ENFA Model

1
ENFA Model

• ENFA Kick-off Meeting
• Hamburg, 10 May 2005

2
ENFA Model

• Simulates land use decisions in the EU
  agricultural and forest sectors
• Represents markets and computes market
  equilibrium
• Portrays trade on a global level
• Accounts for environmental impacts of land use
  decisions
• Spatially explicit, dynamic

3
Non-Food
Land use competition
Food
Biodiversity
4
ENFA Model Structure
Limits
Limits
Resources
Land Use Technologies
Products
Markets
Inputs
Demand Functions, Trade
Processing Technologies
Supply Functions
5
ENFA Optimization

• Model determines the "optimal" use to which each
  individual technology should be used in each
  region and time period
• Maximize welfare
• Obey restrictions
• Product prices are endogenous

6
ENFA Spatial Resolution

• Political regions (NUTS 2)
• Soil types
• Farm types
• Altitude levels
• Slopes

7
ENFA Dynamics

• 5 to 10 year steps from 2005 to 2030 (2100?)
• Technical progress
• Demand industry growth
• Resource change
• Policy scenarios

8
Data

• Resource data
• Climate, Soil, Water, Existing Forests,
  Population, Labor
• Technological data
• Inputs / outputs for crop, livestock, forest
  management, and product processing and
  transportation options
• Market data
• Observed prices, production, trade, and income
  levels
• Supply Demand function parameters
• Environmental impact data
• Emissions, Sequestration, Erosion, Biodiversity

9
ENFA Technologies

• Traditional agriculture
• major crops
• major livestock
• Forestry
• Non-food agriculture
• Processing
• (Wildlife preservation)

10
Non-market Impacts

• Greenhouse gas emissions
• Air, water, soil quality
• Income distribution
• Rural development / employment
• Wildlife

11
Simultaneity

• Technologies
• Non-Market Impacts
• Current and Potential Policies

resource competition multiple impacts
12
Crop Technology Data Base
Region Altitud Soil Farm Rotation Water Tillage Fertilz Residue Item Unit Value
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic Wheat dt/ha/y 50
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic S-Beat dt/ha/y 200
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic Straw dt/ha/y 50
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic Labor hr/ha/y 30
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic Land ha/ha/y 1
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic Diesel l/ha/y 40
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic ... ... ...
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic Soil-C kg/ha/y 50
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic Erosion kg/ha/y 15
Poland 0-300 Sand ES3 W-W-S Irrig Conv. Basic Basic NO3-L kg/ha/y 20
13
Outputs
Inputs
Technology Adoption
Non-Market Impacts
14
Consistency

• Representative yields not maximum yields on
  experimental plots
• Representative input quantities on labor and
  energy intensive inputs
• Representative and complete variable costs on
  remaining inputs
• Environmental Impacts (from EPIC)

15
Technical Details

• Programmed in GAMS
• Non-linear functions are linearly approximated
• Solved with CPLEX
• Variables and equations are aggregated to blocks

16
Constrained Optimization
17
Objective Function
18
Resource Limits

• Limits exist on
• Land
• Water

• Family labor
• Public grazing land

19
Balance Equations
20
International Trade
21
Emission Accounts
22
Basic Results
23
Technology Potentials

• Measures of potential
• Technical
• Economic
• single strategy
• multiple strategy

24
U.S. Ag-Soil Carbon Potentials
500
400
Economic Potential
300
Carbon price (/tce)
Competitive Economic Potential
200
Technical Potential
100
0
0
20
40
60
80
100
120
140
160
Soil carbon sequestration (mmtce)
25
U.S. Afforestation Potentials
500
400
Economic Potential
300
Competitive Economic Potential
Carbon price (/tce)
200
100
Technical Potential
0
0
50
100
150
200
250
300
Emission reduction (mmtce)
26
U.S. Biofuel Potentials
500
Economic Potential
400
300
Competitive Economic Potential
Carbon price (/tce)
200
Technical Potential
100
0
0
50
100
150
200
250
300
350
Emission reduction (mmtce)
27
Pasture
Traditional Crops
Land Allocation
Biomass for Power Plants
Afforestation
Carbon Tax
28
Bioenergy use
None
2010 Limit
2030 Limit
Energy Crop Area
2050 Limit
Unrestricted
Subsidy
29
A Simple Example
30
Constant Corn Price
31
Endogenous Corn Price
Rainfed Corn
Irrigated Corn
Biofuel
250
200
150
Revenue in /Acre
100
50
0
0 (1.80)
25 (1.98)
50 (2.16)
100 (2.88)
Carbon Price in /tce (Corn price in /bu)