Economic Impacts Of Climate Change Research Articles

The impact of climate change on labour demand in the plantation sector: the case of tea production in Sri Lanka

Limited opportunities for crop switching and lengthy preharvesting periods make the plantation sector particularly vulnerable to climate change. Surprisingly, however, the economic consequences of climate change on plantation crops are seldom analysed. Drawing on a unique primary panel data set from a representative cross section of 35 tea estates in Sri Lanka over the period 2002–2014, this study implements a structural model of estate profit maximisation to estimate the elasticity of labour demand with respect to different components of weather. Results indicate a negative relationship between labour demand and rainfall in the south‐west monsoon, the north‐east monsoon and the second inter‐monsoon. A positive relationship is found between labour demand and rainfall in the first inter‐monsoon. Overall, predicted changes in rainfall by 2050 are anticipated to reduce labour demand by approximately 1,175,000 person‐days per year across Sri Lanka's tea plantation sector. This is likely to have considerable social and welfare implications, particularly for the Indian Tamil women who comprise the majority of the sector's workforce.

Stern review on the economics of climate change: implications for Bangladesh

PurposeThe purpose of this study is to investigate the impact of climate change on economic development in Bangladesh. More specifically, the research aims to figure out the influence of climate change on gross domestic product (GDP) growth rate related to different sectors such as agriculture, forest, water, health and infrastructure. It also attempts to explore the effect of climate change on the coastal economy of Bangladesh.Design/methodology/approachA set of statistical and econometric techniques, including descriptive and correlation analysis and time series regression model, was applied to address the objective of the research. Sector-wise time series economic data were collected from the World Bank for the period between 1971 and 2013. Climate data were received from the Bangladesh Agricultural Research Council online database for the period between 1948 and 2013.FindingsThe results from the statistical analysis show that climate variables such as temperature and rainfall have changed between 1948 and 2013 in the context of Bangladesh. The econometric regression analysis demonstrates that an increase by 1°C of annual mean temperature leads to a decrease in the GDP growth rate by 0.44 per cent on average, which is statistically significant at the 5 per cent level. On the other hand, the estimated coefficients of agriculture, industry, services, urbanization and export are positively associated with GDP growth rate, and these are statistically significant at the 1 per cent level. Sector-wise correlation analysis provides statistical evidence that climate change is negatively associated with various sectors, such as agriculture, forest, human health and arable land. In contrast, it has a positive relation to water access and electricity consumption. Analysis of coastal regions shows that climate change negatively affects the local economic sectors of the coastal zone of the country.Originality/valueAlthough this study has received significant insight from the world-renowned research publication “The Economics of Climate Change: The Stern Review”, there is a dearth of research on the economic impact of climate change in the context of Bangladesh. The findings of the paper provide deep insight into and comprehensive views of policy makers on the impact of climate change on economic growth and various sectors in Bangladesh.

Quantifying the Economic Impact of Climate Change and Market Dynamics: The Case of Australia’s Sydney Rock Oyster Industry

Climate change affects fisheries and aquaculture industries due to their reliance on renewable and natural resources. The aim of this study was to develop a framework to quantify the potential economic impact of climate change on an industry and to analyze the impact of market dynamics on its economic viability under changing climate. To achieve the aim, a model was developed that incorporates economic, spatial and biophysical variables. In this study, by way of empirical illustration, the focus was on Australia’s Sydney rock oyster (SRO) industry. The findings from scenario analyses suggest that the negative effect of projected climate change on the industry’s revenue may be moderate overall. However, some production areas may be more affected than others. Furthermore, the results suggest that market dynamics could have a larger impact on the future economic sustainability of the industry than direct effects from climate change.

