The European Forest and The European Forest and Agricultural Sector Optimization Agricultural Sector Optimization

Model (EUFASOM)Model (EUFASOM)

Uwe A. SchneiderUwe A. Schneider

Research Unit Sustainabilty and Global ChangeResearch Unit Sustainabilty and Global Change

Hamburg UniversityHamburg University

FASOM HistoryFASOM History

US (1993)US (1993)

EU (2004)EU (2004)

Global (2006)Global (2006)

FASOMFASOM

Partial Equilibrium Model Partial Equilibrium Model

Maximizes sum of consumer and producer Maximizes sum of consumer and producer surplussurplus

Constrained by resource endowments, Constrained by resource endowments, technologies, policiestechnologies, policies

Spatially explicit, discrete dynamicSpatially explicit, discrete dynamic

Integrates environmental effectsIntegrates environmental effects

Programmed in GAMSProgrammed in GAMS

Purpose and ObjectivesPurpose and Objectives

To To advice policy makersadvice policy makers about the about the agricultural and forestry sector response agricultural and forestry sector response to to structural changesstructural changes

a)a) PoliciesPolicies

b)b) Environmental changeEnvironmental change

c)c) Technical changeTechnical change

d)d) Socioeconomic changeSocioeconomic change

Policy ScopePolicy Scope

Climate and other environmental policiesClimate and other environmental policies

Research subsidiesResearch subsidies

Agricultural policiesAgricultural policies

Trade policiesTrade policies

Simultaneous assessment

FoodTimberFiber

BioenergyBiomaterial

Carbon Sinks

Land use competition Nature

Reserves

SealedLand

Objective FunctionObjective Function

Demand

Supply

Price

Quantity

P*

Q*

ResourceRents

ConsumerSurplus

Surplus MaximizationSurplus Maximization

Impl

icit

Sup

ply

and

Dem

and

For

est I

nven

tory

Lan

d S

uppl

yW

ater

Sup

ply

Lab

or S

uppl

yA

nim

al S

uppl

yN

atio

nal I

nput

s

Impo

rt S

uppl

y

Pro

cess

ing

Dem

and

Fee

d D

eman

dD

omes

tic D

eman

dE

xpor

t Dem

and

CS

P

S

Commodity DemandCommodity Demand

• 4 general cases (above) • For all final products• For all regions• Domestic Use, Export

Model StructureModel Structure

Resources Land Use

Technologies

Processing Technologies

Products Markets

Inputs

Limits

Supply Functions

Limits

Demand Functions,Trade

Limits

Environmental Impacts

Processing

Markets

Feed mixing

Labor

Pasture

Other Inputs

Cropland

Water

Livestock production

Forestry, Nature,Crop

productionExport

Domestic demand

Import

Model StructureModel StructureForest

Inventory

Spatial ResolutionSpatial Resolution

Soil textureSoil texture

Stone contentStone content

Altitude levelsAltitude levels

SlopesSlopes

Soil stateSoil state

Political regionsPolitical regions

Ownership (forests)Ownership (forests)

Farm typesFarm types

Farm sizeFarm size

Many crop and tree Many crop and tree speciesspecies

Tillage, planting Tillage, planting irrigation, fertilization irrigation, fertilization harvest regimeharvest regime

Altitude:1. < 300 m2. 300-600 m3. 600-1100 m4. >1100 m

Texture:1. Coarse2. Medium3. Medium-fine4. Fine 5. Very fine

Soil Depth:1. shallow2. medium3. deep

Stoniness:1. Low content2. Medium content3. High content

Slope Class:1. 0-3%2. 3-6%3. 6-10%4. 10-15%5. …

Homogeneous Response Units

DE13

DE12

DE11

DE14

EUFASOM DynamicsEUFASOM Dynamics

5 (to 20) year time steps5 (to 20) year time steps

State of forests (and soil organic matter)State of forests (and soil organic matter)

