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Economic impacts of climate change on agriculture: The importance of additional climatic variables other than temperature and precipitation

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  • Zhang, Peng
  • Zhang, Junjie
  • Chen, Minpeng

Abstract

Climate change shifts the distributions of a set of climatic variables, including temperature, precipitation, humidity, wind speed, sunshine duration, and evaporation. This paper explores the importance of those additional climatic variables other than temperature and precipitation. Using the county-level agricultural data from 1980 to 2010 in China, we find that those additional climatic variables, especially humidity and wind speed, are critical for crop growth. Therefore, omitting those variables is likely to bias the predicted impacts of climate change on crop yields. In particular, omitting humidity tends to overpredict the cost of climate change on crop yields, while ignoring wind speed is likely to underpredict the effect. Our preferred specification indicates that climate change is likely to decrease the yields of rice, wheat, and corn in China by 36.25%, 18.26%, and 45.10%, respectively, by the end of this century.

Suggested Citation

  • Zhang, Peng & Zhang, Junjie & Chen, Minpeng, 2017. "Economic impacts of climate change on agriculture: The importance of additional climatic variables other than temperature and precipitation," Journal of Environmental Economics and Management, Elsevier, vol. 83(C), pages 8-31.
    • Handle: RePEc:eee:jeeman:v:83:y:2017:i:c:p:8-31
    DOI: 10.1016/j.jeem.2016.12.001
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    More about this item

    Keywords

    Climate change; Agriculture; Humidity; Wind speed; China;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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