IDEAS home Printed from https://ideas.repec.org/p/ott/wpaper/2003e.html
   My bibliography  Save this paper

Climate Change and the Distribution of Agricultural Output

Author

Listed:
  • Francisco Costa

    (FGV EPGE, Rio de Janeiro, Brazil)

  • Fabien Forge

    (Department of Economics, University of Ottawa, Ottawa, ON)

  • Jason Garred

    (Department of Economics, University of Ottawa, Ottawa, ON)

  • João Paulo Pessoa

    (Sao Paulo School of Economics - FGV, São Paulo, Brazil)

Abstract

This paper uses a multi-run climate projection model to examine the potential impact of climate change on the distribution of agricultural outcomes in India. Weather draws resulting in extremely low agricultural revenues (1-in-100-year events) are projected to become the norm, increasing by 53 to 88 percentage points by the end of the 21st century. As a result, Indian farmers will face a 16% to 33% decline in mean revenue over the course of the century, presenting a more urgent problem than changes in yield variability. Analysis using a structural general equilibrium model suggests consequences of a similar magnitude for welfare.

Suggested Citation

  • Francisco Costa & Fabien Forge & Jason Garred & João Paulo Pessoa, 2020. "Climate Change and the Distribution of Agricultural Output," Working Papers 2003E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:2003e
    as