Technical progressTechnical progress

Demand & industry growthDemand & industry growth

Resource and global changeResource and global change

Policy scenariosPolicy scenarios

State of the ArtState of the Art

Flexibility (resolve acc. needs)Flexibility (resolve acc. needs)

Index notationIndex notation

– millions of data, variables, and equations millions of data, variables, and equations with sparse programming statementswith sparse programming statements

– ensures consistency (model development)ensures consistency (model development)

Extensive generic equation checks (30 checks Extensive generic equation checks (30 checks per equation)per equation)

Systematic solution analysis (symptom to Systematic solution analysis (symptom to cause)cause)

Positive VariablesPositive VariablesRESOURCE_VAR (PERIOD,REGION,RESOURCE) RESOURCE_VAR (PERIOD,REGION,RESOURCE)

FOREST_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH) FOREST_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH)

PEREN_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,CROPTECH) PEREN_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,CROPTECH)

CROP_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,CROPTECH) CROP_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,CROPTECH)

LIVE_VAR (PERIOD,REGION,ANIMAL,LIVETECH) LIVE_VAR (PERIOD,REGION,ANIMAL,LIVETECH)

FEED_VAR (PERIOD,REGION,ANIMAL,PRODUCT,FEEDTECH)FEED_VAR (PERIOD,REGION,ANIMAL,PRODUCT,FEEDTECH)

ECO_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,ECOTECH) ECO_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,ECOTECH)

PROCESS_VAR (PERIOD,REGION,PROCTECH) PROCESS_VAR (PERIOD,REGION,PROCTECH)

LUC_VAR (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) LUC_VAR (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE)

DEMAND_VAR (PERIOD,REGION,PRODUCT) DEMAND_VAR (PERIOD,REGION,PRODUCT)

SUPPLY_VAR (PERIOD,REGION,PRODUCT) SUPPLY_VAR (PERIOD,REGION,PRODUCT)

TRADE_VAR (PERIOD,REGION,REGION,PRODUCT) TRADE_VAR (PERIOD,REGION,REGION,PRODUCT)

EquationsEquationsOBJECTIVE_EQU OBJECTIVE_EQU

RESOURCEBAL_EQU (PERIOD,REGION,RESOURCE) RESOURCEBAL_EQU (PERIOD,REGION,RESOURCE)

RESOURCEMAX_EQU (PERIOD,REGION,RESOURCE) RESOURCEMAX_EQU (PERIOD,REGION,RESOURCE)

SOILSTATE_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE) SOILSTATE_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE)

FORINVENT_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH) FORINVENT_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH)

LUC_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) LUC_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE)

LUCLIMIT_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) LUCLIMIT_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE)

STOCK_EQU (PERIOD,REGION,STOCK)STOCK_EQU (PERIOD,REGION,STOCK)

EMIT_EQU (PERIOD,REGION,SUBSTANCE)EMIT_EQU (PERIOD,REGION,SUBSTANCE)

PRODUCTBAL_EQU (PERIOD,REGION,PRODUCT) PRODUCTBAL_EQU (PERIOD,REGION,PRODUCT)

MINFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT) MINFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT)

MAXFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT) MAXFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT)

DataDataFOREST_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,ALLTECH,ALLITEM)FOREST_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,ALLTECH,ALLITEM)

PEREN_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)CROP_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,ALLTECH,ALLITEM)

ECO_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,ALLTECH,ALLITEM)ECO_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,ALLTECH,ALLITEM)

LIVE_DATA (PERIOD,REGION,ANIMAL,ALLTECH,ALLITEM)LIVE_DATA (PERIOD,REGION,ANIMAL,ALLTECH,ALLITEM)

FEED_DATA (PERIOD,REGION,PRODUCT,ALLTECH,ALLITEM)FEED_DATA (PERIOD,REGION,PRODUCT,ALLTECH,ALLITEM)

PROCESS_DATA (PERIOD,REGION,ALLTECH,ALLITEM)PROCESS_DATA (PERIOD,REGION,ALLTECH,ALLITEM)

