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A Structural Ricardian Valuation of Climate Change Impacts on Agriculture in Pakistan

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Mirza Nomman Ahmed

This book presents the economic analysis of the impacts of climate change on agriculture in Pakistan. Particular emphasis is laid on the magnitude of implicit adaptations in overall climate impact assessment and the analysis of selected adaptation options. Using a hedonic pricing model and a revealed choice approach, this study identifies the impacts of climate change on agricultural incomes, depicts the spatial patterns and seasonality of the impacts, and models the future adaptation behavior of farmers in the crop sector. A high sensitivity of farming in Pakistan to climate change is confirmed. With a changing climate and income in mind, farmers in Pakistan are more likely to choose rice, vegetables and maize, whereas they move away from wheat, sugarcane, cotton and fruits.

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Figure 2.1 Physiographic Division of Pakistan ........................................................................ 28 Figure 2.2 Pakistan – Boundaries and Geographical Features ................................................. 28 Figure 2.3 Climatic Classification of Pakistan ......................................................................... 33 Figure 2.4 The South-East-Asian Monsoons ........................................................................... 35 Figure 2.5 The Indus Basin and the Water Resources of Pakistan, 2008/2009 ....................... 39 Figure 2.6 Areas of Physical and Economic Water Scarcity ................................................... 39 Figure 2.7 Agro-Ecological-Zones of Pakistan ........................................................................ 41 Figure 2.8 Utilization of Arable Land, 1999-2009 ................................................................... 46 Figure 2.9 Arable Land Abundance in Southern Asia 2008 (hectares/capita) ......................... 47 Figure 2.10 Major crop production regions of Pakistan ........................................................... 49 Figure 2.11 Provincial average wheat yield development in Pakistan 1987-2006 .................. 51 Figure 2.12 Provincial average rice yield development in Pakistan 1987-2006 ...................... 53 Figure 2.13 Provincial average Cotton lint yield development in Pakistan 1987-2006 ........... 55 Figure 2.14 Provincial average Sugarcane yield development in Pakistan 1987-2006 ........... 57 Figure 2.15 Provincial average Vegetables’ yield development in Pakistan 1987-2006 ......... 59 Figure 2.16 Tariff averages 2001/02 & 2007/08 ...................................................................... 71 Figure 2.17 The importance of Agriculture- measured by key indicators 1960-2004 ............. 74 Figure 2.18 Sectoral contribution to GDP, 1990-2009 ............................................................ 75 Figure 2.19 Evolution of Agricultural Trade in Pakistan and its importance 1961-2009 ........ 80 Figure 2.20 Structure of Investments in the Agricultural Sector of Pakistan 1992-2003 ........ 83 Figure 2.21 Agricultural credit advanced by Zarai Taraqiati Bank Limited (ZTBL) ............. 84 Figure 3.1 Climate and soil interaction – impacts on crops and livestock ............................... 89 Figure 3.2 The response of photosynthesis to internal CO2 ..................................................... 93 Figure 3.3 Photosynthesis-Temperature Relationship ............................................................. 93 Figure 3.4 Annual Temperature (°C) Trend 1901-2000 Pakistan ............................................ 97 Figure 3.5 Mean Annual Temperature Anomaly – Pakistan (°C)...

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