Economic Assessment of Farm Level Climate Change Adaptation Options: Analytical Approach and Empirical Study for the Coastal Area of Bangladesh

Bangladesh already suffers from continued global warming effects and sea level rising. Water stagnation, salinity intrusion, seasonal drought, and high humidity severely hamper agricultural production and cropping intensity in the coastal zone. However, there is an immense adaptation potential of farmers shifting their agricultural practices in response to climatic conditions. While many economists have examined the potential impact of climate change on farms, surprisingly few attempts have been made to systematically analyze farmers’ adaptation potential. Are such farm level adaptation practices likely to be effective stabilizing yields and income under climate change scenarios? The study investigates the existing adaptation practices and the impact of adaptation on productivity and on farm revenue. An intensive farm survey of 300 climate prone farm households is conducted in the coastal district. The vulnerability of yields is assessed using descriptive statistics. Then, the sensitivity of crop yields to weather variability and adaptation is estimated econometrically to get insight into farmers’ vulnerability. The study analyzes climate change impacts and adaptation implications by using farm analytical tools. Moreover, available adaptation options are assessed by investment analytical tools. In addition, the study empirically develops a bio-economic yield function and calibrates it to IPCC’s climate variability (temperature, precipitation) scenarios. The research may help to develop improved climate change adaptation policies using existing knowledge and adaptation practices.