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362 | IAASTD Global Report

Table A.5.3.4 Overview of key uncertainties in GTEM.

Model component

Uncertainty

Model structure

•   Based on general equilibrium theory. •   Conforms to a competitive market equilibrium—no "supernormal" economic profit. •   Structured on nested supply and demand functions representing technologies, tastes, endowments and policies. •   Incorporates the Armington demand structure—a commodity produced in one region treated as an imperfect substitute for a similar good produced elsewhere. •   Total demand equals total supply—for all commodities at the global level and for production factors at the regional level.

Parameters

Input parameters: •   Base year input-output flows and (bilateral) trade flows for 67 commodities and 87 countries and regions. •   Numerous elasticities underlying demand and supply equations. •   Technical coefficients for anthropogenic greenhouse gas emissions.

Driving Force

•   Regional income growth (GDP). •   Population growth. •   Changes in policies (taxes and subsidies). •   Technological changes—productivity growth and energy technology options. The choice of the model closure, i.e., the distinction between exogenous (drivers or shocks) and endogenous (determined or projected) variables of the model, is quite flexible. The above variables, e.g., could also be determined endogenously within the model for some specific economic closure characterized by a well specified set of economic and demographic shocks.

Initial Condition

•   The 2001 global economy in terms of production, consumption and trade.

Model operation

•   Suite of GEMPACK programs.

one hand, and climate, crop technology, production mode (rainfed or. irrigated) and water availability on the other. Ir­rigation water demand is a function of the food production requirement and management practices, but constrained by the amount of available water.
     Water demand for irrigation, domestic purposes, indus­trial sectors, livestock and the environment are estimated at basin scale. Water supply for each basin is expressed as a function of climate, hydrology and infrastructure. At basin level, hydrologic components (water supply, usage and out­flow) must balance. At the global level, food demand and supply are leveled out by international trade and changes in commodity stocks. The model iterates between basin, region and globe until the conditions of economic equilibrium and hydrologic water balance are met.
     Different aspects of the model use different spatial units. To model hydrology adequately, the river basin is used as the basic spatial unit. For food policy analysis, administrative boundaries should be used since trade and policy making happens at national level, not at the scale of river basins. WATERSIM takes a hybrid approach to its spatial unit of modeling. First, the world is divided into 125 major river basins of various sizes with the goal of achieving accuracy with regard to the basins most important to irrigated agri-

 

culture. Next the world is divided into 115 economic re­gions composed of mostly single nations with a few regional groupings. Finally the river basins are intersected with the economic regions to produce 282 Food Producing Units (FPUs). The hydrological processes are modeled at basin scale by summing up relevant parameters and variables over the FPUs within one basin; similarly economic processes are modeled at regional scale by summing up the variables over the FPUs belonging to one region.
     The model uses a temporal scale with a baseline year of 2000. Economic processes are modeled at an annual time-step, while hydrological and climate variables are modeled at a monthly time-step. Crop related variables are either de­termined by month (crop evapotranspiration) or by season (yield, area). The food supply and demand module runs at region level on a yearly time-step. Water supply and demand runs at FPU level at a monthly time-step. For the area and yield computations the relevant parameters and variables are summed over the months of the growing season.

A.5.4.3 Application
Watersim has been used in the following cases:
•     Scenario analysis in the Comprehensive Assessment of Water Management in Agriculture (CA, 2007)
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