Integration of General and Partial Equilibrium Agricultural Land-Use Transformation for the Analysis of Climate Change in the Mediterranean

Abstract

This study presents an internal modification of a dynamic computable general equilibrium model, ICES, employing inputs from a partial equilibrium model for the agricultural sector, VALUE. The aim is to quantify and analyze the medium-term socio-economic consequences of projected climate change. The methodology is innovative as it combines state-of-the-art knowledge from economic and biophysical sources and is demonstrated in application to two Mediterrenean countries: Israel and Italy. The information from the VALUE model was incorporated into the ICES economic model to improve the agricultural production structure. The new land allocation method takes into account the variation of substitutability across different types of land use. It captures agronomic features included in the VALUE model. This modification gives a better representation of heterogeneous information of land productivity to the economic framework. Climate impacts and policy evaluation with ICES are reinforced due to the more refined system of land allocation. This exercise is original in its ability to base the analysis on empirically estimated parameters rather than on assumptions, as in other studies of this kind. Notably, we suggest diverse land Constant Elasticity of Transformation (CET) frontiers for two main ecological regions in the Mediterranean basin for a more accurate representation of agronomic characteristics. Using the modified ICES model we evaluate climate change impact on agricultural production in the Mediterranean region.

The impacts of climate change on cropland allocation, crop production, output prices and social welfare in Israel: A structural econometric framework

“…Such market-level models are frequently linked with micro-level agricultural production models to represent farmers' optimal responses to changes in exogenous variables, including climate, prices and policy instruments. These micro-level models are often based on the mathematical programming approach, in which agricultural production is represented explicitly, enabling integration with the market-level equilibrium models to reflect price-feedback effects on supply changes (e.g., Howitt, Tauber, and Pienaar 2003;Parry et al 2004;Nelson et al 2010;Arndt et al 2011Arndt et al , 2012Palatnik et al 2011;Robinson, Willenbockel, and Strzepek 2012;Shrestha et al 2013).…”

Development of Methodological Foundations for Stating the Cost of Agricultural Products

“…Obviously, the lack of a clearly established and perfect controlling system in agricultural production, including constructive accounting and information space for making managerial decisions, causes a number of problems in ensuring high work efficiency. However, the current methodological approach to planning of production Unlike industry, the impact of biological characteristics of agricultural production [7][8][9][10][11][12] causes forced changes in the technology or results of production during and at the end of a long production cycle [13][14][15], which limits the possibility of accurate planning of costs and production output at the beginning of the reporting period (usually a calendar year).…”

Large‐Scale Desalination and the External Impact on Irrigation‐Water Salinity: Economic Analysis for the Case of Israel

“…Water Resources Research VALUE is a positive mathematical programming (PMP) partial-equilibrium model of Israel's agriculture used to analyze rural landscape amenities (Kan et al, 2009), organic-waste policies (Kan et al, 2010;Raviv et al, 2017), climate change (Palatnik et al, 2011;Zelingher et al, 2019), and water management (Baum et al, 2016;Kan & Rapaport-Rom, 2012). The decision variables in VALUE are the cultivated lands allocated to the 55 crops in each of the 18 nodes specified in MYWAS as agricultural water-consumption regions.…”