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The European Forest and Agricultural Sector Optimization Model (EUFASOM) Uwe A. Schneider Research Unit Sustainabilty and Global Change Hamburg University FASOM History US (1993) EU (2004) Global (2006) FASOM Partial Equilibrium Model Maximizes sum of consumer and producer surplus Constrained by resource endowments, technologies, policies Spatially explicit, discrete dynamic Integrates environmental effects Programmed in GAMS Purpose and Objectives To advice policy makers about the agricultural and forestry sector response to structural changes a) Policies b) Environmental change c) Technical change d) Socioeconomic change Policy Scope Climate and other environmental policies Research subsidies Agricultural policies Trade policies Simultaneous assessment Food Timber Fiber Carbon Sinks Bioenergy Biomaterial Land use competition Sealed Land Nature Reserves Objective Function Price Supply Consumer Surplus P* Resource Rents Demand Q* Quantity Surplus Maximization Land Supply Forest Inventory Processing Demand Water Supply CS Labor Supply PS Implicit Supply and Demand Animal Supply National Inputs Domestic Demand Import Supply Feed Demand Export Demand Commodity Demand • 4 general cases (above) • For all final products • For all regions • Domestic Use, Export Model Structure Limits Limits Resources Inputs Supply Functions Land Use Products Markets Processing Technologies Demand Functions, Trade Technologies Environmental Impacts Limits Model Structure Cropland Water Labor Forest Inventory Forestry, Nature, Crop production Markets Domestic demand Export Processing Import Other Inputs Livestock production Pasture Feed mixing Spatial Resolution Soil texture Stone content Altitude levels Slopes Soil state Political regions Ownership (forests) Farm types Farm size Many crop and tree species Tillage, planting irrigation, fertilization harvest regime Homogeneous Response Units Altitude: 1. < 300 m 2. 300-600 m 3. 600-1100 m 4. >1100 m Texture: 1. Coarse 2. Medium 3. Medium-fine 4. Fine 5. Very fine Stoniness: 1. Low content 2. Medium content 3. High content Slope Class: 1. 0-3% 2. 3-6% 3. 6-10% 4. 10-15% 5. … Soil Depth: 1. shallow 2. medium 3. deep DE11 DE12 DE13 DE14 EUFASOM Dynamics 5 (to 20) year time steps State of forests (and soil organic matter) Technical progress Demand & industry growth Resource and global change Policy scenarios State of the Art Flexibility (resolve acc. needs) Index notation – millions of data, variables, and equations with sparse programming statements – ensures consistency (model development) Extensive generic equation checks (30 checks per equation) Systematic solution analysis (symptom to cause) Positive Variables RESOURCE_VAR (PERIOD,REGION,RESOURCE) FOREST_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH) PEREN_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,CROPTECH) CROP_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,CROPTECH) LIVE_VAR (PERIOD,REGION,ANIMAL,LIVETECH) FEED_VAR (PERIOD,REGION,ANIMAL,PRODUCT,FEEDTECH) ECO_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,ECOTECH) PROCESS_VAR (PERIOD,REGION,PROCTECH) LUC_VAR (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) DEMAND_VAR (PERIOD,REGION,PRODUCT) SUPPLY_VAR (PERIOD,REGION,PRODUCT) TRADE_VAR (PERIOD,REGION,REGION,PRODUCT) Equations OBJECTIVE_EQU RESOURCEBAL_EQU (PERIOD,REGION,RESOURCE) RESOURCEMAX_EQU (PERIOD,REGION,RESOURCE) SOILSTATE_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE) FORINVENT_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH) LUC_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) LUCLIMIT_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) STOCK_EQU (PERIOD,REGION,STOCK) EMIT_EQU (PERIOD,REGION,SUBSTANCE) PRODUCTBAL_EQU (PERIOD,REGION,PRODUCT) MINFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT) MAXFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT) Data FOREST_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,ALLTECH,ALLITEM) PEREN_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,ALLTECH,ALLITEM) CROP_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,ALLTECH,ALLITEM) ECO_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,ALLTECH,ALLITEM) LIVE_DATA (PERIOD,REGION,ANIMAL,ALLTECH,ALLITEM) FEED_DATA (PERIOD,REGION,PRODUCT,ALLTECH,ALLITEM) PROCESS_DATA (PERIOD,REGION,ALLTECH,ALLITEM) PRODUCT_DATA (PERIOD,REGION,PRODUCT,ALLITEM) MARKET_DATA (PERIOD,REGION,ALLITEM,SDTYPE,SDITEM) TRADE_DATA (PERIOD,REGION,REGION,PRODUCT,ALLITEM) RESOURCE_DATA (PERIOD,REGION,ALLRESOURCE,SDITEM) STOCK_DATA (PERIOD,REGION,PRODUCT,ALLITEM) LUC_DATA (PERIOD,REGION,SOILTYPE,SPECIES,ALLCHANGE,ALLITEM) Pre-Solution Analysis Identifies structural errors – Missing data – Misspecified data – Wrong signs More than 30 general variable and equation checks Mitigation Potentials 500 Carbon price (Euro/tce) 450 400 Technical Potential 350 Competitive Potential 300 250 200 150 100 50 0 0 100 200 300 400 500 Mitigation (mmtce) 600 700 800 Changes in Welfare Accounts 8 6 4 Gross Ag-Producer Surplus Billion Euros 2 Net Ag-Producer Surplus 0 -2 Emission Payments -4 -6 Ag-Consumer Surplus -8 -10 0 20 40 60 80 Carbon Equivalent (CE) Prices in Euros per Ton 100 GHG Mitigation and Markets 220 200 Fisher index 180 160 Crop prices Livestock prices 140 120 Livestock production 100 80 60 Crop production Net exports 40 20 0 50 100 150 200 Carbon price (Euro/tce) 250 300 Afforestation Potentials Carbon price (Euro/tce) 500 400 300 Competitive Economic Potential 200 Economic Potential 100 Technical Potential 0 0 50 100 150 200 Emission reduction (mmtce) 250 300 Forest Policy: Crop Emissions 15 Emissions (kg C/ha) 10 Irrigation Use Nitrogen Fertilizer 5 0 Fossil Fuel Use -5 -10 -15 Ag-Soil Carbon 0 50 100 150 200 Carbon price (Euro/tce) 250 300 500 Carbon Price in Euro/mtce 450 400 350 Independent Geographic Potential Competitive Economic Potential 300 250 Simult. Technical Potential 200 150 Independent Technical Potential 100 50 0 0 100 200 300 400 500 600 700 800 Total Agricultural Greenhouse Gas Emission Abatement in mmtce 900 500 Crop Area Fixed 450 Carbon Price in Euro/mtce 400 Crop Area and Prices Fixed 350 300 Crop Area and Prices Endogenous 250 200 Prices Fixed 150 100 50 0 0 100 200 300 400 500 600 700 Total Agricultural and Forest Greenhouse Gas Emission Abatement in mmtce Power Plant Biomass Supply Energy Crops (million hectares) 80 70 Unrestricted Capacity 60 50 2050 Capacity 40 30 2030 Capacity 20 10 0 2010 Capacity 0 20 40 60 80 Carbon tax on energy (Euro/ton of carbon) 100 Thanks