United States. Congress. House. Committee on Scien.

Road from Kyoto : hearing before the Committee on Science, U.S. House of Representatives, One Hundred Fifth Congress, second session (Volume pt. 2) online

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under irrigation



228



38



C ROSENZWEIG, M. L PARRY AND G FISCHER



Table 5. Adaptations tested in crop mcdeiing study







Change >


of


Change


of


Additional


Additional N


Country


Crop tested"


planting


date


cultivar


/crop


irrigation


fertilizer


Argentina


m


X




x"




X




Australia


r.w


x'




x




x=




Bangladesh


r






X








Brazil


w,m,s


X-




x'




x.x='


X


Canada


w


X'








x,x-




China


r


X




x.x"








Egypf


ni,w


X




X




X




France


m,w


x.x'




X




X




India


w










X




Japan


"■.w.m


X-








X-




Mexico


m


X




x'




r'


X


Pakistan


w


X








X




Philippines


r


X5




x>








Thailand


r






X








Uruguay


b


X




X




X


x.x'


USA


w,m,s


X




X




X




USSR


w


x'-'




X








Zimbabwe


m


x'








x,x-


X



Notes:

"w = wheat; m = maize; r = rice; s = soybean; b = barley

' Hypothetical new cultivar

' Combination of irrigation and change in planting date.

' Combination of irrigation and increased nitrogen fertilize..

■" Combination of change in planting date and incrc;'scd nitrogen fertilizer

^ Combination of new cultivar and change in planting date.

" Change to winter wheat.

' Suggested shift in the zone of crop production.



3 Changes in crop variety to currently available varieties
more adapted to the altered climate

Adaptation Level 2 included:



I.



Large shifts in planting date { > I month)
Increased fertilizer application (included here because of
the implied costs for farmers in developing: countries)
Installation of irrigation systems

Development ofnew crop varieties (tested by the manipula-
tion of genetic cocllicicnls m c^op models)



Yield changes for both adaptation levels were based on
crop model simulations where available and extende'l to
other crops and regions using the estimation methods des-
cribed above. For the crops and regions not simulated, the
negative impact ofclimate change was halved ifadaptations
were estimated to partially compensate for them; if compen-
sation was estimated to be full, yield changes were set toO. If
yield changes were positive in response to climate change and
the direct efTects of CO;, adaptation to produce even greater
yield increases was not included, with the assumption that



farmers would lack incentive to adapt further The adap-
tation estimates were developed only for the scenarios that
included the direct effects of CO,, as these were judged to be
most realistic. Examples of the crop yield change estimates
for Adaptation Levels 1 and 2 for the DKMOclimalcchangc
scenario for several countries arc shown in I'able 6.

Limitations o/ the ciJaplaliiin analysis

The adaptation simulations were not comprehensive.
becau.se all possible combinations ol farmer responses were
not tested at every s.te. Spatial analyses of crop, climatic, and
.soil resources are needed to fully test the possibilities for crop
subr.titutioii Neither the availability of water supplies for
irrigation nor the costs of adaptation were considered in this
study; these are both critical needs for further research A
related :;tudy on the integrated l.npact'. ofclimate change in
Egypt, which utilized the results of this work, does address
future water availability for national agricultural production
in that country (see Chapter 7)

At the local level, there may De social or lechiucal reasons



229



2 WORLD FOOD SUPPLY



39



Table 6. Changes in wheal yield' estimated for the UKMO
2 X CO^ tlimule chani;e scenario, alone and with two levels
ill farm adaptation

UKMO(%) ADr(%) AD2'(%)



Argcniina


-30


-20


-10


USA


-14


-7


-3


Eastern Europe &








former USSR


-20


-10


-5



Notes

' Wiih direct CO, effects.

- Adaptation Level 1 implies minor change to current

agricultural systems.

' Adaptation Level 2 implies major change to current

agncultural systems.



why farmers arc reluctant to implement adaptation mea-
sures. For example, increased fertilizer application and
improved seed slocks may be capital-intensive and not suited
to indigenous agricultural strategies. Furthermore, such
measures may not necessarily result in sustainable produc-
tion increases. In the case of irrigation, initial benefits may
eventually give way to soil salinization and lower crop yields.
Thus, Adaptation Level 2 represents a fairly optimistic
assessment of world agriculture's response to changed cli-
mate conditions as characterized by the GCMs tested in
this study and inay possibly require substantial changes in
current agricultural systems, investment in regional and
national agncultural infrastructure, and policy changes.
However, estimation of the effect of changes in regional,
national, and international agricultural policies relating to
farm-level adaptation were beyond the scope of the analysis.



