Climate Change and Agriculture: A Computable General Equilibrium Approach

This paper quantifies the impact of climate change on agriculture in East Asian and South Asian countries using a CGE based energy model and the latest GTAP satellite energy database version 9. The rising temperature causes an adverse supply shock reducing the productivity of agricultural commodities. Lower productivity reduces crop production while increasing their prices. India and Pakistan are predicted to be the main net exporters of rice while China, Japan and Korea are the main net importers of wheat, vegetables and fruits, oil seeds, sugarcane and other agricultural products after climate change. Finally, both the welfare level and GDP decrease in most of the East Asian and South Asian countries after climate change and China is expected to bear the highest GDP losses. Although climate change might increase the number of poor in East Asia and South Asia, however it provides many options for green businesses.