An assessment of the distributional impacts of autonomous adaptation to climate change from European agriculture

Abstract

Farmers facing a durable change in climate conditions may autonomously adapt through the intensive margin, the extensive margin, or through the adoption of new practices. Based on a coupling between a microeconomic model of European agriculture (AROPAj) and a crop model (STICS), this article investigates the potential distributional impacts of farm-level autonomous adaptation to climate change within the European Union (EU-27). Considering the representative concentration pathway (RCP) 4.5 of the second report on emission scenario of the fifth assessment report (SRES AR5), we implement two levels of autonomous adaptation for farmers, and three time horizons. The results indicate that ceteris paribus, climate change may lead in terms of social welfare to a slightly worse situation in the middle term and a slightly better situation in the long term with respect to the present. However, the ranking of agents in the distribution is importantly impacted. Our Shapley inequality decomposition shows that income inequality is largely explained by the region and type of farming. Climate change barely affects the marginal contribution of these two characteristics to overall income inequality.