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A general equilibrium assessment of climate change–induced loss of agricultural productivity in Nepal

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  • Chalise, Sudarshan
  • Naranpanawa, Athula
  • Bandara, Jayatilleke S.
  • Sarker, Tapan

Abstract

The impact of climate change on agriculture has been one of the most discussed topics in the literature on climate change. Multi-regional computable general equilibrium (CGE) models have frequently been used to examine the impact of climate change on agriculture. However, these studies do not focus on country-specific issues related to the link between climate change and agriculture. This paper aims to address this gap by investigating the economy-wide impacts of climate change on Nepalese agriculture. Nepal makes an interesting case study as it has one of the most vulnerable agricultural economies in South Asia. This paper develops a comparative static multi-household CGE model to trace the direct and indirect impacts of climate change in Nepal. The results suggest that climate change has a significant negative impact on the overall Nepalese economy due to the induced loss of agricultural productivity. The results further reveal that rural households in Nepal, whose livelihoods primarily depend on subsistence farming, will face additional climate change–induced stresses due to already overstrained poverty and a weak social welfare system. The results indicate an urgent need to mainstream adaptation strategies to lessen the negative impacts of any climate change–induced loss of agricultural productivity in Nepal.

Suggested Citation

  • Chalise, Sudarshan & Naranpanawa, Athula & Bandara, Jayatilleke S. & Sarker, Tapan, 2017. "A general equilibrium assessment of climate change–induced loss of agricultural productivity in Nepal," Economic Modelling, Elsevier, vol. 62(C), pages 43-50.
    • Handle: RePEc:eee:ecmode:v:62:y:2017:i:c:p:43-50
    DOI: 10.1016/j.econmod.2017.01.014
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    3. Santos, Cárliton Vieira dos & Oliveira, Aryeverton Fortes de & Filho, Joaquim Bento de Souza Ferreira, 2022. "Potential impacts of climate change on agriculture and the economy in different regions of Brazil," Revista de Economia e Sociologia Rural (RESR), Sociedade Brasileira de Economia e Sociologia Rural, vol. 60(1), January.
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    6. Nanda Kaji Budhathoki & Kerstin K. Zander, 2019. "Socio-Economic Impact of and Adaptation to Extreme Heat and Cold of Farmers in the Food Bowl of Nepal," IJERPH, MDPI, vol. 16(9), pages 1-24, May.
    7. Md Kamrul Hasan & Lalit Kumar, 2020. "Perceived farm-level climatic impacts on coastal agricultural productivity in Bangladesh," Climatic Change, Springer, vol. 161(4), pages 617-636, August.
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    9. Nanda Kaji Budhathoki & Douglas Paton & Jonatan A. Lassa & Gopal Datt Bhatta & Kerstin K. Zander, 2020. "Heat, cold, and floods: exploring farmers’ motivations to adapt to extreme weather events in the Terai region of Nepal," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 103(3), pages 3213-3237, September.
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    11. Huey-Lin Lee & Yu-Pin Lin & Joy R. Petway, 2018. "Global Agricultural Trade Pattern in A Warming World: Regional Realities," Sustainability, MDPI, vol. 10(8), pages 1-21, August.
    12. Philip Kofi Adom, 2024. "The Socioeconomic Impact of Climate Change in Developing Countries in the Next Decades," Working Papers 681, Center for Global Development.
    13. Sabina Regmi & Kushal Naharki, 2020. "A Swot Analysis Of Agribusiness Entrepreneurship In Nepal," Food & Agribusiness Management (FABM), Zibeline International Publishing, vol. 1(2), pages 83-88, June.
    14. Mohammad Rondhi & Ahmad Fatikhul Khasan & Yasuhiro Mori & Takumi Kondo, 2019. "Assessing the Role of the Perceived Impact of Climate Change on National Adaptation Policy: The Case of Rice Farming in Indonesia," Land, MDPI, vol. 8(5), pages 1-21, May.
    15. Sudeshna Paul & Athula Naranpanawa & Jay Bandaralage & Tapan Sarker, 2018. "Climate change, crop productivity and regional growth disparity in Bangladesh: What does a district-level regional CGE model tell us?," Discussion Papers in Economics economics:201803, Griffith University, Department of Accounting, Finance and Economics.
    16. Abeysekara, Walimuni Chamindri Sewanka Mendis & Siriwardana, Mahinda & Meng, Samuel, 2023. "Economic consequences of climate change impacts on the agricultural sector of South Asia: A case study of Sri Lanka," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 435-450.

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