This paper uses the dynamic computable general equilibrium (DCGE) model to evaluate the economic impact of technologies developed to foster adaptation to climate change in domestic rice production, related food industries, and economic welfare in Japan, where high temperatures in 2010 led to rice quality deteriorating and other serious problems over and above a mere decline in output. Three scenarios were simulated: one without temperature change, one with temperature change but rice cultivars unchanged, and one with both an increase in temperature and the adoption of high temperature-tolerant rice varieties. Our simulations indicate that new rice cultivars with high temperature tolerance would reduce economic welfare losses from 264 to 118 billion yen during the simulation period. Paddy-rice farming production increased because product prices increased. Farming inputs also rose correspondingly, triggering an increase in agricultural land rents. Non-agricultural household and small-scale paddy rice-growing household suffered welfare loss. Conversely, medium- and large-scale paddy rice-growing and other farming households saw their welfare boosted. These differences were attributable to the impact of changes in agricultural land rents to their total income. All impacts, not only on economic welfare but also production in the case with new cultivars of high temperature-tolerant rice were smaller than in the those without such cultivars, which indicates that adopting new adaptive technologies eases the economic impact of a warmer climate.
Akune, Y; Okiyama, M; Tokunaga, S
Economic Evaluation of Dissemination of High Temperature-Tolerant Rice in Japan Using a Dynamic Computable General Equilibrium Model
Jarq-Japan Agricultural Research Quarterly