Economic effects of climate change on the Mediterranean’s irrigated agriculture

PurposeThis paper aims to assess the economic effects of climate change on the Mediterranean’s irrigated agriculture and how the adoption of alternative crop varieties adapted to the expected length of the growing season can be an effective adaptation measure.Design/methodology/approachA case study of two irrigation areas in Southern Portugal is used to assess the response to climate change impacts on crop yields and irrigation requirements, and an agricultural supply model is calibrated using a positive mathematical programming (PMP) approach was developed.FindingsClimate change reduces crop yields and causes a slight decrease in irrigation requirements, which could allow an increase in the irrigated area. However, positive impacts on rural areas regarding employment and investment are not expected. The adoption of adaptation measures based on alternative crop varieties, which could maintain crop yields at current levels, increases dramatically the economic value of water and mitigates losses in farm income.Research limitations/implicationsThe impacts on output and input market prices, as well as other biophysical impacts (for instance, CO2 and water availability), are important in understanding the effects of climate change on irrigated agriculture, but they were not considered in this study. While this may be a limitation, it can also be a stimulus for further research.Practical implicationsThis is an empirical paper, whose results contribute to improving knowledge about the effects of climate change on irrigated agriculture in Mediterranean areas, namely, its economic impacts on returns and the use of agricultural resources (land, water, labour and capital). Other practical implications of the paper are associated with the methodological approach, which provides a framework able to deal with the complexity and multidimensional effects of climate change.Social implicationsThe results of the paper provide important information for scientists, politicians and other stakeholders about the design of more effective adaptation measures able to mitigate the effects of climate change.Originality/valueCrop yields and irrigation requirements were previously calculated based on data generated by the regional climate models. This is the first time that an application is developed for Portugal. Two distinct profiles of irrigation areas were studied and a large set of crops was considered, which is not common in the existing studies. To specify the PMP approach used to calibrate the agricultural supply model, exogenous crop-specific supply elasticities were estimated through a least square model, which is not common in previous studies.

The Political Economy of a Planetary Sunshade

ABSTRACTGeoengineering proposals are increasingly acknowledged as possible responses to climate change because of the repeated failure of national decision makers to solve the collective action problem of allocating carbon emission reductions at the Conference of the Parties to the United Nations Framework Convention on Climate Change. Geoengineering is attractive, the possible moral hazard notwithstanding, because of differences in the economic effects of climate change across countries, which are organized as factions seeking to shift the burden of carbon reductions or to delay response. This article outlines the political economic advantages of a planetary sunshade to reduce the amount of sunlight reaching the Earth. Rather than adopt the more common game theoretic model to describe the relevant international relations, construction of the planetary sunshade is characterized as an auction in which a single spacefaring power completes construction of the megaproject as a global good, comparable to the willingness of the United States to provide the dollar as a global reserve currency, and then determines the average global temperature based upon financial or material contributions from other countries. The willingness to contribute is based upon calculations of preferred average global temperatures.

Economic impact of climate change on agriculture using Ricardian approach: A case of northwest Vietnam

Abstract The impact of climate change on agriculture will help to clarify the perception of the problem and quantify the impact, contributing to the formulation of sustainable livelihoods. This study uses the Ricardian approach to explore the implications of climate change on agriculture in the Northwestern area of Vietnam by taking farmer adaptations into account. The study uses secondary data of 1055 households which selected from Vietnam Household Living Standards Surveys in 2012 dataset and climate. To examine the effect of an infinitesimal change of temperature and rainfall in Northwest farming, marginal impact analysis was conducted. The study then predicts the impact of climate scenarios on net revenue for the years 2050 and 2100. The study found that relationship between household revenue and weather variables are nonlinear significant and inverted U-shaped relationships between the two seasons. Net revenue decreased as temperature and rainfall increase in the dry season. Net revenue projected to decline about 17.7% and 21.28% due to climate change in 2050 and 2100 respectively in without adaptation model. Net revenue would be loss about 0.37% and 0.20% in 2050 and 2100 respectively in with adaptation model.

Socioeconomic Indicators for the Evaluation and Monitoring of Climate Change in National Parks: An Analysis of the Sierra de Guadarrama National Park (Spain)

This paper analyzes the importance of assessing and controlling the social and economic impact of climate change in national parks. To this end, a system of indicators for evaluation and monitoring is proposed for the Sierra de Guadarrama National Park, one of the most important in Spain. Based on the Driving forces-Pressure-State-Impact-Response (DPSIR) framework, the designed system uses official statistical data in combination with data to be collected through ad hoc qualitative research. The result is a system of indicators that monitors the use of natural resources, the demographic evolution, economic activities, social interactions, and policies. Adapted to different contexts, these indicators could also be used in other national parks and similar natural protected areas throughout the world. This type of indicator system is one of the first to be carried out in Spain’s national parks. The result is a system that can be useful not only in itself, but also one that can catalyze climate change planning and management of national parks.

