This paper investigates the potential socioeconomic impacts of the climate change projected for 2040 may have on agriculture and on the Brazilian economy, in its different regions. Thus, we used a recursive dynamic interregional CGE model calibrated for 2010. We considered two scenarios of climate change, an Intermediate Scenario (RCP4.5) – less severe – and a Pessimistic Scenario (RCP8.5) – more severe. The main distinction in relation to previous studies performed in Brazil is the estimates of areas that become unviable for agricultural crops, based on projections for the regional pattern of climate change of the 5th and most recent IPCC report. Results suggest that climate change should cause Brazil’s real GDP to shrink in both simulated scenarios, but this should be more intense in the Intermediate Scenario. Results also point out that the losses will be greater for poorer households and for regions whose economy is more dependent on agriculture and, in particular, on soybean; and that the actual consumption and well-being of households in the Midwest and part of the Northeast (in the part where the soybean crop is most representative) will be more affected than in other regions of Brazil.
Climate change and agriculture in Brazil
One of the first studies on the relationship between climate change and agriculture for Brazil was performed by Sanghi et al. (1997). The study sought to assess the possible impacts of climate change on the value of land and the profitability of agriculture. Subsequently, Mendelsohn & Dinar (1999) discussed the effects of global warming on agriculture in Brazil (and also in India). Nobre & Assad (2005) analyzed the effects of the increase in temperature at the levels indicated by the IPCC on the ecosystems of the Amazon and on Brazilian agriculture. Deconto (2008) sought to predict the loss of low planting risk area for eight agricultural crops in different regions of Brazil, generating projections of loss of area for the years 2010, 2020, 2050 and 2070 from projections of temperature increase from the 4th IPCC Assessment Report (IPCC, 2007). All of these studies used a partial equilibrium approach.
In another line of studies, Domingues et al. (2008) analyzed the impacts on the Northeast region of a shock in the availability of land suitable for agriculture in each state of the region using a static interregional computable general equilibrium (CGE) model. Domingues et al. (2010) used a dynamic recursive general equilibrium model to analyze the impacts of climate change for Brazil by distinguishing micro-regions and eight agricultural activities. Ferreira Filho & Moraes (2015) analyzed this issue using a static interregional general equilibrium model, calibrated for the year 2005, considering shocks detailed by agricultural product (eight products) and by region (27 regions). The common element in these studies – in addition to the general equilibrium approach – is that they start from the same future estimates of losses of apt areas made by researchers from the Brazilian Agricultural Research Corporation (Embrapa) and partners – more fully communicated in Deconto (2008) – derived from the climatic scenarios of the 4th IPCC Assessment Report (AR4) (Intergovernmental Panel on Change Climate, 2007).
More recently, several studies have emerged in Brazil with an agronomic approach or under a partial equilibrium economic approach, which tried to estimate the direct impact that the climate changes projected for the rest of this century will have on the productivity of the main agricultural crops in the country (for example, Féres et al., 2009; Santos et al., 2011; Marin et al., 2013; Araújo et al. 2014; Walter et al., 2014; Assunção & Chein, 2016; Pires et al., 2016; Cruz et al., 2016; Verhage et al., 2017; Cera et al., 2017; Tavares et al., 2018). These studies have, although in a very incipient way, allowed the first investigations of the impacts of climate change on Brazilian agriculture, based on the general equilibrium approach, using as inputs these agricultural productivity projections – instead of losses of apt areas – similarly to what has been done for some time in the international literature.