The world food trade model

The world food system is a complex, dynamic interaction
of producers and consumers, mediated through global
ir.arkels. Related activities include input production and
acquisition, transpoitation, storage, and processing.
Although there is a trend toward internationalization in the
world food system, only about 1 5 percent of the total world
agricultural production currently crosses national borders
(Fischer et al.. 1990). National governments shape the
system by imposing regulations and by making investments
in agricultural research, infrastructure improvements, and
education. The system functions to meet the demand for
food, to produce food in increasingly efficient ways, and to
trade food within and across national borders. Although the
system does not guarantee stability, it has generated long-



term real declines in prices of major food staples (Fischer el
al . 1990).

The Basic Linked System consists of linked national
agricultural sector models. It was designed at 1 1 ASA for food
policy studies, but it also can be used to evaluate the effect of
climate-induced changes in crop yield on world food supply
and agricultural prices. It consists of 16 national (including
the European Community (EC]) models with a common
structure. 4 models with country-specific structures, and 14
regional group models (Table 7). The 20 models in the first
two gruups cover about 80 percent of attributes of the world
food system, such as demand, land, and agricultural produc-
tion. The remaining 20 percent are covered by the 1 4 regional
models for countries that have broadly similar attributes
(e.g., African oil-exporting countries, Latin American high-
income exporting countries, Asian low-income countries,
etc.). The grouping is based on country characteristics, such
as geographic location, income per capita, and the country's
position with regard to net food trade.

The BLS is a general equilibrium model system, with
representation of all economic sectors, empirically estimated
parameters, and no unaccounted supply sources or demand
sinks (see Fischer ei al. [1988] for a complete description of
the model) In the BLS, countries are linked through trade,
world market prices, and financial flows (Figure 3). It is a
recursively dynamic system: a first round of exports from all
countries is calculated for an assumed set of world prices, and
international market clearance is checked for each commo-
dity. World prices are then revised, using an optimizing
algorithm and are again transmitted to the national models.
Next, new domestic equilibria are generated and net exports
are adjusted. This process is repeated until the world markets
for all commodities are cleared. Al each stage of the iteration,
domestic markets are in equilibrium. This process yields
international prices as influenced by governmental and
intergovernmental agreements The system is solved in
annual increments, simultaneously for all countries. Sum-
mary indicators of the sensitivity of the world system include
world cereal production, world cereal prices, and prevalence
of population in developing countries at risk of hunger.

The BLS does not incorporate any climate relationships
per se. Effects of changes in climate were introduced to the
model as changes in the average national or regional yield per
^commodity Ten commodities were included in the mt/Oel:
wheat, rice, coarse grains, protein feed, bovine and ovine
meat, dairy products, other animal products, other food,
non-food agriculture, and non-agriculture. Yield change
estimates for coarse grains were based on the percentage of
maize grown in the coimtry or region; soybean crop model
results were used to estimate the protein feed category; and
the estimates for the non-grain crops were based on the
modeled grain crops and previous estimates of climate



230



40



C. ROSENZWEIG. M L PARRY AND G FISCHER



Table 7 Models in im Bcsk Linked Syrun,



MoUels with a common structure



Models with country-specific structures



Regional group models



Argentina

Australia

Austria

Brazil

Canada

Egypt

Indonesia

Japan

Kenya

Mexico

Nigena

New Zealand

Pakistan

Thailand

Turkey

European Community



Eastern Europe & former USSR

China

India

United States



Africa Oil Exporters
Africa Medium-Income Exporters
Africa Medium-Income Importers
Africa Low-Income Exporters
Africa Low-Income Importers
Latin American High-Income Exporters
Latin American High-Income Importers
Latin American Medium Income
Southeast Asia High-Medium Exporters
Southeast Asia High-Medium Importers
Asia Low Income
Southwest Asia Oil Exporters
Southwest Asia Medium-Low Income
Rest of the World



Note: See Appendix 3 for countries within regional groups.

change impacts as described above. A positive bias toward
non-grain crops was introduced by this procedure, since the
previous estimates of yield changes of the non-grain crops
were less negative than the modeled results from this study

