The Economic Impacts of Climate Change in Sub-Saharan Africa

Abstract

The aim of this study is to investigate the impact of climate change on trade and competitiveness in Sub-Saharan African (SSA) countries and to address the implications for managing the impacts, including the options for mitigation and adaptation. The African continent is particularly vulnerable to climate change for a variety of reasons including the fact that the majority of the countries are reliant on agriculture, which is particularly sensitive to climate change and variability. Furthermore, the low per capita incomes and the existing stresses present unique challenges to adapting to climate change. Forecasts indicate that agricultural productivity decline for SSA as a whole could be about 28% on average without carbon fertilisation by the 2080s, and about 18% with carbon fertilisation. However, these figures mask the extreme nature of the losses for some countries. For example, for countries that are dependent on dryland agriculture, productivity losses could be as much as 100%. The study simulated the macroeconomic implications of the decline in agricultural productivity using a computable general equilibrium model of the world economy. It was found that GDP increases for the EU, Japan and the US but decreases by significant amounts in the SSA region. The terms of trade declines in SSA, leading to a reduction of disposable incomes and hence a reduction in welfare. Issues and challenges relating to adaptation and mitigation, as well as options for managing the impact of climate change and the role of key stakeholders, are discussed.