European climate change impacts on agriculture: an updated Ricardian analysis

Charlotte Fabri and Steven Van Passel

Chapter 3 in Handbook on Climate Change Impacts, Mitigation, and Adaptation in Agriculture, 2026, pp 34-47 from Edward Elgar Publishing

Abstract: Agriculture is vital to the economy of the European Union, covering 40% of land and contributing 1.2% to GDP. Climate change poses regional challenges and opportunities, with Northern Europe expected to benefit from rising temperatures, while Southern Europe faces declining yields and economic losses. Using an updated Ricardian analysis, this study estimates the economic impact of climate change on European agriculture, accounting for adaptation. Results confirm a north–south divide: a 1°C temperature increase raises land values by 2% in Northern Europe and 0.8% in Southern Europe, with extreme warming leading to economic decline. Adaptation can mitigate the losses from increasing mean temperatures, but increased climate variability threatens all regions. EU policies, particularly the Common Agricultural Policy, should shift towards adaptation-focused measures, ensuring resilience across European agriculture. Findings highlight the need for targeted support as suitable growing conditions shift northwards, while addressing the risks of climate extremes.

Keywords: Climate Change; European Agriculture; Common Agricultural Policy; Climate Adaptation; Ricardian Model (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035344963
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