Manfred Wiebelt

National and international policies for tropical rain forest conservation—A quantitative analysis for Cameroon

This paper provides a numerical general equilibrium assessment of policies to reduce tropical deforestation in Cameroon. Market failure—mainly in the form of national and international externalities—and policy failures—such as highly distorted product markets—are identified as major sources of overexploitation. The ecological effects of deforestation control are shown to depend crucially upon its impact on land use patterns whereas its efficiency effects hinge on the manner in which a specified set-aside target is achieved. If the international community wants to ensure a higher level of protection of these forests, and to do so within a market-based system, the provision of conditional financial resources is neceassary.

RESOURCE BOOMS, INEQUALITY, AND POVERTY: THE CASE OF GAS IN BOLIVIA

This paper addresses the question of whether the Bolivian gas boom of the 1990s has bypassed large parts of the poor population, thereby leading to increasing inequalities in an already unequal society. Using a Computable General Equilibrium model that is sequentially linked to a microsimulation model, we examine the transmission channels through which the large resource inflows related to the gas boom, both initial foreign investment in the sector and the subsequent export earnings, as well as large public transfer programs affect the distribution of income. Our focus is on labor market impacts, in particular on shifts between formal and informal employment and changes in relative factor prices. Our simulation results suggest that the gas boom induces a combination of unequalizing and equalizing forces, which tend to offset each other. As net distributional change is limited, growth generated by the boom reduces poverty despite increasing informality.

Stopping deforestation in the Amazon : trade-off between ecological and economic targets?

Stopping Deforestation in the Amazon: Trade-off between Ecological and Economic Targets? —Using a computable general equilibrium model the paper analyzes the regional, sectoral and macroeconomic dimension of Brazil’s “deforestation problem”. It is shown that macroeconomic reform is not in conflict with conservation policies. Therefore, there is no need for compensation payments but rather for improving the effectiveness of conservation policies by macroeconomic reform. The analysis also shows that regional conservation policies are generally superior to sectoral conservation policies.ZusammenfassungZur Begrenzung der Tropenwaldrodung im Amazonas: Gibt es einen Konflikt zwischen ökologischen und ökonomischen Zielen? —Auf der Basis eines berechenbaren allgemeinen Gleichgewichtsmodells wird untersucht, inwieweit dem Raubbau am brasilianischen Regenwald durch Korrektur von Politikmängeln auf der regionalen, sektoralen und gesamtwirtschaftlichen Ebene Einhalt geboten werden kann. Die Simulationsergebnisse zeigen keinen Konflikt zwischen ökologischen und ökonomischen Zielen. Es besteht somit im allgemeinen kein Bedarf für Kompensationszahlungen bei der Verfolgung ökologischer Ziele. Es besteht dagegen Bedarf, die ökologische Effektivität tropenwaldspezifischer Instrumente durch makroökonomische Reformen zu verbessern. Dabei ist eine regional ausgerichtete Tropenwaldpolitik einer sektorspezifischen Tropenwaldpolitik grundsätzlich überlegen.

Effects of the 2008 flood on economic performance and food security in Yemen: a simulation analysis

Extreme weather events such as floods and droughts can have devastating consequences for individual well being and economic development, in particular in poor societies with limited availability of coping mechanisms. Combining a dynamic computable general equilibrium model of the Yemeni economy with a household-level calorie consumption simulation model, this paper assesses the economy-wide, agricultural and food security effects of the 2008 tropical storm and flash flood that hit the Hadramout and Al-Mahrah governorates. The estimation results suggest that agricultural value added, farm household incomes and rural food security deteriorated long term in the flood-affected areas. Due to economic spillover effects, significant income losses and increases in food insecurity also occurred in areas that were unaffected by flooding. This finding suggests that while most relief efforts are typically concentrated in directly affected areas, future efforts should also consider surrounding areas and indirectly affected people.

Shocks, Policy Reforms and Pro‐Poor Growth in Bolivia: A Simulation Analysis

This paper analyzes how major external shocks and policy reforms affect Bolivias ability to achieve pro-poor growth. Employing a recursive-dynamic CGE model, it considers three different scenarios: an optimistic baseline scenario; a more realistic scenario that accounts for two important negative external shocks (declining capital inflows and El Nino); and a scenario that captures the combined effect of the shocks and two major reform projects (development of the gas sector and deregulation of the urban labor market). It turns out that the shocks are likely to impair Bolivias medium-term development prospects, leading to marked increases in both urban and rural poverty. If the reform projects were implemented, the poverty increase caused by the shocks would be more than offset for urban households, but reinforced for rural households. Copyright

Who Bears the Costs of Climate Change? Evidence from Tunisia

In order to estimate the economic costs of climate change for Tunisia, this paper uses a combination of biophysical and economic models. In addition, the paper draws on the literature to complement the quantitative analysis with policy recommendations on how to adapt to the changing climate. The results bear out the expectation that climate change has a negative but weak overall effect on the Tunisian economy. Decomposing the global and local effects shows that global climate change may benefit the agricultural sector since higher world market prices for agricultural commodities are likely to stimulate export expansion and import substitution. Locally felt climate change, however, is likely to hurt the agricultural sector as lower yields reduce factor productivities and lead to lower incomes and higher food prices. The combined local and global effects are projected to be mostly negative and the costs will have to be carried mainly by urban and richer households. From a policy perspective, the results suggest that Tunisia should try to maximize the benefits from rising global agricultural prices and to minimize (or reverse) declining crop yields at home.

