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

Abstract

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 ...

Rainfall and Temperature Trend Analysis by Mann–Kendall Test and Significance for Rainfed Cereal Yields in Northern Togo

“…Likewise, Sohou [56] pointed out that maize and sorghum are the most threatened cereals by climate change in northern Benin. It is evident from the results that there is an imperative need to adopt appropriate adaptation strategies to curb the negative effects of climate change on cereal production, as highlighted by Nyuor et al [47] in Ghana, Hounnou et al [57] who evaluated the effects of climate change on the agricultural sector in Benin, and Nana [58] who analysed the impact of climate change on cereal production in Burkina Faso. Similarly, Sossou et al [54] recommended implementing effective adaptation strategies in Burkina Faso as a conclusion to their study of the impact of climate change on cereal yield and production in that country.…”

Climate change adaptation strategies and technical efficiency of maize producers in Benin, West Africa

“…Benin in particular (Awoye et al, 2017;Hounnou et al, 2019;IPCC, 2014). Several studies carried out by Trisos et al (2022), in West Africa, led to the conclusion that projected median maize yields will decrease by 9% as result of 1.5 8C of global warming and by 41% at 4 8C, without adaptation compared to 2005 yield levels.…”

“…Both theoretical and empirical literature show that climate change has adverse effects on agriculture in developing countries in general and in Benin in particular (Awoye et al. , 2017; Hounnou et al. , 2019; IPCC, 2014).…”

Rainfall and Temperature Trend Analysis by Mann–Kendall Test and Significance for Rainfed Cereal Yields in Northern Togo

“…Likewise, Sohou [52] pointed out that maize and sorghum are the most threatened cereals by climate change in northern Benin. It is evident from the results that there is an imperative need to adopt appropriate adaptation strategies to curb the negative effects of climate change on cereal production, as highlighted by Nyuor et al [44] in Ghana, Hounnou et al [53] who evaluated the effects of climate change on the agricultural sector in Benin, and Nana [54] who analysed the impact of climate change on cereal production in Burkina Faso. Similarly, Sossou et al [50] recommended implementing effective adaptation strategies in Burkina Faso as a conclusion to their study of the impact of climate change on cereal yield and production in that country.…”