Abstract
This research analyzes the economic effects of climate change-induced crop yield losses in Benin. As agriculture is a large sector in Benin, the climate change-induced crop yield losses are expected to affect the entire economy as well as household welfare in both rural and urban areas. The paper applies a dynamic general equilibrium model and simulates productivity shocks in the agricultural sector derived from climate change scenarios for Benin. The findings show that climate change-induced crop yield losses reduce domestic agricultural outputs by 4.4% and the nonagricultural output by 0.9% on average by 2025. While export supply decrease by 25.5%, import demand increases by 4.9% on average by 2025. As price of labour and capital decline, household income drop for all household groups by 2.5% on average. Ultimately, household welfare decline for all household groups by 2.7% on average. Rural and particularly poor households are projected to experience the worst adverse effects of climate change-induced crop yield losses. The results show that without adaptive strategies to cope with climate change, economic growth and household welfare will decline even further by 2035 and 2045. Subsequently, the paper suggests that adaptation strategies are needed not only at the national level to overcome the projected negative effects on macroeconomic indicators, but also at household level to enhance the adaptative capacity of households, especially the poor households living in rural areas.
Highlights
Climate change is a serious threat to the development of several regions in the world, due to both its economic and biophysical effects [1,2,3]
The paper suggests that adaptation strategies are needed at the national level to overcome the projected negative effects on macroeconomic indicators, and at household level to enhance the adaptative capacity of households, especially the poor households living in rural areas
The results of the dynamic computable general equilibrium show that climate-induced crop yield losses could lead to a decline in domestic outputs and export supply, and an increase in import demand
Summary
Climate change is a serious threat to the development of several regions in the world, due to both its economic and biophysical effects [1,2,3] As these effects become more tangible, several experts argue that more and frequent extreme weather events are to be expected in the future [2]. The implications of such extreme weather events for economic activities, especially the agriculture and food sector have been investigated at the global level [4,5]. The effects and mechanisms are known, more studies are needed at the country level, incorporating local specificities in analyses in order to inform policy
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