Coping With Collapse: A Stock-Flow Consistent Monetary Macrodynamics of Global Warming

This paper presents a macroeconomic model that combines the economic impact of climate change with the pivotal role of private debt. Using a Stock-Flow Consistent approach based on the Lotka–Volterra logic, we couple its nonlinear monetary dynamics of underemployment and income distribution with abatement costs. A calibration of our model at the scale of the world economy enables us to simulate various planetary scenarios. Our findings are threefold: 1) the +2 °C target is already out of reach, absent negative emissions; 2) the long-term (resp. short-term) results of climate change on economic fundamentals may lead to severe economic consequences without the implementation (resp. in case of too rapid an application) of proactive climate policies. Global warming (resp. too fast transition) forces the private sector to leverage in order to compensate for output and capital losses (resp. to lower carbon emissions), thus endangering financial stability; 3) Implementing an adequate carbon price trajectory, as well as increasing the wage share, fostering employment, and reducing private debt make it easier to avoid unintended degrowth and to reach a +2.5 °C target.

Оценка экономических последствий наблюдаемых и ожидаемых климатических изменений с учетом долгосрочных прогнозных сценариев развития лесного сектора

Economic consequences of climate change for the forest sector were calculated on the basis of data on changes in wood reserves as a result of an increase in the vegetation period, the sum of active temperatures and the total average annual increase for 1 ha of forest fund lands covered by forest vegetation, as well as the dynamics of the complex Nesterov’s fire danger index for weather conditions for the middle and end of the century for the 3rd, 4th and 5th classes of fire danger. Comparative analysis of the position of boundaries of natural and climatic zones at current time, middle and end of the century indicates a predictable shift of boundaries from south to north. The displacement of the boundaries of the natural and climatic zones will inevitably entail a change in the pedigree composition of the forest tracts in these territories. In particular, the gradual change of coniferous species for deciduous ones is predicted, which will directly affect the structure of forest resources. The economic consequences of predicted changes will be related both to the change in the species composition of forests and to the change in the average annual growth of wood. Due to the increase in the growing season and the sum of the active temperatures, an increase in the total average annual growth per hectare of forestland covered with vegetation, operational forests up to 2.9 m3/ha in the middle of the century and up to 3.2 m3/ha at the end of the century (at 2.6 m3/ha for the period of 2008-2014). Taking into account the cost of coniferous and deciduous wood by regions (in average prices in 2017), as well as the growth of productivity of plantations, by the middle of the century the value of forests in relation to 2014 will increase by 50.3%. By the end of the century, an increase up to 217% is expected from the level of 2014. By 2090, the boundaries of the southern taiga are expected to shift to the middle taiga. If current forest productivity continues, the valuation is expected to decline to 93.8% from the level of 2014. By the middle and the end of the century, the fire season is expected to increase, in aver-age for 4 days by 2050 and for 9 days by 2090. Due to this, the cost of extinguishing forest fires is likely to increase. On average, by regions, the increase in expenditures from 2016 to 2050 will be 2.3 million rubles per year, from 2051 to 2090 - 4.1 million rubles per year.

Climate Change and the Macro-Economy: A Critical Review

Climatic factors can directly affect economic outcomes such as output, investment and productivity, and understanding the economic consequences of climate change is becoming a necessity not just for climate economists but also for a wider range of economic professionals involved in modelling and forecasting macroeconomic variables. The focus of this review is on the key theoretical and empirical modelling issues in the analysis of the macroeconomic risks deriving from climate change. The paper develops the taxonomy introduced by a number of previous Bank of England studies, which distinguish between physical and transition risks of climate change. The paper then identifies the different channels through which these risks are transmitted to the macro-economy, either through (unpredictable) economic shocks or through predictable, longer-term impacts. The different approaches to modelling these macroeconomic effects are then discussed and assessed in light of the increasing need to routinely monitor and quantify the impact of emerging climate change risks on the economy.

The Economic Impacts of Climate Change

AbstractThis article reviews the economic impacts of climate change and the policy implications of the results. Current estimates indicate that climate change will likely have a limited impact on t...

Economic Impacts of Climate Change on Agriculture: Empirical Evidence From The ARDL Approach for Turkey

Purpose- The agricultural sector is one of the sectors most sensitive to climate change. This sector is directly affected by temperature and precipitation, which is an input in agricultural production. The main objective of this study is to evaluate the effects of climate change in agricultural production in Turkey. Methodology- The data cover the period 1961-2013. In this study, economic effects of climate change on agriculture were analyzed for Turkey using a time series approach. Findings- The increase in precipitation affects agricultural GDP positively, while the increase in temperature has a negative effect on agricultural GDP. Conclusion- In order to minimize the adverse effects of climate change in Turkey, which is one of the largest countries in the world in terms of agricultural land, it is important to establish policies, strategies, plans and programs to combat climate change.

