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Impact of Climate Change on Agricultural Growth in Nepal

Author

Listed:
  • Shankar Prasad Acharya, Ph.D.

    (Nepal Rastra Bank, Birgunj)

  • Guna Raj Bhatta

    (Nepal Rastra Bank, Research Department)

Abstract

The concern of climate change has been emphasized in the field of economics too owing to the challenge of adapting to global warming for sustainable development and growth. This challenge becomes dominant in the developing economies like Nepal as these countries face the combination of equator vulnerable climate change pattern, agro-based economy, scarcity of resources, and lack of influence to put forth the global agenda of climate change to international forum. In this paper, we conducted a quantitative modeling of climate change and its impact to the agricultural value addition in Nepal taking into consideration annual series of agricultural gross domestic product (AGDP), rainfall, temperature, seeds and fertilizer distribution data for the period of 36 years ranging from 1975 to 2010. The statistical inferences show the significant positive impact of rainfall to the AGDP. Nevertheless, improved seeds and chemical fertilizers are found to be insignificant. The impact of rising temperature to AGDP is cautious as we find a large negative coefficient of cyclical component of temperature, but statistically insignificant. This insignificance may be due to the nature of very little temperature variability over the study period as compared to the variability in AGDP. The country should assess the impact of climate change in national, regional, and district level to collect the spatial information and underpin the adaptive policies to the required areas.

Suggested Citation

  • Shankar Prasad Acharya, Ph.D. & Guna Raj Bhatta, 2013. "Impact of Climate Change on Agricultural Growth in Nepal," NRB Economic Review, Nepal Rastra Bank, Economic Research Department, vol. 25(2), pages 1-16, October.
    • Handle: RePEc:nrb:journl:v:25:y:2013:i:2:p:1
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    References listed on IDEAS

    as
    1. William R. Cline, 2007. "Global Warming and Agriculture: Impact Estimates by Country," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4037, January.
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    More about this item

    Keywords

    Agricultural GDP; Climate Change; Growth;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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