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

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  • James Thurlow
  • Paul Dorosh
  • Winston Yu

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.
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  • James Thurlow & Paul Dorosh & Winston Yu, 2012. "A Stochastic Simulation Approach to Estimating the Economic Impacts of Climate Change in Bangladesh," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 412-428, August.
    • Handle: RePEc:bla:rdevec:v:16:y:2012:i:3:p:412-428
    DOI: j.1467-9361.2012.00671.x
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    1. Paul J. Block & Kenneth Strzepek & Mark W. Rosegrant & Xinshen Diao, 2008. "Impacts of considering climate variability on investment decisions in Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 171-181, September.
    2. Richard S. J. Tol, 2009. "The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 29-51, Spring.
    3. World Bank, 2011. "World Development Indicators 2011," World Bank Publications - Books, The World Bank Group, number 2315, December.
    4. Hertel, Thomas & Burke, Marshall & Lobell, David, 2010. "The Poverty Implications of Climate-Induced Crop Yield Changes by 2030," GTAP Working Papers 3196, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    5. Hertel, Thomas & Burke, Marshall & Lobell, David, 2010. "The Poverty Implications of Climate-Induced Crop Yield Changes by 2030," GTAP Working Papers 3196, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    6. 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(6), pages 661-685, December.
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    Cited by:

    1. Davis, Peter & Ali, Snigdha, 2014. "Exploring local perceptions of climate change impact and adaptation in rural Bangladesh:," IFPRI discussion papers 1322, International Food Policy Research Institute (IFPRI).
    2. Elshennawy, Abeer & Robinson, Sherman & Willenbockel, Dirk, 2016. "Climate change and economic growth: An intertemporal general equilibrium analysis for Egypt," Economic Modelling, Elsevier, vol. 52(PB), pages 681-689.
    3. Bairagi, Subir & Bhandari, Humnath & Kumar Das, Subrata & Mohanty, Samarendu, 2021. "Flood-tolerant rice improves climate resilience, profitability, and household consumption in Bangladesh," Food Policy, Elsevier, vol. 105(C).
    4. Shaikh Moniruzzaman, 2019. "Crop Diversification As Climate Change Adaptation: How Do Bangladeshi Farmers Perform?," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 10(02), pages 1-22, May.
    5. Channing Arndt & Finn Tarp & James Thurlow, 2015. "The Economic Costs of Climate Change: A Multi-Sector Impact Assessment for Vietnam," Sustainability, MDPI, vol. 7(4), pages 1-15, April.
    6. Md. Nazirul Islam Sarker & Yang Peng & Most. Nilufa Khatun & G. M. Monirul Alam & Roger C. Shouse & Md. Ruhul Amin, 2022. "Climate finance governance in hazard prone riverine islands in Bangladesh: pathway for promoting climate resilience," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 110(2), pages 1115-1132, January.
    7. Sudeshna Paul & Athula Naranpanawa & Jay Bandaralage & Tapan Sarker, 2018. "Climate change, crop productivity and regional growth disparity in Bangladesh: What does a district-level regional CGE model tell us?," Discussion Papers in Economics economics:201803, Griffith University, Department of Accounting, Finance and Economics.
    8. Channing Arndt & Finn Tarp & James Thurlow, 2015. "The Economic Costs of Climate Change: A Multi-Sector Impact Assessment for Vietnam," Sustainability, MDPI, Open Access Journal, vol. 7(4), pages 1-15, April.
    9. Dorosh, Paul A. & Thurlow, James & Pradesha, Angga & Raihan, Selim, 2020. "Evaluating Food Policy Options in Bangladesh: Economywide Analysis Under Uncertainty," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304635, Agricultural and Applied Economics Association.
    10. Onil Banerjee & Moogdho Mahzab & Selim Raihan & Nabiul Islam, 2015. "An Economy-Wide Analysis Of Climate Change Impacts On Agriculture And Food Security In Bangladesh," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 6(01), pages 1-17.
    11. Banerjee, Onil & M Mahzab , Moogdho & Asaduzzaman, M, 2015. "Towards 2021: Examining Alternative Growth Scenarios for Bangladesh," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 38(01), pages 77-100, March.
    12. Ouraich, Ismail & Dudu, Hasan & Tyner, Wallace E. & Cakmak, Erol, 2014. "Could free trade alleviate effects of climate change? A worldwide analysis with emphasis on Morocco and Turkey," WIDER Working Paper Series 100, World Institute for Development Economic Research (UNU-WIDER).
    13. Kabir, Md. Jahangir & Gaydon, Donald S. & Cramb, Rob & Roth, Christian H., 2018. "Bio-economic evaluation of cropping systems for saline coastal Bangladesh: I. Biophysical simulation in historical and future environments," Agricultural Systems, Elsevier, vol. 162(C), pages 107-122.
    14. repec:unu:wpaper:wp2012-082 is not listed on IDEAS
    15. Ismail Ouraich & Hasan Dudu & Wallace E. Tyner & Erol Cakmak, 2014. "Could Free Trade Alleviate Effects of Climate Change?: A Worldwide Analysis with Emphasis on Morocco and Turkey," WIDER Working Paper Series wp-2014-100, World Institute for Development Economic Research (UNU-WIDER).
    16. Ashrafun Nahar & Jeff Luckstead & Eric J. Wailes & Mohammad Jahangir Alam, 2018. "An assessment of the potential impact of climate change on rice farmers and markets in Bangladesh," Climatic Change, Springer, vol. 150(3), pages 289-304, October.

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