Texas A&M University



A tale of some studies

Edwards Aquifer

Study Focus This study focused on the Edwards aquifer in central Texas looking at the impacts of various features of recent enabling legislation and water development alternatives

Impact Analysis Method The study was done using a regional impact model. Demand curves were entered for water use by municipal and industrial entities. The crop growth simulator EPIC was used to load data into the model. An aquifer simulation model was used in combination with regression to yield results on the hydrological impacts of different policies on the aquifer elevation, retained water and spring flow. The model was a SPR, Integer, Price Endogenous model.

Study Results A variety of case study findings were generated regarding the desirability of water marketing, the effects of pumping limits, and an alternative pumping limits strategy depending on water available. Methodologically the paper shows how to link stochastic hydrological and sector programming methods

Papers

McCarl, B.A., K.O. Keplinger, C.R. Dillon, and R.L. Williams, "Limiting Pumping from the Edwards Aquifer: An Economic Investigation of Proposals, Water Markets and Springflow Guarantees," Water Resources Research, 35(4), 1257-1268, 1999.

Chen, C.C., D. Gillig, and B.A. McCarl, "Effects of Climatic Change on a Water Dependent Regional Economy: A Study of the Texas Edwards Aquifer," Climatic Change, 49, 397-409, 2001.

Gillig, D., B.A. McCarl, and F.O. Boadu, "An Economic, Hydrologic, and Environmental Assessment of Water Management Alternative Plans for the South-Central Texas Region," Journal of Agricultural and Applied Economics, 33, 1 (April ), 59-78, 2001.

Gillig, D., B.A. McCarl, L.L. Jones, and F.O. Boadu, "Economic Efficiency and Cost Implications of Habitat Conservation: An Example in the Context of the Edwards Aquifer Region," Water Resources Research, forthcoming, 2004.

A tale of some studies

El Nino

Study Focus Impact analysis of benefits of improved El Nino forecasting. The study how soon tried examine the effects of alternative ways that factoring in international trade phenomena.

Impact Analysis Method A stochastic version of ASM was used which also included global trade to the merger with a set of spatial equilibrium models. The model was a SPR, Price Endogenous model.

Study Results El Nino forecasting was found to be quite valuable. Factoring in international trade and the effects of El Nino for trading partners had large implications for study results

Paper Status

Adams, R.M., K.J. Bryant, B.A. McCarl, D.M. Legler, J.J. O'Brien, A.R. Solow, and R.F. Weiher, "Value of Improved Long-Range Weather Information," Contemporary Economic Policy, XIII, Number 3, 10-19, 1995.

Solow, A.R., R.M. Adams, K.J. Bryant, D.M. Legler, J.J. O'Brien, B.A. McCarl, W.I. Nayda, and R.F. Weiher, "The Value of Improved ENSO Prediction to U. S. Agriculture," Climatic Change, 39, 47-60, 1998.

Chen, C.C., and B.A. McCarl, "The Value of ENSO Information to Agriculture: Consideration of Event Strength and Trade," Journal of Agricultural and Resource Economics, Vol. 25, no. 2 (December), 368-385, 2000.

Chen, C.C., B.A. McCarl, and H.J.S. Hill, "The Value of ENSO Information under Alternative ENSO Phase Definitions," Climatic Change, 54, 305-325, 2002.

Chen, C.C., B.A. McCarl, and R.M. Adams, "Economic Implications of Potential Climate Change Induced ENSO Frequency and Strength Shifts," Climatic Change, 49, 147-159, 2001.

A tale of some studies

Farm program

Study Focus Impact analysis of implications of changes in farm program provisions. In particular we studied decoupling. Later the decoupling strategy was used in forming the 1996 farm program.

Impact Analysis Method ASM was used. This study developed an endogenous deficiency payment method. The model was a Price Endogenous model.

Study Results The results showed substantial dead weight social loss arising to farm program provisions principally through government payments for the target price gain. However significant redistribution of income was found to occur under the decoupling of the farm program. In particular producers were shown to lose by program elimination as were consumers. However taxpayers which largely consist of consumers were shown to gain

Paper Status

Chang, C.C., B.A. McCarl, J.W. Mjelde, and J.W. Richardson, "Sectoral Implications of Farm Program Modifications," American Journal of Agricultural Economics, 74, 38-49, 1992.

Chang, C.C., B.R. Eddleman, and B.A. McCarl, "Potential Benefits of Rice Variety and Water Management Improvements in the Texas Gulf Coast," Western Journal of Agricultural Economics, 16(2), 185-193, 1991.

