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A Stochastic Simulation Approach to Estimating the Economic Impacts of Climate Change in Bangladesh

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  • Thurlow, James
  • Yu, Winston

Abstract

Climate change assessments often inadequately address uncertainty when estimating damages. Using a dynamic economy-wide model of Bangladesh, we estimate and decompose damages from historical climate variability and future anthropogenic climate change. Our stochastic simulation approach avoids biases caused by non-linear damage functions and fixed occurrences of extreme events in historical data. Using ten climate projections, we find that future anthropogenic climate change damages until 2050 are, on average, one-fifth of those from historical climate variability. Climate change also alters the temporal distribution of damages and slows Bangladeshâ..s long- run shift (adaptation) into dry (winter) season rice production.

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File URL: http://www.wider.unu.edu/stc/repec/pdfs/wp2011/wp2011-086.pdf
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Bibliographic Info

Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Papers with number UNU-WIDER Research Paper WP2011/86.

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Length: 22
Date of creation: 2011
Date of revision:
Handle: RePEc:unu:wpaper:wp2011-86

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Keywords: climate change; uncertainty; stochastic simulation; CGE model; agriculture; Bangladesh;

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  1. Calzadilla, Alvaro & Zhu, Tingju & Rehdanz, Katrin & Tol, Richard S.J. & Ringler, Claudia, 2009. "Economywide impacts of climate change on agriculture in Sub-Saharan Africa:," IFPRI discussion papers 873, International Food Policy Research Institute (IFPRI).
  2. Ahmed , Syud Amer & Diffenbaugh, Noah S. & Hertel , Thomas W. & Lobell, David B. & Ramankutty, Navin & Rios, Ana R. & Rowhani, Pedram, 2009. "Climate volatility and poverty vulnerability in Tanzania," Policy Research Working Paper Series 5117, The World Bank.
  3. del Ninno, Carlo & Dorosh, Paul A. & Smith, Lisa C. & Roy, Dilip K., 2001. "The 1998 floods in Bangladesh: disaster impacts, household coping strategies, and responses," Research reports 122, International Food Policy Research Institute (IFPRI).
  4. Arndt, Channing & Strzepeck, Kenneth & Tarp, Finn & Thurlow, James & Fant, Charles & Wright, Len, 2010. "Adapting to Climate Change An Integrated Biophysical and Economic Assessment for Mozambique," Working Papers wp2010-101, World Institute for Development Economic Research (UNU-WIDER).
  5. Hassan, Rashid, 2010. "The double challenge of adapting to climate change while accelerating development in sub-Saharan Africa," Environment and Development Economics, Cambridge University Press, vol. 15(06), pages 661-685, December.
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