Planned expansion of transportation infrastructure in Brazil has implications for the pattern of agricultural production and carbon emissions.

High transportation costs have been a barrier to the expansion of agriculture in the interior of Brazil. To reduce transportation costs, Brazil launched the National Logistics Plan, aiming to expand its railway network by up to 91 % by 2035. Such a large-scale infrastructure investment raises concerns about its economic and environmental consequences. By combining geospatial estimation of transportation cost with a grid-resolving, multi-scale economic model that bridges fine-scale crop production with its trade and demand from national and global perspectives, we explore impacts of transportation infrastructure expansion on agricultural production, land use changes, and carbon emissions both locally and nationally in Brazil. We find that globally, the impacts on output and land use changes are small. However, within Brazil, the plan's primary impacts are impressive. PNL2035 results in the reduction of transportation costs by 8-23 % across states (depending on expansion's extent) in the interior Cerrado biome. This results in cropland expansion and increases in terrestrial carbon emissions in the Cerrado region. However, the increase in terrestrial carbon emissions in the Cerrado is offset by spillover effects elsewhere in Brazil, as crop production shifts away from the Southeast-South regions and accompanying change in the mix of transportation mode for farm products from roadway to more emission-efficient railway. Furthermore, we argue that the transportation infrastructure's impact on the enhanced mobility of labor and other agricultural inputs would further accentuate the regional shift in agricultural production and contribute to carbon emission mitigation. Upon its completion, PNL2035 is expected to result in the reduction of net national emissions by 1.8-30.7 million metric ton of CO2-equivalent, depending on the impacts on labor and purchased input mobility. We conclude that the omission of spillover effects due to infrastructure expansion can lead to misleading assessments of transport policies.

Recent Developments and Challenges in Projecting the Impact of Crop Productivity Growth on Biodiversity Considering Market-Mediated Effects.

The effect of an increase in crop productivity (output per unit of inputs) on biodiversity is hitherto poorly understood. This is because increased productivity of a crop in particular regions leads to increased profit that can encourage expansion of its cultivated area causing land use change and ultimately biodiversity loss, a phenomenon also known as "Jevons paradox" or the "rebound effect". Modeling such consequences in an interconnected and globalized world considering such rebound effects is challenging. Here, we discuss the use of computable general equilibrium (CGE) and other economic models in combination with ecological models to project consequences of crop productivity improvements for biodiversity globally. While these economic models have the advantage of taking into account market-mediated responses, resource constraints, endogenous price responses, and dynamic bilateral patterns of trade, there remain a number of important research and data gaps in these models which must be addressed to improve their performance in assessment of the link between local crop productivity changes and global biodiversity. To this end, we call for breaking the silos and building interdisciplinary networks across the globe to facilitate data sharing and knowledge exchange in order to improve global-to-local-to-global analysis of land, biodiversity, and ecosystem sustainability.

Investing in nature can improve equity and economic returns.

Sustainable development requires jointly achieving economic development to raise standards of living and environmental sustainability to secure these gains for the long run. Here, we develop a local-to-global, and global-to-local, earth-economy model that integrates the Global Trade Analysis Project (GTAP)-computable general equilibrium model of the economy with the Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST) model of fine-scale, spatially explicit ecosystem services. The integrated model, GTAP-InVEST, jointly determines land use, environmental conditions, ecosystem services, market prices, supply and demand across economic sectors, trade across regions, and aggregate performance metrics like GDP. We use the integrated model to analyze the contribution of investing in nature for economic prosperity, accounting for the impact of four important ecosystem services (pollination, timber provision, marine fisheries, and carbon sequestration). We show that investments in nature result in large improvements relative to a business-as-usual path, accruing annual gains of $100 to $350 billion (2014 USD) with the largest percentage gains in the lowest-income countries. Our estimates include only a small subset of ecosystem services and could be far higher with inclusion of more ecosystem services, incorporation of ecological tipping points, and reduction in substitutability that limits economic adjustments to declines in natural capital. Our analysis highlights the need for improved environmental-economic modeling and the vital importance of integrating environmental information firmly into economic analysis and policy. The benefits of doing so are potentially very large, with the greatest percentage benefits accruing to inhabitants of the poorest countries.

Market-mediated responses confound policies to limit deforestation from oil palm expansion in Malaysia and Indonesia.