The Sectoral and Regional Economic Consequences of Climate Change to 2060

This paper presents a new detailed global quantitative assessment of the economic consequences of climate change (i.e. climate damages) to 2060. The analysis is based on an assessment of a wide range of impacts: changes in crop yields, loss of land and capital due to sea level rise, changes in fisheries catches, capital damages from hurricanes, labour productivity changes and changes in health care expenditures from diseases and heat stress, changes in tourism flows, and changes in energy demand for cooling and heating. A multi-region, multi-sector dynamic computable general equilibrium model is used to link different impacts until 2060 directly to specific drivers of economic growth, including labour productivity, capital stocks and land supply, as well as assess the indirect effects these impacts have on the rest of the economy, and on the economies of other countries. It uses a novel production function approach to identify which aspects of economic activity are directly affected by climate change. The model results show that damages are projected to rise twice as fast as global economic activity; global annual Gross Domestic Product losses are projected to be 1.0–3.3% by 2060. Of the impacts that are modelled, impacts on labour productivity and agriculture are projected to have the largest negative economic consequences. Damages from sea level rise grow most rapidly after the middle of the century. Damages to energy and tourism are very small from a global perspective, as benefits in some regions balance damages in others. Climate-induced damages from hurricanes may have significant effects on local communities, but the macroeconomic consequences are projected to be very small. Net economic consequences are projected to be especially large in Africa and Asia, where the regional economies are vulnerable to a range of different climate impacts. For some countries in higher latitudes, economic benefits can arise from gains in tourism, energy and health. The global assessment also shows that countries that are relatively less affected by climate change may reap trade gains.

ENVIRONMENTAL AND ECONOMIC CHALLENGES OF CLIMATE CHANGE FOR EASTERN EUROPEAN FORESTS IN MID-LATITUDE ZONE

The article considers the main challenges facing the forest sector of European part of Mid-Latitude zone in connection with climate change. The main aim was to systematize available scientific information on climate change influence on forests in the research region. The methods of analysis, synthesis, comparison and generalization of available scientific information were applied. Environmental results of climate changeimpact on forests are represented by future worsening stability and sanitary state of forest stands of Ukraine's main forest-forming tree species. This becomes more and more noticeable for Scots pine dominated stands across Ukraine, and the future for forests composed by other tree species is no longer optimistic in the long run. It is stated that the changing environment will lead to alteration of growth, productivity and bioproductivity of Ukrainian forests, and, consequently,to the necessity to rethink approaches to selection of tree species, forest caring and growing, assessment of ecosystem functions and so on. Economic consequences of climate change for forestry will manifest themselves in the loss of resources, loss of income, as well as expenditures for implementing environmental stabilizing measures. The attention is drawn to significant volumes of normative and information support as well as unique empirical data accumulated in Ukraine during a prolonged period of forest management, forest science and practice. Those are actively used to describe dynamics of various characteristics of forest ecosystems within scientific research, management planning and forest industry.The importance of improving the information support of the forestry sector is emphasized, which will ensure the possibility of forecasting the state of forests under climate change conditions and making sound managerial decisions, and possible pathways for this are highlighted. Characterized are necessary prerequisites and possible ways of transition to the paradigm of sustainable development on the basis of risk-resilient forest management in Ukraine and in geographically greater region.

Ethics of the scientist qua policy advisor: inductive risk, uncertainty, and catastrophe in climate economics

This paper discusses ethical issues surrounding Integrated Assessment Models (IAMs) of the economic effects of climate change, and how climate economists acting as policy advisors ought to represent the uncertain possibility of catastrophe. Some climate economists, especially Martin Weitzman, have argued for a precautionary approach where avoiding catastrophe should structure climate economists’ welfare analysis. This paper details ethical arguments that justify this approach, showing how Weitzman’s “fat tail” probabilities of climate catastrophe pose ethical problems for widely used IAMs. The main claim is that economists who ignore or downplay catastrophic risks in their representations of uncertainty likely fall afoul of ethical constraints on scientists acting as policy advisors. Such scientists have duties to honestly articulate uncertainties and manage (some) inductive risks, or the risks of being wrong in different ways.

