The Impact of Climate Change on Indian Agriculture

This paper estimates the impact of climate change on Indian agriculture. I use a 40-year district-level panel data set covering over 200 Indian districts to estimate the e¤ect of random year-to-year variation in weather on agricultural output. These panel estimates incorporate farmers’within-year adaptations to annual weather shocks. These estimates, derived from short-run weather e¤ects, are relevant for predicting the medium-run economic impact of climate change if farmers are unable to adapt quickly. I …nd that projected climate change over the period 2010-2039 reduces major crop yields by 4.5 to 9 percent. The long-run (2070-2099) impact is dramatic, reducing yields by 25 percent or more in the absence of long-run adaptation. These results suggest that climate change is likely to impose signi…cant costs on the Indian economy unless farmers can quickly recognize and adapt to increasing temperatures. Such rapid adaptation may be less plausible in a developing country, where access to information and capital is limited. Keywords: climate change, India, agriculture, panel data JEL Classi…cation Codes: Q54, Q56, O13, C23 I thank my advisors, Esther Du‡o and Michael Greenstone, for their encouragment and guidance. I thank C. Adam Schlosser of MIT’s Center for Energy and Environmental Policy Research for guidance with the NCC data set and Kavi Kumar of the Madras School of Economics for guidance with the World Bank India Agriculture and Climate Data Set. Nivedhitha Subramanian and Henry Swift provided excellent research assistance. I thank Daron Acemoglu, Joseph Aldy, Miriam Bruhn, Jessica Cohen, Greg Fischer, Douglas Gollin, Rick Hornbeck, Jeanne Lafortune, Doug Miller, Ben Olken, José Tessada, Robert Townsend and Maisy Wong for their comments and suggestions. The paper also bene…ted from comments by seminar participants at University of British Columbia, University of California Merced, Colgate University, Harvard University Kennedy School of Government, MIT, Resources for the Future, Smith College, University of Maryland, University of North Carolina and Williams College. All errors are my own. yDepartment of Economics; University of Maryland; College Park, MD 20742; email: guiteras@econ.umd.edu.