Economic Effects of Climate Change on Agriculture Productivity by 2035: A case study of Pakistan

Abstract

Climate Change is an ever growing issue with a great importance due to wide socio-economic effects. Agriculture is the most climate sensitive economic sector that is influenced both positively and negatively by climate change. A change in temperature or precipitation could cause a significant change in crops productivity and yields. Different crop/bio-physical experts have been making efforts to process the impact of climate on crop yields through different crop modellings using input from different global climate models. In this research, the output of the crop models is used as a shock in the global computable general equilibrium economic model to evaluate the economic effects of climate change. Pakistan has two crop seasons – Kharif and Rabi- therefore two major crops i.e. Wheat and Rice have been chosen for this analysis. A Baseline scenario, representing business as usual with no change in climate, has been created using projections for GDP, population, factor supplies, and required food production. A counterfactual experiment has done using the same GDP and population growth as in the baseline but with addition of crop yield shocks from bio-physical models. A comparison of these two experiments has shown the economic effects of climate change by 2035.