Empirische allgemeine Gleichgewichtsmodelle Struktur und Anwendungsmöglichkeiten / Computable General Equilibrium Models — Structure and Scope for Applications

Zusammenfassung In diesem Artikel wird ein Überblick über neuere Entwicklungen bei empirischen allgemeinen Gleichgewichtsmodellen (EAG) gegeben, wobei walrasianische Modelle weitgehend ohne makroökonomische Aspekte im Vordergrund stehen. Zunächst wird eine typische EAG-Modellstruktur dargestellt und die Erstellung einer konsistenten Datenbasis zusammen mit der Modellkalibrierung diskutiert. Neuere Modelle mit unvollständiger Konkurrenz werden im Anschluß dargestellt. Ein besonderes Problem bei der Berücksichtigung von diesen Modellen ist Kongruenz zwischen dem theoretischen Modell strategischen Verhaltens und den empirischen Tatbeständen herzustellen. Danach werden zwei Typen von dynamischen Modellen vorgestellt: Sequentiell, dynamische Modelle, die als Sequenz von statischen Modellen lösbar sind, und vollständig dynamische Modelle, denen eine explizite Modellierung der intertemporalen Entscheidungen zugrunde liegt.

Macro-economic Models: How to Spend Uganda’s Expected Oil Revenues? A CGE Analysis of the Agricultural and Poverty Impacts of Spending Options

With the recent discovery of crude oil reserves along the Albertine Rift, Uganda is set to establish itself as an oil producer in the coming decade. Total oil reserves are believed to be two billion barrels, with recoverable reserves estimated at 0.8–1.2 billion barrels. This is comparable to the level of oil reserves in African countries such as Chad (0.9 billion barrels), Republic of the Congo (1.9 billion barrels), and Equatorial Guinea (1.7 billion barrels) but far short of Angola (13.5 billion) and Nigeria (36.2 billion) (World Bank 2010). Using a conservative reserve scenario of 800 million barrels, peak production, likely to be reached by 2017, is estimated by the World Bank to range from 120,000 to 140,000 barrels per day, with a production period spanning 30 years. A more optimistic scenario in this study is based on 1.2 billion barrels and sets peak production at 210,000 barrels per day (see Wiebelt et al. 2011). Although final stipulations of the revenue sharing agreements with oil producers are not yet known, government revenue from oil will be substantial. One estimate, based on an average oil price of US

Economic Impacts of Climate Change in the Arab World: A Summary of Case Studies from Syria, Tunisia and Yemen

75 per barrel, puts revenues at approximately 10–15% of GDP at peak production (World Bank 2010). The discovery of crude oil therefore has the potential to provide significant stimulus to the Ugandan economy and to enable it to better address its development objectives, provided oil revenues are managed in an appropriate manner.

Managing future oil revenues in Ghana: An assessment of alternative allocation options

This paper synthesizes pioneering work based on a comprehensive modeling suite that combines biophysical, sub-national and global economic models to assess the global and local effects of a changing climate on growth and household incomes in three countries in the Middle East and North Africa: Syria, Tunisia and Yemen. This cross country comparison is important given these countries’ location in a region that is consistently projected to be amongst the hardest hit by climate change. Results show that even under perfect climate change mitigation, the world market prices for food are projected to increase affecting the three economies differently. Higher global prices for food negatively affect most sectors of the economy in Syria, except for agriculture, which benefits from the higher prices. However, Syrian real household incomes decline, particularly those of poor rural nonfarm households. In Tunisia, higher food prices pose challenges to its poor and in Yemen, results from the DCGE model suggest that higher global prices for food will lower Yemen’s overall GDP growth, raise agricultural GDP, and decrease real household incomes. Effects on agricultural GDP vary by agroecological zone depending on the production structure in place. Local climate change impacts alone will lead to lower crop yields for all of the countries. In Syria, the agricultural sector suffers as a result of long-term declines in yields, and different agroecological zones will be affected differently. In Tunisia, local climate change shocks operate on the sector and on households through reduced crop yields. Results from the Tunisian DCGE model shows that local climate change is welfare reducing for all household groups under both GCM scenarios, however, farm households are most adversely affected by these yield reductions. Finally for Yemen, the local impacts of climate change are different under the two climate scenarios considered where under the MIROC scenario, agricultural GDP is somewhat higher compared to the baseline. Rural incomes are expected to rise due to the higher yields and the lower prices for sorghum and millet, whereas the urban households are largely unaffected because they hardly consume those commodities. Under the CSIRO scenario, positive and negative yield changes cancel each other out so agricultural GDP and incomes for all three household groups hardly change over the period of analysis compared to the baseline. Over the long-term, the adverse effects of both global and local climate change impacts are felt throughout the three countries. In Syria, combining local and global climate change effects slows GDP growth in all sectors. Rural households (both farm and nonfarm households) suffer the most from climate change, but urban households are also worse off when compared with the perfect mitigation scenario. Across Tunisia, the combined climate change effects lead to negative effects on the overall economy, the agricultural sector, and a total reduction of household incomes and in Yemen, the long-term implications of climate change (local and global) lead to a reduction in household welfare under both the MIROC and the CSIRO scenarios. Those reductions in welfare accumulate over time and rural households suffer more from climate change than urban households. However, under the MIROC scenario, farm households benefit from the increasing yields but rural nonfarm households do not and suffer both in relative and absolute terms under the MIROC and CSIRO scenarios. Given the strong global and local impacts of climate change, a diverse set of policy actions at different levels will be required to mitigate the negative socioeconomic effects. Moreover, global price increases, declining crop yields, and droughts affect different sectors and households differently, which underscores the necessity to consider a variety of mitigation and adaptation tools including global and national action plans, investments in agriculture, social protection, and disaster risk management.