To What Extent Will Climate and Land-Use Change Affect EU-28 Agriculture? A Computable General Equilibrium Analysis

Abstract

This paper assesses the structural, joint implications of climate and land-use change on agriculture in the European Union, by means of a computable general equilibrium model of the world economy. The counterfactual simulations are conducted at the year 2050 under the second Shared Socioeconomic Pathway. We find that climate and land-use change are likely to affect agricultural systems very differently across Europe. Northern countries are expected to benefit from climate change impacts, whereas other areas in Europe will suffer negative consequences in terms of reduced agricultural output, real income and welfare. The most vulnerable region is not made of Mediterranean countries, but rather Central Europe. Our results suggest that climate and land-use changes may exacerbate existing disparities within the EU. Therefore, appropriate adaptation strategies and a more flexible land-use are required to limit these negative consequences and possibly exploit the beneficial effects of climate change in some countries.

Keywords: agricultural productivity, climate change, land-use change, general equilibrium analysis

JEL Classification: C68, Q11