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Impact of Climate Change on Agricultural Growth in Nepal

  • Shankar Prasad Adharya Ph.D.


  • Guna Raj Bhatta


    (Nepal Rastra Bank)

The concern of climate change have emphasized in the field of economics too owing to the challenge of adapting to global warming for sustainable development and growth. This challenge becomes central in the developing economies like Nepal as these countries face the combination of unfortunate geography, agro-based economy and low efforts from government and private sectors to mitigate the direct and indirect impacts of climate change. In this paper, we conducted a quantitative modeling of climate change and its impact to the agricultural value addition taking into consideration of annual series of agricultural gross domestic product (AGDP), rainfall, temperature, seeds and fertilizer distribution data for the 36 years ranging from 1975-2010 in Nepal. 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. Nevertheless, statistical insignificance of the coefficient of temperature may be due to the nature of very little temperature variability over the study period as compared to the variability in AGDP.

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Paper provided by Nepal Rastra Bank, Research Department in its series NRB Working Paper with number 15/2013.

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Length: 13 pages
Date of creation: May 2013
Date of revision:
Handle: RePEc:nrb:wpaper:nrbwp201315
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  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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