Visiting Fellow Program 2020: Assessing Economic Impact of Climate Change on Agriculture

One of our visiting fellows 2020, Mr. Samrat Kunwar of the College of Saint Benedict and Saint John’s University of Minnesota, USA, assessed the economic impact of climate change on agriculture in Central Asia (KAZ, KGZ, TKM, TAJ, UZB) by employing the Ricardian method.

The research findings suggest that agriculture in Central Asia is sensitive to climate change, and the impacts will be more acute after the temperature increase. Results indicate that every degree Celsius increase in annual temperature has resulted in a modest benefit of $4/hectare increase in agricultural net revenue, which amounts to $117 million in total agricultural benefits across Central Asia.

The estimation of future climate change scenarios indicates that changes in the pattern of rainfall and temperature by 2040 will result in approximately $66 million net welfare loss from agriculture in Central Asia (with Kazakhstan at $50 million loss, and Tajikistan at $1.6 million).

From a policy perceptive, the results in this study highlight the need for governments of Tajikistan, Turkmenistan, and Uzbekistan to implement regulations that allow private ownership of farmlands to encourage investments in adaptation measures; for the government in Kazakhstan to invest in novel technologies such as drip irrigation systems, climate smart agriculture, and canals for rainwater harvesting; while the government of Kyrgyzstan might benefit from ensuring that farming populations in the country easily alter their farm types or even switch between owning crops and livestock that are suited for dryer climatic conditions.