The Macroeconomics of Climate Change Adaptation in Agriculture:Evidence from Kenya and Mali

41 Pages Posted: 20 Jun 2023

See all articles by Fleur Wouterse

Fleur Wouterse

Global Center on Adaptation

Tadesse Getaw

AKADEMIYA2063

Racine Ly

AKADEMIYA 2063

Ismael Fofama

AKADEMIYA2063

Amara Zongo

Global Center on Adaptation

Abstract

Africa has achieved impressive growth in recent decades but now climate change puts livelihoods at risk and threatens to undo Africa’s hard-fought development. Kenya and Mali are experiencing a change in climatic conditions involving a decrease in precipitation and an increase in temperature but also an extension of the hot season and heat waves during the cold season. Given the important role that rain-fed agriculture plays in the economies of both countries, both countries are highly vulnerable to the impacts of these changes and the risk of food insecurity is likely to further increase as a result. This is also evident from their ranking on the ND-GAIN vulnerability index. At the same time, the agriculture sector holds enormous potential to mitigate the risk of food insecurity. In particular, adoption of a Climate Smart Agriculture approach appears as a promising adaptation pathway. In fact, elements of the CSA approach are included in adaptation planning in both countries. However, low adaptation readiness means that there is limited ability to leverage investments and convert them to adaptation actions in the agriculture sector.Macro-economic models can support decision-making and improve adaptation readiness. In this paper, we use a Computable General Equilibrium and Micro-Simulation model to describe the economic effects of climate change in Kenya and Mali and assess the impacts of adaptation strategies in agriculture. Our results reveal that projected changes in agricultural yields would decrease GDP by 8.3 and 8.9 percent in Kenya and Mali, respectively, compared to the agricultural yield trends over the last 20 years. Negative effects of agricultural productivity changes are also observed on employment and poverty. We also find that adaptation in the agricultural sector using the CSA approach can mitigate the economic effects of climate change. Increasing the area under soil and water conservation techniques and/or planted with improved seed are particularly promising strategies but would need to be implemented at a large scale thus requiring significant levels of funding. At the same time, multiplier effects created by the adoption of these two strategies are expected to lead to an increase in GDP, employment, consumption and income increase as a result of adoption of these two strategies. These effects are similar for both adaptation strategies in Kenya but stronger for improved varieties in Mali.

Keywords: Climate change, adaptation, anomaly analysis, CGE modeling, Africa

Suggested Citation

Wouterse, Fleur and Getaw, Tadesse and Ly, Racine and Fofama, Ismael and Zongo, Amara, The Macroeconomics of Climate Change Adaptation in Agriculture:Evidence from Kenya and Mali. Available at SSRN: https://ssrn.com/abstract=4486272 or http://dx.doi.org/10.2139/ssrn.4486272

Fleur Wouterse (Contact Author)

Global Center on Adaptation ( email )

Energy Academy Europ
Nijenborgh 6
Groningen, 9747 AG
Netherlands

Tadesse Getaw

AKADEMIYA2063 ( email )

Rwanda

Racine Ly

AKADEMIYA 2063 ( email )

Ismael Fofama

AKADEMIYA2063 ( email )

Rwanda

Amara Zongo

Global Center on Adaptation ( email )

Energy Academy Europ
Nijenborgh 6
Groningen, 9747 AG
Netherlands

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