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GTAP Resource #2024

"How do trade, poverty and climate policies affect biodiversity?"
by Manders, Ton

Over the past 50 years humans have changed ecosystems more rapidly and extensively than in any comparable period of time in human history. However, the changes that have been made to ecosystems have contributed to substantial gains in human well-being and economic development. For the coming 50 years, the degradation of ecosystem services could grow significantly worse, depending on different policies undertaken. In this paper, we selected a number of policy options initiated, proposed and discussed in international forums, which can be expected to have a large impact on biodiversity. The selected policy options influence several of the major pressures on biodiversity loss: habitat loss, (over-)exploitation of natural resources, agriculture and eutrophication, climate change, fragmentation and infrastructural development. The options considered in this paper are: (1) Liberalization of agricultural markets as currently discussed in the Doha round of the World Trade Organization, (2) Alleviation of extreme poverty in Sub-Saharan Africa, as proposed by the Millennium Project of the United Nations, and (3) Limiting climate change by stabilizing greenhouse gas concentration levels that coincide with the EU target of 2°C stabilization compared to pre-industrial levels. The impacts of these policy interventions are assessed for economic consequences, the amount of land use and the loss of biodiversity. This loss of biodiversity is of central concern. Parties to the Convention of Biological Diversity (CBD) agreed upon a significant reduction in the current rate of loss of biological biodiversity at the global and regional levels by 2010.
For this analysis a modeling framework of an extended version of GTAP (Van Meijl et al., 2005) and the IMAGE model (Integrated Model to Assess the Global Environment; Alcamo et al., 1998) is used. This modeling framework translates exogenous drivers like population and macro-economic growth into direct drivers of change, like land use, climate change and nitrogen loading. From indirect drivers such as energy demand and supply and associated emissions of greenhouse gases and air pollutants, IMAGE calculates land-cover and land-use changes for agriculture and forestry practices. Agricultural demand, supply and trade result in the production of crops and animal products per region. These demands are spatially allocated by the IMAGE model to calculate implications for land-cover and land-use per grid cell of 0.5x0.5°. Productivity assumptions are established between GTAP and IMAGE as the compounded result of bio-geophysical and economic factors. Resulting emissions lead to atmospheric concentration of greenhouse gases and associated temperature and precipitation patterns, as well as to nitrogen deposition. The energy model of IMAGE also generates a demand for bio-energy for different end-use markets, taking potential land availability and productivity from IMAGE. The amount of bio-energy produced depends on energy demands, relative energy price developments and technological advancement.
The quantitative analysis shows that most options are too little or too late to meet the CBD 2010- target. For limiting climate change (bio-energy) and poverty alleviation (increasing GDP) initial losses in the medium term (2010 -2030) of biodiversity seem to be inevitable but improvements are foreseen in the much longer term. Eventually, these long term benefits might offset the medium term losses, although this is not found within the time frame until 2050.
All options have an economic impact or ‘costs’. In most cases there is a trade-off between biodiversity and economic growth. In the case of trade liberalization and poverty reduction higher economic growth comes at the expense of global biodiversity. However, on the regional, national and local scales there will be biodiversity and economic gains due to safeguarding a variety of functions from which –eventually- humanity entirely depends (see also the Millennium Ecosystem Assessment). Economic costs and biodiversity gains may be spread over time. Climate change policy will slightly decrease economic growth, while beneficial effects on biodiversity and the economy (or avoided cost) can only be expected in the long run.

Alcamo, J., Leemans, R. and Kreileman, G.J.J., 1998. Global change scenarios of the 21st century. Results from the IMAGE 2.1 model. Pergamon & Elseviers Science, London.
Meijl H. van, T. van Rheenen, A. Tabeau and B. Eickhout, 2005. The impact of different policy environments on agricultural land use in Europe. Agriculture Ecosystems & Environment. In Press

Resource Details (Export Citation) GTAP Keywords
Category: 2006 Conference Paper
Status: Published
By/In: Presented at the 9th Annual Conference on Global Economic Analysis, Addis Ababa, Ethiopia
Created: Manders, T. (4/30/2006)
Updated: Manders, T. (4/30/2006)
Visits: 3,482
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