Climate Change and Agriculture: Global and Regional Effects Using an Economic Model of International Trade

John Reilly, Neil Hohmann, and Sally Kane


John Reilly, Neil Hohmann, and Sally Kane, August 1993Empirical estimates of the economic welfare implications of the impact of climate change on global agricultural production are made. Agricultural yield changes resulting from climate scenarios associated with a doubling of atmospheric trace gases are used as an input into a global model of agricultural supply and demand. The agricultural production, price and economic welfare implications for 32 separate geographic regions are computed for 9 scenarios. The 9 scenarios reported are based on 3 different general circulation models (GCMs), estimated with and without the direct effects of carbon dioxide on plant growth, and with different levels of adaptation. The major conclusions are that economic welfare losses tend to be more severe in developing countries, major agricultural exporters can gain significantly if world agricultural prices rise, and the carbon dioxide fertilization effect substantially offsets losses dut to climate change alone. In one scenario, the combination of carbon dioxide fertilization and adaptation led to net global welfare increases. Policy implications of the potential changes and uncertainty in the magnitude, direction , and timing of change are discussed.