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Climate Change Impacts: Prospects for 2050 in Brazil, Mexico, and Peru

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Climate Change Impacts: Prospects for 2050 in Brazil, Mexico, and Peru FOOD POLICY REPORT CLIMATE CHANGE IMPACTS AND HOUSEHOLD RESILIENCE Prospects for 2050 in Brazil, Mexico, and Peru LYKKE E. ANDERSEN, CLEMENS BREISINGER, LUIS CARLOS JEMIO, DANIEL MASON-D’CROZ, CLAUDIA RINGLER, RICHARD ROBERTSON, DORTE VERNER, AND MANFRED WIEBELT APRIL 2016 Climate Change Impacts and Household Resilience Prospects for 2050 in Brazil, Mexico, and Peru Lykke E. Andersen, Clemens Breisinger, Luis Carlos Jemio, Daniel Mason-D’Croz, Claudia Ringler, Richard Robertson, Dorte Verner, and Manfred Wiebelt A Peer-reviewed Publication International Food Policy Research Institute Washington, DC ABOUT IFPRI The International Food Policy Research Institute (IFPRI), established in 1975, provides research-based policy solutions to sustainably reduce poverty and end hunger and malnutrition. The Institute conducts research, communicates results, optimizes partnerships, and builds capacity to ensure sustainable food production, promote healthy food systems, improve markets and trade, transform agriculture, build resilience, and strengthen institutions and governance. Gender is considered in all of the Institute’s work. IFPRI collaborates with partners around the world, including development implementers, public institutions, the private sector, and farmers’ organizations. Copyright ©2016 International Food Policy Research Institute. All rights reserved. For permission to reprint, contact [email protected]. Editor: Sandra Yin Design: David Popham Layout: Deirdre Launt and Julia Vivalo Cover photo: Panos/D. Telemans ISBN: 978-0-89629-581-0 DOI: http://dx.doi.org/10.2499/9780896295810 CONTENTS Tables, Figures, Boxes ...........................................................iv Acknowledgments ..............................................................vii EXECUTIVE SUMMARY ............................................................viii Introduction .......................................................................................1 Modeling Suite ...................................................................................3 Socioeconomic Impacts of Climate Change in Brazil ....................... 20 Socioeconomic Impacts of Climate Change in Mexico .......................32 Socioeconomic Impacts of Climate Change in Peru ...........................42 Summary, Conclusions, and Proposed Actions ..................................53 Appendix: Supplementary Tables ......................................................56 Notes ..................................................................................73 References ..........................................................................76 About the authors ..............................................................84 TABLES Table 1 Brazil: Projected annual crop yield changes (percentage per year), 2000–2050 ....................9 Table 2 Mexico: Projected annual crop yield changes (percentage per year), 2000–2050 ...............10 Table 3 Peru: Projected annual crop yield changes (percentage per year), 2000–2050 .....................11 Table 4 Summary of GDP, population, and GDP per capita assumptions for Shared Socioeconomic Pathway Number 2, by region ..............................................................................13 Table 5 Country model characteristics .............................................................................................................17 Table 6 Brazil: Agricultural value-added by region and agricultural trade orientation, 2008 ..........21 Table 7 Brazil: Distribution of households by gender and location (percentage of all households), 2008 .............................................................................................................. 30 Table 8 Brazil: Per capita household income, by household type (reais per month per person), 2008.................................................................................................................. 30 Table 9 Brazil: Household Income Diversification Index, by household type, 2008 .......................... 31 Table 10 Brazil: Probability of being highly vulnerable, by household type (percentage), 2008 .... 31 Table 11 Brazil: Probability of being highly resilient, by household type (percentage), 2008 ........ 31 Table 12 Mexico: Agricultural value-added by region and agricultural trade orientation, 2008 ....33 Table 13 Mexico: Distribution of households by gender and location, 2008 ......................................... 41 Table 14 Mexico: Per capita household income, by household type (pesos per month per person), 2008 ................................................................................................................. 41 Table 15 Mexico: Household Income Diversification Index, by household type, 2008 ..................... 41 Table 16 Mexico: Probability of being highly vulnerable, by household type (percentage), 2008 .41 Table 17 Mexico: Probability of being highly resilient, by household type (percentage), 2008 ...... 41 Table 18 Peru: Agricultural value-added by region and agricultural commodity, 2008 ....................45 Table 19 Peru: Distribution of households by gender and location (percentage of all households), 2008 .............................................................................................................. 50 Table 20 Peru: Per capita household income, by household type, (nuevos soles per month per person), 2008 ................................................................................................... 50 Table 21 Peru: Household Income Diversification Index, by household type (percent), 2008 ...... 50 Table 22 Peru: Probability of being highly vulnerable, by household type (percent), 2008 ............. 51 Table 23 Peru: Probability of being highly resilient, by household type (percent), 2008 .................. 51 Table 24 Summary of results: Climate-change induced changes in agricultural price ..................... 54 Table A1 Dynamic Computable General Equilibrium model variables and parameters ...................56 Table A2 Full Dynamic Computable General Equilibrium model equations .....................................58 Table A3 Brazil: Economic structure in base year (percent), 2008. ....................................................... 64 iv Table A4 Mexico: Economic structure in base year (percent), 2008 .......................................................66 Table A5 Peru: Economic structure in base year (percent), 2002 .......................................................... 68 Table A6 Brazil: Summary of results ..................................................................................................................69 Table A7 Mexico: Summary of results ...............................................................................................................69 Table A8 Peru: Summary of results ................................................................................................................... 70 Table A9 Sensitivity of macroeconomic results to income elasticity variation (percentage point deviation of annual average growth rates) ...................................................................71 FIGURES Figure 1 Schematic overview of the modeling suite ........................................................................................4 Figure 2 Comparing CO2 concentration and radiative forcing assumptions .........................................5 Figure 3 Projected changes in average annual maximum temperatures (in degrees Celsius) in Brazil, Mexico, and Peru for four downscaled climate scenarios .........................................................6 Figure 4 Projected changes in total annual precipitation in Brazil, Mexico, and Peru for four climate scenarios .................................................................................................................... 7 Figure 5 The Impact System of Models .............................................................................................................12 Figure 6 Global food price scenarios by climate model, 2010–2050 ........................................................14 Figure 7 Agroecological zones of Brazil, Mexico, and Peru ........................................................................15 Figure 9 Brazil: Impacts of global agricultural price changes on net present value of agricultural GDP, by product group ............................................................................................................22 Figure 10 Brazil: Impacts of global agricultural price changes on net present value of agricultural GDP, by region ...........................................................................................................................23 Figure 11 Brazil: Impacts of global agricultural price changes on net present value of GDP, by sector................................................................................................................................................... 24 Figure 12 Brazil: Impacts of global agricultural price changes on household welfare, by income decile .................................................................................................................................................... 24 Figure 13 Brazil: Impacts of local yield changes on net present value of agricultural GDP, by region ...................................................................................................................................................................25 Figure 14 Brazil: Impacts of local yield
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