Win for agriculture resource economist

27 July 2011

A specialist in global warning, Dr Seo's paper titled 'A Microeconometric Analysis of Adapting Portfolios to Climate Change: Adoption of Agricultural Systems in Latin America' published in Applied Economic Perspectives and Policy made a pioneering contribution to the economics of climate change by developing a Geographically scaled Microeconometric model (G-MAP model).

The G-MAP model aims to provide a guide map of adaptations to climate change to the global communities.

A Senior Fellow in Research in our Faculty, Dr Seo's research was based on a survey of 2300 households as part of a World Bank project. The households were located in seven South American countries with differing and distinct vegetations including: Argentina, Brazil, Chile, and Uruguay in the Southern Cone and Colombia, Ecuador, and Venezuela.

The paper examined how each household choose one of three agricultural systems and maximised profit from their chosen system: a specialised crop system, a mixed system, and a specialised livestock system.

The results indicated that choices and land values of agricultural systems across South America are sensitive to climate.

"Simulating the impacts under selected climate scenarios, we find that under a hot and dry CCC scenario, farmers turn more frequently to a mixed system (+3.5 percent) by giving up specializing in crops (-4 percent)," states Dr Seo.

Dr Seo paper reported that when climate becomes wet under the Parallel Climate Models (PMC), farmers move away from a specialised livestock (-4 percent) towards adopting crops. Under the Canadian Climate Change Scenario, the reduction in land value amounts to 20 percent in the case of specialised crop farms, but is limited to 10 percent for integrated farms.

"Therefore, integrated farming is found to be more resilient to severe climate change due to its diversification benefits," the paper states.

Combining the results from all three systems, the research found that South American agricultural income will decline due to climate change. The losses will amount to 8 percent under the severe CCC scenario, but to only 4 percent under the mild PCM scenario. However, when farmers do not adapt the damage estimates double to 18 percent under the CCC scenario.

Contact: Dr Niggol Seo

Phone: 02 9351 5029

Email: 3620132b5e264d114a0936443655260c116f010b3f740914