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Abstract
This study estimates a Climate Adjusted Total Factor Productivity (CATFP) for agriculture in
Latin America and Caribbean (LAC) countries. Climatic variability is introduced in SPF models
by including average annual maximum temperature, precipitation and its monthly intra-year
standard deviations, and the number of rainy days. Climatic conditions have a negative impact
on production becoming stronger at the end of the 2000s compared to earlier periods. An Error
Correction Model is applied to investigate catch-up and convergence across LAC countries.
Argentina defines the frontier in LAC and CATFP convergence is found across all South
American countries, Costa Rica, Mexico, Barbados and The Bahamas. Using IPCC 2014
scenarios, the study shows climatic variability induces significant reductions in productivity over
the 2013-2040 period. Estimated productivity losses due to climatic variability range from USD
12.7 to 89.1 billion in the LAC region depending on the scenario and the discount rate.