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Environmental and Resource Economics

, Volume 74, Issue 2, pp 679–696 | Cite as

Economic Impacts of Climate Change on Vegetative Agriculture Markets in Israel

  • Rotem Zelingher
  • Andrea Ghermandi
  • Enrica De Cian
  • Malcolm Mistry
  • Iddo KanEmail author
Article

Abstract

We integrate the combined agricultural production effects of forecasted changes in CO2, temperature and precipitation into a multi-regional, country-wide partial equilibrium positive mathematical programming model. By conducting a meta-analysis of 2103 experimental observations from 259 agronomic studies we estimate production functions relating yields to CO2 concentration and temperature for 55 crops. We apply the model to simulate climate change in Israel based on 15 agricultural production regions. Downscaled projections for CO2 concentration, temperature and precipitation were derived from three general circulation models and four representative concentration pathways, showing temperature increase and precipitation decline throughout most of the county during the future periods 2041–2060 and 2061–2080. Given the constrained regional freshwater and non-freshwater quotas, farmers will adapt by partial abandonment of agriculture lands, increasing focus on crops grown in controlled environments at the expense of open-field and rain-fed crops. Both agricultural production and prices decline, leading to reduced agricultural revenues; nevertheless, production costs reduce at a larger extent such that farming profits increase. As total consumer surplus also augments, overall social welfare rises. We find that this outcome is reversed if the positive fertilization effects of increased CO2 concentrations are overlooked.

Keywords

Adaptation Agriculture Climate change CO2 fertilization Meta-analysis Positive mathematical programming Production Function Israel 

Notes

Acknowledgements

Funding was provided by the Center for Agricultural Economic Research, Department of Environmental Economics and Management, The Hebrew University of Jerusalem.

Supplementary material

10640_2019_340_MOESM1_ESM.docx (20 kb)
Supplementary material 1 (DOCX 19 kb)
10640_2019_340_MOESM2_ESM.docx (16 kb)
Supplementary material 2 (DOCX 15 kb)
10640_2019_340_MOESM3_ESM.docx (21 kb)
Supplementary material 3 (DOCX 21 kb)

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Copyright information

© Springer Nature B.V. 2019

Authors and Affiliations

  1. 1.Department of Environmental Economics and ManagementThe Hebrew University of JerusalemRehovotIsrael
  2. 2.Department of Natural Resources and Environmental ManagementUniversity of HaifaHaifaIsrael
  3. 3.Department of EconomicsCa’ Foscari University of VeniceVeniceItaly
  4. 4.Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC)VeniceItaly
  5. 5.Center for Agricultural Economic ResearchThe Hebrew University of JerusalemRehovotIsrael

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