Potential impacts of climate change on agriculture and the economy in different regions of Brazil

This paper investigates the potential socioeconomic impacts of the climate change projected for 2040 may have on agriculture and on the Brazilian economy, in its different regions. Thus, we used a recursive dynamic interregional CGE model calibrated for 2010. We considered two scenarios of climate change, an Intermediate Scenario (RCP4.5) - less severe - and a Pessimistic Scenario (RCP8.5) - more severe. The main distinction in relation to previous studies performed in Brazil is the estimates of areas that become unviable for agricultural crops, based on projections for the regional pattern of climate change of the 5th and most recent IPCC report. Results suggest that climate change should cause Brazil’s real GDP to shrink in both simulated scenarios, but this should be more intense in the Intermediate Scenario. Results also point out that the losses will be greater for poorer households and for regions whose economy is more dependent on agriculture and, in particular, on soybean; and that the actual consumption and well-being of households in the Midwest and part of the Northeast (in the part where the soybean crop is most representative) will be more affected than in other regions of Brazil.