    Download full text from publisher

    File URL: https://ruor.uottawa.ca/bitstream/10393/40334/1/2003E.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Olivier Deschênes & Michael Greenstone, 2011. "Climate Change, Mortality, and Adaptation: Evidence from Annual Fluctuations in Weather in the US," American Economic Journal: Applied Economics, American Economic Association, vol. 3(4), pages 152-185, October.
    2. Daniel Urban & Michael Roberts & Wolfram Schlenker & David Lobell, 2012. "Projected temperature changes indicate significant increase in interannual variability of U.S. maize yields," Climatic Change, Springer, vol. 112(2), pages 525-533, May.
    3. Jonathan Colmer, 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 101-124, October.
    4. Anthony C. Fisher & W. Michael Hanemann & Michael J. Roberts & Wolfram Schlenker, 2012. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Comment," American Economic Review, American Economic Association, vol. 102(7), pages 3749-3760, December.
    5. Crost, Benjamin & Duquennois, Claire & Felter, Joseph H. & Rees, Daniel I., 2018. "Climate change, agricultural production and civil conflict: Evidence from the Philippines," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 379-395.
    6. Wolfram Schlenker & W. Michael Hanemann & Anthony C. Fisher, 2006. "The Impact of Global Warming on U.S. Agriculture: An Econometric Analysis of Optimal Growing Conditions," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 113-125, February.
    7. Marshall Burke & Kyle Emerick, 2016. "Adaptation to Climate Change: Evidence from US Agriculture," American Economic Journal: Economic Policy, American Economic Association, vol. 8(3), pages 106-140, August.
    8. Katrina Jessoe & Dale T. Manning & J. Edward Taylor, 2018. "Climate Change and Labour Allocation in Rural Mexico: Evidence from Annual Fluctuations in Weather," Economic Journal, Royal Economic Society, vol. 128(608), pages 230-261.
    9. Chen, Shuai & Chen, Xiaoguang & Xu, Jintao, 2016. "Impacts of climate change on agriculture: Evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 76(C), pages 105-124.
    10. Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-771, September.
    11. Wolfram Schlenker & W. Michael Hanemann & Anthony C. Fisher, 2005. "Will U.S. Agriculture Really Benefit from Global Warming? Accounting for Irrigation in the Hedonic Approach," American Economic Review, American Economic Association, vol. 95(1), pages 395-406, March.
    12. David Blakeslee & Ram Fishman & Veena Srinivasan, 2020. "Way Down in the Hole: Adaptation to Long-Term Water Loss in Rural India," American Economic Review, American Economic Association, vol. 110(1), pages 200-224, January.
    13. Olivier Deschênes & Michael Greenstone, 2007. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather," American Economic Review, American Economic Association, vol. 97(1), pages 354-385, March.
    14. Katrina Jessoe & Dale T. Manning & J. Edward Taylor, 2018. "Climate Change and Labour Allocation in Rural Mexico: Evidence from Annual Fluctuations in Weather," Economic Journal, Royal Economic Society, vol. 128(608), pages 230-261, February.
    15. Fernando M. Arag'on & Francisco Oteiza & Juan Pablo Rud, 2019. "Climate Change and Agriculture: Subsistence Farmers' Response to Extreme Heat," Papers 1902.09204, arXiv.org, revised Feb 2019.
    16. Arnaud Costinot & Dave Donaldson & Cory Smith, 2016. "Evolving Comparative Advantage and the Impact of Climate Change in Agricultural Markets: Evidence from 1.7 Million Fields around the World," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 205-248.
    17. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    18. Daniel L. Swain & Baird Langenbrunner & J. David Neelin & Alex Hall, 2018. "Increasing precipitation volatility in twenty-first-century California," Nature Climate Change, Nature, vol. 8(5), pages 427-433, May.
    19. Ram Fishman, 2018. "Groundwater depletion limits the scope for adaptation to increased rainfall variability in India," Climatic Change, Springer, vol. 147(1), pages 195-209, March.
    20. Tatyana Deryugina & Solomon Hsiang, 2017. "The Marginal Product of Climate," NBER Working Papers 24072, National Bureau of Economic Research, Inc.
    21. Treb Allen & David Atkin, 2022. "Volatility and the Gains From Trade," Econometrica, Econometric Society, vol. 90(5), pages 2053-2092, September.
    22. Taraz, Vis, 2018. "Can farmers adapt to higher temperatures? Evidence from India," World Development, Elsevier, vol. 112(C), pages 205-219.
    23. A. J. Challinor & J. Watson & D. B. Lobell & S. M. Howden & D. R. Smith & N. Chhetri, 2014. "A meta-analysis of crop yield under climate change and adaptation," Nature Climate Change, Nature, vol. 4(4), pages 287-291, April.
    24. Jonathan I. Dingel & Kyle C. Meng & Solomon M. Hsiang, 2019. "Spatial Correlation, Trade, and Inequality: Evidence from the Global Climate," NBER Working Papers 25447, National Bureau of Economic Research, Inc.
    25. Colmer, Jonathan, 2018. "Weather, labor reallocation and industrial production: evidence from India," LSE Research Online Documents on Economics 88695, London School of Economics and Political Science, LSE Library.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Amrit Amirapu & Irma Clots-Figueras & Juan Pablo Rud, 2022. "Climate Change and Political Participation: Evidence from India," Studies in Economics 2204, School of Economics, University of Kent.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Francisco Costa & Fabien Forge & Jason Garred & João Paulo Pessoa, 2023. "The Impact of Climate Change on Risk and Return in Indian Agriculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(1), pages 1-27, May.
    2. Huang, Kaixing & Zhao, Hong & Huang, Jikun & Wang, Jinxia & Findlay, Christopher, 2020. "The impact of climate change on the labor allocation: Empirical evidence from China," Journal of Environmental Economics and Management, Elsevier, vol. 104(C).
    3. Chengzheng Li & Zheng Pan, 2021. "How do extremely high temperatures affect labor market performance? Evidence from rural China," Empirical Economics, Springer, vol. 61(4), pages 2265-2291, October.
    4. Fernando M. Aragón & Francisco Oteiza & Juan Pablo Rud, 2018. "Climate change and agriculture: farmer adaptation to extreme heat," IFS Working Papers W18/06, Institute for Fiscal Studies.
    5. Fernando M. Arag'on & Francisco Oteiza & Juan Pablo Rud, 2019. "Climate Change and Agriculture: Subsistence Farmers' Response to Extreme Heat," Papers 1902.09204, arXiv.org, revised Feb 2019.
    6. Xiaoguang Chen & Madhu Khanna & Lu Yang, 2022. "The impacts of temperature on Chinese food processing firms," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(2), pages 256-279, April.
    7. Jaqueline Oliveira & Bruno Palialol & Paula Pereda, 2021. "Do temperature shocks affect non-agriculture wages in Brazil? Evidence from individual-level panel data," Working Papers, Department of Economics 2021_13, University of São Paulo (FEA-USP).
    8. Cui, Xiaomeng, 2020. "Climate change and adaptation in agriculture: Evidence from US cropping patterns," Journal of Environmental Economics and Management, Elsevier, vol. 101(C).
    9. Fernando M. Aragón & Francisco Oteiza & Juan Pablo Rud, 2018. "Climate Change and Agriculture: Farmer Adaptation to Extreme Heat," Discussion Papers dp18-02, Department of Economics, Simon Fraser University.
    10. Jonathan Colmer, 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 101-124, October.
    11. Yan Chen & Xiaohong Chen & Hongshan Ai & Xiaoqing Tan, 2022. "Temperature and Migration Intention: Evidence from the Unified National Graduate Entrance Examination in China," IJERPH, MDPI, vol. 19(16), pages 1-23, August.
    12. Meyer, Kevin Michael, 2017. "Three essays on environmental and resource economics," ISU General Staff Papers 201701010800006585, Iowa State University, Department of Economics.
    13. Yoro Diallo & Sébastien Marchand & Etienne Espagne, 2019. "Impacts of extreme events on technical efficiency in Vietnamese agriculture," CIRED Working Papers halshs-02080285, HAL.
    14. Severen, Christopher & Costello, Christopher & Deschênes, Olivier, 2018. "A Forward-Looking Ricardian Approach: Do land markets capitalize climate change forecasts?," Journal of Environmental Economics and Management, Elsevier, vol. 89(C), pages 235-254.
    15. Sandy Dall'Erba & Zhangliang Chen & Noé J. Nava, 2021. "U.S. Interstate Trade Will Mitigate the Negative Impact of Climate Change on Crop Profit," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(5), pages 1720-1741, October.
    16. Zhang, Peng & Deschenes, Olivier & Meng, Kyle & Zhang, Junjie, 2018. "Temperature effects on productivity and factor reallocation: Evidence from a half million chinese manufacturing plants," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 1-17.
    17. Etienne ESPAGNE & Yoro DIALLO & Sébastien MARCHAND, 2019. "Impacts of Extreme Climate Events on Technical Efficiency in Vietnamese Agriculture," Working Paper c1221ee7-5311-4af0-b1b4-3, Agence française de développement.
    18. Pierre Mérel & Matthew Gammans, 2021. "Climate Econometrics: Can the Panel Approach Account for Long‐Run Adaptation?," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1207-1238, August.
    19. Ahmed, Musa Hasen & Tesfaye, Wondimagegn Mesfin & Gassmann, Franziska, 2022. "Within Growing Season Weather Variability and Land Allocation Decisions: Evidence from Maize Farmers in Ethiopia," 96th Annual Conference, April 4-6, 2022, K U Leuven, Belgium 321171, Agricultural Economics Society - AES.
    20. Huang, K., 2018. "How Large is the Potential Economic Benefit of Agricultural Adaptation to Climate Change?," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277238, International Association of Agricultural Economists.

    More about this item

    Keywords

    climate change; agriculture; India; crop yield; volatility; extreme events;
    All these keywords.

    JEL classification:

    • 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
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ott:wpaper:2003e. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Aggey Semenov (email available below). General contact details of provider: https://edirc.repec.org/data/deottca.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.