Epsilon Archive for Student Projects

Abstract

Global warming and its impacts are one of the most significant topics of the 21st century. The consequences of it have an impact on wide aspects of life. This thesis analyses changes in economic outcomes and agriculture by answering the following question: How will global warming affect the production of wheat in the different regions of the EU, and how will this affect prices, trade and economic welfare? This thesis studies one agriculture product – wheat. The literature suggests that wheat yield should increase in the Northern region and decrease in the Southern region of the EU by 2050., A partial equilibrium analysis suggests that these production changes will lead to exports increasing and a producer surplus increase in the North, while imports increase and producer surplus decreases in the South. Using a regression analysis, I test whether the increase in temperatures between 1980 and 2020 have already led to the changes in wheat production as predicted by the literature. Also, I find that higher temperatures are associated with higher wheat yields in both the South and North regions of the EU during the period 1980–2020.