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Economic impacts of climate-induced crop yield changes: evidence from agri-food industries in six countries

Abstract

The potential impact of climate change on agriculture has been one of the most discussed topics in the literature on climate change. Although the possible impacts of climate change on crop yields have been widely studied, there remains little quantitative understanding of the heterogeneous economic responses to climate-induced crop yield changes in different economies, particularly at higher levels of warming. This study assesses the economic impacts of eight scenarios of warming, from 1.5 to 4 °C, on rice and wheat yields in China, India, Brazil, Egypt, Ghana and Ethiopia. The role of both natural and social factors in crop production is considered by coupling a statistical crop model (ClimaCrop) and a global economic model (GTAP). Changes in economic outputs, consumer and producer prices and national economic welfare are presented. The study shows marginal benefits of crop yield changes on GDP and welfare in China up to 3.5 and 3.0 °C, respectively. This is due to projected increases in rice yields which lower domestic consumer rice prices. Although at higher warming levels these trends begin to reverse. The other countries are negatively impacted due to declining crop yields, with increasing consumer prices of domestic and imported rice and wheat. GDP and welfare declines, with more severe reductions associated with the higher warming levels, particularly in India and Ethiopia. The method is beneficial as the economic outputs reflect a more in-depth picture of the response of global markets and ultimately regional consequences of agricultural impacts that will be of importance to decision makers.

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Acknowledgements

K.J., N.F., J.P., R.W., and R.J. acknowledge support from the UK Government, Department for Business, Energy and Industrial Strategy. D.G. acknowledges supports from the National Natural Science Foundation of China (41921005, 72091514). D.W. acknowledges support from the Fundamental Research Funds for the Central Universities (CXJJ-2020-301). We also thank Rebecca Wright who contributed to the creation of the crop yield change maps.

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Correspondence to Dabo Guan.

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This article is part of the topical collection "Accrual of Climate Change Risk in Six Vulnerable Countries", edited by Daniela Jacob and Tania Guillén Bolaños

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Wang, D., Jenkins, K., Forstenhäusler, N. et al. Economic impacts of climate-induced crop yield changes: evidence from agri-food industries in six countries. Climatic Change 166, 30 (2021). https://doi.org/10.1007/s10584-021-03062-8

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  • DOI: https://doi.org/10.1007/s10584-021-03062-8

Keywords

  • Climate change
  • Crop yield
  • Economic effects
  • CGE modelling