Climate Change, Water Scarcity in Agriculture and the Economy-Wide Impacts in a CGE Framework

39 Pages Posted: 20 Dec 2016

See all articles by Roberto Ponce

Roberto Ponce

Universidad del Desarrollo

Ramiro Parrado

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici; Fondazione Eni Enrico Mattei (FEEM); Ca Foscari University of Venice - SMCC Phd

Alejandra Stehr

University of ConcepciĆ³n

Francesco Bosello

University of Milan - Department of Economics, Business and Statistics; CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Date Written: December 20, 2016

Abstract

This paper analyzes the economic impacts of changes in water availability due to climate change. We develop a new modeling approach as an alternative to include water as a production factor within a global CGE model. We tailor the structure of the ICES model to characterize the key features of the world economy with a detailed representation of the agricultural sector. In order to reach this objective, a new database has been built to explicitly consider water endowments, precipitation changes, and unitary irrigation costs. Results suggest different economic consequences of climate change depending on the specific region. Impacts are related to change in crop production, endowment demands, and international trade.

Keywords: CGE Models, Climate Change, Agriculture, Irrigation, Water Resources

JEL Classification: C68, Q54, Q15, Q25

Suggested Citation

Ponce, Roberto and Parrado, Ramiro and Stehr, Alejandra and Bosello, Francesco, Climate Change, Water Scarcity in Agriculture and the Economy-Wide Impacts in a CGE Framework (December 20, 2016). FEEM Working Paper No. 79.2016, Available at SSRN: https://ssrn.com/abstract=2887916 or http://dx.doi.org/10.2139/ssrn.2887916

Roberto Ponce

Universidad del Desarrollo ( email )

School of Business
Ainavillo 456
Concepcion
Chile

Ramiro Parrado (Contact Author)

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici ( email )

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Fondazione Eni Enrico Mattei (FEEM) ( email )

Isola di San Giorgio Maggiore
Venezia, VE 30124
Italy

Ca Foscari University of Venice - SMCC Phd ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Alejandra Stehr

University of ConcepciĆ³n ( email )

Victoria Lamas 471
Concepcion
Chile

Francesco Bosello

University of Milan - Department of Economics, Business and Statistics

Via Festa del Perdono, 7
Milan, 20122
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

via Augusto Imperatore, 16
Lecce, I-73100
Italy

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