Economic Analysis of the Effects of Climate Change Induced by Greenhouse Gas Emissions on Agricultural Productions and Available Water Resources (Case Study: Down Lands of the Taleghan Dam)

Introduction: Greenhouse gases absorb the radiation reflected from the earth surface which would otherwise be sent back into space. The composition and mixture of these gases make life on earth possible. In recent years, human activity has affected both the composition and mixture of the atmosphere, modifying the climate. When climate changes, crop production is affected. There are many studies that consider the type and amount of production changes for particular crops, places and scenarios. Others attempt to expand knowledge about production changes and their impacts on economy and regional welfare. Climate change affects agriculture through direct and indirect affects i.e. temperature, and precipitation changes in the biological and physical environment. Restriction in water availability is one of the most dramatic consequences of climate change for the agricultural sector. Water availability is expected to be even more limited in the future. Scarcity of water is due to potential evapotranspiration increase. It is related to increase in air and earth surface temperatures. This phenomenon is important in low-precipitation seasons, and is even more severe in dry areas. The number of regions with loss of soil moisture is expected to increase, resulting in direct economic consequences on the production capacity. Considering the above decisions, the main objective of this paper is to integrate climate change into agricultural decision-making by using an Economic Modeling System to identify the impacts of climate change induced by greenhouse gas emissions on agricultural sector productions and available water resources in the down lands of the Taleghan Dam. Materials and Methods: In this study, the effects of greenhouse gases on climate variables of temperature and precipitation under emission scenarios A1B, A2 and B1 were evaluated using time series data from 1981- 2008 and General Circulation Models (GCM). Then Ordinary Least Squares (OLS) was used to survey the impacts of climate variables on the selected products yield. Changes in agricultural production, farmer’s gross profit and economic value of irrigation water were analyzed and compared with the base year by the regression analysis results in the Positive Mathematical Programming (PMP) model. This methodology that was developed by Howitt (1995) to calibrate agricultural supply models has been used to link biophysical and economic information in an integrated biophysical and economic modeling framework and to assess the impacts of agricultural policies and scenarios. These models are also accepted for analyzing the impact of climate change and water resources management policies and scenarios. The PMP model used in this paper is a three-step procedure in which a non-linear cost function is calibrated to observe values of inputs usage in agricultural production. In the basic formulation, the first step is a linear program providing marginal values that are used in the second step to estimate the parameters for a non-linear cost function and a production function. In the third step, the calibrated production and cost functions are used in a non-linear optimization program. The solution to this non-linear program calibrates to observed values of production inputs and output. The required data in this paper were collected from meteorological stations and the relevant agencies in the Qazvin province. Regression functions estimated in Eviews software package and the PMP model were solved in GAMS (General Algebraic Modeling System) software. Results and Discussion: The results obtained in this paper showed that with emissions of greenhouse gases under the studied scenarios (A1B, A2 and B1), the average annual climate variables of temperature and precipitation changes from 1.64 to 2.28 °C and from20.92 to 1.1 mm, respectively. With these change, the yield of the most selected products decreases in the down lands of Taleghan Dam. Moreover, the obtained results showed that with emissions of greenhouse gases under the scenarios A1B, A2 and B1, the total acreage of the selected products changes from 2.18 to 4.09 percent. Total used water also decreases from 1.67 to 5.18 percent. Moreover, with emissions of greenhouse gas under the above scenarios total farmer’s gross profit decreases from 1.93 to 3.72 percent. However, the economic value of water increases from 4.27 to 13.6 percent in comparison with the base year. Conclusion: In this study finally, in order to reduce greenhouse gas emissions in the vicinity of the down lands of the Taleghan Dam, it is recommended that the government should use punitive tools (green complications) for polluting units and serve the private sectors in forestry projects in the vicinity of the industrial towns. Keywords: Agricultural productions, Climate change, Greenhouse Gases, Positive Mathematical Programming, Taleghan Dam