Implications of climate change for the sugarcane industry

This review was undertaken to draw together research on how climate change impacts sugarcane production, and to assess the implications of climate change for the sugarcane industry, as well as possible response options. Much of the extant research examines how changes in climate lead to changes in primary production; however, few studies consider how climate change translates into industry‐wide impacts and economic consequences across the sugarcane value chain. Of the 90 studies we reviewed (published as journal articles, proceedings, and book chapters), 61 assess observed and/or projected impacts of climate change on sugarcane production. These studies reach largely different conclusions regarding how increases in air temperature or atmospheric carbon dioxide levels impact sugarcane production. These mixed results can be attributed to differences between the studies in terms of methods, time frames, and growing regions, which all limit cross‐study comparability. A total of 17 studies focus on the adaptation to observed and/or projected impacts of climate change, such as changed management procedures or farming practices, but there is limited evidence regarding successful adaptation outcomes. In addition, a separate stream of papers discusses mitigating energy use and greenhouse gas emissions in the sugarcane production process, often with a view to reducing environmental impacts. Our review concludes by outlining the pathways for future research, highlighting that further insights are needed in particular regarding the economic consequences of climate change for the sugarcane industry. WIREs Clim Change 2018, 9:e498. doi: 10.1002/wcc.498This article is categorized under: Future of Global Energy > Evaluating Future Impacts of Climate Change

Climate change and agriculture: an integrated approach to evaluate economy-wide effects for Turkey

This paper quantifies the economic effects of climate change on Turkey. We use an integrated framework that combines an economy-wide model with a crop water requirement model to analyse the probable effects of the B1 scenario of the intergovernmental panel on climate change which is comparable to representative concentration pathway 4.5 scenario. Results suggest that the economic effects of climate change will not have serious economic effects over the period up to late 2030s, but the negative effects dominate the economy in the second half of this century. This provides Turkey an excellent opportunity to increase resilience and implement appropriate adaptation policies. The impact of climate change varies across regions. Agriculture and food production will be heavily affected. Especially irrigated production will decline as water stress increases. Significant decline in agricultural production is transmitted throughout the economy and reduces national welfare. Part of agriculture’s decline is compensated by imports, thus deteriorating Turkey’s food trade balance.

Climate change impacts on EU agriculture: A regionalized perspective taking into account market-driven adjustments

The biophysical and economic consequences of climate change for agriculture are surrounded by uncertainties. The evaluation of climate change impacts on global and regional agriculture has been studied at length. In most cases, however, global and regional impacts are examined separately. Here we present a regionalized assessment – for the 2030 time horizon – covering the whole European Union while accounting for market feedback through international markets. To account for uncertainty on climate effects, we defined several simulation scenarios that differ as to climate projections and assumptions on the degree of carbon fertilization. Biophysical simulations show that crop productivity effects are largely determined by the degree of carbon fertilization, leading to decreased productivity in the absence of carbon fertilization and increased productivity otherwise. The magnitude of those effects differs across regions and crops, with maize being one of the most negatively affected in the EU. Economic simulations show that, while, on the whole, crop price effects attenuate the global impacts of climate change, aggregate results conceal significant regional disparities and their related trade adjustment. These results suggest that a multi-scale perspective is helpful for assessing climate change impacts on agriculture, as it will improve understanding of how regional and global agrifood markets respond to climate change and how these responses interact with each other.

Climate change through a poverty lens

The economic impact of climate change has typically been considered at regional or national levels. This Perspective assesses impacts at household level to determine effects on poverty and the poor. It shows how rapid development could reduce these impacts. Analysis of the economic impact of climate change typically considers regional or national economies and assesses its impact on macroeconomic aggregates such as gross domestic product. These studies therefore do not investigate the distributional impacts of climate change within countries or the impacts on poverty. This Perspective aims to close this gap and provide an assessment of climate change impacts at the household level to investigate the consequences of climate change for poverty and for poor people. It does so by combining assessments of the physical impacts of climate change in various sectors with household surveys. In particular, it highlights how rapid and inclusive development can reduce the future impact of climate change on poverty.

Assessing the economic impact of climate change (maximum and minimum temperature) on productivity of sorghum crop in gadarif state, sudan

Assessing the economic impact of climate change (maximum and minimum temperature) on productivity of sorghum crop in gadarif state, sudan