Economic Impacts Of Climate Change Research Articles

Assessing the economic impact of climate change on forest resource use in Nigeria: A Ricardian approach

Quantifying the impact of climate change at a regional scale is important in trying to develop adaptation policies. We estimated the economic impact of climate change on forest resource use in Nigeria using the Ricardian model in the STATA statistical software. Using a structured questionnaire, data were collected from 400 rural households in forest communities, sampled from five broad ecological regions across Nigeria to estimate income and potential impact on this as a result of climate change. Estimated average value of annual household income from the forest was $3380. The age of the household head, level of education, mode of transport, hudrology (river flow) significantly and positively affected net revenue from the forest, while noticing of climate change negatively affected net revenue. Also while winter and spring precipitation had positive impacts on net revenue ($1.5 and $0.28 respectively), summer and autumn precipitation had negative impacts; (−$0.073 and −$0.05 respectively). Marginal impact analysis shows that increasing rainfall during winter and spring seasons significantly increases the net revenue per household by $62 and $75 respectively, while increasing precipitation marginally during the summer and autumn seasons reduce the net revenue per household by $42 and $18 respectively. This underscores the place of rainfall as a limiting factor in tropical ecosystem productivity and the growing impact of changing rainfall on household income and efforts to moderate water supply in agriculture and forestry will be an effort in the right direction. Annual marginal increase in rainfall increases net revenue per household by $77. The model shows that a 1°C increase in temperature will lead to an annual loss of $39×10−7 in net income per household, after which further increase in temperature or decreases in precipitation shows no significant change in net revenue, thus underscoring the resilience of tropical forest to climate change.

Economic Impacts of Climate Change: Evidence from OIC Member Countries

Economic Impacts of Climate Change: Evidence from OIC Member Countries

The Economics of Wine, Weather, and Climate Change

In this article, we provide an overview of the extensive literature on the impact of weather and climate on grapes and wine, with the goal of identifying how climate change is likely to affect their production. We first discuss the physical impact of weather on vine phenology (i.e., the timing of biological events such as bud break or flowering), berry composition, and yields. Then we examine the economic literature that measures the effects of temperature on wine quality, prices, costs, and profits and, based on this review, infer how climate change will affect these variables. We also describe what has been learned thus far about possible adaptation strategies for grape growers that would allow them to mitigate the economic effects of climate change. We conclude that climate change is likely to produce both winners and losers, with the winners being those located closer to the North and South Poles. There are also likely to be some substantial short-run costs as growers adapt to climate change. Nevertheless, wine making has survived through thousands of years of recorded history, a history that has included significant climate changes. ( JEL: Q13, Q18, Q54)

Estimation of property loss and business interruption loss caused by storm surge inundation due to climate change: a case of Typhoon Vera revisit

This paper estimates property loss and business interruption loss under scenarios of storm surge inundation to explore the economic impact of climate change on Ise Bay, Japan. Scenarios-based analyses are conducted with respect to Typhoon Vera, which caused the most severe storm surge in the recorded history of Japan in 1959. Four different hazard scenarios are chosen from a series of typhoon storm surge inundation simulations: Typhoon Vera’s landfall with respect to the condition of the past seawall; Typhoon Vera’s landfall with respect to the condition of the current seawall; intensifying Typhoon Vera, but retaining its original tracks; and intensifying Typhoon Vera, but choosing the worst tracks from various possible typhoon tracks. Our economic loss estimation takes advantage of fine geographical scale census and economic census data that enable us to understand the spatial distribution of property loss and business interruption loss as well as identify the most potentially affected areas and business sectors on a sub-city scale. By comparing the property loss and business interruption loss caused by different hazard scenarios, the effect of different seawalls is evaluated and the economic impact of future climate change is estimated. The results indicate that although the current seawall can considerably reduce the scale of losses, climate change can cause Ise Bay to experience more serious storm surge inundation. Moreover, the resulting economic losses would increase significantly owing to a combination of climate change and the worst track scenario. It is, therefore, necessary to consider more countermeasures to adapt to climate change in this area.

The Economic Impact of Climate Change on Road Infrastructure in Ghana

This paper estimates the economic impact of climate change on road infrastructure using the stressor-response methodology. Our analysis indicates that it could cumulatively (2020–2100) cost Ghana $473 million to maintain and repair damages caused to existing roads as a result of climate change (no adapt scenario). However, if the country adapts the design and construction of new road infrastructure, expected to occur over the asset’s lifespan (adapt scenario), the total cumulative cost could increase to $678.47 million due to the initial costs of adaptation. This investment provides lower costs on a decadal basis later in the infrastructure lifespan. This creates the planning question of whether lower decadal costs in the future are a priority or if minimizing initial costs is a priority. The paper addresses this question through decadal and average annual costs up to the year 2100 for the ten regions, using the potential impacts of 54 distinct potential climate scenarios.

