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CLIMATE CHANGE: AGRICULTURAL AND ECONOMIC IMPACTS
Intersessional Meeting of the Intergovernmental Group on Tea
Rome, 5-6 May 2014
Dominique van der Mensbrugghe
Agricultural Development Economics (ESA)
Food and Agriculture Organization of the United Nations
Long-term downward trend in real agricultural prices though-out the 20th century
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 2
0
100
200
300
400
500
600
700
800
900
1000
1960 1962 1964 1966 1968 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Real
pri
ces
in 2
010
$US
per
met
ric
ton
Rice (Thai)
Wheat (US HWT)
Maize (US #2)
Source: World Bank pink sheet (http://go.worldbank.org/4ROCCIEQ50, accessed 7-Jan-2014) and own calculations
Note: 4-year leading moving average (last year available = 2013).
http://go.worldbank.org/4ROCCIEQ50
Slowing population growth, however…
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 3
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2010 2050
HIC ECA EAP LAC MNA SAA SSA
67
11
107
203
241
665
1,120
2,414
Population, SSP2, million
Note: 2010-2050 incremental change indicated in 2050 column. High-income (HIC), Europe & Central Asia (ECA), East Asia & Pacific (EAP), Latin America & Caribbean (LAC), Middle East & North Africa (MNA), South Asia (SAA), Sub-Saharan Africa (SSA).
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2010 2015 2020 2025 2030 2035 2040 2045 2050
Developing countries
SSP3
SSP3
SSP2
SSP2 High-income countries
Population, SSP2 v. SSP3, million
GDP per capita under SSP2 and SSP3, $2007
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 4
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
World Developing East Asia & Pacific
South Asia Europe & Central Asia
Middle East & North Africa
Sub-Saharan Africa
Latin America & Caribbean
High-income
2010 2050—SSP2 2050—SSP3
0.8 3.6
2.0
4.8
3.2 5.1
3.3
2.8
1.8 2.1 1.3
1.6
2.5
1.2
1.3
1.1
2.0
3.6
Note: Growth rates, percent per annum, on top of columns.
History vs. projected yield growth, percent per annum
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
World Developing High-income World Developing High-income World Developing High-income
Wheat Rice Maize
1970/1990 1990/2010 2010/2030 2030/2050
Source: 1970/2010 FAOSTAT (accessed 22-Jul-2013), IFPRI’s IPRs and own calculations Note: Slight differences in regional aggregations between history and projections. Maize yield projections equivalent to coarse grain definition in GTAP.
0.5
1.0
1.5
2.0
2.5Pr
ice
inde
x in
205
0 (2
005=
1)
AGR WHT RIC CGR CR5
0.5
1.0
1.5
2.0
2.5
Variation of world prices across commodities in 2050
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 6
Note: All agriculture (AGR), wheat (WHT), rice (RIC), coarse grains (CGR), index for wheat, rice, coarse grains, oil seeds and sugar (CR5).
Source: AgMIP global economic runs, February 2013 and own calculations.
The climate modeling chain: from biophysical to socioeconomic
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 7
General circulation
models (GCMS)
Global gridded crop
models (GGCMs)
Global economic
models
∆Temp ∆Prec
∆Yield (Biophysical)
∆Area ∆Yield ∆Cons ∆Trade
Climate Biophysical Economic
RCP’s Farm
practices CO2
Pop. GDP
Source: Nelson et al., PNAS (2013).
An extreme climate scenario?
• RCP 8.5 was selected – Currently on path consistent with 8.5 w/m2
– Excludes potentially positive effects of increasing CO2 concentration
– And crop models assume constant management practices (e.g. sowing dates)
• Is this the worst case? Crop models ignore: – Tropospheric ozone (spatially differentiated) – Pests, weeds and diseases – Extreme events
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 8
Four potential yield outcomes for maize in 2045 under RCP 8.5†
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 9
Source: Müller and Robertson (2014). † Excludes CO2 effects.
Simulated impacts for the four climate scenarios: global average for major crops in 2050 wrt reference
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 10
-25
-20
-15
-10
-5
0
5 Wheat Rice Coarse grains Oil seeds Sugar CR5
IPSL/LPJ HADGEM2/LPJ IPSL/DSSAT HADGEM2/DSSAT
Source: Shocks from IFPRI as interpreted for use in the ENVISAGE model, Nelson, van der Mensbrugghe et al. (2014).
Climate induced changes to yields, land use, production, trade, consumption and prices in 2050
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 11
Source: Nelson et al., PNAS (2013).
Perc
ent c
hang
e
-60
-40
-20
0
20
40
60
n
MeanSD
2891
-0.17(0.131)
2891
-0.11(0.166)
2891
0.11(0.249)
2891
-0.02(0.25)
2891
-0.01(0.264)
2891
-0.03(0.063)
2891
0.2(0.242)
YEXO YTOT AREA PROD TRSH CONS PRICE
Take away messages
• Long-term price trends depend on population and income growth and evolution of yields.
• Climate impacts will negatively affect prices, with many of the increases ranging from 5-25%.
• Analysis is complicated by significant uncertainty—climate, impacts of climate changes and future economic structure.
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 12
Further reading
• von Lampe, Willenbockel et al., “Why do global long-term scenarios for agriculture differ? An overview of the AgMIP Global Economic Model Intercomparison”
• Robinson, van Meijl, Willenbockel et al., “Comparing supply-side specifications in models of global agriculture and the food system”
• Valin, Sands, van der Mensbrugghe et al., “The future of food demand: understanding differences in global economic models”
• Schmitz, van Meijl et al., “Land-use change trajectories up to 2050: insights from a global agro-economic model comparison”
• Müller and Robertson, “Projecting future crop productivity for global economic modeling”
• Nelson, van der Mensbrugghe et al., “Agriculture and climate change in global scenarios: why don’t the models agree”
• Lotze-Campen, von Lampe, Kyle et al., “Impacts of increased bioenergy demand on global food markets: an AgMIP economic model intercomparison”
Dominique van der Mensbrugghe ESA/FAO
Rome, 5-6 May 2014 13
Special issue
Special issue of Agricultural Economics (2014): http://onlinelibrary.wiley.com/doi/10.1111/agec.2014.45.issue-1/issuetoc
Proceedings of the National Academy of Sciences (PNAS) (2013): http://www.pnas.org/content/early/2013/12/12/1222465110.full.pdf+html • Nelson et al., “Climate change effects on agriculture: Economic responses to
biophysical shocks”
CLIMATE CHANGE: �AGRICULTURAL AND ECONOMIC IMPACTS��Intersessional Meeting of the Intergovernmental Group on Tea�Rome, 5-6 May 2014�Long-term downward trend in real agricultural prices though-out the 20th centurySlowing population growth, however…GDP per capita under SSP2 and SSP3, $2007History vs. projected yield growth, percent per annumVariation of world prices across commodities in 2050The climate modeling chain: �from biophysical to socioeconomicAn extreme climate scenario?Four potential yield outcomes for maize in 2045 under RCP 8.5†Simulated impacts for the four climate scenarios: global average for major crops in 2050 wrt referenceClimate induced changes to yields, land use, production, trade, consumption and prices in 2050Take away messagesFurther reading