ECONOMIC IMPACTS OF CLIMATE CHANGE ON AGRICULTURE: EMPIRICAL EVIDENCE FROM ARDL APPROACH FOR TURKEY

Abstract

Purpose- The agricultural sector is one of the sectors most sensitive to climate change. This sector is directly affected by temperature and precipitation, which is an input in agricultural production. The main objective of this study is to evaluate the effects of climate change in agricultural production in Turkey.

Methodology- The data cover the period 1961-2013.   In this study, economic effects of climate change on agriculture were analyzed for Turkey using a time series approach.     

Findings- The increase in precipitation affects agricultural GDP positively, while the increase in temperature has a negative effect on agricultural GDP.

Conclusion- In order to minimize the adverse effects of climate change in Turkey, which is one of the largest countries in the world in terms of agricultural land, it is important to establish policies, strategies, plans and programs to combat climate change. 

Keywords

• Climate change,agriculture,economic impact,ARDL,Turkey

References

1. Adams, R. M., Hurd, B.H., Lenhart, S. & Leary, N. 1998, “Effects of Global Climate Change on Agriculture: An Interpretative Review”, Climate Research, vol.11, pp.19-30.
2. Ali, W., Abdullah, A. & Azam, M. 2017, “Re-visiting the Environmental Kuznets Curve Hypothesis for Malaysia: Fresh Evidence from ARDL Bounds Testing Approach”, Renewable and Sustainable Energy Reviews, vol. 77, pp. 990–1000.
3. Akram, N. 2012, “Is Climate Change Hindering Economic Growth of Asian Economies?”, Asia-Pacific Development Journal, vol.19, no.2, pp. 1-18.
4. Aggarwal, P.K., Kumar, S.N. & Pathak, H. 2010, “Impacts of Climate Change on Growth and Yield of Rice and Wheat in the Upper Ganga Basin”, WWF-India Report.
5. Alam, Q. 2013, “Climate Change, Agricultural Productivity and Economic Growth in India: The Bounds Test Analysis”, International Journal of Applied Research and Studies, vol.2, no.11, pp.1-14.
6. Alexandrov, V. A. & Hoogenboom, G. 2000, “The Impact of Climate Variability and Change on Crop Yield in Bulgaria”, Agriculture and Forest Meteorology, vol.104, pp.315-327.
7. Amponsah, L., Hoggar G.K. & Asuamah, S.Y. 2015, “Climate Change and Agriculture: Modeling the Impact of Carbon Dioxide Emission on Cereal Yield in Ghana” Agriculture and Food Sciences Research, vol.2, no.5, pp.32-38.
8. Barnwal, P. & Kotani, K. 2013, “Climatic Impacts Across Agricultural Crop Yield Distributions: An Application of Quantile Regression on Rice Crops in Andhra Pradesh, India”, Ecological Economics, vol.87, pp.95-109.

