The Distributional Impact of Developed Countries’ Climate Change Policies on Senegal: A Macro-Micro CGE Application

Boccanfuso, Dorothée; Savard, Luc; Estache, Antonio

doi:10.3390/su5062727

Cited by 11 publications

(7 citation statements)

References 29 publications

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“…The amplitude of decline in the sectoral output is similar to that found in Nepal by Chalise et al [6]. However, this amplitude is lower compared to that estimated for Senegal by Boccanfuso et al [21]. The subsequent gap could be explained by an additional shock of a 50% increase in world prices of fossil fuel that Boccanfuso et al implemented.…”

Section: Economic Sectoral Effects Of Climate Changesupporting

confidence: 76%

Economy-Wide Effects of Climate Change in Benin: An Applied General Equilibrium Analysis

et al. 2019

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This research analyzes the economic effects of climate change-induced crop yield losses in Benin. As agriculture is a large sector in Benin, the climate change-induced crop yield losses are expected to affect the entire economy as well as household welfare in both rural and urban areas. The paper applies a dynamic general equilibrium model and simulates productivity shocks in the agricultural sector derived from climate change scenarios for Benin. The findings show that climate change-induced crop yield losses reduce domestic agricultural outputs by 4.4% and the nonagricultural output by 0.9% on average by 2025. While export supply decrease by 25.5%, import demand increases by 4.9% on average by 2025. As price of labour and capital decline, household income drop for all household groups by 2.5% on average. Ultimately, household welfare decline for all household groups by 2.7% on average. Rural and particularly poor households are projected to experience the worst adverse effects of climate change-induced crop yield losses. The results show that without adaptive strategies to cope with climate change, economic growth and household welfare will decline even further by 2035 and 2045. Subsequently, the paper suggests that adaptation strategies are needed not only at the national level to overcome the projected negative effects on macroeconomic indicators, but also at household level to enhance the adaptative capacity of households, especially the poor households living in rural areas.In Benin, previous studies showed that yields of major food crops are likely to decline with implications for food security, farm incomes, and household welfare [8,9]. The high potential impact of climate change in Benin is due to the size of the agricultural sector in the economy. As of 2016, agriculture accounts for 23% of the Benin national GDP, 83% of total merchandise exports, and 41% of total employment [10]. Hence, the disruptive effects of climate change in the agricultural sector are felt beyond that sector in the entire economy. There are both direct and indirect effects of climate change on the agricultural sector. Direct effects include changes in agricultural outputs. Indirect effects encompass commodity and factor price changes affecting ultimately household incomes and expenditures.In this paper, the economy-wide implications of climate change in Benin are analyzed and quantified. While vulnerability and adaptation aspects of climate change have been studied in Benin [11][12][13], little is known about its economy-wide effects. In order to capture these effects, the study employs a single-country computable general equilibrium (CGE) model. The CGE framework allows to examine the interdependent links between supply and demand of agricultural products, on the one hand, and between agricultural markets and the rest of the economy, on the other hand [14]. The remainder of this paper is structured as follows: Section 2 presents the existing literature on the economy-wide effects of climate change, while Section 3 describes the ...

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Section: Economic Sectoral Effects Of Climate Changesupporting

confidence: 76%

Economy-Wide Effects of Climate Change in Benin: An Applied General Equilibrium Analysis

et al. 2019

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“…56 In a study focussing on Senegal, the impacts of climate change are modelled along with (assumed) increases in world energy prices. 128 Negative impacts of climate change on crop yields are assumed and will likely increase poverty. The authors state that subsidies for electricity consumption could mitigate negative distributional effects to some extent.…”

Section: Detailed Results For Developing Countriesmentioning

confidence: 99%

Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households

Heindl,

LLschel

2015

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households Andreas Löschel University of Münster February 2015 This paper is also available as: OECD Issue Note -Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households-AbstractThis paper reviews the literature on distributional effects of energy and carbon taxation with focus on microsimulation models. Most studies find that direct energy and carbon taxation tends to be regressive. Regressive effects occur mostly with respect to taxation of electricity or space heating. Taxation of transportation fuels show less regressive, neutral, or even progressive effects. Adequate revenue recycling often allows for neutralisation or full elimination of regressive effects so that energy and carbon tax reforms can be progressive. Some studies find evidence for the existence of a double dividend. There seems to be an efficiency-equity trade-off in revenue recycling, i.e. whether to foster growth or to assist low-income households. While a large number of studies on advanced economies are available, there clearly is a gap with regard to evidence for developing countries. Another gap relates to the lack of documentation on the challenges of incorporating macroeconomic models and long-term modelling perspectives in microsimulation. Both aspects can be of great importance with respect to the design of green growth policies. Thoughtful incorporation of social considerations, including aspects of poverty in modelling approaches could enhance the existing instruments of exante policy assessments since poverty is a tangible concept which is well-known, understandable, and openly observable for citizens and policy makers.

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“…To put it differently, a better model for agricultural modernization produces pro-poor effects where poor households gain relative to the richer ones. Several recent studies have looked at the propoor effects of policies, particularly using CGE-microsimulation model (Boccanfuso et al, 2011(Boccanfuso et al, , 2013a(Boccanfuso et al, , 2013bAnnabi et al 2008;Ravallion and Lokshin 2008). Most of the studies do not show factors behind the differences in the impacts of policy on pro-poor growth or decompose the changes in poverty into growth and distribution components, but rather show how poor benefit/lose relative to rich segments of the population.…”

Section: Introductionmentioning

confidence: 99%

Agricultural Modernization, Structural Change and Pro-poor Growth: Policy Options for the Democratic Republic of Congo

Otchia

2014

Economic Structures

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This paper applies the framework for pro-poor analysis to welfare changes from a CGE-microsimulation model to analyze what are the better or worse models for agriculture modernization, and to estimate the contribution of growth and redistribution to changes in poverty in DRC. The findings indicate that labor-using technological change generates absolute and relative pro-poor effects whereas capital-using technological change leads to immiserizing growth. More importantly, the results suggest that labor-using technological change can be independently sufficient for reducing poverty via the income growth effects. This study also highlights how developing input supply networks, securing tenure among smallholders, and improving access to land for women are important for pro-poor agricultural modernization.

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The Distributional Impact of Developed Countries’ Climate Change Policies on Senegal: A Macro-Micro CGE Application

Cited by 11 publications

References 29 publications

Economy-Wide Effects of Climate Change in Benin: An Applied General Equilibrium Analysis

Economy-Wide Effects of Climate Change in Benin: An Applied General Equilibrium Analysis

Social Implications of Green Growth Policies from the Perspective of Energy Sector Reform and its Impact on Households

Agricultural Modernization, Structural Change and Pro-poor Growth: Policy Options for the Democratic Republic of Congo

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