The economic impacts of climate change on agriculture in Iran: ‎a CGE model analysis

ABSTRACT

In the following, the impacts of climate change on agricultural sector are analyzed through partial ‎equilibrium model and the effects of climate change scenarios on this section will be measured ‎separately. To this end, the data of value added, labor and capital in the agricultural sector between ‎‎1991 and 2014 are derived from the Central Bank and National Statistics Portal. De Martonne ‎index, which represents the climatic condition, is estimated using precipitation and temperature data ‎extracted from the Meteorological Organization of Iran sector between 1991 and 2014. The current study measured the effects of climate change on the agricultural sector in Iran. For this purpose, the function of agricultural sector production, which is affected by climate (temperature and precipitation), was estimated using the ARDL approach; then, the effect of climate change on the agricultural sector was evaluated in the framework of the SAM model. Different scenarios were applied. In general, it can be concluded that improving the climate will increase the country‘s economic potential and reduce costs, while adverse climate conditions will worsen the country‘s economic situation and, consequently, increase costs.

KEYWORDS:

• Climate change
• ARDL approach
• social accounting matrix

Notes

1. Soil & Water Assessment Tool model.