arXiv subjects

Michael Obersteiner

Publications and source records attributed to Michael Obersteiner.

8 recordsLinked to original sources

arXiv2025

The Impact of Phosphate Fertilizer Industry Consolidation on Future Phosphorus Supply for World Agriculture

The addition of phosphorus, in the form of mineral fertilizer, becomes necessary in most agricultural soils in order to achieve consistent high yield levels of intensive farming and maintain soil fertility. Recent consolidation of phosphate fertilizer industry has transformed fragmented trade into a single integrated global network, where a small group of large-scale companies dominates the international market for phosphate commodity fertilizers. To assess the impact of new trade structure on future region-level phosphorus supply, we simulate behavior of markets for ammonium phosphates in the FAO scenarios of global intensive farming evolution. Details of market microstructure are represented here by a many-to-many matching market. Current spatial distribution of global demand in ammonium phosphates is projected to strengthen by 2030. Bootstrap simulations produce similar network structures for both scenarios showing reduction in the density of the distributed market. In response to the non-uniform demand growth across regions, market concentration is expected to increase for small-scale markets, and to remain predominantly stable for large-scale markets; on the supply side, simulated equilibria point out large-scale multi-market suppliers concentrating on fewer markets than before. A high rate of import substitution by local suppliers in some markets indicate the need of additional region-level capital investment.

econ.GN↗

arXiv2023

A note on the logical inconsistency of the Hotelling Rule: A Revisit from the System's Analysis Perspective

The "Hotelling rule" (HR) called to be "the fundamental principle of the economics of exhaustible resources" has a logical deficiency which was never paid a sufficient attention to. This deficiency should be taken into account before attempting to explain discrepancies between the price prediction provided by the HR and historically observed prices. Our analysis is focused on the HR in its original form, we do not touch upon other aspects such as varying extraction costs and other ways of upgrading the original model underlying the Hotelling rule. We conclude that HR can not be derived from the simple models as it was claimed, therefore it should be understood as an assumption on its own, and not as a rule derived from other more basic assumptions.

econ.TH↗

arXiv2022

Shadow prices and optimal cost in economic applications

Shadow prices are well understood and are widely used in economic applications. However, there are limits to where shadow prices can be applied assuming their natural interpretation and the fact that they reflect the first order optimality conditions (FOC). In this paper, we present a simple ad-hoc example demonstrating that marginal cost associated with exercising an optimal control may exceed the respective cost estimated from a ratio of shadow prices. Moreover, such cost estimation through shadow prices is arbitrary and depends on a particular (mathematically equivalent) formulation of the optimization problem. These facts render a ratio of shadow prices irrelevant to estimation of optimal marginal cost. The provided illustrative optimization problem links to a similar approach of calculating social cost of carbon (SCC) in the widely used dynamic integrated model of climate and the economy (DICE).

econ.GN↗

arXiv2022

Early systems change necessary for catalyzing long-term sustainability in a post-2030 agenda

Progress to-date towards the Sustainable Development Goals (SDGs) has fallen short of expectations and is unlikely to fully meet 2030 targets. Despite the little chance of imminent success, past assessments have mostly focused on short- and medium-term evaluations, limiting the ability to explore the longer-term effects of systemic interactions with time lags and delay. Here we undertake global systems modelling with a longer-term view than previous assessments to explore the drivers of sustainability progress and how they could emerge by 2030, 2050, and 2100 under different development pathways and towards quantitative targets. We find that early planning for systems change to shift from business-as-usual to more sustainable pathways is important for accelerating progress towards increasingly ambitious targets by 2030, 2050, and 2100. These findings indicate the importance of adopting longer-term timeframes and pathways to ensure that the necessary pre-conditions are in place for sustainability beyond the current 2030 Agenda.

econ.GN↗

arXiv2021

Social Cost of Carbon: What Do the Numbers Really Mean?

