Economic impact of climate change on agriculture using Ricardian approach: A case of northwest Vietnam

Abstract

The impact of climate change on agriculture will help to clarify the perception of the problem and quantify the impact, contributing to the formulation of sustainable livelihoods. This study uses the Ricardian approach to explore the implications of climate change on agriculture in the Northwestern area of Vietnam by taking farmer adaptations into account. The study uses secondary data of 1055 households which selected from Vietnam Household Living Standards Surveys in 2012 dataset and climate. To examine the effect of an infinitesimal change of temperature and rainfall in Northwest farming, marginal impact analysis was conducted. The study then predicts the impact of climate scenarios on net revenue for the years 2050 and 2100. The study found that relationship between household revenue and weather variables are nonlinear significant and inverted U-shaped relationships between the two seasons. Net revenue decreased as temperature and rainfall increase in the dry season. Net revenue projected to decline about 17.7% and 21.28% due to climate change in 2050 and 2100 respectively in without adaptation model. Net revenue would be loss about 0.37% and 0.20% in 2050 and 2100 respectively in with adaptation model.