An impact analysis of climate change on the forestry industry in Quebec

Quebec’s forests represent 20% of Canadian forests and 2% of the world forests. Over the entire planet, forests play a major role in habitat preservation and in supplying goods and services to the population. However, climate change will have an impact on the forest through inter alia increased droughts, forest fires, warmer weather, and infestations. In this paper, we analyze the economic impact of climate change on the forest industry in Quebec over a 40-year period using a recursive dynamic computable general equilibrium model. We find that the climate change effects will be relatively weak on most macroeconomic variables as agents adjust their behavior over time and factors are reallocated across sectors. We find that climate change could generate losses in gross domestic product of up to Can$300 million (0.12% of gross domestic product) at the end of a 40-year period for Quebec’s economy. However, we find relatively more important effects within the sectors of the forest industry, with losses ranging from 3% to 7.5%.

Economic Impacts of Climate Change on Chinese Agriculture: The Importance of Relative Humidity and Other Climatic Variables

Climate change shifts the distributions of a set of climatic variables including temperature, precipitation, humidity, wind speed, sunshine duration, and evaporation. Previous studies have predominantly focused on temperature and precipitation only, while ignoring other climatic variables. These inter-correlated climatic variables are potential determinants for crop yields. Omitting some important climatic variables could bias the estimations of effects of climate change on agriculture. This paper explores the importance of additional climatic variables besides temperature and precipitation. Using the county-level agricultural data from 1980 to 2010 in China, we find that omitting additional climatic variables, especially humidity, dramatically overestimates the negative impacts of climate change on rice and wheat yields. The restricted model, which only includes temperature and precipitation, overestimates the negative impacts of climate change on rice yields by 57% and wheat yields by 87%. The overestimate for corn, however, is minor. These biases are likely caused by overestimating the negative impacts of higher temperatures on crop yields while simultaneously ignoring the positive impacts of the increased humidity induced by climate change. Using the preferred specification, we project that climate change will reduce the yields of rice, wheat, and corn in China by 9.31%, 4.52%, and 45.04%, or decrease the total production by 15.25 million tons, 4.15 million tons, and 58.63 million tons, respectively, by the end of this century.

Modelling the Economic Impacts of Climate Change on Global and European Agriculture. Review of Economic Structural Approaches

Abstract The economic effects of climate change on agriculture have been widely assessed in the last two decades. Many of these assessments are based on the integration of biophysical and agroeconomic models, allowing to understand the physical and socio-economic responses of the agricultural sector to future climate change scenarios. The evolution of the bio-economic approach has gone through different stages. This review analyses its evolution: firstly, framing the bio-economic approach into the context of the assessments of climate change impacts, and secondly, by reviewing empirical studies at the global and European level. Based on this review, common findings emerge in both global and regional assessments. Among them, the authors show that overall results tend to hide significant disparities on smaller spatial scales. Furthermore, due to the effects of crop prices over yield changes, several authors highlight the need to consider endogenous price models to assess production impacts of climate change. Further, major developments are discussed: the progress made since the last two decades and the recent methods used to provide insights into modeling uncertainties. However, there are still challenges to be met. On this matter, the authors take these unresolved challenges as guidelines for future research.

Comparing the economic effects of climate change and zooanthroponosis in Korea: Prerequisites for the creative economy?

Societies in the 21st century require more proactive management of risks in many areas owing to the complexities people have built into socioeconomic systems, ranging from science and technology, economics, and finance to education, entertainment, and tourism infrastructure. All these systems thrive on stability, which can easily be challenged by unexpected risks. This study compares zooanthroponosis and climate change-induced sea level rise through a cost–benefit analysis in Korea. Borrowing from other methodological approaches, this study shows that the cost–benefit estimation is consistent with the existing macroeconomic speculations, which assume potential loss of GDP due to the two risks. This paper also presents a policy alternative of creating research institutions specializing in the two risks from a cost–benefit perspective as a prerequisite for the "Creative Economy".

