What are the Economic Losses due to the Impact of Climate Change in Cameroon? A Historical Analysis and Projection

Abstract

In a context where it is important to objectively assess the level of vulnerability of nations to climate change in order to better identify adaptation needs, this study evaluates the historical effects of climate change on overall output and sectoral productivity in Cameroon, and makes projections on potential future losses based on climate scenarios. Using historical data from 1980 to 2022 and robust econometric approaches, we find that climate change induced by temperature variations has caused losses of more than 17.36% of average GDP over the period, while precipitation variations have caused a loss of 6.86% of GDP. Furthermore, the loss observed in the agricultural sector is significantly higher than that in the manufacturing and service sectors. More specifically, the results show that temperature shocks caused a loss of more than 4,810 billion CFA francs in overall GDP and approximately 638 billion in agricultural value added, while precipitation shocks caused losses of 1,900 and 171 billion CFA francs in GDP and agricultural value added, respectively. Projections based on SSP1, SSP2, and SSP5 emission scenarios show that Cameroon could lose more than 31% of its current GDP by 2050 in the worst-case scenario. Implications in terms of policy intervention are discussed.