A Micro-Macro Economic Model for Assessment of Climate Change Impacts on the Agricultural Sector

The stochastic impact of climate change on farmers’ production plans may affect agricultural economic performance, by increasing uncertainty and thus affecting the choice of currently available production resources/input (water, land, labor and so on) that are needed to produce agricultural output. In this perspective, the paper presents a micro-macro integrated model/framework for the disaggregated quantitative assessment of the impacts of various shocks generated in different socio-economic and climate-driven simulations on the agricultural sector, with an application in the Italian Veneto region. Selected results report quantitative micro-macro computations. Under a “fragmented world scenario”, a 50% decrease in the cattle stock negatively affects the milk sector (-36% of total production) in such a way that generates a 0.10% decrease in the regional value added. Under an “unequal world” scenario, a 10% increase of cultivated land positively affects the wine grape sector (+14.3% of total production) in such a way that generates a 0.12% increase in the regional value added. Under a “wealthier world” scenario, a 20% increase of agricultural labor positively affects the grains sector (+31.6% of total production) in such a way that generates a 0.23% increase in the regional value added.