Z. Malakoutikhah; Z. Farajzadeh
Abstract
Introduction: The increase in greenhouse gases has affected global weather, resulting in changes in climate zones. Climate change is mostly characterized by changes in temperature. There is strong evidence showing that climate change will adversely affect the world especially developing countries in ...
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Introduction: The increase in greenhouse gases has affected global weather, resulting in changes in climate zones. Climate change is mostly characterized by changes in temperature. There is strong evidence showing that climate change will adversely affect the world especially developing countries in the following decades. Agricultural activities are more vulnerable to climate change as they are more dependent on water resources and temperature. Moreover, damages to agricultural activities may contract output in other sectors as well. Given the importance of the issue, Iran is a prominent example since it is located in an arid and semi-arid region, and its average annual precipitation is less than one-third of the global precipitation. In addition, there is a large body of literature indicating an increase in average temperature of Iran over the last decades. Therefore, this study aims to investigate the effect of climate change on the economic growth in Iran.Materials and Methods: The Solow-Swan growth model was applied to investigate economic growth under climate changing environment. The growth models were estimated using time series data of 1350-1395 (1971-2016). In the growth model, a damage function, change in which damage is a function of temperature, was applied to examine the effect of climate changes. The growth model determinants are physical as well as other types of capital including human, social and environmental capitals. Internet access and phone access were used as proxies for social capital. Also, literacy rate, primary school enrolment rate, and university students were applied as proxies for human capital. Agriculture, mining, and oil and gas production were considered as proxies for natural and environmental resources. Another proxy for environmental capital was the value of natural resources marginal product. This variable is defined as the ratio of CO2 damages to GDP. Trade impact on economic growth was also investigated through using Foreign Direct Investment (FDI) and trade openness variables. Also, to examine the trend of temperature, an ARMA model was used. GDP is technically considered as an endogenous variable so Generalized Method of Moments (GMM) method is applied.Results and Discussion: The specification of ARMA model revealed two significant moving average trends including five-year and nine-year. These trends indicate an increasing average for temperature, leaving less doubt about the phenomenon of climate change. Our results showed that the increase in temperature will negatively affect economic growth. It was also found that one-degree increase in average temperature is expected to reduce Iranian GDP by 5-6.6 percent. Physical capital showed the highest contribution to Iranian GDP. Its contribution to the economic growth, in terms of elasticity, was found to be 0.08-0.16. The corresponding values for human and social capital were 0.02-0.06 and 0.03-0.08, respectively. However, environmental capital failed to affect the economic growth significantly. Among the variables applied for human capital, university students were found to play a more significant role. The insignificant effect of environmental capital on economic growth may be attributed to its nature that is used as a public good, resulting in intensive as well as irrational use. Among the variables applied for environmental capital, the value of natural resources marginal product showed a slightly strong effect, needing to be considered as a proxy for environmental capital. Also, FDI showed an insignificant effect; however, trade openness was found to affect economic growth positively.Conclusion: The general trend of the economic growth in Iran is far from what is expected. In addition, this trend is threatening by, among the others, climate change which is characterized by increasing average temperature as well as decreasing precipitation. Also, as far as the capital is considered, economic growth in Iran is highly dependent on physical capital while the contribution of other types of capital including human, social and environmental capital is not significant. However, it is worth noting that environmental capital seems to be used intensively while for human capital reasons like inappropriateness of labor quality and education system is more acceptable. Even for physical capital, higher contribution is expected since the Iranian economy enjoys lower capital accumulation. It was also found that removing trade barriers and being more connected with the global economy may provide more opportunities to enjoy higher growth.
N. Ashktorab; Gh. Layani; Gh.R. Soltani
Abstract
Introduction: The area under cultivation and yield of crops are affected by various factors, some of which are controllable and some others are uncontrollable. Controllable factors are divided into two types of price and non-price factors. Among the price factors, prices of agricultural products and ...
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Introduction: The area under cultivation and yield of crops are affected by various factors, some of which are controllable and some others are uncontrollable. Controllable factors are divided into two types of price and non-price factors. Among the price factors, prices of agricultural products and inputs play an important role in expanding the cultivation area. Uncontrollable factors also have great effects on increasing the cultivation area of agricultural products. Two of the most important factors that affect yield are weather and climate conditions. The agricultural sector that is one of the sectors that is most vulnerable to climate changes has often been used for political debates and research projects. In the agricultural sector, cereal and especially maize, have a special place in the world both in production and in the area under cultivation. Therefore, given the importance of this product, investigating the effects of climate changes on cultivation area and yield of maize needs careful examination.