Editorial Note: Correction to Richard S. Tol's “The Economic Effects of Climate Change”

Editorial Note: Correction to Richard S. Tol's “The Economic Effects of Climate Change”

Climate Change and Economic Growth in Africa: An Econometric Analysis

The economic landscape of most African countries depends essentially on the dynamics of climate change. Key sectors driving their economic performance and livelihoods such as agriculture, forestry, energy, tourism, coastal and water resources are highly vulnerable to climate change. This article examines the empirical linkage between economic growth and climate change in Africa. Using annual data for 34 countries from 1961 to 2009, we find a negative impact of climate change on economic growth. Our results show that a 1°C increase in temperature reduces gross domestic product (GDP) growth by 0.67 percentage point. Evidence from sensitivity analysis shows the two largest economies in the Sub-Saharan Africa (Nigeria and South Africa) play a significant role in ameliorating the negative economic impact of climate change in the region. In addition to impact on Africa, this article provides estimates of the impact of climate change on GDP growth of these 34 countries, which can be valuable in appraising national adaptation plans. We do not find evidence that average long-run temperature changes affect long-run economic growth as measured by 5 year averages.

Economic Impact of Climate Change in Port Harcourt, Nigeria

The study examines the economic impact of climate change. This is done through a field survey design which involves survey of marketers in Port Harcourt with the aid of archival data from Port Harcourt. Climate data were collected from the archives of Nigeria Meteorological Agency from 1950 to 2015 based on the availability of data. And data on prices and quantity of umbrella, cement, ice cream, cream, palm oil, rubber sander, cold sachet water sold, etc. were extracted from the traders’ dairies from 2004 to 2014. The data collected were presented in tables and descriptive diagrams, and analyzed with the multiple regression analysis; this was done to determine the effect of rainfall and temperature on prices of goods in the city. The results revealed an evidence of climate change in Port Harcourt with an increase of 1581 mm and 3°C for rainfall and temperature, and double rain maxima in the months of July and September. It also confirms the concept of econo-climate by establishing strong correlation between rainfall and temperature and price of goods demanded and supplied. The price and the quantity of goods demanded and supplied are significantly dependent on the amount of rainfall and temperature in the area, and as such the quantity of goods demanded and supplied negates the law of demand and supply which states that the higher the price, the higher the quantity supplied in the area. On this premise planners at the federal, state and local government levels are advised to incorporate climate mitigation and adaptation strategies in urban renewer and planning to avoid unforeseen climate disasters in our urban areas.

Assess the economic imact of climate change on wheat, barley, maize and sunflower in Southeast Bulgaria

The report studied the impact of the expected climate change in the period 2020-2050 on the yield of wheat, barley, maize and sunflower in southeastern planning region (Southeast region) of Bulgaria. Estimated economic impact of climate change on agriculture in the Southeast region. By stepwise regression analysis, predictors are defined and obtained regression relations for the average yield for each of the studied crops with climate model REMO and climate scenario A1B. Enter the evaluation of error forecast yields for each of the studied cultures and reporting its receipt of the final forecasts. Based on regression equations obtained an estimate for the change in the average yield of the studied crops. There are formed groups to change average yields of crops studied, the results are used as input data for economic assessment and analysis. On the basis of these groups was determined the optimal structure of production to Southeast region for the period 2020-2050. Determine the required amounts of fuel, fertilizers and agro-chemical equipment for the production of the studied crops in Southeast region for the period 2020- 2050 due to climate changes.

Assessing Economic Impacts of Climate Change and Adaptation in Indo-Gangetic Basin

The Indo-Gangetic Basin (IGB) is characterised by cereal-based farming systems where livestock is an integral part of farm economy. Majority of the population derives their livelihood from agriculture sector which is dominated by small land holdings (<2ha). Cereal crops (mainly rice and wheat) are crucial to ensuring the food security in the region, but sustaining their productivity has become a major challenge due to climate variability and uncertainty. This paper uses an integrated climate-crop- economic modelling framework (using AgMIP protocols) to make an integrated assessment of climate change and adaptation strategy for rice-wheat growing farms of Meerut district (India) in the IGB. This framework enables integration of location- and farm-specific climate and crop modelling output for assessing economic impact on the farming systems using trade-off analysis (TOA-MD) model. The assessment clearly shows likely impact of climate change on agricultural production systems, and how adaptation strategies can reduce climate change vulnerabilities. Sensitivity analysis shows that under current production system, rice mean yield declines 8–23% while wheat yield declines by 17-29% under five climate scenarios. Though decline in mean net farm returns and per capita income appears small, a large proportion of farm population (53-79%) remains vulnerable to climate change. Assessment of future agricultural systems (2050s) shows that though the mean net farm returns and per capita income decline by 3–9% and 2–6%, respectively, under different climate scenarios, a large proportion of farms (39–64%) incur losses due to climate change. The adaptation strategy for existing farming system shows positive impacts on crop yield, farm returns and per capita income. However, a comprehensive assessment of more sites for climate change impacts on future agricultural production systems would be useful in devising appropriate adaptation strategy to improve the livelihoods and food security in the IGB region.

