Abstract
Climate change can negatively affect crop productivity decreasing food production in many regions across the world. Literature suggests forest carbon sequestration (FCS) is a good alternative to mitigate climate change due to its ability to sequester carbon at low cost. Nevertheless, FCS subsidies have not been addressed together with impacts on food security and climate change reduced crop yields. In our multidisciplinary work, we collected the crop yield shocks from global circulation—crop modeling. We also developed a new version of a computable general equilibrium model for the economic analysis. Thus, we evaluate the global economic impacts of using carbon taxes and FCS to achieve 50% emission reductions. We find that implementing an aggressive FCS incentive can cause substantial increases in food prices because of land competition between forest and crop production. Without climate induced yield reductions, FCS is attractive, but not with the yield reductions. With the climate induced yield shocks, food price increases are huge—so large that it is clear this approach could not be adopted in the real world. The results cry out for investment in agricultural research on climate adaptation. Our findings suggest economic well-being falls more without mitigation than with 50% emission reductions.
Highlights
Introduction and MotivationIn recent decades, economic expansion and population growth have triggered acceleration in anthropogenic greenhouse gas emissions (GHG), the most important contributor to global warming (Kouhestani et al 2016)
This paper aims to improve our understanding of the interplay between climate change, mitigation policies, and their impacts on the global economy by addressing the following important questions: What is the cost of emissions reduction with no forest carbon sequestration (FCS) incentive? What is the mitigation cost incorporating FCS? What are the impacts of FCS on food security? What are the consequences for the global economy and food production when crop productivity is affected by climate change? And, what is the economic value of reducing crop yield losses?
In order to evaluate its effects on the global economy and food supply, we developed a new static computable general equilibrium entitled GTAP-BIO-FCS
Summary
Introduction and MotivationIn recent decades, economic expansion and population growth have triggered acceleration in anthropogenic greenhouse gas emissions (GHG), the most important contributor to global warming (Kouhestani et al 2016). Burniaux and Truong (2002) developed a GTAP expansion called GTAP-E to analyze trade-energy-environmental policies. This model allowed substitution between energy and capital, substitution among energy sources and highlighted interactions between energy and other economic activities. McDougall and Golub (2007) debugged this model and improved it to calculate welfare more accurately and cover a wider range of emissions reduction options for environmental analysis. Both the GTAP-AEZ-GHG and GTAP-BIO models, the parents of GTAP-BIO-FCS, were built based on this model. The new model (named GTAP-AEZ) was able to depict competition among land using sectors (crop producers, forestry, and livestock) and trace change in land cover items (forest, pasture and cropland) across the world by Agro-Ecological Zones (AEZ)
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