Assessing the economic impact of climate change on forest resource use in Nigeria: A Ricardian approach

Abstract

Quantifying the impact of climate change at a regional scale is important in trying to develop adaptation policies. We estimated the economic impact of climate change on forest resource use in Nigeria using the Ricardian model in the STATA statistical software. Using a structured questionnaire, data were collected from 400 rural households in forest communities, sampled from five broad ecological regions across Nigeria to estimate income and potential impact on this as a result of climate change. Estimated average value of annual household income from the forest was $3380. The age of the household head, level of education, mode of transport, hudrology (river flow) significantly and positively affected net revenue from the forest, while noticing of climate change negatively affected net revenue. Also while winter and spring precipitation had positive impacts on net revenue ($1.5 and $0.28 respectively), summer and autumn precipitation had negative impacts; (−$0.073 and −$0.05 respectively). Marginal impact analysis shows that increasing rainfall during winter and spring seasons significantly increases the net revenue per household by $62 and $75 respectively, while increasing precipitation marginally during the summer and autumn seasons reduce the net revenue per household by $42 and $18 respectively. This underscores the place of rainfall as a limiting factor in tropical ecosystem productivity and the growing impact of changing rainfall on household income and efforts to moderate water supply in agriculture and forestry will be an effort in the right direction. Annual marginal increase in rainfall increases net revenue per household by $77. The model shows that a 1°C increase in temperature will lead to an annual loss of $39×10−7 in net income per household, after which further increase in temperature or decreases in precipitation shows no significant change in net revenue, thus underscoring the resilience of tropical forest to climate change.