Ohio State studies effects of deglobalization on Midwest food, energy and water systems

COLUMBUS, Ohio—Imagine the United States gets ensnared in a lengthy trade war and the fallout undercuts international demand for crops grown in the Great Lakes region. Farmers and other producers would eventually adjust their plans, setting in motion changes that could have pronounced ramifications on how land, water and energy resources are used and are collectively affected for years to come. But what are those ramifications, exactly, and to what extent can they be predicted?

Those are questions Ohio State researchers will address as they examine the possible effects of deglobablization and model the scenarios that might play out in the Midwest. The work is supported by the National Science Foundation, which on Sept. 19 announced a grant for Ohio State that is expected to exceed $2.4 million over the next three years. The money is provided through Innovations at the Nexus of Food, Energy and Water Systems (INFEWS), a research partnership between NSF and the U.S. Department of Agriculture.

Elena Irwin, an environmental economist and the principal investigator, said a deeper understanding of potential effects of deglobalization on the interconnected economies of Ohio, Michigan, Indiana, Illinois and Wisconsin is critical given the region’s dependence on agricultural and manufacturing exports and its decades-long integration into the global economy.

“Our goal is to develop a modeling framework that will allow us to project potential futures under different hypothetical scenarios—like a trade war or policies to promote greater energy independence—and assess the environmental and economic consequences,” she said. “These triggers would likely have not just one, but many effects on regional producers and consumers.”

Ohio State researchers will examine a wide sweep of economic, behavioral and environmental factors, including the diversity of watersheds and possible choices by farmers. To take advantage of the expertise of local and regional actors, and to ensure that the results are useful to decision-makers, researchers will ask policymakers, farmers, environmental organizations, conservation groups and other key external stakeholders to review the scientific research and help shape the resulting models.

The Ohio State project is being managed by the Sustainable and Resilient Economy program, a Discovery Themes focus area. SRE is jointly led by Irwin, the program’s faculty director and a professor in Agricultural, Environmental and Development Economics, and Joseph Fiksel, the executive director and a research faculty member in Integrated Systems Engineering.

The work brings together a highly collaborative team with a track record of interdisciplinary research and extensive experience in quantitative and computational modeling. The team includes researchers from three colleges: Food, Agricultural and Environmental Sciences; Engineering; and the John Glenn College of Public Affairs.

One possible scenario that underscores the potential domino effect of deglobalization is a trade war between the United States, on one side, and China and Mexico, on the other. The result, Irwin said, would likely be a significant reduction in U.S. bilateral trade in agricultural commodities, especially in the Great Lakes region, where much of the corn and soybeans sent to those countries is produced. And because of tightly integrated supply chains, these effects could multiply and reverberate through multiple sectors of the economy. In the face of tariffs from China and Mexico, Great Lakes farmers who produce for global markets would see their revenues decline, potentially quite dramatically. And consumers would suffer, too—as a result of U.S. tariffs—facing higher prices and a potential reduction in the availability of beef, fruits and vegetables.

In the longer run, markets would adjust. For example, less global demand for corn and soybeans and reduced availability of imported fresh fruits and vegetables might provide an impetus for Great Lakes farmers to shift from commodity crops and allocate more land to produce fruits and vegetables for regional and U.S. markets. On the other hand, the decline in access to global markets could induce farmers to invest in non-food production, for example, in energy crops, or reduce the overall amount of land in agricultural production. In either case, these changes in land use would affect energy and water demands and, in turn, affect air and water quality through changes in greenhouse gas emissions and agricultural run-off.

Irwin said two factors were essential to garnering the federal support. The first was previous NSF funding that supported development of an integrated model of farmers’ decision-making on Lake Erie wateshed quality, led by current team member Jay Martin, a professor of Food, Agricultural and Biological Engineering. The second was the addition of two researchers hired through the Discovery Themes: Yongyang Cai and Douglas Jackson-Smith.

Cai, an associate professor of Agricultural, Environmental and Development Economics, has extensive experience in integrated modeling of economic and environmental systems. Jackson-Smith, a professor of Environmental Resources, is an expert in participatory modeling. Each brings a level of technical expertise to Ohio State that was previously lacking, Irwin said.

Other team members and their areas of research include:

• Bhavik Bakshi, professor in the Department of Chemical and Biomolecular Engineering; life cycle modeling, sustainability assessment.
• Jeff Bielicki, a professor with a joint appointment in Civil, Environmental and Geodetic Engineering and the John Glenn College of Public Affairs; energy modeling and policy effects on energy and environmental systems.
• Alan Randall, SRE scholar in residence and an emeritus professor and former chair of the Department of Agricultural, Environmental and Development Economics; environmental economics and policy.
• Ian Sheldon, the Andersons Chair of Agricultural Marketing, Trade and Policy in the Department of Agricultural, Environmental and Development Economics; international trade and policy.
• Robyn Wilson, an associate professor in the School of Natural Resources; individual decision-making under risk and uncertainty.