Table Of ContentThomas W. Hertel · Uris Lantz C. Baldos
Global Change and
the Challenges
of Sustainably
Feeding a Growing
Planet
Global Change and the Challenges
of Sustainably Feeding a Growing Planet
Thomas W. Hertel (cid:129) Uris Lantz C. Baldos
Global Change
and the Challenges
of Sustainably Feeding
a Growing Planet
Thomas W. Hertel Uris Lantz C. Baldos
Department of Agricultural Economics Department of Agricultural Economics
Purdue University Purdue University
West Lafayette , IN , USA West Lafayette , IN , USA
ISBN 978-3-319-22661-3 ISBN 978-3-319-22662-0 (eBook)
DOI 10.1007/978-3-319-22662-0
Library of Congress Control Number: 2015947927
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Alexander and Sarah Hertel-Fernandez,
in hopes of a sustainable future
Nagisa, Danilo and Sergia Baldos,
in thanks for love and encouragement
Foreword
I magine this setting. A workshop at the Massachusetts Institute of Technology in
September 2002. A man standing at the blackboard, surrounded by a group of
economists, holding forth on some new idea. Ideas are fl ying as much as the chalk
dust. It was diffi cult not to get drawn in. This was how I fi rst met Tom Hertel. He
was the man at the chalkboard. I was maybe the only non-economist in the group,
and whatever Tom was saying went over my head, but it was clearly exciting to the
others. Tom saw me at some point and said something like, “Navin, this is where
your data would come in and be most useful”. This has been the story of our rela-
tionship since—Tom sees connections that few others do.
T he origins of this book tell the same story, of Tom’s ability to synthesize and see
the big picture. It started with his Presidential Address to the Agricultural and
Applied Economics Association (AAEA) in 2010. My memory of that event is of
numerous phone calls and emails from Tom hunting me down for more and more
references on various global change issues; his thirst was insatiable. Tom has been
fascinated by the analytical work done by climate scientists and ecologists in the
fi elds of climate change, land use change, and global food security; his unique con-
tribution has been his ability to see how economists could contribute. He has often
been the only economist attending annual meetings of the American Geophysical
Union or the Open Science Conference of the Global Land Project. Tom developed
his ideas into a course during his sabbatical at Stanford, collaborating with the agri-
cultural ecologist David Lobell; that effort eventually became this book.1 Tom
brings a decidedly economic perspective on issues, but he is able to make connec-
tions to other disciplines, including my own in global land use and environmental
change, in new and insightful ways.
A more recent story of my interactions with Tom will highlight the joy of inter-
disciplinary collaborations. In 2012, I wrote a Guest Editorial for the top ecology
journal F rontiers in Ecology and the Environment , 2 titled “Can intensive farming
1 Tom was ably assisted in his vision by his coauthor, the fabulous Uris Baldos, then a fresh PhD
student and now a postdoctoral fellow, who did all the empirical work behind the scenes.
2 This journal is a benefi t of ESA membership and distributed to all members.
vii
viii Foreword
save nature?” In this editorial, my coauthor and I argued that intensive farming
could have environmental benefi ts by sparing natural ecosystems from the chain-
saw, popularly termed a “land sparing” strategy. But we concluded that a few impor-
tant questions remain open:
A major criticism of land sparing is that there is scant empirical evidence that agricultural
intensifi cation actually leads to land sparing in practice. In fact, intensifi cation is often
accompanied by further expansion, as neighboring farmers adopt the novel practices. This
implies either that the demand for the agricultural product has increased because of intensi-
fi cation or that the land sparing has occurred in another region of the world. Whether inten-
sifi cation can create increased demand of agricultural products is an important question; it
depends on whether demand remains elastic as supply increases….Measuring land sparing
through empirical analysis is thus confounded by: (1) the lack of a “control” situation to
compare against—perhaps cropland would have expanded even faster had it not been for
intensifi cation; and (2) the fact that national-level analysis may fail to account for “leakage”
of land sparing to other parts of the world.
