Challenges in simulating economic effects of climate change on global agricultural markets

Joint Program Report
Challenges in simulating economic effects of climate change on global agricultural markets
Reilly, J.M., A. Gurgel and E. Blanc (2020)
Joint Program Report Series

Report 343 [Download]

Abstract/Summary:

Summary: Previous studies on the impacts of climate change on agriculture have the following shortcomings: a) most focus only on a few major crops (maize, wheat, rice or soybeans); b) site-level and global gridded crop models (GGCMs) provide very different impacts of climate effects on crops; c) effects of climate change on livestock are well documented, but rarely quantified; d) there are several elements, causal relations and feedbacks among biophysical, environmental and socioeconomic aspects usually not taken into account in these studies. The goal of this paper is to investigate at the global level how alternative assumptions about these four aspects may affect agricultural markets, food supply, consumer well-being and environmental metrics.

To that end, this study simulates changes in crop yield and livestock productivity in a large-scale socio-economic model of the global economy with detailed representation of the agriculture sector, the MIT EPPA-Agriculture model. The economic model considers many complex socio-economic relationships and feedbacks, such as changes in management and land-use allocation, shifts in demand for food as prices and incomes change, and changing patterns of global trade. The climate shocks considered were median agricultural productivity changes taken from several site-level crop models revised by IPPC and several GGCMs.

The researchers find global welfare impacts several times larger when climate impacts all crops and all livestock. At the regional level, food budget impacts are 10% to 25% in many developing countries, which may challenge food security. Most of the results are due to the role of land area expansion as a major source of adaptation. Climate impacts from site-level crop models revised by the IPCC generate most challenging socio-economic outcomes, while median climate impacts from GGCMs on yield were positive for major crops. However, due to the wide range of impacts from these two types of models, caution is warranted in comparing those median effects.

The study’s conclusions indicate that the agricultural research community should expand efforts to estimate climate impacts on many more crops and livestock. Also, careful comparison of the GGCMs and traditional site-level models are needed to understand their major differences and implications for agricultural systems and food markets.

Citation:

Reilly, J.M., A. Gurgel and E. Blanc (2020): Challenges in simulating economic effects of climate change on global agricultural markets. Joint Program Report Series Report 343. (http://globalchange.mit.edu/publication/17475)
  • Joint Program Report
Challenges in simulating economic effects of climate change on global agricultural markets

Reilly, J.M., A. Gurgel and E. Blanc

Report 

343
2020

Abstract/Summary: 

Summary: Previous studies on the impacts of climate change on agriculture have the following shortcomings: a) most focus only on a few major crops (maize, wheat, rice or soybeans); b) site-level and global gridded crop models (GGCMs) provide very different impacts of climate effects on crops; c) effects of climate change on livestock are well documented, but rarely quantified; d) there are several elements, causal relations and feedbacks among biophysical, environmental and socioeconomic aspects usually not taken into account in these studies. The goal of this paper is to investigate at the global level how alternative assumptions about these four aspects may affect agricultural markets, food supply, consumer well-being and environmental metrics.

To that end, this study simulates changes in crop yield and livestock productivity in a large-scale socio-economic model of the global economy with detailed representation of the agriculture sector, the MIT EPPA-Agriculture model. The economic model considers many complex socio-economic relationships and feedbacks, such as changes in management and land-use allocation, shifts in demand for food as prices and incomes change, and changing patterns of global trade. The climate shocks considered were median agricultural productivity changes taken from several site-level crop models revised by IPPC and several GGCMs.

The researchers find global welfare impacts several times larger when climate impacts all crops and all livestock. At the regional level, food budget impacts are 10% to 25% in many developing countries, which may challenge food security. Most of the results are due to the role of land area expansion as a major source of adaptation. Climate impacts from site-level crop models revised by the IPCC generate most challenging socio-economic outcomes, while median climate impacts from GGCMs on yield were positive for major crops. However, due to the wide range of impacts from these two types of models, caution is warranted in comparing those median effects.

The study’s conclusions indicate that the agricultural research community should expand efforts to estimate climate impacts on many more crops and livestock. Also, careful comparison of the GGCMs and traditional site-level models are needed to understand their major differences and implications for agricultural systems and food markets.

Posted to public: 

Friday, August 21, 2020 - 15:57