9. Bayraç, H. N. & Doğan, E. 2016, “Türkiye’de İklim Değişikliğinin Tarım Sektörü Üzerine Etkileri” Eskişehir Osmangazi Üniversitesi İİBF Dergisi, , vol.11, no.1, pp.23- 48.
10. Başoğlu, A. & Telatar, O.M. 2013, “İklim Değişikliğinin Etkileri: Tarım Sektörü Üzerine Ekonometrik Bir Uygulama”, Karadeniz Teknik Üniversitesi Sosyal Bilimler Dergisi, no.6, pp.7-25.
11. Brown, C., Meeks, R., Ghile Y. & Hunu, K. 2010, “An Empirical Analysis of the Effects of Climate Variables on National Level Economic Growth”, World Bank’s World Development Report 2010: Policy Research Working Paper 5357.
12. Chang, C.-C. 2002, “The Potential Impact of Climate Change on Taiwan’s Agriculture”. Agricultural Economics, vol.27, pp.51-64.
13. Chijoke, O.B., Haile, M. & Waschkeit, C. 2011, “Implication of Climate Change on Crop Yield and Food Accessibility in Sub-Saharan Africa”. ZentrumfürEntwicklungsforschung Center of Development Research University of Bonn, 1- 31. http://www.zef.de/fileadmin/downloads/forum/docprog/Termpapers/2011_1_Oyiga__Haile_Waschkeit.pdf.
14. Chen, Y., Wu, Z., Okamoto, K., Han, X. Ma, G., Chien, H.& Zhao, J. 2013, “The Impacts of Climate Change on Crops in China: A Ricardian Analysis” Global and Planetary Change, vol.104, pp. 61–74.
15. Cuervo, J. & Gandhi, V.P. 1998. “Carbon Taxes: Their Macroeconomic Effects and Prospects for Global Adoption: A Survey of the Literature”, Washington, IMF Working Paper, WP/98/73.
16. Dasgupta, S. 2013, “Impact of Climate Change on Crop Yields with Implications for Food Security and Poverty Alleviation”, http://www.climateimpacts-2013.org/files/cwi_dasgupta.pdf.
17. Dell, M., Jones, B.F. & Olken, B. 2012, “Temperature Shocks and Economic Growth: Evidence from the Last Half Century”, American Economic Journal: Macroeconomics, vol.4, no.3, pp. 66-95.
18. Demir, P., & Cevger Y., 2007, “Küresel Isınma ve Hayvancılık Sektörü”, Veteriner Hekimler Derneği Dergisi, vol.78, no.1, pp.13-16.
19. Deressa, T., and Hassan. R.M. 2009, ” Economic Impact of Climate Change on Crop Production in Ethiopia: Evidence from Cross-Section Measures”, Journal of African Economies, vol.18, pp.529-554.
20. Deressa, T., Hassan, R. & Poonyth, D. 2005. “Measuring The Impact of Climate Change on South African Agriculture: The Case of Sugar cane Growing Regions”, Agrekon, vol.44, no.4, pp.524-542.
21. Deschenes, O. & Greenstone, M. 2007, “The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather”, The American Economic Review, vol.97, no.1, pp.354-385.
22. Gbetibouo, G.A. & Hassan, R.M. 2005, “Measuring the Economic Impact of Climate Change on Major South African Field Crops: A Ricardian Approach”, Global and Planetary Change, vol.47, no.2-4, pp.143-152.
23. Guiteras, R. 2007, “The Impact of Climate Change on Indian Agriculture”, Job Market Paper. Department of Economics, University of Maryland, College Park, pp.1-52.
24. Gumel, D.Y., Abdullah, A.M.B., Yacob, M.R., Sood, A.M., Bose, M.M. & Ghadimzadeh, A. 2016. “A Status Quo Review of Approach, Method, and Empirical Studies on Assessing the Impacts of Climate Change Variability on Agriculture”, Journal of Agriculture and Environmental Sciences, vol.5, no.1, pp.187-199.
25. IPCC. Climate Change, 2007: Synthesis Report. Contributing of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. IPCC, Geneva, Switzerland; [Core Writing Team, Pachauri, R.K. and Reisinger, A. (eds)]
26. Jalil, A., Mahmood, T. & Idrees, M. 2013, “Tourism–Growth Nexus in Pakistan: Evidence from ARDL Bounds Tests”, Economic Modelling, vol. 35, pp. 185-191.
27. Kabubo-Mariara, J. & Karanja, F.K. 2006, “The Economic Impact of Climate Change on Kenyan Crop Agriculture: A Ricardian Approach” Third World Congress of Environmental and Resource Economics: Kyoto Japan, July 3-7.
28. Kaiser, H.M., Riha, S.J., Wilks, D.S, Rossiter, D.G. & Sampath, R.K. 1993, “A Farm-level Analysis of Economic and Agronomic Impacts of Gradual Warming”, American Journal of Agricultural Economics, vol.75, pp. 387-98.
29. Lal, M. Singh, K.K., Srinivasan, G., Rathore, L.S., Naidu, D. & Tripathi, C.N., 1999, “Growth and Yield Responses of Soybean in Madhya Paradesh, India, to Climate Variability and Change”, Agriculture and Forest Meteorology, vol. 93, no.1, pp.53-70.
