Economic Impacts of Climate Change in Tunisia: A Global and Local Perspective

Climate change is expected to have major impacts on Tunisia’s agriculture, economy and households from both global and local perspectives. Global climate change’s major impact channel is through changing world food prices, especially since Tunisia is a net importer of many food commodities. World market prices for food are projected to increase under climate change and the local climate change impacts manifest themselves through long-term yield changes. Yields for wheat, barley, and irrigated potatoes are expected to fall.

Results from the economic analyses—based on computable general equilibrium (CGE) modeling—show that climate change will lead to negative effects for the overall economy, the agricultural sector, and a total eduction in household incomes. Global (higher global food prices) and local effects (lower yields) together are rojected to reduce economic output in Tunisia by US$2.0–2.7 billion over 30 years. Agriculture may benefit from the higher world food prices, but the overall effects of falling yields on the sector are significantly

negative. Agricultural growth may drop 0.3–1.1 percentage points by the end of the study period. Household well-being is hit even harder. Farm households are the hardest hit by climate change in Tunisia, but rural nonfarm and urban households also suffer. Climate change is projected to reduce farm incomes by 2–7 percent annually, on average over 30 years. Rural nonfarm and urban households as net consumers of food are most affected by the rising global food prices as a result of climate change.