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Impact of Climate Change on Agricultural Growth in Nepal


  • Shankar Prasad Acharya Ph.D.


  • Guna Raj Bhatta

    () (Nepal Rastra Bank)


The concern of climate change has been emphasized in the field of economics too owing to the challenge of adapting to global warming for sustainable development and growth. This challenge becomes dominant in the developing economies like Nepal as these countries face the combination of equator vulnerable climate change pattern, agro-based economy, scarcity of resources, and lack of influence to put forth the global agenda of climate change to international forum. In this paper, we conducted a quantitative modeling of climate change and its impact to the agricultural value addition in Nepal taking into consideration annual series of agricultural gross domestic product (AGDP), rainfall, temperature, seeds and fertilizer distribution data for the period of 36 years ranging from 1975 to 2010. The statistical inferences show the significant positive impact of rainfall to the AGDP. Nevertheless, improved seeds and chemical fertilizers are found to be insignificant. The impact of rising temperature to AGDP is cautious as we find a large negative coefficient of cyclical component of temperature, but statistically insignificant. This insignificance may be due to the nature of very little temperature variability over the study period as compared to the variability in AGDP. The country should assess the impact of climate change in national, regional, and district level to collect the spatial information and underpin the adaptive policies to the required areas.

Suggested Citation

  • Shankar Prasad Acharya Ph.D. & Guna Raj Bhatta, 2013. "Impact of Climate Change on Agricultural Growth in Nepal," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 25(2), pages 1-16, October.
  • Handle: RePEc:nrb:journl:v:25:y:2013:i:2:p:1-16

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    References listed on IDEAS

    1. Zhai, Fan & Lin, Tun & Byambadorj, Enerelt, 2009. "A General Equilibrium Analysis of the Impact of Climate Change on Agriculture in the People’s Republic of China," Asian Development Review, Asian Development Bank, vol. 26(1), pages 206-225.
    2. Bezabih, Mintewab & Chambwera, Muyeye & Stage, Jesper, 2010. "Climate Change, Total Factor Productivity, and the Tanzanian Economy: A Computable General Equilibrium Analysis," Discussion Papers dp-10-14-efd, Resources For the Future.
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    Cited by:

    1. Guna Raj Bhatta, 2014. "Structural Changes in a Small and Open Economy: Evidences from Nepal," NRB Working Paper 23/2014, Nepal Rastra Bank, Research Department.
    2. Guna Raj Bhatta, 2014. "Structural Change and Per Capita Income in Nepal: Empirical Evidences," NRB Economic Review, Nepal Rastra Bank, Research Department, vol. 26(2), pages 41-60, October.
    3. Guna Raj Bhatta, 2015. "Structural Changes in a Small and Open Economy: Evidences from Nepal," Working Papers id:7270, eSocialSciences.

    More about this item


    Agricultural GDP; Climate Change; Growth;

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming


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