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Territorial Economic Impacts of Climate Anomalies in Brazil

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  • Eduardo A. Haddad

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  • Alexandre A. Porsse, Paula C. Pereda

Abstract

This paper evaluates the systemic impact of climate variations in a regional perspective using an interregional CGE model integrated with a physical model estimated for agriculture in order to catch the effects of climate change. The climate anomalies are estimated for 2005 and represent deviations over the historic trend. The results of this paper suggest that the economic costs of climate anomalies can be significantly underestimated if only partial equilibrium effects (direct impact/damage) are accounted for. The results show that a general equilibrium approach can provide a better comprehension about the systemic impact of climate anomalies, suggesting the economic costs are higher than those that would be observed in a partial equilibrium analysis. In addition, intersectoral and interregional linkages as well price effects seem to be important transmission channels in the context of systemic impact of climate anomalies.

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File URL: http://www.fea.usp.br/feaecon/RePEc/documentos/HaddadPorssePereda20WP.pdf
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Bibliographic Info

Paper provided by University of São Paulo (FEA-USP) in its series Working Papers, Department of Economics with number 2012_20.

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Date of creation: 15 Sep 2012
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Handle: RePEc:spa:wpaper:2012wpecon20

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Keywords: climate anomalies; systemic impact; interregional CGE analysis;

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  1. Kerstin Ronneberger & Maria Berrittella & Francesco Bosello & Richard S.J. Tol, 2006. "Klum@Gtap: Introducing Biophysical Aspects of Land-Use Decisions Into a General Equilibrium Model A Coupling Experiment," Working Papers 2006.102, Fondazione Eni Enrico Mattei.
  2. Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2005. "Market imperfections in a spatial economy: some experimental results," The Quarterly Review of Economics and Finance, Elsevier, vol. 45(2-3), pages 476-496, May.
  3. Ruslana Palatnik & Roberto Roson, 2012. "Climate change and agriculture in computable general equilibrium models: alternative modeling strategies and data needs," Climatic Change, Springer, vol. 112(3), pages 1085-1100, June.
  4. Adams, Philip D. & Dixon, Peter B. & McDonald, Daina & Meagher, G. A. & Parmenter, Brian R., 1994. "Forecasts for the Australian economy using the MONASH model," International Journal of Forecasting, Elsevier, vol. 10(4), pages 557-571, December.
  5. Gurgel Angelo & Reilly John M & Paltsev Sergey, 2007. "Potential Land Use Implications of a Global Biofuels Industry," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-36, December.
  6. Eduardo A. Haddad & Jaime Bonet & Geoffrey. J.D.Hewings & Fernando S Perobelli, . "Spatial Aspects of Trade Liberalization in Colombia: A General Equilibrium Approach," Borradores de Economia 515, Banco de la Republica de Colombia.
  7. Horridge, Mark & Madden, John & Wittwer, Glyn, 2005. "The impact of the 2002-2003 drought on Australia," Journal of Policy Modeling, Elsevier, vol. 27(3), pages 285-308, April.
  8. Roberto Roson & Ruslana Rachel Palatnik, 2009. "Climate Change Assessment and Agriculture in General Equilibrium Models: Alternative Modeling Strategies," Working Papers 2009_08, Department of Economics, University of Venice "Ca' Foscari".
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