Economic Impact of Climate Change on Crop Production in Ethiopia: Evidence from Cross-section Measures

Abstract

This study used the Ricardian approach that captures farmer adaptations to varying environmental factors to analyze the impact of climate change on cropfarminginEthiopia. Bycollectingdatafromfarmhouseholdsindifferent agro-ecological zones of the county, net crop revenue perhectarewas regressed on climate, household and soil variables. The results show that these variables have a significant impact on the net crop revenue per hectare of farmers under Ethiopian conditions. The seasonal marginal impact analysis indicates that marginally increasing temperature during summerand winter would significantly reduce crop net revenue per hectare whereas marginally increasing precipitation during spring would significantly increase net crop revenue per hectare. Moreover, the net crop revenue impact of predicted climate scenarios from three models (CGM2, HaDCM3 and PCM) for the years 2050 and 2100 indicated that there would be a reduction in crop net revenue per hectare bytheyears2050and2100.Moreover,thereductioninnetrevenueperhectare bytheyear2100wouldbemorethanthereductionbytheyear2050indicating the damage that climate change would pose increases with time unless this negative impact is abated through adaptation. Additionally, results indicate that the net revenue impact of climate change is not uniformly distributed across the different agro-ecological zones of Ethiopia.