Trade and Environment in an Inter-Connected World | 9am PT Tues May 13, 2025

[Grigory Bronevetsky]

Modeling Talks

Trade and Environment in an Inter-Connected World Channing Arndt, Purdue University Tues, May 13, 2025 | 9am PT Meet | Youtube Stream Hi all, The presentation will be via Meet and all questions will be addressed there. If you cannot attend live, the event will be recorded and can be found afterward at https://sites.google.com/modelingtalks.org/entry/trade-and-environment-in-an-inter-connected-world More information on previous and future talks: https://sites.google.com/modelingtalks.org/entry/home Abstract: This seminar begins with an overview of the Global Trade Analysis Project (GTAP). GTAP data and models underpin a large array of analyses including trade and industrial policy, energy transitions, climate change impacts and adaptation, and other environmental change such as biodiversity loss. Three example applications are then presented examining (i) regional approaches to confronting climate change focused on the Tigris-Euphrates river basin; (ii) agricultural technology and biodiversity loss, as well as terrestrial carbon emissions, in the tropics; and (iii) implications of tariffs by China on US soybeans for the spatial distribution of agricultural production in Brazil. These applications generate actionable evidence and illustrate a range of methodological approaches.   Bio: Channing Arndt directs the Global Trade Analysis Project, which is housed at Purdue University. GTAP supports a network of more than 30,000 individuals engaged in quantitative analysis of 21st century challenges. A consortium of 31 leading national, international, and private institutions provides baseline financial support and strategic advice. GTAP aims to advance high-quality quantitative analysis of global issues and facilitate deliberate decision-making. To this end, GTAP (i) lowers analytical barriers through the provision of data, models/tools, and training; (ii) conducts research on pressing issues with global ramifications; and (iii) serves as a platform for discussion and dissemination of novel approaches and ideas.   Prior to directing GTAP, he directed the Transformation Strategies Department at the International Food Policy Research Institute overseeing a research budget of about $65 million and about 350 staff. Arndt has more than 30 years of experience in analytics for economic policy, with emphasis on large-scale global trends and their implications for country level-strategy and policy. He frequently works directly with central decision-making organs within governments, including seven years of resident experience in Africa. He has published more than 95 articles in leading academic journals. His books include Growth and Poverty in Sub-Saharan Africa, Measuring Poverty and Wellbeing in Developing Countries, and The Political Economy of Clean Energy Transitions, all published by Oxford University Press. His program of research has focused on growth, trade, economic development, poverty alleviation, market integration, nutrition, gender and discrimination, health-related shocks such as Covid-19 and HIV/AIDS, technological change, aid effectiveness, energy, bioenergy, climate variability, and climate change.

[Grigory Bronevetsky]

Video Recording: https://youtube.com/live/WuDPlpO0yjg

Slides:

- pptx: https://docs.google.com/presentation/d/1-aYl8uKMGaesoMYxPsKig_b8RUUztlLE/edit?usp=sharing&ouid=110584304018462442605&rtpof=true&sd=true

- pdf: https://drive.google.com/file/d/1T_anSTEAY5oamwV2hnfWlY0KcohkJklu/view?usp=sharing

Summary:

• GTAP: Global Trade Analysis Project

  • Goal: improve quality of quantitative analysis for global trade issues

  • Collaborative community

  • Common language for economic analysis of global policy issues

• Capabilities

  • Data: www.gtap.org/databases

  • Models: www.gtap.org/models

  • Training: www.gtap.org/gtap-u

• Database

  • Assembly of data from many international sources

  • 65 sectors

  • Time series: 2004, 2007, 2011, 2014, 2017, 2019

  • Satellite data

    • Core: energy, electricity, emissions, agro-ecology, decomposition by end-users

    • New: SPP projections, tariffs, biofuels, circular economy, critical minerals, pollution, etc.

  • Example Applications:

    • OECD environmental outlook report, including integrated macroeconomic modeling 

    • Trump Tariffs

    • Carbon mitigation and trade (fuels, low carbon technologies)

• Regional approaches to climate change

  • Cooperation in Tigris-Euphrates basin

  • Goal: quantify changes in water scarcity by 2050 and identify economic outcomes

  • Model:

    • General Circulation Models (GCM) of the global climate

    • Hydrological models of water balance

    • Drive computable macroeconomic general equilibrium model GTAP-BIO-W

  • Scenarios: cross product of

    • SSP: RCP4.5, RCP8.5

    • Climate model variables 

    • Two levels of water elasticity on capital stock

  • Predicted: 

    • Significant increase in water scarcity

    • Major impact on national GDP

  • Regional collaboration significantly improves regional GDP in all scenarios

    • Major negative impacts of climate change are avoided via cooperation

  • Many other examples: EU, ASEAN cooperation

• Using structural models to understand the past

  • Productivity growth is a key driver of agriculture

    • Much driven by new tech developments

    • Has driven increase in food production

    • Increased crop yield has also put stress on the environment

  • Analyzed land use and impact on emissions and biodiversity (some regions account for majority of global bio-diversity)

  • SIMPLE-G: gridded model of ag economics + environment

    • Uses gridded ag productivity data: 1961-2015

    • Runs model over historical time period back to 1961 to calibrate model

    • Re-run on same time period with lower ag productivity to compare impact on land use and environment

  • Impact: Increased crop productivity 

    • Reduces land use of agriculture

    • Emissions from ag

    • Reduced impact on biodiversity

  • Back-casting useful in general: Covid-19 impacts, historical trade wars, etc.

• Global to local to global

  • US and Brazil are major exporters of soy to China

  • How do Brazilian policies affecting structure of trade

    • GTAP V7

    • SIMPLE-G

    • Gridded crop production (SPAM2010)

    • Merged to combine global trade/production and local Brazilian gridded agricultural output

  • Simulate China’s 25% tariff of US soybeans

    • Predicted

      • Expansion of land use from pasture to cropland

      • Expansion of soy and oilseed expansion

      • Reduction in sugar (pushed out by soybeans)

  • Global policy has local implications, drives local responses, which affect global patterns

  • Can significantly affect the environment

  • Institutions are key for ensuring maximal gain for people

• Future directions:

  • Global: GTAO

  • Gridded: SIMPLE-G

  • Ground-level: Machine Learning