Assessing the Economic Impacts of Changes in Crop Production Due to Climate Change and Adaptation in Vietnam

Abstract

Vietnam is at risk from diverse climate change impacts, including sea-level rise, extreme weather events, rising temperatures and changes in precipitation. In this chapter, we use a multi-regional dynamic computable general equilibrium model of Vietnam to investigate the effects of changes in crop yields and harvested areas caused by climate change, with and without adaptation measures, under alternative climate change scenarios. We find that reduced crop yields, and reduced crop areas in low-lying regions, cause negative deviations in national and regional GDP, consumption and industrial production. Inequality is projected to rise, primarily due to higher food prices. Adaptation measures improve both crop yields and crop area compared with no-adaptation scenarios. This mitigates some of the adverse macroeconomic effects, while also reducing disparities in climate change impacts across regions and across households distinguished by urban/rural location and expenditure quintile.