Social cost of carbon (SCC) is estimated by integrated assessment models (IAM) and is widely used by government agencies to value climate policy impacts. While there is an ongoing debate about obtained numerical estimates and related uncertainties, little attention has been paid so far to the SCC calculation method itself. This work attempts to fill the gap by providing theoretical background and economic interpretation of the SCC calculation approach implemented in the open-source IAM DICE (Dynamic Integrated model of Climate and the Economy). Our analysis indicates that the present calculation method provides an approximation that might work pretty well in some cases, while in the other cases the estimated value substantially (by the factor of four) deviates from the "true" value. This deviation stems from the inability of the present calculation method to catch the linkages between two key IAM's components -- complex interconnected systems -- climate and economy, both influenced by emission abatement policies. Within the modeling framework of DICE, the presently estimated SCC valuates policy-uncontrolled emissions against economically unjustified consumption, which makes it irrelevant for application in climate-economic policies and, therefore, calls for a replacement by a more appropriate indicator. An apparent SCC alternative, which can be employed for policy formulation is the direct output of the DICE model -- the socially optimal marginal abatement cost (SMAC), which corresponds to technological possibilities at optimal level of carbon emissions abatement. In policy making, because of the previously employed implicit approximation, great attention needs to be paid to the use of SCC estimates obtained earlier.

econ.GN↗

arXiv2021

Impact of lockdowns and winter temperatures on natural gas consumption in Europe

As the COVID-19 virus spread over the world, governments restricted mobility to slow transmission. Public health measures had different intensities across European countries but all had significant impact on peoples daily lives and economic activities, causing a drop of CO2 emissions of about 10% for the whole year 2020. Here, we analyze changes in natural gas use in the industry and built environment sectors during the first half of year 2020 with daily gas flows data from pipeline and storage facilities in Europe. We find that reductions of industrial gas use reflect decreases in industrial production across most countries. Surprisingly, natural gas use in buildings also decreased despite most people being confined at home and cold spells in March 2020. Those reductions that we attribute to the impacts of COVID-19 remain of comparable magnitude to previous variations induced by cold or warm climate anomalies in the cold season. We conclude that climate variations played a larger role than COVID-19 induced stay-home orders in natural gas consumption across Europe.

physics.ao-ph↗

arXiv2020

Resiliency in Numerical Algorithm Design for Extreme Scale Simulations

This work is based on the seminar titled ``Resiliency in Numerical Algorithm Design for Extreme Scale Simulations'' held March 1-6, 2020 at Schloss Dagstuhl, that was attended by all the authors. Naive versions of conventional resilience techniques will not scale to the exascale regime: with a main memory footprint of tens of Petabytes, synchronously writing checkpoint data all the way to background storage at frequent intervals will create intolerable overheads in runtime and energy consumption. Forecasts show that the mean time between failures could be lower than the time to recover from such a checkpoint, so that large calculations at scale might not make any progress if robust alternatives are not investigated. More advanced resilience techniques must be devised. The key may lie in exploiting both advanced system features as well as specific application knowledge. Research will face two essential questions: (1) what are the reliability requirements for a particular computation and (2) how do we best design the algorithms and software to meet these requirements? One avenue would be to refine and improve on system- or application-level checkpointing and rollback strategies in the case an error is detected. Developers might use fault notification interfaces and flexible runtime systems to respond to node failures in an application-dependent fashion. Novel numerical algorithms or more stochastic computational approaches may be required to meet accuracy requirements in the face of undetectable soft errors. The goal of this Dagstuhl Seminar was to bring together a diverse group of scientists with expertise in exascale computing to discuss novel ways to make applications resilient against detected and undetected faults. In particular, participants explored the role that algorithms and applications play in the holistic approach needed to tackle this challenge.

cs.DC↗

arXiv2015

Systemic trade-risk of critical resources

In the wake of the 2008 financial crisis the role of strongly interconnected markets in fostering systemic instability has been increasingly acknowledged. Trade networks of commodities are susceptible to deleterious cascades of supply shocks that increase systemic trade-risks and pose a threat to geopolitical stability. On a global and a regional level we show that supply risk, scarcity, and price volatility of non-fuel mineral resources are intricately connected with the structure of the world-trade network of or spanned by these resources. On the global level we demonstrate that the scarcity of a resource, as measured by its trade volume compared to extractable reserves, is closely related to the susceptibility of the trade network with respect to cascading shocks. On the regional level we find that to some extent the region-specific price volatility and supply risk can be understood by centrality measures that capture systemic trade-risk. The resources associated with the highest systemic trade-risk indicators are often those that are produced as byproducts of major metals. We identify significant shortcomings in the management of systemic trade-risk, in particular in the EU.

econ.GN↗