An Economic Analysis of Potential Impacts of Climate Change in Egypt

Onyeji, S.C. & Fischer, G. (1993). An Economic Analysis of Potential Impacts of Climate Change in Egypt. IIASA Working Paper. IIASA, Laxenburg, Austria: WP-93-012

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Abstract

Projections of climate impacts on crop yields simulated for different GCM scenarios are used, in a recursively dynamic general equilibrium framework, to account for potential economy-wide impacts of climate change in Egypt. Comparing these impact projections to those obtained under a reference, business-as-usual, scenario assuming some moderate changes in the political, economic or technological sphere, indicates that global warming has potentially negative effects. The analysis is based on a global assessment of potential climate change-induced variations in world commodity production and trade. The Egyptian agricultural sector (and the nonagricultural sector to a lesser extent), is projected to be increasingly less self-sufficient. Specific adverse impacts include a general rise in food prices, declines in consumer incomes and a consequent decline in per capita food consumption. A deterioration in terms of trade is also projected, suggesting difficulties in augmenting food and other essential supplies with imports. A surplus agricultural labor force is projected to emerge, leading to possible urban and foreign migration. Lower and Upper Egypt where agricultural activity is concentrated are the regions likely to suffer most from the negative impacts on the agricultural sector. Urban Egypt which has a monopoly on nonagricultural activity is expected to be the general destination of possible future labor migration. Baring possibilities for foreign migration, the labor market can be expected to contend with added pressures from greater unemployment and underemployment. The simulation results show that farm level adaptation measures (e.g., adjustments in planting dates, irrigation practices and choice of cultivars), may mitigate these adverse impacts.

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