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The Micro-behavioral Framework for Estimating Total Damage of Global Warming on Natural Resource Enterprises with Full Adaptations

S. Niggol Seo

Journal of Agricultural, Biological and Environmental Statistics, 2016, vol. 21, issue 2, No 7, 328-347

Abstract: Abstract This paper presents a novel methodology in which an individual’s optimization decisions are statistically decomposed into choices of systems, system-specific outcomes, and the overall outcome in an integrative framework. The methodology is applied to individuals’ decisions on natural resource enterprises given climatic changes. This paper finds that when the Goddard Institute scenario comes to pass by the middle of this century, adoption of a crops-only enterprise will fall, so will adoption of a crops–forests enterprise. Instead, people will increase adoption of a livestock-only as well as a crops–livestock–forests enterprise. The impacts of climate change on the six enterprises are varied, which are calculated from the estimated models by altering climate variables. The crops-only enterprise will lose the value of land by 8.3 %. However, the livestock-only enterprise will gain by 8.9 %. The crops–livestock–forests enterprise also will gain largely by 7.8 %. The impacts on the other enterprises are muted, e.g., 1 % gain for the crops–livestock enterprise. The total damage under the scenario is expected to be a loss of 1.9 % of land value. Under a severer UK Met Office scenario, the damage is predicted to increase to 6.2 %.

Keywords: Micro-behavioral framework; Global warming damage; Natural resource enterprises; South America (search for similar items in EconPapers)
Date: 2016
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DOI: 10.1007/s13253-016-0249-2

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