Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia

Salvatore Di Falco and Marcella Veronesi

Environmental & Resource Economics, 2014, vol. 57, issue 4, 553-577

Abstract: This study investigates the impact of climate change adaptation on farm households’ downside risk exposure in the Nile Basin of Ethiopia. The analysis relies on a moment-based specification of the stochastic production function. We use an empirical strategy that accounts for the heterogeneity in the decision on whether to adapt or not, and for unobservable characteristics of farmers and their farm. We find that past adaptation to climate change (i) reduces current downside risk exposure, and so the risk of crop failure; (ii) would have been more beneficial to the non-adapters if they adapted, in terms of reduction in downside risk exposure; and (iii) is a successful risk management strategy that makes the adapters more resilient to climatic conditions. Copyright Springer Science+Business Media Dordrecht 2014

Keywords: Adaptation; Climate change; Downside risk exposure; Environmental risk; Ethiopia; D80; Q18; Q54 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (53)

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Related works:
Chapter: Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile Basin of Ethiopia (2018)
Working Paper: Managing Environmental Risk in Presence of Climate Change: The Role of Adaptation in the Nile basin of Ethiopia (2012)
Working Paper: On Adaptation to Climate Change and Risk Exposure in the Nile Basin of Ethiopia (2011)
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DOI: 10.1007/s10640-013-9696-1

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