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CLIMATE FORECASTING AND EMERGENCY POLICIES EVIDENCE OF OPPORTUNITIES FROM CEARÁ, BRAZIL

Ariaster Baumgratz Chimeli and Francisco de Assis de Souza Filho

Anais do XXXII Encontro Nacional de Economia [Proceedings of the 32th Brazilian Economics Meeting] from ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]

Abstract: We take small steps towards the approximation between economic analysis and the science of climate forecasting in the formulation of policies to alleviate the impact of climatic shocks. We do so by estimating the relationship between climate variables and corn production in Ceará, an important State in the Brazilian semi-arid. Using parametric and non-parametric regression models, we first estimate the relationship between contemporaneous sea surface temperatures (SSTs) for the Pacific and Atlantic oceans and the local rainfed corn market. Next, we investigate the forecasting potential of future corn production conditional on information on current SSTs. We find strong evidence that climate determinants are important in determining current and future corn production, a key indicator of the climatic stress to which a large number of small farmers are subject in the Brazilian semi-arid. Additionally, corn production in the region is negatively correlated with federal government transfers meant to mitigate the impact of local droughts. These resources have been subject to lethargic bureaucracies, corruption and economic inefficiencies in general. The observation and forecasting of corn production can be invaluable in the design of more efficient, expeditious and transparent policies to mitigate the effects of droughts in the region.

JEL-codes: I38 Q11 O13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-env
Date: 2004
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