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Economic Effects of Climate Change-Induced Loss of Agricultural Production by 2050: A Case Study of Pakistan

Muhammad Aamir Khan, Alishba Tahir (), Nabila Khurshid (), Muhammad Iftikhar ul Husnain (), Mukhtar Ahmed () and Houcine Boughanmi ()
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Alishba Tahir: Department of Economics, COMSATS University, Islamabad 45550, Pakistan
Nabila Khurshid: Department of Economics, COMSATS University, Islamabad 45550, Pakistan
Muhammad Iftikhar ul Husnain: Department of Economics, COMSATS University, Islamabad 45550, Pakistan
Mukhtar Ahmed: Department of Agronomy, PMAS Arid Agriculture University, Rawalpindi 46300, Pakistan
Houcine Boughanmi: Department of Natural Resource Economics, College of Agricultural and Marine Sciences, Sultan Qaboos University, Muscat 123, Oman

Sustainability, 2020, vol. 12, issue 3, 1-17

Abstract: This research combined global climate, crop and economic models to examine the economic impact of climate change-induced loss of agricultural productivity in Pakistan. Previous studies conducted systematic model inter-comparisons, but results varied widely due to differences in model approaches, research scenarios and input data. This paper extends that analysis in the case of Pakistan by taking yield decline output of the Decision Support System for Agrotechnology Transfer (DSSAT) for CERES-Wheat, CERES-Rice and Agricultural Production Systems Simulator (APSIM) crop models as an input in the global economic model to evaluate the economic effects of climate change-induced loss of crop production by 2050. Results showed that climate change-induced loss of wheat and rice crop production by 2050 is 19.5 billion dollars on Pakistan’s Real Gross Domestic Product coupled with an increase in commodity prices followed by a notable decrease in domestic private consumption. However, the decline in the crops’ production not only affects the economic agents involved in the agriculture sector of the country, but it also has a multiplier effect on industrial and business sectors. A huge rise in commodity prices will create a great challenge for the livelihood of the whole country, especially for urban households. It is recommended that the government should have a sound agricultural policy that can play a role in influencing its ability to adapt successfully to climate change as adaption is necessary for high production and net returns of the farm output.

Keywords: climate change; global climate models; economic models; agriculture production; computable general equilibrium; Pakistan (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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