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A Ricardian analysis of the impact of climate change on African cropland.

SUMMARY

This study examines the impact of climate change on cropland in Africa. It is based on an 11-country survey of over 9000 farmers administered as part of a Global Environment Facility (GEF) project. Five of the countries are West African: Burkina Faso, Cameroon, Ghana, Niger and Senegal; three are from Southern Africa: South Africa, Zambia and Zimbabwe; two are East African: Ethiopia and Kenya; and Egypt is the sole representative of North Africa. The study uses a Ricardian cross-sectional approach to measure the relationship between the net revenue from growing crops and climate. Net revenue is regressed on climate, water flow, soils and economic variables. The resulting regression explains the role that each variable plays today. We find that net revenues fall as precipitation falls or as temperatures warm across all the surveyed farms. Specifically, the elasticity of net revenue with respect to temperature is -1.3. This elasticity implies that a 10% increase in temperature would lead to a 13% decline in net revenue. The elasticity of net revenue with respect to precipitation is 0.4.

In addition to examining all farms together, the study examined dryland and irrigated farms separately. Dryland farms are especially climate sensitive. The elasticity of net revenue with respect to temperature is -1.6 for dryland farms but 0.5 for irrigated farms. Irrigated farms have a positive immediate response to warming because they are located in relatively cool parts of Africa. The elasticity of net revenue with respect to precipitation is 0.5 for dryland farms but only 0.1 for irrigated farms. Irrigation allows farms to operate in areas with little precipitation, such as Egypt.

The study also examined some simple climate scenarios to see how Africa would respond to climate change. These 'uniform' scenarios assume that only one aspect of climate changes and the change is uniform across all of Africa. For example, the study examined a 2.5[degrees]C warming and found that net revenues from farming in all of Africa would fall by $23 billion. It also examined a 5[degrees]C warming and found that this would cause net revenues to fall $38 billion. A 7% decrease in precipitation would cause net revenues from crops to fall $4 billion and a 14% decrease in precipitation would cause it to fall $9 billion. Increases in precipitation would have the opposite effect on net revenues.

In addition to the uniform scenarios, the study also examined three climate change scenarios from Atmospheric Oceanic General Circulation Models (AOGCMs). These AOGCM scenarios predicted changes in climate in each country over time. They reveal that African net revenues may rise by up to $97 billion if future warming is mild and wet but would fall by up to $48 billion if future climates are hot and dry. Dryland farms would be affected the most by either beneficial or harmful scenarios. Irrigated farms are relatively resilient to climate change.

Not all countries are equally vulnerable to climate change. First, the climate scenarios predict different temperature and precipitation changes in each country. Second, it is also important whether a country is already hot and dry. Any increase in temperature or reduction in precipitation in these countries leads to large impacts per farm. Third, the extent to which farms are irrigated is also important. Dryland farmers in Africa have little recourse if the climate becomes more hostile.
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Publication:A Ricardian Analysis of the Impact of Climate Change on African Cropland
Date:Aug 1, 2007
Words:562
Next Article:1. Introduction.
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