Material and Method: Panel data in econometrics has many advantages over using cross-sectional data and time series. The Hausman test is used to determine the fixed and random effects in the panel data. Also panel data unit root tests will be necessary. In this study, several price and non-price factors are considered:
(1) Cit = f(Wit, RPit-1, Rit, Tit, Cit-1)
where Cit: maize cultivation area in province i in year t
Wit : wheat irrigated area and dry area in province i in year t
RPit-1: relative imposed price of maize and wheat in t-1.
Rit : rainfall in province i in year t
Tit : temperature in province i in year t
Cit-1: maize cultivation area in province i in year t-1
(2) Cit = α1 Wit + α2 RPit-1+ α3Rit+ α4 Tit+ α5 Cit-1+ uit
In addition, in this study the Ricardian model was used to examine the impact of climate change on maize yield.
(3)
: Yield per hectare of maize in province i in year t
: Temperature in province i in year t
: Rainfall in province i in year t
: Latitude and height above sea level, respectively.
The data used in this study were for the provinces of Fars, Khuzestan, Kerman, Kermanshah and Elam for the period 1993-2011.
Results and Discussion: According to Table 1, all variables are significant at the one percent level of confidence. Therefore, all of the variables are stationary.
Table 1- Results of stationary test for variables
variables Levin-Lin & chow stat. Pesaran& Shin stat. Stationary state
Cultivation area of maize 2.51*** ***1.13 I(0)
Cultivation area of Irrigated wheat 2.45*** 2.89*** I(0)
Cultivation area of Dry wheat 5.02*** 3.76*** I(0)
rainfall 8.74*** 6.09*** I(0)
Temperature 5.78*** 3.40*** I(0)
Relative imposed price of maize to wheat 2.74*** 1.36*** I(0)
Source: Research calculations
Based on the results shown in Table 2, all variables are significant. The highest and the lowest estimated coefficient is for the relative imposed price of maize to wheat (6.68) and cultivation area of dry wheat (0.01).
Table2- Results of the factors affecting the maize cultivation area in selected provinces
Variables coefficient Standard deviation T-statistics
Constant -2.49* 1.23 -2.03
Imposed price ratio with a lag 6.68*** 1.32 5.06
Cultivation area of Irrigated wheat -0.42* 0.22 -1.88
Cultivation area of Dry wheat -0.01* 0.006 -1.98
Cultivation area of maize with a lag 0.66*** 0.06 10.28
Rainfall 0.17*** 0.06 2.86
R-squared 0.97 Durbin-Watson stat 1.84
Adjusted R-squared 0.96 F-statistic 184.5
Source: Research calculations
Table 3 indicates the results of the Ricardian model by using the panel data method. R2 in this model is equal to 86 % and it shows that %86 of the variation of maize yield is explained by variables. According to the results,the rainfall altitude, the rainfall height above sea, the square of rainfall and latitude have significant effects on maize yield.
Table 3- Results of climatic factors on maize yield in selected provinces
Variables coefficient Standard deviation T-statistics
Constant 12.73*** 2.55 4.99
Temperature -0.11 0.20 -0.52
Rainfall 0.002*** 0.0002 7.32
Height above sea level -0.0004*** 0.0001 -3.51
Square of temperature 0.001 0.005 0.17
Square of rainfall -2.62*** 2.45 -10.71
Latitude -0.07*** 0.02 -3.05
R-squared 0.86 Durbin-Watson stat 1.59
Adjusted R-squared 0.81 F-statistic 5.15
Source: Research calculations
Conclusions: In this study, the factors affecting maize cultivation area and yield as a plant that uses a lot of water in Fars, Khuzestan, Kerman, Kermanshah and Elam provinces were investigated. The results showed that non-price factors such as rainfall and temperature have a significant impact on the cultivation area of maize. Due to the emphasis placed on the policy of self-sufficiency in wheat, irrigated and dry cultivation area of wheat and imposed price of wheat, mentioned by Garshasbi et al., have a significant impact on the cultivation area of maize in the selected provinces. The results indicated that according to specific climatic conditions in these provinces, irrigated wheat can be a proper alternative product for maize. Due to Vaseghi and Esmaeili, climate changes could have adverse effects on maize yield and can lead to a reduction of maize cultivation area. Due to the inevitability of global warming, further investigation of this issue is very important.
Keywords: Maize, Rainfall, Temperature, Yield, Cultivation area, Ricardian model, Panel data method