The global demand for palm oil has grown rapidly over the past several decades. Much of the output expansion has occurred in carbon- and biodiversity-rich forest lands of Malaysia and Indonesia (M&I), contributing to record levels of terrestrial carbon emissions and biodiversity loss. This has led to a variety of voluntary and mandatory regulatory actions, as well as calls for limits on palm oil imports from M&I. This paper offers a comprehensive, global assessment of the economic and environmental consequences of alternative policies aimed at limiting deforestation from oil palm expansion in M&I. It highlights the challenges of limiting forest and biodiversity loss in the presence of market-mediated spillovers into related oilseed and agricultural commodity and factor markets, both in M&I and overseas. Indeed, limiting palm oil production or consumption is unlikely to halt deforestation in M&I in the absence of active forest conservation incentives. Policies aimed at restricting palm oil production in M&I also have broader consequences for the economy, including significant impacts on consumer prices, real wages, and welfare, that vary among different global regions. A crucial distinction is whether the initiative is undertaken domestically, in which case the M&I region could benefit, or by major palm oil importers, in which case M&I loses income. Nonetheless, all policies considered here pass the social welfare test of global carbon dioxide mitigation benefits exceeding their costs.

New science of climate change impacts on agriculture implies higher social cost of carbon.

Despite substantial advances in climate change impact research in recent years, the scientific basis for damage functions in economic models used to calculate the social cost of carbon (SCC) is either undocumented, difficult to trace, or based on a small number of dated studies. Here we present new damage functions based on the current scientific literature and introduce these into an integrated assessment model (IAM) in order to estimate a new SCC. We focus on the agricultural sector, use two methods for determining the yield impacts of warming, and the GTAP CGE model to calculate the economic consequences of yield shocks. These new damage functions reveal far more adverse agricultural impacts than currently represented in IAMs. Impacts in the agriculture increase from net benefits of $2.7 ton-1 CO2 to net costs of $8.5 ton-1, leading the total SCC to more than double.

Global market integration increases likelihood that a future African Green Revolution could increase crop land use and CO2 emissions.

There has been a resurgence of interest in the impacts of agricultural productivity on land use and the environment. At the center of this debate is the assertion that agricultural innovation is land sparing. However, numerous case studies and global empirical studies have found little evidence of higher yields being accompanied by reduced area. We find that these studies overlook two crucial factors: estimation of a true counterfactual scenario and a tendency to adopt a regional, rather than a global, perspective. This paper introduces a general framework for analyzing the impacts of regional and global innovation on long run crop output, prices, land rents, land use, and associated CO2 emissions. In so doing, it facilitates a reconciliation of the apparently conflicting views of the impacts of agricultural productivity growth on global land use and environmental quality. Our historical analysis demonstrates that the Green Revolution in Asia, Latin America, and the Middle East was unambiguously land and emissions sparing, compared with a counterfactual world without these innovations. In contrast, we find that the environmental impacts of a prospective African Green Revolution are potentially ambiguous. We trace these divergent outcomes to relative differences between the innovating region and the rest of the world in yields, emissions efficiencies, cropland supply response, and intensification potential. Globalization of agriculture raises the potential for adverse environmental consequences. However, if sustained for several decades, an African Green Revolution will eventually become land sparing.

Global climate policy impacts on livestock, land use, livelihoods, and food security.

Recent research has shed light on the cost-effective contribution that agriculture can make to global greenhouse gas abatement; however, the resulting impacts on agricultural production, producer livelihoods, and food security remain largely unexplored. This paper provides an integrated assessment of the linkages between land-based climate policies, development, and food security, with a particular emphasis on abatement opportunities and impacts in the livestock sector. Targeting Annex I countries and exempting non-Annex I countries from land-based carbon policies on equity or food security grounds may result in significant leakage rates for livestock production and agriculture as a whole. We find that such leakage can be eliminated by supplying forest carbon sequestration incentives to non-Annex I countries. Furthermore, substantial additional global agricultural abatement can be attained by extending a greenhouse gas emissions tax to non-Annex I agricultural producers, while compensating them for their additional tax expenses. Because of their relatively large emissions intensities and limited abatement possibilities, ruminant meat producers face the greatest market adjustments to land-based climate policies. We also evaluate the impacts of climate policies on livelihoods and food consumption in developing countries. In the absence of non-Annex I abatement policies, these impacts are modest. However, strong income and food consumption impacts surface because of higher food costs after forest carbon sequestration is promoted at a global scale. Food consumption among unskilled labor households falls but rises for the representative farm households, because global agricultural supplies are restricted and farm prices rise sharply in the face of inelastic food demands.