Economic growth rales

Economic growth rates are a product of several Bl.S func-
tions. Non-agricultural production utilizes a Cobb Douglas
production function, with labor and capital as production
factors. Non-agricultural labor input depends primarily on
population growth and somewhat on relative prices between
agriculture and non-agriculture by means of a sector mig-
ration function. Capital accumulation depends on invest-
ment and depreciation, which in turn depend on rates of
saving and depreciation. Depreciation rates and rates of
saving were estimated from historical data anil were kept
constant after 1990. There was an exogenous assumption
ba.scd on historical data for technical progress in the prodiic-
tioii function. Kor the lower growth scenario, the rale ol
saMng was reduced, resulting in about 10 percent lower gross
domestic product in 2060.

The economic growth rates predicted by the BLS in the
reference case followed historical trends, as shown in Table 8.
Kor the period 1980 to 2060, the BLS predicted a growth of
I..1 percent. 1.7 percent, and 2.4 percent annually for world,
developed, and developing countries, respectively, as com-
pared to average population growth rates ol I.I per-.ent, 3
percent, and 1.3 percent.

YhIiI trends

In general, the rate of exogenous technical progress started

from historical values and for cereal crops approached 5



percent per annum by 2060. Representing improvement in
agriculture productivity due to technological progress, the
annual yield trends used in the BLS for the period 1980-2000
were 1.2 percent, 1.0 percent, and 1.7 percent for world,
developed countries, and developing countries, respectively.
According to KAO data, yields have been growing at an
average of around 2 percent annually during the period
1961 1990. both for developed and developing (excluding
China) countries (F-AO, 1991). From 1965 to 1985, annual
productivity for less-developed countries grew at about 1.5
percent/year. In the 1980s, however, yields grew globally by
an average of only 13 percent, implying a falling trend in
yield growth rales.

The falling growth rales utilized in the reference case of the
BLS may be justilied for several reasons. Historical trends
suggest decreasing rates of increase in crop yields, and yield
improvements from biotechnology have yet to be realized.
Much ol ihe huge yield increases in developed countries in
the 1950s and 1960s and in developing countries thereafter
was due to the intensiticalion of chemical inputs and mecha-
nization. Apart from economic reasons and environmental
concerns, nhich suggest that maximum input levels may
have been reached in many developed countries, there are
likely to be diminishing rales of return for further input
increases. In some developing countries, especially in Africa,
increase in input levels and intensification of production are
likely to continue foi sonic time but may also ultimately level
olT. Furthermore, since Africa has the lowest average cereal
yields of all the regional groups combined with a high
population growth rate, it will likely conlribule an increasing
share of cereal producion, thereby reducing average global
yield increases



231



2 WORLD FOOD SUPPLY



41







COUNTRV


' A






















EXCHANGE EQUILIBRIUM

Prices, consumption,
stocks, net exports
to satisfy:

- Budget constraint

- Market clearance

- Trade balance

- Trade quota






PRODUCTION










Non-
agriculture
production




Agri-
culture
production








k











Production inputs

- Land - Fertilizer

- Labor - Ottiers

- Capitai












\











GOVERNMENT POLICIES
Target prices, tarirts, taxes, quota, etc.













International
commodity
prices P^



Net
trade



COUNTRY B



WORLD MARKETS

International prices to satisfy

- Commodity balances

- Financial transfer balarrce



,W



COUNTRY C



>w



:,W



-.w



COUNTRY D



COUNTRY E



Figure 3 The Basic Linked System; relationships between country componenls and world markets. ,\rrows to counlries represent
international commodity prices; arrows to world n,arkets represent net trade



A rahle IcnJ

Estimates of the availability of arable land for expansion of
crop produclion were based on FAO data In the BLS
standard national models, a piece-wise linear time-trend
function was used to impose upper bounds (inequality
constraints) on land use In addition, this time-trend func-
tion was modified with an elasticity term (usually 0.05 or less)
which reacts to changes in shadow prices of land in compari-
son to 1980 levels. The upper limits imposed by the time-
irend function utili/:ed ihc FAO data on potential arable
land. The arable land limits were not adjusted for climate
change even though the',' may be afTcc'.cd positively :n some



locations by an extension of season length or a drying of wet
soils, or negatively by sea-level inundation or desertification.

