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Introducing Forest Access Cost Functions into a General Equilibrium Model

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  • Gouel, Christophe
  • Hertel, Thomas

Abstract

The purpose of this Research Memorandum is to propose an approach to incorporating forest access cost functions into global general equilibrium models such as GTAP. Towards this end, we develop a long run access cost function which can be calibrated to national data on total forest land, currently inaccessible forest land, forest land rents, and expected rates of return on investment. This is illustrated for an 11 region aggregation of the GTAP-AEZ data base. We find that this long run function generates far too high a rate of annual access, and so we introduce a short run component which introduces a quadratic term into the cost function. This can be chosen to target current rates of forest access as reported by the FAO. Finally, we discuss the treatment of this new type of investment in the general equilibrium model.

Suggested Citation

  • Gouel, Christophe & Hertel, Thomas, 2006. "Introducing Forest Access Cost Functions into a General Equilibrium Model," GTAP Research Memoranda 2215, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    • Handle: RePEc:gta:resmem:2215
    Note: GTAP Research Memorandum No. 08
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    File URL: https://www.gtap.agecon.purdue.edu/resources/res_display.asp?RecordID=2215
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    1. Ujjayant Chakravorty & Marie‐Hélène Hubert & Beyza Ural Marchand, 2019. "Food for fuel: The effect of the US biofuel mandate on poverty in India," Quantitative Economics, Econometric Society, vol. 10(3), pages 1153-1193, July.
    2. Antoine Blandine & Gurgel Angelo & Reilly John M, 2008. "Will Recreation Demand for Land Limit Biofuels Production?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 6(2), pages 1-29, December.
    3. Lakatos, Csilla, 2010. "Knowledge Capital, Product Differentiation and Market Structure: a Comparative Static CGE Analysis," Conference papers 331958, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Meiyappan, Prasanth & Dalton, Michael & O’Neill, Brian C. & Jain, Atul K., 2014. "Spatial modeling of agricultural land use change at global scale," Ecological Modelling, Elsevier, vol. 291(C), pages 152-174.
    5. Schwerhoff, Gregor & Wehkamp, Johanna, 2018. "Export tariffs combined with public investments as a forest conservation policy instrument," Forest Policy and Economics, Elsevier, vol. 95(C), pages 69-84.
    6. Jevgenijs Steinbuks & Thomas Hertel, 2016. "Confronting the Food–Energy–Environment Trilemma: Global Land Use in the Long Run," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(3), pages 545-570, March.
    7. Ujjayant Chakravorty & Marie‐Hélène Hubert & Michel Moreaux & Linda Nøstbakken, 2017. "Long‐Run Impact of Biofuels on Food Prices," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 733-767, July.
    8. Michetti, Melania & Parrado, Ramiro, 2012. "Improving Land-use modelling within CGE to assess Forest-based Mitigation Potential and Costs," Climate Change and Sustainable Development 122862, Fondazione Eni Enrico Mattei (FEEM).
    9. Si Mokrane Siad & Andrea Gioia & Gerrit Hoogenboom & Vito Iacobellis & Antonio Novelli & Eufemia Tarantino & Pandi Zdruli, 2017. "Durum Wheat Cover Analysis in the Scope of Policy and Market Price Changes: A Case Study in Southern Italy," Agriculture, MDPI, vol. 7(2), pages 1-20, February.
    10. Ujjayant Chakravorty & Marie-Helene Hubert & Michel Moreaux, 2014. "Land Allocation between Food and Energy," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 9(1), pages 52-69, March.
    11. Ujjayant Chakravorty & Marie-HéLène Hubert, 2013. "Global Impacts of the Biofuel Mandate under a Carbon Tax," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 282-288.
    12. Calzadilla, Alvaro & Delzeit, Ruth & Klepper, Gernot, 2014. "DART-BIO: Modelling the interplay of food, feed and fuels in a global CGE model," Kiel Working Papers 1896, Kiel Institute for the World Economy (IfW Kiel).
    13. Ujjayant Chakravorty & Marie-Hélène Hubert & Michel Moreaux & Linda Nøstbakken, 2012. "Do Biofuel Mandates Raise Food Prices?," Economics Working Paper Archive (University of Rennes & University of Caen) 201214, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    14. Irfanoglu, Zeynep Burcu, 2011. "Credibility of Trade Sanctions in Greenhouse Gas Mitigation Agreements in Agriculture and Forestry," Conference papers 332055, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Ujjayant Chakravorty & Marie-Hélène Hubert & Beyza Ural Marchand, 2016. "The effect of the US biofuels mandate on poverty in India," Economics Working Paper Archive (University of Rennes & University of Caen) 2016-13, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.

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