Elsevier

Economic Modelling

Volume 63, June 2017, Pages 128-142
Economic Modelling

Potential socio-economic implications of future climate change and variability for Nigerien agriculture: A countrywide dynamic CGE-Microsimulation analysis

https://doi.org/10.1016/j.econmod.2017.02.005Get rights and content

Highlights

  • Deterministic and stochastic scenarios of future agro-climatic conditions in Niger change are defined.

  • Simulations are conducted with a DMS model and a DCGE model.

  • Some options to cope with the climatic conditions are explored.

Abstract

This study explores the potential economic and social effects induced by a possible future deterioration of weather conditions on Niger's agriculture. Our scenarios over a 25 year period rely on both long term climate change deterministic features and climate variability stochastic features which take into account a higher than normal frequency of severe droughts. Using a microsimulated Dynamic Recursive Computable General Equilibrium model, we show how a long run mean decrease in main crop yields could adversely affect growth, poverty and food security in the country and how more severe drought would worsen these negative effects. However, we also show that there would appear to be some room for manœuvre for coping strategies for Niger such as improving the rural road network, adopting modern crop varieties or, to a lesser extent, extending irrigation capacity.

Introduction

The Nigerien economy depends strongly on its agricultural sector, a sector that occupies more than 80 percent of the workforce and contributes to more than 40 percent of GDP. However, this agriculture is handicapped by its low productivity and its exposition to a number of risks. Among the latter, the adverse climatic conditions are often considered to be the most severe (World Bank, 2013). Over the last few decades, the Sahel region has indeed been hit by rising temperatures, reduction in average rainfall and higher climate variability reflected, in particular, in more frequent major droughts (Druyan, 2011; IPCC, 2013). Within this context, the living conditions of the fast-growing population are particularly precarious, especially in rural areas where agriculture is the main source of income but also the main source of food. In 2010, 48,2% of Nigerien households were poors and rural areas contributed 90% to total poverty with a poverty rate of 54.6%; 48.1% suffered chronic malnutrition and more than 20% were affected by lack of food security and identified as being in a severely vulnerable situation (Herderschee et al., 2014). Noting the apparent consensus in agro-climate literature that Niger's future weather conditions could deteriorate and be characterized by both a drier climate and a higher frequency of severe droughts (Sylla et al., 2010, Mohino et al., 2011, Roudier et al., 2011; IPCC, 2013; Sultan 2013; Niang, 2014), the present study seeks to assess the risk that these possible deteriorations might entail for the Niger's economy and the welfare of its population. We draw here on several ways on the studies attempting to assess developing countries’ vulnerability to possible changes in weather conditions.

First, regarding the modelling framework, we chose to build a Dynamic Recursive Computable General Equilibrium (DRCGE) model for the Nigerien economy. This framework seems indeed better suited to an economy-wide analysis of the potential effects of future agro-climatic shocks than others approaches in the literature (relying on Ricardian or partial equilibrium analysis). On the one hand, because the general equilibrium logic does not restrict the effects of the shocks to agriculture alone but also captures explicitly all the linkages between prices, income, supply and demand in the whole economy. On the other hand, because the use of a dynamic specification enables to generate time paths of the evolutions of the country's economic variables under different hypotheses for potential shocks over a given period. In the recent economic literature CGE studies on developing counties climate's vulnerability have known a rapid growth, either in a global or national framework (see for instance Gebreegziabher et al., 2016, for a review). However, to our knowledge, such analysis has never been conducted for Niger. Our DRCGE model involves fairly standard general equilibrium assumptions for low income countries (Decaluwé et al., 2013). But, unlike the majority of other CGE studies, we also chose to consider some specific features of the Nigerien economy, particularly its dual nature, both in rural areas and urban areas (Stifel and Thorbecke, 2003). Moreover, using a top-down approach, we chose to link this model to a dynamic microsimulation (DMS) model in order to also assess the potential social outcomes of the future adverse climatic conditions at the micro level.