The Polar Bears can Sink or Swim, but the Stock Market needs to Soar

The Polar Bears can Sink or Swim, but the Stock Market needs to Soar

Measuring the economic impact of climate change on agriculture: a Ricardian analysis of farmlands in Tajikistan

We apply the Ricardian approach to analyse the economic impact of climate change on agriculture using the 2007 World Bank Tajikistan Living Standards Survey. The study analyses data of 2557 farm households in 166 villages across the 10 agro-ecological country zones. In general, the results indicated that increasing temperature and precipitation will both be damaging to Tajikistan agriculture and consequently to the net revenue (NR) of farmers in the medium and long term. Regressing NR on climate parameters, household and soil variables showed that these variables have a significant impact on the farmers' NR per hectare. We examined the impact of the current climate on farmers' NR per hectare, and how that is affected by future climate scenarios: one +2.9°C warming and one 4.6°C warming scenarios. Although the analysis did not incorporate variables such as the carbon fertilization effect, the role of technology or the change in prices in the future, significant information for policy-making can be extracted. Tajikistan has very diverse regions in terms of geography, population density and socio-economic situation; our results will help policy-makers to anticipate the adaptation effort needed in different locations of the country.

A modelling framework for assessing the economic impact of climate change in the Caribbean

The ECLAC-Climate Impacts Assessment Model (CIAM) is a modelling platform that has been created to assess the economic consequences of climate change in the Caribbean. The model can be freely accessed, downloaded and even modified. The version available is a full-fledged model which can readily be used to conduct simulation exercises. This paper provides a general description of the model and an illustrative simulation exercise. Our results from this exercise highlight the fact that the Caribbean is a highly vulnerable region where climate change is expected to generate sizeable and negative economic consequences.

Analyzing and visualizing the synergistic impact mechanisms of climate change related costs

One climate related phenomenon could affect many more. The direct costs associated to climate related factors pass to a number of other climate related costs through the indirect economic consequences of climate change. In this paper we propose a mathematical model which aims to provide forecasts of the distribution of the costs caused by the synergistic mechanism of environmental effects. The model is created to be directly applied to situations where the primary costs associated to climate related factors can be specified. It is expressed in matrix terms and is programmed using Mathematica’s matrix functions. We provide the framework for efficient computation of this model, covering possible linear and nonlinear functions of the impact mechanism for costs and, infinite direct cost scenarios. Some directions for the quantitative estimation of impact indicators and adaptation potentials of the costs incurred by certain climate related factors are included, in order to apply the proposed model using real socioeconomic data.

Economic Impact of Climate Change on Maize Production in Northern Nigeria

In recent years, climate change has become a more serious issue than any other environmental problem. One of the main concerns is the risk it poses to food production in developing countries, due to heavy reliance on agriculture. This study examined the influence of climate change on net revenue from maize production in northern Nigeria and the role of socioeconomic factors on farm adaptation. The results are intended to inform farmers, researchers and policy makers, on the impact of climate change on net revenue from maize production in the study area. A farm survey of the respondents found that, there was a significant correlation between climate change (temperature and rainfall) and net revenue from maize production. Results of the study revealed that precipitation plays a more important role as a determinant of farm net revenue, as against temperature, particularly during the rainy season. Furthermore, socioeconomic factors were found to have a mix effect on net revenue. In conclusion the study found that climate change affects net revenue from maize production in the area and there is the need to focus attention on the greatest environmental threat of our time, an issue that previous studies have not addressed comprehensively. The policy implications of the results, if carefully evaluated are expected to serve as a framework for developing climate change adaptation and mitigation options in the study area.

The Economic Impacts of Climate Change on Agriculture in Africa

The African continent is projected to suffer adverse impacts from climate change, which are disproportionate to its contribution to global carbon dioxide emissions. Africa is particularly vulnerable because it is among the hottest places on the Earth and therefore any further warming will likely have adverse socioeconomic consequences; and most of the economies in this region rely mainly on natural resources and rain-fed agriculture, which are very sensitive to climate change and variability. This article investigates the impacts of climate change on African agriculture and discusses the policy implications for managing these impacts. The modelling results show that Africa will experience the largest impacts from climate change in terms of decline in economic growth and welfare losses. The disaggregated results show that Southern Africa will be the hardest hit region, followed by the Rest of sub-Saharan Africa, North Africa and East Africa, in that order. There is therefore need for concerted efforts at adaptation, which should include introduction of temperature-sensitive varieties, diversification of production systems and livelihoods, shift to sustainable agricultural intensification, shift to irrigation agriculture, addressing institutional challenges such as poor physical and social infrastructure, market imperfections, lack of access to credit, and lack of crop insurance, etc. In the long run, emphasis should be placed on diversifying away from agriculture to industry and services.