Distributional Implications of Climate Change in India

56 Pages Posted: 20 Apr 2016

See all articles by Hanan G. Jacoby

Hanan G. Jacoby

World Bank - Agriculture and Rural Development Department; World Bank - Development Research Group (DECRG)

Mariano Rabassa

World Bank

Emmanuel Skouas

affiliation not provided to SSRN

Date Written: April 1, 2011

Abstract

Global warming is expected to heavily impact agriculture, the dominant source of livelihood for the world's poor. Yet, little is known about the distributional implications of climate change at the sub-national level. Using a simple comparative statics framework, this paper analyzes how changes in the prices of land, labor, and food induced by modest temperature increases over the next three decades will affect household-level welfare in India. The authors predict a substantial fall in agricultural productivity, even allowing for farmer adaptation. Yet, this decline will not translate into a sharp drop in consumption for the majority of rural households, who derive their income largely from wage employment. Overall, the welfare costs of climate change fall disproportionately on the poor. This is true in urban as well as in rural areas, but, in the latter sector only after accounting for the effects of rising world cereal prices. Adaptation appears to primarily benefit the non-poor, since they own the lion's share of agricultural land. The results suggest that poverty in India will be roughly 3-4 percentage points higher after thirty years of rising temperatures than it would have been had this warming not occurred.

Keywords: Climate Change Economics, Climate Change Mitigation and Green House Gases, Science of Climate Change, Rural Poverty Reduction, Regional Economic Development

Suggested Citation

Jacoby, Hanan G. and Rabassa, Mariano and Skouas, Emmanuel, Distributional Implications of Climate Change in India (April 1, 2011). World Bank Policy Research Working Paper No. 5623, Available at SSRN: https://ssrn.com/abstract=1803003

Hanan G. Jacoby (Contact Author)

World Bank - Agriculture and Rural Development Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/hjacoby

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Mariano Rabassa

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Emmanuel Skouas

affiliation not provided to SSRN

No Address Available

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