Effects of climate change on depopulating regional economies through changes in Japan’s rice production and recovery policies

Abstract

The present study measures the impact of climate change induced by global warming on the regional economies through changes in Japan’s rice production in a society experiencing a depopulation trend and analyzes economic effects of three recovery policies from climate change such as an import policy, technological innovation policy of rice, and labor substitution policy. Our findings show that the real GRP of each region will decline by 20–30% relative to 2005 given climate change in a society experiencing depopulation. Moreover, the national equivalent variation will decrease by 71.5 trillion yen, and the equivalent variation per capita will decrease by 812,000 yen in the case of mean value. On the other hand, long-term climate change has different impacts in each region and expands regional economic disparities. Also, to mitigate the influence of climate change, three simulations were carried out in three scenarios for an import policy, a technological innovation policy of rice, and a labor substitution policy. When evaluating the results, a technological innovation policy was preferable to an import policy and a labor substitution policy. Therefore, by including other rice crops and their increases, we must promote aggressive R&D investments for agricultural production from the early stage before being affected by global warming.