Modelling Land Use Changes in GTAP

Abstract

It is agreed by members in the 7th Conference of the Parties (COP7) to the UNFCCC held in November 2001 to take land-based carbon sequestration into account for the 2008-2012 greenhouse gas (GHG) emissions reduction targets. Activities such as afforestation, reforestation, and deforestation (ARD), forest management, crop management, grazing land management, and re-vegetation affect carbon sequestration. This provision has motivated more research efforts to consider land-use changes in integrated assessment (IA) of climate change issues. A need is elicited to count in greenhouse gas (GHG) emissions from all sources and sinks from land-based resources—land use, land use change and forestry (LULUCF) activities are specially focused. In conventional CGE models, land is normally assumed sectoral-specific and is exogenous. To consider the context of LULUCF in the model, it is important to identify functions of land supply to sectors—especially sources of land supply, as emission coefficients vary to different uses of land. In this paper we introduce the GTAPE-L model (Burniaux, 2002), which recognizes sources of land supply via a "land transition matrix". GTAPE-L is based on the GTAP-E model, which extends the standard GTAP model to accommodate substitution between energy and between capital and energy. GTAPE-L is designed to track inter-sectoral land transitions and to estimate sectoral net emissions due to land use changes. In GTAPE-L, we treat GHG emissions as part of the CES nested production structure, which takes into account complementary inputs to GHG abatement technologies. We calibrate the CES substitution elasticities to fit marginal abatement costs of †