PRODUCT_DATA (PERIOD,REGION,PRODUCT,ALLITEM)PRODUCT_DATA (PERIOD,REGION,PRODUCT,ALLITEM)

MARKET_DATA (PERIOD,REGION,ALLITEM,SDTYPE,SDITEM)MARKET_DATA (PERIOD,REGION,ALLITEM,SDTYPE,SDITEM)

TRADE_DATA (PERIOD,REGION,REGION,PRODUCT,ALLITEM)TRADE_DATA (PERIOD,REGION,REGION,PRODUCT,ALLITEM)

RESOURCE_DATA (PERIOD,REGION,ALLRESOURCE,SDITEM)RESOURCE_DATA (PERIOD,REGION,ALLRESOURCE,SDITEM)

STOCK_DATA (PERIOD,REGION,PRODUCT,ALLITEM)STOCK_DATA (PERIOD,REGION,PRODUCT,ALLITEM)

LUC_DATA (PERIOD,REGION,SOILTYPE,SPECIES,ALLCHANGE,ALLITEM)LUC_DATA (PERIOD,REGION,SOILTYPE,SPECIES,ALLCHANGE,ALLITEM)

Pre-Solution AnalysisPre-Solution Analysis

Identifies structural errorsIdentifies structural errors– Missing dataMissing data– Misspecified dataMisspecified data– Wrong signsWrong signs

More than 30 general variable and More than 30 general variable and equation checksequation checks

Mitigation PotentialsMitigation Potentials

0

50

100

150

200

250

300

350

400

450

500

0 100 200 300 400 500 600 700 800

Car

bon

pric

e (E

uro/

tce)

Mitigation (mmtce)

TechnicalPotentialCompetitive

Potential

-10

-8

-6

-4

-2

0

2

4

6

8

0 20 40 60 80 100

Bill

ion

Eu

ros

Carbon Equivalent (CE) Prices in Euros per Ton

Changes in Welfare Accounts

Gross Ag-Producer Surplus

Emission Payments

Net Ag-Producer Surplus

Ag-Consumer Surplus

GHG Mitigation and MarketsGHG Mitigation and Markets

20

40

60

80

100

120

140

160

180

200

220

0 50 100 150 200 250 300

Fis

her

ind

ex

Carbon price (Euro/tce)

Crop prices

Livestock prices

Livestock production

Crop productionNet exports

Afforestation PotentialsAfforestation Potentials

0

100

200

300

400

500

0 50 100 150 200 250 300

Car

bon

pric

e (E

uro/

tce)

Emission reduction (mmtce)

Technical Potential

Economic PotentialCompetitive

Economic Potential

Forest Policy: Crop EmissionsForest Policy: Crop EmissionsE

mis

sion

s (k

g C

/ha)

Carbon price (Euro/tce)

-15

-10

-5

0

5

10

15

0 50 100 150 200 250 300

Nitrogen Fertilizer

Ag-Soil Carbon

Irrigation Use

Fossil Fuel Use

0

50

100

150

200

250

300

350

400

450

500

0 100 200 300 400 500 600 700 800 900

Car

bon

Pri

ce in

Eur

o/m

tce

Total Agricultural Greenhouse Gas Emission Abatement in mmtce

Competitive Economic Potential

Simult. Technical Potential

Independent Geographic Potential

IndependentTechnical Potential

0

50

100

150

200

250

300

350

400

450

500

0 100 200 300 400 500 600 700

Car

bon

Pri

ce in

Eur

o/m

tce

Total Agricultural and Forest Greenhouse Gas Emission Abatement in mmtce

Crop Area Fixed

Crop Area and

Prices Fixed

Crop Area and Prices Endogenous

Prices Fixed

0

10

20

30

40

50

60

70

80

0 20 40 60 80 100

Ene

rgy

Cro

ps (

mil

lion

hec

tare

s)

Carbon tax on energy (Euro/ton of carbon)

2010 Capacity

2030 Capacity

2050 Capacity

UnrestrictedCapacity

Power Plant Biomass SupplyPower Plant Biomass Supply

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