GTAP-SIMPLE-G: Integrating Gridded Land Use, Crop Production and Environment Impacts into Global General Equilibrium Model of Trade

Abstract

The integration between global and local economic systems has become an increasingly important research topic. This paper presents GTAP-SIMPLE-G, a general-equilibrium framework that extends the existing GTAP model by integrating a gridded partial equilibrium system detailing land use and crop production. This integrated framework links global demand and bilateral trade flows with local level crop supply and land use conversion, accounting for spillover effects across land-using sectors and subnational regions. The paper details the structure of GTAP-SIMPLE-G model, the development of a gridded database for one region in the model – namely Brazil, and the calibration of key parameters that govern the land use conversion and as well as the multi-crop production decisions. For illustrative purposes, GTAP-SIMPLE-G is applied to simulate the impacts of China's retaliatory tariffs on U.S. soybean exports on Brazilian crop production and land use at the local level. Findings show that the tariff shock causes not only an increase in Brazilian soybean production, but also highly heterogeneous responses in the production of other crops as well as land use in the wake of spatially varying multi-crop activities. Finally, this paper discusses the potential extensions of GTAP-SIMPLE-G for future studies and policy assessments on the Global-to-Local-to-Global linkages.