Risk (>l hunger iiulicaliir

The indicator of the number of people at risk of hunger used
in the BLS was defined as those people in developing
countries (excluding China) with an income insufficient to
either produce or procure their food requirements. The
measure was derived from FAO estimates and methodology
for developing market economies (FAO, 1984 and 1987).
The FAO estimates were obtained by stipulating that calorie
c'jnsi;np',ion distribution :r. a country is ske'Aed and can be



232



42



C ROSENZWEIG. M L PARRY AND G FISCHER



1 able 8. Historical and simulated average annual growin
rates of GDP (% p?r annum}



Historical



Basic Linked
System



I960 1970 1980 1980 2000 2020 2040
to to to to to to to
1970 1980 1990 2000 2020 2040 2060



World


4.8


3.6


2.9


2.9


2.0


1.5


I.I


Developed


4.7


3.1


2.8


2.6


1.8


1.3


1.0


coantries
















Developing


5.2


5.4


3.1


4.0


2.6


1.8


1.3


countries

















Source: FAO, 1991.

repicsented by a beta distribution. The parameters of those
distributions were estimated by the FAO for each country
based on country-specific data and cross-country compari-
sons. The estimate of the energy requirement of an individual
was based on the basal metabolic rate (time in a fasting state
and lying at complete rest in a warm environment). Body
weight, age, and sex have an impact on this requirement. The
FAO presented two estimates of the number of undernour-
ished people, based on minimum maintenance requirements
of 1 .2 and 1 .4 (the latter judged as more appropriate) basal
metabolic rate. The BLS estimate for 1980, ba.sed on the 1 .4
basal metabolic rate requirements, was 501 million under-
nourished people in the developing world, excluding China

l.imitalions of the world food trade model
The economic adjustments simulated by the BLS were
assumed not to alter the basic structure of the production
functions. These relationships may be altered in a changing
climatic regime and under conditions of elevated CO,. For
example, yield responses to nitrogen fertilization may be
altered due to changing nutrient solubilities in warmer soils.
Furthermore, in the analysis of BLS results, consideration
was limited to the major cereal food crops, even though shifts
in the balance of arable land and livestock agncullure are
also likely under changed climatic regimes. Livestock pro-
duction is a significant component of the global tood system
and IS also potentially sensitive to climatic change. The non-
agriculture sector was poorly modeled in the BLS, leading to
simplifications in the simulation of economic responses to
climatic change.

Finally, recent changes in global geopolitics and related
changes in agricultural production were not well represented
in the BLS. To account for these changes, prices in previously
planned economies were made more responsive compared to
earlier versions, 'plan targets" for allocation decisions were



replacsd, and some constraints were relaxed in the agricul-
tural sector model. Better analysis depends on the develop-
ment of new models for these emerging capitalist economics.

The set of model experiments

The estimates ofclimate-induced changes in food production
potential were used as inputs to the BLS in order to assess
possible impacts of climate change on future levels of food
production, food prices, and the number of people at risk of
hunger (see Figure 1). Impacts were assessed for the year
2060, with estimates of population growth, technology
trends, and economic growth projected to that vear Assess-
ments were first made for a reference scenario that assumed
no climate change and were subsequently made for the GC M
scenarios (see discussion above). The difference between the
two assessments is the climate-induced effect A further set of
assessments examined the efficacy of two levels of farmer
adaptation in mitigating climate change impacts and the
effect on future production of different rates of economic and
population growth, and of liberalizing the world trade
system. Results for these scenarios are described in the
following sections.

THE RE FERE-NCE SCENARIO

The reference scenario projected the agricultural system to
the year 2060, assuming no climate change and no major
changes in the political or economic context of world food
trade. It assumed:

• UN medium population eslimalcs (10 2 billion people by
2060) (Inlernalional Bank for Reconstruction Dcvclup-
mcnl/World Bank, 1990)

• 50 percent trade libcrali/alion in agriculture (c g , removal
of import restrictions), inlroduccj gradually hy 2020

• Moderate economic growth (ranging from 3.0 percent/year
in l98()-2000 to 1.1 percent/year in 2(Ma 2060)

• Technology projected lo increase yields over time (1990
2060), Cereal yields for the world, developing countries,
and developed countries were assumed to increase annually
by 0.7 percent. (> 9 percent, and 6 perccni. respectively,

