A Stochastic Simulation Approach to Estimating the Economic Impacts of Climate Change in Bangladesh

Abstract

Climate change assessments often inadequately address uncertainty when estimating damages. Using a dynamic economy-wide model of Bangladesh, we estimate and decompose damages from historical climate variability and future anthropogenic climate change. Our stochastic simulation approach avoids biases caused by non-linear damage functions and fixed occurrences of extreme events in historical data. Using ten climate projections, we find that future anthropogenic climate change damages until 2050 are, on average, one-fifth of those from historical climate variability. Climate change also alters the temporal distribution of damages and slows Bangladesh’s long- run shift (adaptation) into dry (winter) season rice production.

Citation

Thurlow, J.; Dorosh, P.; Yu, W. A Stochastic Simulation Approach to Estimating the Economic Impacts of Climate Change in Bangladesh. UNU-WIDER, Helsinki, Finland (2011) 22 pp. [WIDER Working Paper No. 2011/86]

A Stochastic Simulation Approach to Estimating the Economic Impacts of Climate Change in Bangladesh

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