*2.2. Projections of Pakistan's Agricultural Trade in 2030*

To estimate the future impacts of Pakistan's agricultural trade on the country's water resources and global savings, we make use of the Global Trade Analysis Project (GTAP) model and its latest database (with the base year 2011) to project Pakistan's trade through to 2030. GTAP is a well-known and widely used global general equilibrium economic model [41,42]. The model assumes cost minimization by producers and utility maximization by consumers. In a competitive market setup, prices adjust until supplies and demands of all commodities equalize. The model and database have been extensively used in research areas such as food security policy, energy, climate change, poverty and migration, among others. There are other model choices as well, like ENVISAGE, FARM, GTEM, AIM and MAGNET, GLOBIOM, GCAM and IMPACT. Most of these computable general equilibrium (CGE) models have their roots in the Global Trade Analysis Project database and the CGE optimizing approach [41] and so have similar model specifications. They mainly differ in parameterization choices, which significantly affect the result. Nelson et al. [43] have discussed the effects of model structure and parameter choice on the results of CGE simulations in detail.

For projecting the future trade of Pakistan with other countries, we use a recursive dynamic method wherein the given GDP targets are met by exogenous shocks to factors of production including population, skilled labor, unskilled labor, capital and natural resources. The exogenous macro assumptions and the procedure for implementing these shocks are discussed in detail in References [41,44], respectively. Most of the data used for projections are based on the CEPII EconMap database 2.4 (2016), which contains 1980–2050 and 2100 data for 167 countries and 6 scenarios (one central scenario and the 5 Shared Socioeconomic Pathways) for GDP, savings, investment, total population, labor force, capital stock, total primary energy consumption, human capital, total factor productivity and energy efficiency [45].

For these projections, we retained maximum disaggregation for agricultural commodities and Pakistan's major trading partners. As for projection for future agriculture production in Pakistan, we use current production technology and the availability of irrigation water. The potential decrease in water availability for agricultural production in the coming decade due to climate change, population growth and urbanization could well be countered by the improved crop production technology (like drought-resistant varieties and new irrigation technology).
