Shocks related to weather variations have strong effects on developing countries’ economies. Climate change is expected to increase the occurrence and magnitude of extreme weather events such as droughts, floods or hurricanes that strongly affect agriculture and other activities. Yet, impacts on economic performance and livelihoods, as well as adaptation strategies and their environmental feedback, could be looked at deeper and assessed more accurately.
This double special issue follows up the annual conference of the Climate Economics ChairFootnote 1 on ‘Climate, Energy and Development’.Footnote 2 The objective of this issue is (1) to have a better understanding of the economic impacts of weather shocks in developing countries, as well as (2) to investigate the options to cope with climate change. The papers that have been selected encompass case studies from Africa (Ethiopia, Malawi, Uganda, Zambia) as well as Brazil and India.
2. The impact of weather shocks
Impacts related to weather shocks mostly take place in agricultural sectors, which are key to developing countries’ economic development. McCarthy et al. (Reference McCarthy, Kilic, Brubaker, Murray and de la Fuente2021) estimate that floods and droughts severely impact agricultural outputs in Malawi. Yet, weather shocks also impact non-agricultural sectors. Wages in non-agricultural sectors are shown to be impacted by weather events (Oliveira et al., Reference Oliveira, Palialol and Pereda2021); moreover, socio-economic factors closely related to development, such as education, which curb the long-term growth potential of populations, are also affected. Nübler et al. (Reference Nübler, Austrian, Maluccio and Pinchoff2020) assess how the cognitive capacities and educational achievement of girls and boys are negatively impacted by droughts in Kenya. The transmission channels at stake are the factors influencing educational achievements, that is, the health and household wealth of the younger generation, which are negatively affected by droughts. It is important to consider the impact of climate change and weather events not only through production outcomes, but also on welfare. Consumption indicators may help to understand how supply shocks can affect demand. Aggarwal (Reference Aggarwal2020) analyzes how temperature and rainfall variability influence consumption in India. The author shows that the impact differs according to the household's main economic activity: while industrial and agricultural households’ consumption is negatively impacted by a temperature increase, for service sector households consumption tends to increase. The author notices that climate change is likely to foster inequalities. Nutrition can also be an interesting indicator to be used in the context of agricultural sectors in developing countries, as it allows us to bypass the key issue of market access and focus directly on well-being outcomes. Antonelli et al. (Reference Antonelli, Coromaldi, Dasgupta, Emmerling and Shayegh2020) analyze the links between climate, food intake and labor supply in Uganda. Combining econometric estimates and overlapping-generation modeling, they infer the impact of climate change scenarios on food consumption and labor. Shocks and adaptation are also likely to have not only economic, but also environmental feedbacks: strategies undertaken to cope with climate risks may influence several indicators. Focusing on land-use change, Girard et al. (Reference Girard, Delacote and Leblois2021) give some insight on how adaptation in the agricultural sector may interact with deforestation in a literature review focused on Sub-Saharan Africa.
3. Climate change adaptation practices
Extreme weather shocks make adaptation practices and strategies all the more important. With regard to practices, private and public strategies have to be distinguished. First, public policies are likely to influence the coping capacity of agricultural households. Ajefu et al. (Reference Ajefu, Efobi and Beecroft2020) show how input subsidies may help households deal with the negative impact of rainfall shocks and smooth their consumption and food intake. When it comes to private adaptation, Girard et al. (Reference Girard, Delacote and Leblois2021) provide a comprehensive description of the risk-management and risk-coping strategies that may be put in place by agricultural households, and how the economic context may influence the choice of those strategies. McCarthy et al. (Reference McCarthy, Kilic, Brubaker, Murray and de la Fuente2021) estimate that in Malawi, green belts provide protection against floods. In contrast, there is little evidence showing that the adoption of current sustainable land management practices occurs due to the risk of weather shocks. Similarly, Alfani et al. (Reference Alfani, Arslan, McCarthy, Cavatassi and Sitko2021) show the limited impact of adaptation strategies to cope with the El-Nino related drought in Zambia and its impact on maize yields. Nshakira-Rukundo et al. (Reference Nshakira-Rukundo, Kamau and Baumüller2021) review the factors affecting the low uptake of insurance against these shocks by households. They identify several barriers to access. Some of them are purely related to the insurance market (affordability, product characteristics), while others are more behavioral (lack of reliable information, cultural factors). Thinking of adaptation in a broader perspective allows us to question social norms. Bezabih et al. (Reference Bezabih, Di Falco, Mekonnen and Kohlin2021) show that certifying property rights is likely to facilitate the long-term investment required by some adaptation strategies.
Overall, the papers in this special issue illustrate the diversity of the impacts related to weather and climate impacts and how they are enmeshed with local socio-economic conditions. Together with adaptation and mitigation strategies, this variety of impacts brings into question the effectiveness of the actual policy instruments needed to reach the Paris Agreement objectives and their coordination with the broader Objectives of Sustainable Development. This is a topic that deserves to be further investigated.