AN ECONOMIC-ANALYSIS OF POTENTIAL IMPACTS OF CLIMATE-CHANGE IN EGYPT

Projections of climate impacts on crop yields simulated for different General Circulation Model (GCM) scenarios are used, in a recursively dynamic general equilibrium framework, to account for potential economy-wide impacts of climate change in Egypt, Comparing impact projections to those obtained under a reference, business-as-usual, scenario assuming some moderate changes in the political, economic or technological spheres, indicates that global warming has potentially negative effects. The analysis is based on a global assessment of potential climate change-induced variations in world commodity production and trade. The Egyptian agricultural sector, and the non-agricultural sector to a lesser extent, are projected to be increasingly less self-sufficient. Specific potential adverse impacts are identified. The simulation results show that high-cost adaptation measures involving major changes in the agricultural system and practices may mitigate these adverse impacts. Stimulating economic development of the rural areas and creating appropriate conditions for effective diffusion and development of technologies - particularly for the agricultural sector - would seem a desirable strategy. Perhaps, more importantly, the simulation results show that the assumption of exogenously determined technological progress may be inappropriate, in which case the potential adverse impacts of a future warming of the global climate are likely to be fewer than is indicated in this study - if prevailing constraints on productivity growth in the major food and feed grains are 'released' by endogenous advances in technology.