30. Loum, A. & Fogarassy, C. 2015. “The Effects of Climate Change on Cereals Yield of Production and Food security in Gambia”, Applied Studies in Agribusiness and Commerce- APSTRACT, vol.9, no.4, pp. 83-92.
31. Lobell, D.B., Schlenker, W. & Costa-Roberts, J. 2011, ”Climate trends and global crop production since 1980”. Science, vol.333, pp.616-620.
32. Mendelsohn, R. & Dinar, A. 2003. Climate, Water, and Agriculture”. Land Economics, vol.79, no.3, pp.328-341.
33. Mendelsohn, R., Nordhaus, W.D. & Shaw, D. 1994, “The Impact of Global Warming on Agriculture: A Ricardian Analysis”, The American Economic Review, vol.84, no.4, pp.753-771.
34. Maharjan, K.L. & Prakash, J.N. 2012. Climate Change, Agriculture and Rural Livelihoods in Developing Countries with References to Nepal, Hiroshima International Center for Environmental Cooperation, Graduate School for International Development and Cooperation, Hiroshima University, pp. 1-203.
35. Marques, A.C., Fuinhas, J.A. & Menegaki, A.N. 2016, “Renewable vs non-renewable electricity and the industrial production nexus: Evidence from an ARDL bounds test approach for Greece” Renewable Energy, vol.96, pp.645-655.
36. Mathauda S.S., Mavi H.S., Bhangoo B.S.& Dhaliwal B.K. 2000, “Impact of Projected Climate Change on Rice Production in Punjab (India)”. Tropical Ecology, vol. 41, no.1, pp.95-98.
37. Medellín-Azuara, J, Howitt, R.E., MacEwan, D.J. & Lund, J.R. 2011, “Economic Impacts of Climate-related Changes to California Agriculture”, Climatic Change, vol.109, Supplement 1, pp.387–405.
38. Mishra, D. & Sahu, N.C. 2014, “Economic Impact of Climate Change on Agriculture Sector of Coastal Odisha”, APCBEE Procedia, vol.10, pp.241-245.
39. Narayan, P.K. 2005, “The Saving and Investment Nexus for China: Evidence from Cointegration Tests”, Applied Economics, vol.37, pp.1979 1990.
40. Olesen, J.E., Jensen, T. & Petersen, J. 2000, “Sensitivity of Field-scale Winter Wheat Production in Denmark to Climate Variability and Climate Change”. Climate Research, vol.15, pp.221-238.
41. Pesaran, M.H. & Shin, Y. 1999, “An autoregressive distributed lag modelling approach to cointegration analysis” S Strom (Ed.), Econometrics and Economic Theory in the 20th Century: The Ragnar Frisch Centennial Symposium, Cambridge University Press, Cambridge.
42. Peseran, M.H., Shin, Y. & Smith, R.J. 2001, “Bounds Testing Approaches to the Analysis of Level Relationships”, Journal of Applied Econometrics, vol.16, pp.289-326.
43. Rahim, S. & Puay, T.G. 2017, “The Impact of Climate on Economic Growth in Malaysia”. Journal of Advanced Research in Business and Management Studies, vol.6, no.2, pp.108-119.
44. Ricardo, D., 1817, On the Principle of Political Economy and Taxation. John Murray, London.
45. Sarker, M.D., Rashid, A., Alam, K. & Gow, J. 2014, “Assessing the Effects of Climate Change on Rice Yields: An Econometric Investigation using Bangladeshi Panel Data”. Economic Analysis and Policy, vol.44, pp.405-416.
46. Salvo, M.D., Raffaelli, R. & Moser, R. 2013,“The impact of climate change on permanent crops in an Alpine region: A Ricardian analysis”, Agricultural Systems, vol.118, pp.23-32.
47. Southworth, J., Randolph, J.C., Habeck, M.. Doering , O.C., Pfeifer, R.A., Rao, D.G. &. Johnston J.J. 2000, “Consequences of Future Climate Change and Changing Climate Variability on Maize Yield in the Midwestern United States”, Agriculture, Ecosystem and Environment, vol.82, no.3, pp.139-158.
48. Swart, R., Robinson J. & Cohen, S. 2003, “Climate Change and Sustainable Development: Expanding the Options” Climate Policy, vol.3, Suppl. 1, pp.19-40.
49. UN, 1992, United Nations Framework Convention on Climate Change,http://unfccc.int/resource/docs/convkp/conveng.pdf (26.04.2014).
50. Zeb, A. 2013, “Climate Change and Economic Growth in Nordic Countries: An Application of Smooth Coefficient Semi-parametric Approach”. International Journal of Social Sciences, vol.11, no.3, pp.159-171.
51. Zaied, Y.B. & Zouabi, O. 2015, “Climate change impacts on agriculture: A panel cointegration approach and application to Tunisia”, MPRA Paper No. 64711, https://mpra.ub.uni-muenchen.de/64711/1/MPRA_paper_64711.pdf.
52. Zhang, P., Zhang, J. & Chen, M. 2017, “Economic impacts of climate change on agriculture: The importance of additional climatic variables other than temperature and precipitation”, Journal of Environmental Economics and Management, vol.83, pp.8-31.