EXERCISING RICARDIAN EMPIRICS TO INVESTIGATE THE IMPACT OF CLIMATE CHANGE ON DAIRY PRODUCTION IN PAKISTAN

This study examined the economic impact of climate change on dairy production in Pakistan based on a Ricardian model. Using secondary data from the Household Integrated Economics (HIES) Survey 2015-16, Net Household Revenue (NHR) was calculated and then regressed with climatic variables such as temperature and rainfall and also suitable socio-economic variables. The Results confirmed that dairy production in Pakistan is highly sensitive to climate change; a non-linear relationship existed between climate change and dairy productivity. Estimated marginal impacts suggested considerable losses in NHR due to increases in maximum temperature and modest losses due to increases in rainfall. Socio-economic variables like age of dairy farmer and education level were found to be significant in compensating for loss in revenue arising from changing climate, if addressed properly from policy corridors. Otherwise, climate change is likely to lead to increased poverty and fluctuating livelihoods of dairy farmers in Pakistan. Major policy level interventions by governments are required in the nation's dairy sector.