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Global Futures: Modelling the Global Economic Impacts of Environmental Change to Support Policy-Making

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Global Futures: Modelling the Global Economic Impacts of Environmental Change to Support Policy-Making Global Futures: Modelling the global economic impacts of environmental change to support policy-making TECHNICAL REPORT February 2020 TM Global Trade Analysis Project This report presents the first full set of results from the Global Futures project, together with a description of the project background, objectives, methods and conclusions. A summary of the headline results and recommendations is provided in the accompanying Summary Report, available here. The work was based on a project concept developed and funded by WWF UK. For further information please contact: Dr. Justin Johnson ([email protected]) or Toby Roxburgh ([email protected]). Written by: Justin Andrew Johnson; University of Minnesota, Minneapolis, USA Uris Lantz Baldos; Purdue University, West Lafayette, USA Thomas Hertel; Purdue University, West Lafayette, USA Chris Nootenboom; University of Minnesota, Minneapolis, USA Stephen Polasky; University of Minnesota, Minneapolis, USA Toby Roxburgh; WWF UK, Woking, UK Suggested citation: Johnson, J.A., Baldos, U., Hertel, T., Liu, J., Nootenboom, C., Polasky, S., and Roxburgh, T. 2020. Global Futures: modelling the global economic impacts of environmental change to support policy-making. Technical Report, January 2020. https://www.wwf.org.uk/globalfutures Acknowledgements: Expert reviewers: Onil Banerjee (Inter-American Development Bank), Sergey Paltsev (Massachusetts Institute of Technology) and Alexander Popp (Potsdam Institute for Climate Impact Research). Technical advisory group: Rob Alkemade (PBL-Netherlands Environmental Assessment Agency), Carter Brandon (World Resources Institute), Raffaello Cervigni (World Bank), Karen Ellis (WWF UK), Fabien Hassan (Boston Consulting Group), David Leclere (IIASA), Hugo Valin (IIASA), Georgina Mace (University College London), Emily McKenzie (HM Treasury - Dasgupta Review team), Elizabeth Passey (The Wye & Usk Foundation), Giovanni Ruta (World Bank) and James Vause (UN Environment Programme World Conservation Monitoring Centre). Additional inputs from: Cristiane Close, Cicero de lima Zanetti, Andrea Dreifke-Pieper, Angela Francis, Gunter Mitlacher, Alessandra Prampolini, Samantha Putt del Pino, Katharine Tyndall, Rob Wood and Mark Wright. Editor: Barney Jeffries (www.swim2birds.co.uk) Design: Clean Canvas (www.cleancanvas.co.uk) The authors have taken care to ensure the material presented in this report is accurate and correct. However, the authors do not guarantee the accuracy of the data or material contained in this report, and accept no legal liability or responsibility connected to its use or interpretation. Contents List of figures ........................................................................................................................................... 3 List of tables ............................................................................................................................................ 4 Executive summary ................................................................................................................................. 5 Key results ........................................................................................................................................... 6 Result 1: Creation of a linked ecosystem services and economic model ........................................... 6 Result 2: Business-as-usual will be very damaging to the world economy......................................... 7 Result 3: The Sustainable Pathway scenario still incurs a loss to the economy, but the Global Conservation scenario generates a gain ........................................................................................... 7 Result 4: Key storylines .................................................................................................................. 10 Recommendations for further work ................................................................................................... 13 1 Introduction ....................................................................................................................................... 14 1.1 Background on models and research networks ............................................................................ 15 1.2 Modelling the economy-wide impacts of changes in ecosystem services...................................... 15 1.3 Applications and implications of this work ................................................................................... 15 1.4 Caveats and limitations ................................................................................................................ 16 2 Methods ............................................................................................................................................. 17 Step 1: Define future global development and land-use change scenarios ......................................... 18 2.1.1 Approach to scenario development ....................................................................................... 19 2.1.2 Detailed description of scenarios........................................................................................... 22 2.1.3 Land-use change modelling and downscaling ........................................................................ 25 Step 2: Use InVEST to calculate changes in ecosystem services .......................................................... 25 2.2.1 Pollination InVEST methods................................................................................................... 25 2.2.2 Coastal protection InVEST methods ....................................................................................... 26 2.2.3 Water yield InVEST methods ................................................................................................. 26 2.2.4 Forestry and carbon storage InVEST methods ....................................................................... 27 2.2.5 Marine fisheries InVEST methods .......................................................................................... 27 Step 3: Use ecosystem services changes as inputs to the GTAP model ............................................... 29 2.3.1 Structure of economic model ................................................................................................ 29 2.3.2 Pollination GTAP methods ..................................................................................................... 33 2.3.3 Coastal protection GTAP methods ......................................................................................... 34 2.3.4 Water yield GTAP methods ................................................................................................... 37 1 2.3.5 Forestry production GTAP methods ...................................................................................... 39 2.3.6 Carbon storage GTAP methods .............................................................................................. 40 2.3.7 Marine fisheries production GTAP methods .......................................................................... 41 Step 4: Processing results .................................................................................................................. 42 2.4.1 Calculating annual GDP impact .............................................................................................. 42 2.4.2 Calculating cumulative, discounted GDP impact .................................................................... 43 3 Results ................................................................................................................................................ 43 3.1 Pollination ................................................................................................................................... 43 3.2 Coastal protection ....................................................................................................................... 47 3.3 Water yield .................................................................................................................................. 50 3.4 Forestry production ..................................................................................................................... 52 3.5 Carbon storage ............................................................................................................................ 55 3.6 Marine fisheries production ......................................................................................................... 55 3.7 All ecosystem services in combination ......................................................................................... 58 4 Recommendations for future work ..................................................................................................... 62 5 Analysis and discussion of results ....................................................................................................... 64 References ............................................................................................................................................ 66 Appendices............................................................................................................................................ 75 A-1: Literature review .................................................................................................................... 76 A-2: Detailed model linkages.......................................................................................................... 82 A-3: Spatial data
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