System for Environmental and Agricultural Modelling; Linking European Science and Society Linking CAPRI and GTAP T. Jansson, M.H. Kuiper, M. Adenäuer Partners involved: LEI, UBONN Report no.: 39 September 2009 Ref: D3.8.3 ISBN no.: 978-90-8585-127-1 Logo’s main partners involved in this publication Sixth Framework Programme SEAMLESS No. 010036 Deliverable number: D3.8.3 18 March 2009 SEAMLESS integrated project aims at developing an integrated framework that allows ex- ante assessment of agricultural and environmental policies and technological innovations. The framework will have multi-scale capabilities ranging from field and farm to the EU25 and globe; it will be generic, modular and open and using state-of-the art software. The project is carried out by a consortium of 30 partners, led by Wageningen University (NL). Email: [email protected] Internet: www.seamless-ip.org Authors of this report and contact details Name: Torbjörn Jansson Partner acronym: LEI Address: PO Box 29703, 2502 LS, The Hague, The Netherlands. E-mail: [email protected] Name: Marijke Kuiper Partner acronym: LEI Address: PO Box 29703, 2502 LS, The Hague, The Netherlands. E-mail: [email protected] Name: Marcel Adenäuer Partner acronym: UBONN Address: Nussallee 21, 53115, Bonn, Germany. E-mail: [email protected] Page 2 of 100 SEAMLESS No. 010036 Deliverable number: D3.8.3 18 March 2009 Disclaimer 1: “This publication has been funded under the SEAMLESS integrated project, EU 6th Framework Programme for Research, Technological Development and Demonstration, Priority 1.1.6.3. Global Change and Ecosystems (European Commission, DG Research, contract no. 010036-2). Its content does not represent the official position of the European Commission and is entirely under the responsibility of the authors.” "The information in this document is provided as is and no guarantee or warranty is given that the information is fit for any particular purpose. The user thereof uses the information at its sole risk and liability." Disclaimer 2: Within the SEAMLESS project many reports are published. Some of these reports are intended for public use, others are confidential and intended for use within the SEAMLESS consortium only. As a consequence references in the public reports may refer to internal project deliverables that cannot be made public outside the consortium. When citing this SEAMLESS report, please do so as: Jansson, T., M.H. Kuiper, M. Adenäuer (2009) Linking CAPRI and GTAP, SEAMLESS Report No.39, SEAMLESS integrated project, EU 6th Framework Programme, contract no. 010036-2, www.SEAMLESS-IP.org, 100 pp. ISBN no. 978-90-8585-127-1. Page 3 of 100 SEAMLESS No. 010036 Deliverable number: D3.8.3 18 March 2009 Table of contents General information.............................................................................................................................. 9 Executive summary ............................................................................................................................... 9 1 Introduction ................................................................................................................................ 11 1.1 CAPRI .................................................................................................................................. 11 1.1.1 Modelling agricultural supply.......................................................................................... 11 1.1.2 Modelling of the market for agricultural commodities.................................................... 12 1.2 GTAP ................................................................................................................................... 13 1.3 Strategy for linking............................................................................................................... 14 2 Linking general and partial equilibrium models ..................................................................... 15 2.1 A formal treatment ............................................................................................................... 15 2.2 Iterative solution and some potential problems ................................................................... 17 3 A didactic example...................................................................................................................... 21 3.1 Linked items ......................................................................................................................... 22 3.2 Algorithms: how to use the linked information .................................................................... 23 3.2.1 Downward algorithm GE→PE........................................................................................ 23 3.2.2 Upward algorithm PE→GE............................................................................................. 24 4 Mapping CAPRI and GTAP to each other............................................................................... 27 4.1 Establishing a map between CAPRI and GTAP regions...................................................... 27 4.1.1 Concordance of regions ................................................................................................... 27 4.1.2 Aggregation of regions in the linked model system ........................................................ 29 4.2 Establishing a map between CAPRI and GTAP sectors ...................................................... 31 4.2.1 Coverage of GTAP agricultural sectors by CAPRI ......................................................... 32 4.2.2 Mapping agricultural sectors from CAPRI to GTAP....................................................... 33 4.2.3 Sector aggregation used in GTAP ................................................................................... 37 4.3 Other links between CAPRI and GTAP................................................................................ 38 5 Technical implementation of the full-scale linking .................................................................. 41 5.1 Information flow in the linked system .................................................................................. 41 5.2 Modifications to CAPRI for linking ..................................................................................... 43 5.3 Modifications to GTAP for linking....................................................................................... 45 5.3.1 The SHIFTER program for calibrating GTAP to CAPRI results .................................... 45 6 Results of linked system of models ............................................................................................ 49 6.1 Scenario ............................................................................................................................... 49 6.1.1 Default approach to reducing non-agricultural tariffs...................................................... 49 6.1.2 Exceptions to default cuts defined in the modalities........................................................ 50 6.1.3 Construction of the NAMA scenario ............................................................................... 51 6.1.4 Scenario implemented in GTAP...................................................................................... 52 6.2 Results.................................................................................................................................. 58 6.2.1 Results of GTAP standalone............................................................................................ 58 Page 5 of 100 SEAMLESS No. 010036 Deliverable number: D3.8.3 18 March 2009 6.2.2 Results of GTAP standalone versus linked with CAPRI .................................................59 6.2.3 Results of CAPRI for the linked system ..........................................................................60 6.2.4 Inconsistencies and missing links ....................................................................................61 6.3 Convergence.........................................................................................................................63 7 Conclusions..................................................................................................................................65 References.............................................................................................................................................67 Glossary ................................................................................................................................................69 Appendix 1: Equations of the didactic example ................................................................................71 Appendix 2: CAPRI-GTAP country concordance............................................................................73 Appendix 3: CAPRI-GTAP sector concordance for agriculture.....................................................79 Appendix 4: Detailed description of composition non-agricultural sectors in GTAP....................97 Page 6 of 100 SEAMLESS No. 010036 Deliverable number: D3.8.3 18 March 2009 List of tables Table 3.1: Social accounting matrix in baseline......................................................................23 Table 3.2: Baseline data for the PE model ..............................................................................23 Table 3.3: Downward interface (GE→PE)..............................................................................24 Table 3.4: Upward interface (PE→GE).