Agricultural/Forestry Greenhouse Gas Modeling Forum October 1-3, 2001 Top-Down Simulation of Energy, Agriculture, and Land Use Ron Sands Joint Global Change Research Institute: University of Maryland and Pacific Northwest National Laboratory Agricultural/Forestry Greenhouse Gas Modeling Forum October 1-3, 2001

Acknowledgements Pacific Northwest National Laboratory Jae Edmonds Hugh Pitcher Steve Smith Chris MacCracken (former PNNL) Marshall Wise (former PNNL) Dartmouth College Kenny Gillingham (intern)

Overview Uses for top-down economic models SGM background Marginal abatement curves for energy Applications PNNL approach to agriculture and land use Modular development of agricultural sector Application to commercial biomass

Top-Down Economic Models Project baseline greenhouse gas emissions over time for a country or group of countries Find the least-cost way to meet any particular emissions constraint Provide a measure of the carbon price, in dollars per metric ton Provide some measure of the overall cost of meeting an emissions target

SGM Production Sectors

Return to 1990 ($ per ton C) 2010 2020 Full Global Trading 28 29 Annex I Trading 106 126 Annex I targets = 1990 carbon emissions Carbon policy starts in 2005 SGM reference case

Return to 1990 ($ per ton C) 2010 2020 Full Global Trading 21 27 Annex I Trading 72 113 Annex I targets = 1990 carbon emissions Carbon policy starts in 2005 EIA reference case

Mitigation at Least Cost Consider all opportunities for reducing greenhouse gas emissions Energy system efficiency Non-CO2 greenhouse gases Expansion of commercial biomass Carbon sequestration in terrestrial ecosystems Carbon capture and sequestration Top-down models should be a tool for integrating knowledge of sector specialists

1998 Administration Analysis Analysis by Council of Economic Advisers Reduced-form analysis SGM was not run directly Marginal abatement curves derived from many SGM model runs Emissions baselines taken from a different source (U.S. Energy Information Administration) Supply curve for non-CO2 greenhouse gases (U.S. Environmental Protection Agency)

Why Model Agriculture? Carbon emissions from energy consumption are not the whole story Carbon emissions from land-use change Carbon mitigation using biomass fuels CH4 and N2O emissions from agriculture Impact of climate change on agricultural productivity

PNNL Approach to Agriculture Modular development of Agriculture and Land Use (AgLU) component Key Drivers Population growth Demand for food and forest products Rate of increase in crop yield

Products in AgLU Crops (calories) Processed Crops (calories) Rice and Wheat Coarse Grains Oil Crops Other Crops Processed Crops (calories) Vegetable Oils Sweeteners and Alcoholic Beverages Animal Products (calories) Beef and other Ruminant Livestock Pork and Poultry Commercial Biomass (calories or metric tons) Forest Products (cubic meters)

1990 Food Consumption

Land Allocation

Methodology Forest Dynamics Land Allocation Trees in AgLU grow for 45 years Two forest markets (current and future) needed for model stability Land Allocation Land owners compare economic returns across crops, biomass, pasture, and future trees Underlying probability distribution of yields per hectare

Land Shares si = share of land in use i = profit rate per hectare in land use i l determines rate of change in land use (is a function of correlation within land-use nest)

Status of SGM Quick Turnaround Model Development Reduced form Rely on marginal abatement curves from sector models Model Development Move AgLU into SGM Rely on sector models to parameterize agriculture and forestry Collaboration with Texas A&M University and Lawrence Berkeley National Laboratory