Assessing asymmetrical effects of climate change on cereal yields in Algeria: The NARDL-AEC approach

Cereal crops hold a significant position in Algerian household consumption patterns, with specific implications for public policy priorities. Unfortunately, they are highly susceptible to the influence of climatic conditions. This study aims to empirically examine the relationship between cereal crop yields and climate change factors using time series data spanning from 1961 to 2021 in Algeria. The study employs the nonlinear autoregressive distributed lag model with asymmetric error correction component and the Granger-causality approach. The outcomes of cointegration tests confirm the existence of both long-run and short-run equilibrium among cereal yield, the area under cereal crops, temperature, precipitation, and carbon emissions. Long-run estimates reveal that shocks in area and positive shocks in precipitation have a positive impact on cereal crop yield, while shocks in temperature and carbon emissions have a negative impact, while negative shocks in precipitation also negatively affect cereal crop yield. In the short run, it appears that shocks in area, temperature, and precipitation positively impact cereal crop yield, while shocks in carbon emissions significantly reduce yield. Additionally, both CUSUM tests and overall fitness tests confirm the model’s stability. The outcomes of pairwise Granger-causality test indicate the presence of both unidirectional and bidirectional causal relationships among the underlying variables. Based on the study's findings, several public policy implications are highlighted. Primarily, there is an urgent need to promote the adoption of water-saving irrigation systems, improve existing infrastructure through increased public investment, and develop climate-resilient cereal varieties to address the challenges posed by climate change.