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ENFA Model

ENFA Model. ENFA Kick-off Meeting Hamburg, 10 May 2005. ENFA Model. Simulates land use decisions in the EU agricultural and forest sectors Represents markets and computes market equilibrium Portrays trade on a global level Accounts for environmental impacts of land use decisions

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ENFA Model

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  1. ENFA Model ENFA Kick-off Meeting Hamburg, 10 May 2005

  2. ENFA Model • Simulates land use decisions in the EU agricultural and forest sectors • Represents markets and computes market equilibrium • Portrays trade on a global level • Accounts for environmental impacts of land use decisions • Spatially explicit, dynamic

  3. Non-Food Land use competition Food Biodiversity

  4. ENFA Model Structure Limits Limits Resources Land Use Technologies Products Markets Inputs Demand Functions, Trade Processing Technologies Supply Functions

  5. ENFA Optimization Model determines the "optimal" use to which each individual technology should be used in each region and time period • Maximize welfare • Obey restrictions Product prices are endogenous

  6. ENFA Spatial Resolution • Political regions (NUTS 2) • Soil types • Farm types • Altitude levels • Slopes

  7. ENFA Dynamics • 5 to 10 year steps from 2005 to 2030 (2100?) • Technical progress • Demand & industry growth • Resource change • Policy scenarios

  8. Data • Resource data • Climate, Soil, Water, Existing Forests, Population, Labor • Technological data • Inputs / outputs for crop, livestock, forest management, and product processing and transportation options • Market data • Observed prices, production, trade, and income levels • Supply Demand function parameters • Environmental impact data • Emissions, Sequestration, Erosion, Biodiversity

  9. ENFA Technologies • Traditional agriculture • major crops • major livestock • Forestry • Non-food agriculture • Processing • (Wildlife preservation)

  10. Non-market Impacts • Greenhouse gas emissions • Air, water, soil quality • Income distribution • Rural development / employment • Wildlife

  11. Simultaneity • Technologies • Non-Market Impacts • Current and Potential Policies … resource competition … multiple impacts

  12. Crop Technology Data Base

  13. Inputs Outputs Technology Adoption Non-Market Impacts

  14. Consistency • Representative yields not maximum yields on experimental plots • Representative input quantities on labor and energy intensive inputs • Representative and complete variable costs on remaining inputs • Environmental Impacts (from EPIC)

  15. Technical Details • Programmed in GAMS • Non-linear functions are linearly approximated • Solved with CPLEX • Variables and equations are aggregated to blocks

  16. Constrained Optimization

  17. Objective Function

  18. Resource Limits • Limits exist on • Land • Water • Family labor • Public grazing land

  19. Balance Equations

  20. International Trade

  21. Emission Accounts

  22. Basic Results

  23. Technology Potentials Measures of potential • Technical • Economic • single strategy • multiple strategy

  24. U.S. Ag-Soil Carbon Potentials 500 400 Economic Potential 300 Carbon price ($/tce) Competitive Economic Potential 200 Technical Potential 100 0 0 20 40 60 80 100 120 140 160 Soil carbon sequestration (mmtce)

  25. U.S. Afforestation Potentials 500 400 Economic Potential 300 Competitive Economic Potential Carbon price ($/tce) 200 100 Technical Potential 0 0 50 100 150 200 250 300 Emission reduction (mmtce)

  26. U.S. Biofuel Potentials 500 Economic Potential 400 300 Competitive Economic Potential Carbon price ($/tce) 200 Technical Potential 100 0 0 50 100 150 200 250 300 350 Emission reduction (mmtce)

  27. Pasture Traditional Crops Land Allocation Biomass for Power Plants Afforestation Carbon Tax

  28. Bioenergy use None 2010 Limit 2030 Limit Energy Crop Area 2050 Limit Unrestricted Subsidy

  29. A Simple Example

  30. Constant Corn Price

  31. Endogenous Corn Price Rainfed Corn Irrigated Corn Biofuel 250 200 150 Revenue in $/Acre 100 50 0 0 (1.80) 25 (1.98) 50 (2.16) 100 (2.88) Carbon Price in $/tce(Corn price in $/bu)

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