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The impacts of climate change on Australia and New Zealand: a Gross Cell Product analysis by land cover

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  • S. Niggol Seo

Abstract

This paper examines the newly constructed geographically scaled economic output measure, Gross Cell Product (GCP), of Australia and New Zealand to quantify the impacts of climate change in the region. The paper discusses advantages of using the GCP instead of the Gross Domestic Product. The paper reveals that the GCP falls sharply as temperature increases in the region. A 1 degree Celsius increase in temperature would decrease the productivity with an elasticity of )2.4. A 1 per cent decrease in precipitation would decrease productivity with an elasticity of )2.3. However, forest vegetation on the coasts will benefit from initial warming. We find that the changes in climate means are potentially more harmful than changes in climate variability. In the long term, a 3.4 warming coupled with 6.6 mm decrease in rainfall would decrease the GCP by 34 per cent by 2060. The damage is largely accounted for by population effects. The paper confirms that Australia is highly constrained by climate and geographic factors.
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Suggested Citation

  • S. Niggol Seo, 2011. "The impacts of climate change on Australia and New Zealand: a Gross Cell Product analysis by land cover," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 55(2), pages 220-238, April.
    • Handle: RePEc:bla:ajarec:v:55:y:2011:i:2:p:220-238
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    1. Seo, Sung-No Niggol & Mendelsohn, Robert & Munasinghe, Mohan, 2005. "Climate change and agriculture in Sri Lanka: a Ricardian valuation," Environment and Development Economics, Cambridge University Press, vol. 10(5), pages 581-596, October.
    2. William A. Masters & Kym Anderson, 2009. "Distortions to Agricultural Incentives in Africa," World Bank Publications - Books, The World Bank Group, number 2607, August.
    3. Garnaut, Ross, 2010. "Climate change and the Australian agricultural and resource industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(01), pages 1-17.
    4. Anderson, Kym, 2009. "Political Economy of Distortions to Agricultural Incentives: Introduction and Summary," Agricultural Distortions Working Paper Series 50306, World Bank.
    5. Anderson, Kym, 2009. "Five Decades of Distortions to Agricultural Incentives," Agricultural Distortions Working Paper Series 48742, World Bank.
    6. S. Niggol Seo & Robert Mendelsohn, 2008. "Measuring impacts and adaptations to climate change: a structural Ricardian model of African livestock management-super-1," Agricultural Economics, International Association of Agricultural Economists, vol. 38(2), pages 151-165, March.
    7. Johan Swinnen & Kym Anderson, 2009. "Distortions to Agricultural Incentives in Eastern Europe and Central Asia," World Bank Publications - Reports 28168, The World Bank Group.
    8. Kym Anderson & Will Martin, 2009. "Distortions to Agricultural Incentives in Asia," World Bank Publications - Books, The World Bank Group, number 2611, August.
    9. Kym Anderson, 2009. "Distortions to Agricultural Versus Nonagricultural Producer Incentives," Annual Review of Resource Economics, Annual Reviews, vol. 1(1), pages 55-74, September.
    10. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2009. "Temperature and Income: Reconciling New Cross-Sectional and Panel Estimates," American Economic Review, American Economic Association, vol. 99(2), pages 198-204, May.
    11. Kym Anderson, 2009. "Distortions to Agricultural Incentives : A Global Perspective, 1955-2007," World Bank Publications - Books, The World Bank Group, number 9436, August.
    12. Ross Garnaut, 2010. "Climate change and the Australian agricultural and resource industries," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 54(1), pages 9-25, January.
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    Cited by:

    1. Víctor M. Guerrero & Juan A. Mendoza, 2019. "On measuring economic growth from outer space: a single country approach," Empirical Economics, Springer, vol. 57(3), pages 971-990, September.

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