Economic impact of climate change on crop farming in Bangladesh: An application of Ricardian method

Abstract Climate change may influence crop income negatively or positively. To address this, present study is an attempt to quantify the impacts of climate change on net income from crop farming in Bangladesh using Ricardian method. For estimating the relationship between net crop income and climatic parameters, farm household and climate data were collected from the selected agro-ecological zones (AEZs) in Bangladesh. The results revealed that net crop income is sensitive to climate, particularly to seasonal temperature. Temperature rise was found to be positively influencing net crop income in AEZs having adequate irrigation facilities. Marginal impact estimates suggest that increase in temperature and rainfall will lead to increase in net income from crop farming in Bangladesh. However, the impacts will vary significantly across cropping seasons and space (studied AEZs). Using selected AOGCM scenarios, the study predicts that net crop incomes are expected to increase in the future. The empirical findings underscore the need for policy makers to take agro-ecological zones specific effects of climate change into consideration when formulating and implementing the adaptation strategies in Bangladesh.