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Estimating the Economic Impacts of Climate Change on Global Food Market

Author

Listed:
  • Chen, Chi-Chung
  • Hsu, Sheng-Ming
  • Chang, Ching-Cheng
  • Hsu, Shih-Hsun

Abstract

This study investigates the impacts of climatic change on global markets of maize, rice, and wheat. The first step is to combine the Crop Yield Model estimated results and climate factors data predicted from five climate models (i.e. hadcm3, MIROC3_2_MEDRES, ECHAM5,CSIRO-MK30, and CNRM_CM3), and with the assumption that future world is in IPCC (2007) A1B scenario. Under such assumptions, we estimate the production impacts in 2030, 2040, and 2050. Moreover, using Global Trade Analysis Model (GTAP) and its data set we can further assess the economic impacts on food price, productivity, GDP, and social welfare. Simulation results show that the negative impacts of future climate change are imposing serious effects on the production of maize, rice, and wheat. Moreover, results also indicate that adverse impacts on GDP and social welfare in various countries can be seen. Among these countries, India, Mexico, and Indonesia are experiencing larger magnitude of adverse impacts on GDP in three out of five climate models. On the other hand, the most significant negative effect on social welfare is in China, India, and Mexico.

Suggested Citation

  • Chen, Chi-Chung & Hsu, Sheng-Ming & Chang, Ching-Cheng & Hsu, Shih-Hsun, 2012. "Estimating the Economic Impacts of Climate Change on Global Food Market," Conference papers 332262, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332262
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    References listed on IDEAS

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    1. Chi‐Chung Chen & Ching‐Cheng Chang, 2005. "The impact of weather on crop yield distribution in Taiwan: some new evidence from panel data models and implications for crop insurance," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 503-511, November.
    2. Murat Isik & Stephen Devadoss, 2006. "An analysis of the impact of climate change on crop yields and yield variability," Applied Economics, Taylor & Francis Journals, vol. 38(7), pages 835-844.
    3. Richard E. Just & Rulon D. Pope, 1979. "Production Function Estimation and Related Risk Considerations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 61(2), pages 276-284.
    4. Alfons Weersink & Juan H. Cabas & Edward Olale, 2010. "Acreage Response to Weather, Yield, and Price," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 58(1), pages 57-72, March.
    5. Bruce A. McCarl & Xavier Villavicencio & Ximing Wu, 2008. "Climate Change and Future Analysis: Is Stationarity Dying?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(5), pages 1241-1247.
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