CLIMATE CHANGE SCENARIOS
These are projections of the world system, including effects of
climate cliangc on agricultural yields under the GCM
scenarios. The food trade simulations for these three
scenarios began with 1990 and assumed a linear change in
yields until the doubled CO, changes would be reached in
2060. Simulations wire made both «ith and without taking
into account the physiological elTects of 555 ppm CO, on
crop growth and yield for the equilibrium yield estimates In
these scenarios, internal economic adjustments in the model
occur, such as increased agricultural investment, reallocation



233



2 WORLD FOOD SUPPLY



43



of agricultural resources according to economic returns
(including crop switching), and reclamation of additional
arable land as a response to higher cereal prices. These arc
based on shifts in supply and demand factors that alter the
comparative advantage among countries and regions in the
world food trade system These eco:ioniic adjustments are
assumed not to feed back to the yield levels predicted by the
crop modeling study.



20
15
10
S

-5
-10
-15



% YIELD CHANOe




WITH DIBECT CO, EFFE








.■











~"




-











T ♦2



T ♦4



I Wheat I I Rice I 1 Soybean



SCENARIOS INCLUDING THE EFEECTS Ol-

I ARM-LEVEL ADAPTATIONS

The food trade model was first run with yield changes

assuming no external farm-level adaptation to climate

change and was then re-run uith difl'erent climate-induced

changes in yield projected from the mo levels of adaptation

described above Policy, cost, and water resourc- availability Figure 4 Aggregated IBSNAT crop model yield changes I'nr

were not studied explicitly and were assiinied not to be -i- 2"C and -t^4°C temperature Increase ("oiinlry re^ulIs .ire

barriers to adaptation. Switching from one enterprise to weighted hy contribution of national production lo wcirki prodiic-

another based on production and demand factors was Hon. Direct elTeets of CO, on crop frowih ^ind waier use are taken

included in the BLS



-]



into account.



SCENARIOS Ol Dill ERENT FUTURE TRADE
POLICIES AND DH-FEKENT LEVELS OF
ECONOMIC AND POPULATION GROWTH
A final set of scenarios assumed changes to the world larilf
structure and dilfcreiit rates of economic and population
growth, yielding insight into alternate futures. As with the
previous experiments, these were conducted both with and
without taking climate change into account. These scenarios
included:

• Trailc liheralizaiKin. with full trade liberalization in agricul-
ture being introduced gradually by 2020.

• Slower rales t>l econimuc growih. ranging from 2.7 percent/
year in 1980-2000 to 1.0 percent in 2040-2060. Such low
rates would result in a global GDP in 2060 that would be
10.3 percent lower than the reference scenario and would be
1 1 .2 percent lower in devLloping countries and 9 8 percent
lower in developed countries

• Low ptipulalion );ri)»ih. following UN low population
estimates (8.6 billion people by 2060)

The analysis of trade liberalization in this study was
restricted lo the removal of distortions between trade prices
and domestic prices at the level of the raw materials of the
agricultural commodities. Where applicable, trade and pro-
duction quotas were released. Other types of domestic assist-
ance, e.g., input subsidies, export credit, and insurance, were
not included in the analysis. For a given world market price
for an agricultural commodity, the domestic price under
trade liberalization depends upon whether the country is a
net exporter or net importer of the commodity, the differen-
tial being a margin for international freight and insurance.



EFFECTS ON CROP YIELDS

Crop yields with arbitrary sensitivity tests

With the direct effects of CO, and precipitation held at
current levels, average crop yields weighted by national
production showed a positive response to + 2°C warming
and a negative response to +4°C (Figure 4). Wheat and
soybean yields were estimated to increase 10 15 percent, and
maize and rice yields were estimated to inci;case about 8
percent, with a + 2°C temperature rise. Yields of all four
crops turn negative at +4°C, indicating a threshold of the
compensation of direct CO; effects for temperature increases
between 2 and 4°C, as simulated in the I BSNATcrop models.
Rice and soybean would be most negatively affected at
+ 4°C. These averaged results, however, mask differences
among countries. For example, the effects of latitude are such
that in Canada, a +2°C temperature increase with no



Online LibraryUnited States. Congress. House. Committee on ScienRoad from Kyoto : hearing before the Committee on Science, U.S. House of Representatives, One Hundred Fifth Congress, second session (Volume pt. 2) → online text (page 27 of 137)