Abstract
In 1972, The Limits to Growth, using the World3 System Dynamics model, modeled for the first time the long-term risk of food security, which would emerge from the complex relation between capital and population growth within the limits of the planet. In this paper, we present a novel system dynamics model to explore the short-term dynamics of the food and energy system within the wider global economic framework. By merging structures of the World3, Money, and Macroeconomy Dynamics (MMD) and the Energy Transition and the Economy (ETE) models, we present a closed system global economy model, where growth is driven by population growth and government debt. The agricultural sector is a general disequilibrium productive sector grounded on World3, where capital investment and land development decisions are made to meet population food need, thus generating cascade demands for the energy and capital sector. Energy and Capital Sectors employ a more standard economic approach in line with MMD and ETE. By taking into account the role of financial, real, and natural capital, the model can be used to explore alternative scenarios driven by uncertainty and risk, such as climate extreme events and their impacts on food production. The paper presents scenario analysis of the impact of an exogenous price, production, and subsidies shock in the food and/or energy dimensions on the economic system, understanding the sources of potential cascade effects, thus providing a systemic risk assessment tool to inform global food security policies.
Highlights
The impact of climate change on global food systems is expected to be heterogeneous and uneven across regions in the world [1]
We argue that System Dynamics modeling is a suitable approach to deal with such a complex system and should be run alongside Integrated Assessment Models to develop a better understanding of the full food system risk
Accounting for the limits to growth in the land and non-renewable energy systems according to the World3-03, we propose an interpretation of the economic system similar to Sterman [20], that is a closed system structural economy composed of different productive sectors responsible for assuring the demand of each commodity, is met at any time in the simulation
Summary
The impact of climate change on global food systems is expected to be heterogeneous and uneven across regions in the world [1]. No renewable energy resource has been taken into account in the energy mix Such inclusions could have altered the shock analysis in comparison to real data; as we are only interested in the immediate short-term, these assumptions were deemed appropriate at this time, given that they represented only a small portion of the global market historically. We argue that modeling this complex interaction is a valuable addition to the process of policy development when running alongside other models, as it allows the feedbacks contained within the system interdependencies to be accounted for, which leads to the better understanding of the cascade effects associated with shocks to the system
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