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Climate Uncertainty and Economic Development: Evaluating the Case of Mozambique to 2050

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  • Arndt, Channing
  • Thurlow, James

Abstract

We apply a probabilistic approach to the evaluation of climate change impacts in the Zambeze River Valley. The economic modeling relies on an economywide modeling approach. Taking a distribution of shocks as inputs, we create hybrid frequency distributions of the potential economic impacts of climate change for Mozambique. The approach identifies an explicit range of potential outcomes and associates a probability with given sets of outcomes. For example, we find that the economy of Mozambique may be up to 13% smaller in 2050 due to the effects of climate change. However, the chance of GDP losses of less than 5% are more than four out of five with about 10% of these outcomes actually positive. Large declines in GDP, defined as a decline greater than 10%, are the result of a dramatic reduction in flood return periods though the probability of large declines is relatively small at 2.5%. We conclude that this probabilistic approach provides significantly more information to policy makers and productively focuses scientific effort and the agenda for future research.

Suggested Citation

  • Arndt, Channing & Thurlow, James, 2013. "Climate Uncertainty and Economic Development: Evaluating the Case of Mozambique to 2050," WIDER Working Paper Series 042, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2013-042
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    References listed on IDEAS

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    1. Paul Chinowsky & Channing Arndt, 2012. "Climate Change and Roads: A Dynamic Stressor–Response Model," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 448-462, August.
    2. Channing Arndt & M. Azhar Hussain & E. Samuel Jones & Virgulino Nhate & Finn Tarp & James Thurlow, 2013. "Explaining the Evolution of Poverty: The Case of Mozambique," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(1), pages 206-206.
    3. John G. Fernald, 1999. "Roads to Prosperity? Assessing the Link between Public Capital and Productivity," American Economic Review, American Economic Association, vol. 89(3), pages 619-638, June.
    4. Arndt, Channing & Strzepeck, Kenneth & Tarp, Finn & Thurlow, James & Fant, Charles & Wright, Len, 2010. "Adapting to Climate Change An Integrated Biophysical and Economic Assessment for Mozambique," WIDER Working Paper Series 101, World Institute for Development Economic Research (UNU-WIDER).
    5. Benson, C. & Clay, E., 1998. "The Impact of Drought on Sub-Saharan African Economies. A Preliminary Examination," Papers 401, World Bank - Technical Papers.
    6. Channing Arndt & James Thurlow, 2015. "Climate uncertainty and economic development: evaluating the case of Mozambique to 2050," Climatic Change, Springer, vol. 130(1), pages 63-75, May.
    7. repec:unu:wpaper:wp2012-65 is not listed on IDEAS
    8. Channing Arndt & Paul Chinowsky & Kenneth Strzepek & James Thurlow, 2012. "Climate Change, Growth and Infrastructure Investment: The Case of Mozambique," Review of Development Economics, Wiley Blackwell, vol. 16(3), pages 463-475, August.
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    Cited by:

    1. Salazar-Espinoza, CĂ©sar & Jones, Sam & Tarp, Finn, 2015. "Weather shocks and cropland decisions in rural Mozambique," Food Policy, Elsevier, vol. 53(C), pages 9-21.
    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. Channing Arndt & James Thurlow, 2015. "Climate uncertainty and economic development: evaluating the case of Mozambique to 2050," Climatic Change, Springer, vol. 130(1), pages 63-75, May.
    4. Channing Arndt & Adam Schlosser & Kenneth Strzepek & James Thurlow, 2014. "Climate Change and Economic Growth Prospects for Malawi: An Uncertainty Approach," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 23(suppl_2), pages 83-107.
    5. Channing Arndt & Paul Chinowsky & Charles Fant & Yohannes Gebretsadik & James E. Neumann & Sergey Paltsev & C. Adam Schlosser & Kenneth Strzepek & Finn Tarp & James Thurlow, 2015. "Climate change and developing country interests:Cases from the Zambezi River Basin," WIDER Working Paper Series 116, World Institute for Development Economic Research (UNU-WIDER).
    6. Rodrigues, Joao & Thurlow, James & Landman, Willem & Ringler, Claudia & Robertson, Richard D. & Zhu, Tingju, 2016. "The economic value of seasonal forecasts stochastic economywide analysis for East Africa:," IFPRI discussion papers 1546, International Food Policy Research Institute (IFPRI).
    7. Alton Theresa & Arndt Channing & Gebretsadik Yohannes & Hartley Faaiqa & Makrelov Konstantin & Strzepek Kenneth & Thurlow James & Schlosser C. Adam & Gabriel Sherwin & Cullis James & Cartwright Anton , 2015. "An Uncertainty Approach to Modelling Climate Change Risk in South Africa," WIDER Working Paper Series 045, World Institute for Development Economic Research (UNU-WIDER).

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    Keywords

    Climatic changes; Economic forecasting; Environmental economics; Macroeconomics;

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