Second, regarding the nature of the climatic shocks simulated with the models, we chose here to use a three-pronged approach in order to isolate the respective potential effects of climate change and climate variability. In a first step, as with a majority of CGE studies (see for instance, Juana et al., 2008; Reid et al., 2008; Bezabih et al., 2011; Hertel et al., 2010; Bosello et al., 2013; Calzadilla et al., 2013; Gebreegziabher et al., 2016), we adopt a deterministic approach of climate change by considering solely the potential effects of long-run mean changes in agriculture (mainly crop yields reductions). We thus define a first group of agro-climatic scenarios over the next 25 years for Niger, on the basis of the main forecasts of average yield evolutions found in the agro-climate literature. However, limiting the agro-climatic shocks to average changes clearly underestimates their potential effects. In the literature, whenever possible, other CGE studies thus try to include some climate variability features using stochastic or probabilistic scenarios (see for instance, Thurlow et al., 2009; Yu et al., 2010; Arndt et al., 2011; Arndt et al., 2012; Sassi and Cardaci, 2013; Arndt et al., 2015; Arndt and Thurlow, 2015). Others, though in limited number, focus even more on future changes in extreme events and the disaster risks that they could represent for a country (see for instance World Bank, 2008; Pauw et al., 2011; Al-Riffai et al., 2012 or Zhong et al., 2014). In a second step, we therefore chose to focus on the risk of a potential future greater climate variability by defining a second group of agro-climatic scenarios including more frequent and more intense drought events for the next 25 years in Niger. These scenarios rely here on stochastic annual weather sequences including drought events with sizeable one-off impacts on yields, rainfed land depreciation or livestock capital. Finally, in a last step, we combine previous analyses in a range of scenarios including both climate change and climate variability features.

Third, some CGE studies (see for instance, Eboli et al., 2010; World Bank, 2010; Robinson et al., 2012; Bosello et al., 2013; Bandara and Cai, 2014; Calzadilla et al., 2014; Chalise and Naranpanawa, 2016) explore also different options for coping with future climate conditions focusing on either autonomous price-driven decisions of agents (mainly regarding primary factors-use change) or adaptation strategies that governments may promote. We thus chose to also asses the opportunity of such coping strategies for Niger. For that purpose, we selected some planned strategies specifically designed to boost agricultural productivity with a focus on improvements in the rural road network, expansions of irrigation capacity or changes in farm management practices.

The rest of the paper is structured as follows. Section 2 presents the current vulnerability of Nigerien agriculture to climate conditions and the hypotheses we selected for defining the different future agro-climatic scenarios. Section 3 describes the main features of our economic models and Section 4 presents the results of the different simulations. Finally, Section 5 explores the net impact of the coping strategies we selected in order to determine if they are capable of counterbalancing the effects of the changing weather conditions.

Section snippets

Niger's current vulnerability to adverse climatic conditions

Despite the major efforts made since the 1970s by the Nigerien government to develop agriculture, this sector, which is essentially rainfed subsistence farming, is characterised by structural fragility. The decline in natural resources and in soil fertility, the traditional nature of systems of production, the lack of rural infrastructures, the weakness of state institutions or rural organizations, the low level of incomes which limit farmers’ ability to invest, etc., are all handicaps which

Key model features

Our DRCGE model for Niger is adapted from the PEP-1-t Standard Model (Decaluwé et al., 2013). It features four groups of households (Subsistence farmers, Other agricultural workers in export agriculture, Urban formal and Urban informal), one government agent, one firm agent, twelve agricultural activities (irrigated or rainfed), seven industrial activities and five service activities (the relevant equations and variables are presented in Supplementary Material).

Its within-period specification

Potential socio-economic impacts of climate change scenarios

Selected results for the three long-term climate change scenarios are given in Table 3 (more detailed results are given in the supplementary material). They are consistent with the findings of the other CGE studies that assess (even in different frameworks) the impacts of a long-run crop yields reductions for other developing countries (see for instance Bosello et al., 2013; Calzadilla et al., 2013; Gebreegziabher et al., 2016 for recent studies in Africa). As expected, the economic and social

Investigating some strategies to cope with new climate conditions

The final step of our analysis is to investigate whether Niger migth have some room for manœuvre for coping strategies. Over the years, a number of adaptation options have been identified for developing countries (see for instance IPCC, 2014, chap.14) and some CGE studies have tried to include them in their analyse (for instance, Bandara and Cai, 2014; Calzadilla et al., 2014 or Chalise and Naranpanawa, 2016). In Niger, many planned adaptation options have already been defined by Nigerien

Conclusion

This study uses a microsimulated DRCGE model to explore the potential economic and social impacts over a 25 year period of various new climate conditions scenarios for Niger. First, it shows how a long term fall in the main crop yields could reduce the country's economic growth and considerably degrade its poverty and food insecurity indicators. Secondly, it also shows how these negative impacts could be aggravated by a higher frequency of extreme drought events. Third, it shows that there is

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