A tale of some studies

Global Climate Change variability

Study Focus The implications of global climate change on the welfare variability of the U.S. agricultural sector was analyzed

Impact Analysis Method The stochastic version of ASM was developed for this study. The model was a SPR, Price Endogenous model.

Study Results Consideration of welfare variability was not found to have large effects on the estimation of the net cost of climate change relative to an examination procedure which did not consider variability effects.

Paper Status

Lambert, D.K., B.A. McCarl, Q. He, M.S. Kaylen, W.D. Rosenthal, C.C. Chang, and W.I. Nayda, "Uncertain Yields in Sectoral Welfare Analysis: An Application to Global Warming," Journal of Agricultural and Applied Economics, 27(2), 423-436, 1995.

Adams, R.M., B.A. McCarl, and L.O. Mearns, "The Effects of Spatial Scale of Climate Scenarios on Economic Assessments: An Example from U.S. Agriculture," Climatic Change, Vol. 60, Nos. 1-2, September I, II, 131-148, 2003.

Chen, C.C., B.A. McCarl, and R.M. Adams, "Economic Implications of Potential Climate Change Induced ENSO Frequency and Strength Shifts," Climatic Change, 49, 147-159, 2001.

A tale of some studies

Egyptian Policy Reform

Study Focus An examination of the implications of changes in Egyptian cotton price supports.

Impact Analysis Method A sector model was developed for Egypt expanding upon an earlier sector model developed by others. An early version of the Egyptian model in the GAMS model library. The model was a Price Endogenous model.

Study Results Cotton price reform was found to have very large implications for cotton production. In particular a Laffer type curve was found. Namely we considered reductions of the implicit taxation charged when the government bought cotton at a low price from the producers and resold it at a much higher export price. We found if those taxes were substantially reduced a large increase in cotton production resulted in which actually increased government tax receipts under a smaller tax.

Paper Status Was presented an Egyptian conference on policy reform. Subsequently policy was reformed by the program later became controversial. Paper never was published

A tale of some studies

Carbon Sequestration

Study Focus Examination of the supply curve for land that could be converted into force tree in an effort to increase carbon sequestration

Impact Analysis Method Used ASM’s big brother named FASOM which encompasses the forestry and the agricultural sectors. FASOM contains 10 ASM ten region models one for each decade for the next hundred years. The model was a Price Endogenous model with a mixture of unknown life and equilibrium modeling.

Study Results The nature of the supply curve was found to be very dependent upon timing of the program and provisions of the policies in the program.

Paper Status

McCarl, B.A., and U.A. Schneider, "Greenhouse Gas Mitigation in U.S. Agriculture and Forestry," Science, Volume 294 (21 Dec), 2481-2482, 2001.

Schneider, U.A., and B.A. McCarl, "Economic Potential of Biomass Based Fuels for Greenhouse Gas Emission Mitigation," Environmental and Resource Economics, 24(4), 291-312, 2003.

Lee, H.C., B.A. McCarl, U.A. Schneider, and C.C. Chen, "Leakage and Comparative Advantage Implications of Agricultural Participation in Greenhouse Gas Emission Mitigation," paper under submission to a journal, 2004.

Murray, B.C., B.A. McCarl, and H.C. Lee, "Estimating Leakage From Forest Carbon Sequestration Programs," Land Economics, 80(1), 109-124., 2004.

A tale of some studies

Crop variety improvement – Environmental linkages

Study Focus Study arose out of a Texas-based study of the cost benefits of crop variety improvements. The study was designed to develop environmental implications on these technological improvements.

Impact Analysis Method ASM was used to generate the economic impact results. That model was a Price Endogenous model. Links within made to the SWAT hydrological model through an auxiliary GAMS based multiple objective model which allocated the broad geographic ASM region crop mix results to watersheds based on historical production patterns in those watersheds.

Study Results Environmental implications at the watershed level were allowed to be simulated and found to be significant in some cases

Paper Status

Atwood, J.D., B.A. McCarl, C.C. Chen, B.R. Eddleman, R. Srinivasan, and W.I. Nayda, "Assessing Regional Impacts of Change: Linking Economic and Environmental Models," Agricultural Systems, (63) 3, 147-159, 2000.

Pattanayak, S.K., B.A. McCarl, A.J. Sommer, B.C. Murray, T. Bondelid, D. Gillig, and B. DeAngelo, "Water Quality Co-effects of Greenhouse Gas Mitigation in US Agriculture," 2004.

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