A keen reader would have noticed some economic language in the above para-
graph—references to demand elasticity—concepts whose importance I appreciated
better through my interactions with Tom. I sent the editorial to Tom suggesting this
as an area where an economist could make an important contribution. Tom responded
that he had already conducted an analysis of this issue and submitted a paper to an
economic journal, but his paper had been rejected on the basis that these ideas were
not new to economists. But these ideas were new to land change scientists! Tom and
I thus collaborated on a broader analysis, to develop an analytical framework using
an economic perspective, to investigate under what conditions agricultural intensi-
fi cation can lead to land sparing. The fi ndings of our study that historical intensifi ca-
tion in Latin America and Asia did indeed spare land for nature, but future
intensifi cation in Africa is not guaranteed to do so, were considered suffi ciently
important and interesting to a broad audience that our paper3 was published in the
top journal, P roceedings of the National Academy of Sciences .
Clearly, natural scientists have a lot to gain from interdisciplinary collaborations,
especially with economists interested in the same problem. Global environmental
change science (climate science, land use science, ecology) is capable of saying if
humans do X, the consequence will be Y. But these disciplines have a limited ability
of projecting what, indeed, humans will do, and more importantly, how they will
respond to the ongoing environmental changes (i.e., the endogenous response, in
economic language). In systems language, these are feedbacks to the system that
include human responses, i.e., humans are active participants in the system, rather
than passive respondents. How humans respond to price fl uctuations is, certainly, a
limited perspective on the complexity of human behavioral responses, but it is an
important one. The logic is simple. When the price of food increases, humans will
3 Hertel, T. W., Ramankutty, N., & Baldos, U. L. C. (2014). Global market integration increases
likelihood that a future African Green Revolution could increase crop land use and CO2 emissions.
P roceedings of the National Academy of Sciences of the United States of America, 111( 38),
13799–13804.
Foreword ix
generally buy less of it, depending on their base economic circumstances. All of us
who have stood at the grocery store comparing the prices and labels of various
options can relate to this. People like me, who grew up in India eating little meat,
not because of religious or cultural reasons, but because we could not afford it, can
relate well to the price sensitivity of food consumption.
So what does this book have to offer? First, every chapter has a nugget of “eco-
nomic wisdom.” And when the authors discuss economic concepts, they go back to
the basics, to the supply–demand curves, and explain them in a way that is easily
accessible to a nonspecialist audience. I am going to take examples from four differ-
ent chapters to illustrate what I mean. In Chap. 2 , we learn how income determines
consumption, and in particular how consumer response to food price and income
changes depends on base income levels. Here we learn, for example, that if you are
rich, and devoting a tiny portion of your net income to food, changes in food price
will have less infl uence on your purchasing behavior, than if you were poor and
devoting a large portion of your income to food.
In Chap. 3 , Hertel and Baldos introduce the important concept of Total Factor
Productivity (TFP), how it is different from yields, and why it is important to con-
sider. I must admit that I am a recent convert myself to appreciating the value of
TFP. Until Tom’s infl uence, I had always thought that yields (production per unit
area) are what matter, because it is what we derive from the land. To me TFP
sounded like an economic “construct” with no real-world signifi cance, i.e., some-
thing only economists cared about. Chap. 3 makes the case for why non-e conomists
take TFP seriously. Increasing yields, derived simply from increasing inputs, say
little about the effi ciency of the agricultural system. It is only TFP, through compar-
ing outputs to inputs, that evaluates effi ciency of the system (i.e., getting more by
simply putting more in is not improving effi ciency). Given our current environmen-
tal challenges related to food, growing more food by adding more water and fertil-
izers is not a solution.
In Chap. 4 , the authors discuss the importance of price effects in forecasting
future demand and future land use. Typical biophysical analysis would project
demand based on population and income growth and then estimate the land supply
response required (with implications for land use, depending on the assumptions on
intensifi cation). But bringing in the economics allows for capturing the infl uence of
higher price on consumer response (typically to reduce consumption), which
reduces the land supply response. On the land supply side, economics allows one to
better capture how a farmer would respond to increasing prices by either increasing
input use, or through expanding land. As Hertel and Baldos put it, the price effects
on demand and input use act as “shock absorbers” to reduce the land use response
from what one might naively predict without consideration of economics.
I n the fi nal Chap. 11, the authors pull all of their insights together to illustrate the
impact of ignoring economic logic. They exercise the SIMPLE model under various
common assumptions used by other studies to illustrate their shortcomings (or
“error signatures” as they call it). They start their exercise with a historical validation
