PUCP / Chapters of PUCP books, in: José Rodríguez & Albert Berry (ed.), Desafíos laborales en América Latina después de dos décadas de reformas estructurales. Bolivia, Paraguay y Perú 1997-2008, edition 1, chapter 5, pages 273-356, Fondo Editorial - Pontificia Universidad Católica del Perú.
    2. Lykke Andersen & Jonah Busch & Elizabeth Curran & Juan Carlos Ledezma & Joaquín Mayorga & Mélissa Bellier, 2012. "Environmental and socio-economic consequences of forest carbon payments in Bolivia: Results of the OSIRIS-Bolivia model," Development Research Working Paper Series 02/2012, Institute for Advanced Development Studies.
    3. Groom, Ben & Palmer, Charles, 2014. "Relaxing constraints as a conservation policy," Environment and Development Economics, Cambridge University Press, vol. 19(4), pages 505-528, August.
    4. Angelsen, Arild, 1999. "Agricultural expansion and deforestation: modelling the impact of population, market forces and property rights," Journal of Development Economics, Elsevier, vol. 58(1), pages 185-218, February.
    5. Groom, Ben & Palmer, Charles, 2010. "Cost-effective provision of environmental services: the role of relaxing market constraints," Environment and Development Economics, Cambridge University Press, vol. 15(2), pages 219-240, April.
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    Cited by:

    1. Hallegatte, Stephane & Bangalore, Mook & Bonzanigo, Laura & Fay, Marianne & Narloch, Ulf & Rozenberg, Julie & Vogt-Schilb, Adrien, 2014. "Climate change and poverty -- an analytical framework," Policy Research Working Paper Series 7126, The World Bank.

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