The Effects of Climate Change on Agricultural Production and Iranian Economy

The aim of this study is to assess impact of climate change on agriculture sector، production of the other sectors and national production in Iranian economy. To this end، farm production function considering climate factors (temperature and precipitation) estimated using the ARDL (Auto Regressive Distributed Lag) approach. Then، Social Accounting Matrix with sector supply limitation analysis framework was applied to calculate production impact on the other sectors. For this purpose the adjusted demand side model، in form of mixed model of SAM on the base of 2006 SAM for Iran at the national level is used. The results indicated that agriculture production decreased by -5. 37percent، construction by -2. 27percent and services by -1. 64 percent. The result also showed that decreases in the national production and income of production factors due to this shock would be -9. 5 and -25. 54 percent respectively. Decrease in the production of agriculture sector affected low-deciles of rural and high-deciles of urban households more than other income groups.