ECONOMIC AND WELFARE IMPACTS OF CLIMATE-CHANGE ON DEVELOPING-COUNTRIES

The impact of global climate change on developing countries is analyze d using CGE-multimarket models for three archetype economies represent ing the poor cereal importing nations of Africa, Asia, and Latin Ameri ca. The objective is to compare the effects of climate change on the m acroeconomic performance, sectoral resource allocation, and household welfare across continents. Simulations help identify those underlying structural features of economies which are the primary determinants of differential impacts; these are suggestive of policy instruments to c ountervail undesirable effects. Results show that all these countries will potentially suffer income and production losses. However, Africa, with its low substitution possibilities between imported and domestic foods, fares worst in terms of income losses and the drop in consumpt ion of low income households. Countervailing policies to mitigate nega tive effects should focus on integration in the international market a nd the production of food crops in Africa, and on the production of ex port crops in Latin America and Asia.