1. The European Forest and Agricultural Sector Optimization Model (EUFASOM) Uwe A. Schneider Research Unit Sustainabilty and Global Change Hamburg University

2. FASOM History US (1993) EU (2004) Global (2006)

3. FASOM Partial Equilibrium Model Maximizes sum of consumer and producer surplus Constrained by resource endowments, technologies, policies Spatially explicit, discrete dynamic Integrates environmental effects Programmed in GAMS

4. Purpose and Objectives To advice policy makers about the agricultural and forestry sector response to structural changes a) Policies b) Environmental change c) Technical change d) Socioeconomic change

5. Policy Scope Climate and other environmental policies Research subsidies Agricultural policies Trade policies Simultaneous assessment

6. Food Timber Fiber Bioenergy Biomaterial Carbon Sinks Land use competition Nature Reserves Sealed Land

7. Objective Function Demand Supply Price Quantity P* Q* Resource Rents Consumer Surplus

8. Surplus Maximization Implicit Supply and Demand Forest InventoryLand Supply Water Supply Labor Supply Animal Supply National Inputs Import Supply Processing Demand Feed Demand Domestic Demand Export Demand CS PS

9. Commodity Demand 4 general cases (above) For all final products For all regions Domestic Use, Export

10. Model Structure Resources Land Use Technologies Processing Technologies ProductsMarkets Inputs Limits Supply Functions Limits Demand Functions, Trade Limits Environmental Impacts

11. Processing Markets Feed mixing Labor Pasture Other Inputs Cropland Water Livestock production Forestry, Nature, Crop production Export Domestic demand Import Model Structure Forest Inventory

12. Spatial Resolution Soil texture Stone content Altitude levels Slopes Soil state Political regions Ownership (forests) Farm types Farm size Many crop and tree species Tillage, planting irrigation, fertilization harvest regime

13. Altitude: 1.< 300 m 2.300-600 m 3.600-1100 m 4.>1100 m Texture: 1.Coarse 2.Medium 3.Medium-fine 4.Fine 5.Very fine Soil Depth: 1.shallow 2.medium 3.deep Stoniness: 1.Low content 2.Medium content 3.High content Slope Class: 1.0-3% 2.3-6% 3.6-10% 4.10-15% 5.… Homogeneous Response Units DE13 DE12 DE11 DE14

14. EUFASOM Dynamics 5 (to 20) year time steps State of forests (and soil organic matter) Technical progress Demand & industry growth Resource and global change Policy scenarios

15. State of the Art Flexibility (resolve acc. needs) Index notation –millions of data, variables, and equations with sparse programming statements –ensures consistency (model development) Extensive generic equation checks (30 checks per equation) Systematic solution analysis (symptom to cause)

16. Positive Variables RESOURCE_VAR (PERIOD,REGION,RESOURCE) FOREST_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH) PEREN_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,CROPTECH) CROP_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,CROPTECH) LIVE_VAR (PERIOD,REGION,ANIMAL,LIVETECH) FEED_VAR (PERIOD,REGION,ANIMAL,PRODUCT,FEEDTECH) ECO_VAR (PERIOD,REGION,SOILTYPE,SOILSTATE,ECOTECH) PROCESS_VAR (PERIOD,REGION,PROCTECH) LUC_VAR (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) DEMAND_VAR (PERIOD,REGION,PRODUCT) SUPPLY_VAR (PERIOD,REGION,PRODUCT) TRADE_VAR (PERIOD,REGION,REGION,PRODUCT)

17. Equations OBJECTIVE_EQU RESOURCEBAL_EQU (PERIOD,REGION,RESOURCE) RESOURCEMAX_EQU (PERIOD,REGION,RESOURCE) SOILSTATE_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE) FORINVENT_EQU (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,OWNER,AGE,FORTECH) LUC_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) LUCLIMIT_EQU (PERIOD,REGION,SOILTYPE,SPECIES,CHANGE) STOCK_EQU (PERIOD,REGION,STOCK) EMIT_EQU (PERIOD,REGION,SUBSTANCE) PRODUCTBAL_EQU (PERIOD,REGION,PRODUCT) MINFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT) MAXFEED_EQU (PERIOD,REGION,ANIMAL,NUTRIENT)

18. Data FOREST_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,ALLTECH,ALLITEM) PEREN_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,AGE,ALLTECH,ALLITEM) CROP_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,SPECIES,FARM,ALLTECH,ALLITEM) ECO_DATA (PERIOD,REGION,SOILTYPE,SOILSTATE,ALLTECH,ALLITEM) LIVE_DATA (PERIOD,REGION,ANIMAL,ALLTECH,ALLITEM) FEED_DATA (PERIOD,REGION,PRODUCT,ALLTECH,ALLITEM) PROCESS_DATA (PERIOD,REGION,ALLTECH,ALLITEM) PRODUCT_DATA (PERIOD,REGION,PRODUCT,ALLITEM) MARKET_DATA (PERIOD,REGION,ALLITEM,SDTYPE,SDITEM) TRADE_DATA (PERIOD,REGION,REGION,PRODUCT,ALLITEM) RESOURCE_DATA (PERIOD,REGION,ALLRESOURCE,SDITEM) STOCK_DATA (PERIOD,REGION,PRODUCT,ALLITEM) LUC_DATA (PERIOD,REGION,SOILTYPE,SPECIES,ALLCHANGE,ALLITEM)

19. Pre-Solution Analysis Identifies structural errors –Missing data –Misspecified data –Wrong signs More than 30 general variable and equation checks

20. Mitigation Potentials 0 50 100 150 200 250 300 350 400 450 500 0100200300400500600700800 Carbon price (Euro/tce) Mitigation (mmtce) Technical Potential Competitive Potential

21. -10 -8 -6 -4 -2 0 2 4 6 8 020406080100 Billion Euros Carbon Equivalent (CE) Prices in Euros per Ton Changes in Welfare Accounts Gross Ag-Producer Surplus Emission Payments Net Ag-Producer Surplus Ag-Consumer Surplus

22. GHG Mitigation and Markets 20 40 60 80 100 120 140 160 180 200 220 050100150200250300 Fisher index Carbon price (Euro/tce) Crop prices Livestock prices Livestock production Crop production Net exports

23. Afforestation Potentials 0 100 200 300 400 500 050100150200250300 Carbon price (Euro/tce) Emission reduction (mmtce) Technical Potential Economic Potential Competitive Economic Potential

24. Forest Policy: Crop Emissions Emissions (kg C/ha) Carbon price (Euro/tce) -15 -10 -5 0 5 10 15 050100150200250300 Nitrogen Fertilizer Ag-Soil Carbon Irrigation Use Fossil Fuel Use

25. 0 50 100 150 200 250 300 350 400 450 500 0 100 200 300 400 500 600 700 800 900 Carbon Price in Euro/mtce Total Agricultural Greenhouse Gas Emission Abatement in mmtce Competitive Economic Potential Simult. Technical Potential Independent Geographic Potential Independent Technical Potential

26. 0 50 100 150 200 250 300 350 400 450 500 0 100 200 300 400 500 600 700 Carbon Price in Euro/mtce Total Agricultural and Forest Greenhouse Gas Emission Abatement in mmtce Crop Area Fixed Crop Area and Prices Fixed Crop Area and Prices Endogenous Prices Fixed

27. 0 10 20 30 40 50 60 70 80 0 20 40 60 80 100 Energy Crops (million hectares) Carbon tax on energy (Euro/ton of carbon) 2010 Capacity 2030 Capacity 2050 Capacity Unrestricted Capacity Power Plant Biomass Supply

28. Thanks