Economic impacts of climate change considering individual, additive, and simultaneous changes in forest and agriculture sectors in Canada: A dynamic, multi-regional CGE model analysis

Thomas O. Ochuodho; Van A. Lantz; Edward Olale

doi:10.1016/j.forpol.2015.12.005

Economic impacts of climate change considering individual, additive, and simultaneous changes in forest and agriculture sectors in Canada: A dynamic, multi-regional CGE model analysis

Thomas O. Ochuodho, Van A. Lantz, Edward Olale

Forestry and Natural Resources

Research output: Contribution to journal › Article › peer-review

20 Scopus citations

Abstract

Computable general equilibrium (CGE) model analyses of economic impacts from climate change have often focused on individual impacted sectors such as forest. However, such an approach may not provide accurate economic impact estimates since climate change will affect multiple sectors simultaneously. Furthermore, imprecise aggregate economic impact estimates may result if one were to add together individual sector impact estimates. We used CGE models to compare economic impacts of individual, additive, and simultaneous climate-induced changes in Canadian and other regions' forest and agriculture sectors over the 2006-2051 period. We found negative additive impact biases in a majority of regions for five of our economic variables including GDP, income, imports, terms of trade, capital, and total output. Positive additive impact biases were found in a majority of regions for four economic variables including welfare, consumption, export, and labor. These findings emphasize the importance of considering impacted sectors simultaneously when using CGE models to evaluate the economic impacts of climate change.

Original language	English
Pages (from-to)	43-51
Number of pages	9
Journal	Forest Policy and Economics
Volume	63
DOIs	https://doi.org/10.1016/j.forpol.2015.12.005
State	Published - Feb 1 2016

Bibliographical note

Funding Information:
We would like to thank the following people who provided data or otherwise vital information, which made this study possible: Wei-Yew Chang (University of British Columbia) Siobhan Hanratty (University of New Brunswick); John G. Neilson, Jelinic Gordan, Julie Denis, Troy Melanson, and France Couture (Statistics Canada); Sophie Allain-Melanson (Industry Canada); Donald D. Kim, Billy Jolliff, Chi Hoang, and Steve Zemanek (USDOC, Bureau of Economic Analysis); Erin Ludlow and Josie Hollingsworth (US Census Bureau); and Angel H. Aguiar (Purdue University). The authors are responsible for any errors.

Publisher Copyright:
© 2015 Elsevier B.V.

Keywords

Additive impacts
Climate change impacts
Computable general equilibrium
Simultaneous impacts

ASJC Scopus subject areas

Forestry
Sociology and Political Science
Economics and Econometrics
Management, Monitoring, Policy and Law

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.forpol.2015.12.005

Cite this

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title = "Economic impacts of climate change considering individual, additive, and simultaneous changes in forest and agriculture sectors in Canada: A dynamic, multi-regional CGE model analysis",

abstract = "Computable general equilibrium (CGE) model analyses of economic impacts from climate change have often focused on individual impacted sectors such as forest. However, such an approach may not provide accurate economic impact estimates since climate change will affect multiple sectors simultaneously. Furthermore, imprecise aggregate economic impact estimates may result if one were to add together individual sector impact estimates. We used CGE models to compare economic impacts of individual, additive, and simultaneous climate-induced changes in Canadian and other regions' forest and agriculture sectors over the 2006-2051 period. We found negative additive impact biases in a majority of regions for five of our economic variables including GDP, income, imports, terms of trade, capital, and total output. Positive additive impact biases were found in a majority of regions for four economic variables including welfare, consumption, export, and labor. These findings emphasize the importance of considering impacted sectors simultaneously when using CGE models to evaluate the economic impacts of climate change.",

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N1 - Funding Information: We would like to thank the following people who provided data or otherwise vital information, which made this study possible: Wei-Yew Chang (University of British Columbia) Siobhan Hanratty (University of New Brunswick); John G. Neilson, Jelinic Gordan, Julie Denis, Troy Melanson, and France Couture (Statistics Canada); Sophie Allain-Melanson (Industry Canada); Donald D. Kim, Billy Jolliff, Chi Hoang, and Steve Zemanek (USDOC, Bureau of Economic Analysis); Erin Ludlow and Josie Hollingsworth (US Census Bureau); and Angel H. Aguiar (Purdue University). The authors are responsible for any errors. Publisher Copyright: © 2015 Elsevier B.V.

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N2 - Computable general equilibrium (CGE) model analyses of economic impacts from climate change have often focused on individual impacted sectors such as forest. However, such an approach may not provide accurate economic impact estimates since climate change will affect multiple sectors simultaneously. Furthermore, imprecise aggregate economic impact estimates may result if one were to add together individual sector impact estimates. We used CGE models to compare economic impacts of individual, additive, and simultaneous climate-induced changes in Canadian and other regions' forest and agriculture sectors over the 2006-2051 period. We found negative additive impact biases in a majority of regions for five of our economic variables including GDP, income, imports, terms of trade, capital, and total output. Positive additive impact biases were found in a majority of regions for four economic variables including welfare, consumption, export, and labor. These findings emphasize the importance of considering impacted sectors simultaneously when using CGE models to evaluate the economic impacts of climate change.

AB - Computable general equilibrium (CGE) model analyses of economic impacts from climate change have often focused on individual impacted sectors such as forest. However, such an approach may not provide accurate economic impact estimates since climate change will affect multiple sectors simultaneously. Furthermore, imprecise aggregate economic impact estimates may result if one were to add together individual sector impact estimates. We used CGE models to compare economic impacts of individual, additive, and simultaneous climate-induced changes in Canadian and other regions' forest and agriculture sectors over the 2006-2051 period. We found negative additive impact biases in a majority of regions for five of our economic variables including GDP, income, imports, terms of trade, capital, and total output. Positive additive impact biases were found in a majority of regions for four economic variables including welfare, consumption, export, and labor. These findings emphasize the importance of considering impacted sectors simultaneously when using CGE models to evaluate the economic impacts of climate change.

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Economic impacts of climate change considering individual, additive, and simultaneous changes in forest and agriculture sectors in Canada: A dynamic, multi-regional CGE model analysis

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

UN SDGs

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