IMPACT OF ENVIRONMENTAL DEGRADATION ON IVORIAN ECONOMY

1. IMPACT OF ENVIRONMENTAL DEGRADATION ON IVORIAN ECONOMY By Karine KOUASSI LOU

2. PLAN • Introduction • Deforestation, climate change and economic impact in Côte d‘Ivoire • Recommendations • Conclusion

3. INTRODUCTION • Côted’Ivoire is farfromachieving the MDGs • Climatechange is anadditionalchallenge to achieve the MDGs • The objective of thisstudy is to highlight the potentialrisks of climatechangeon the Ivorianeconomy.

4. Ivorianforestdisappearsquickly Ivorianforestdisappearsquickly

5. annualrainfall has decreasedsignificantly

6. average annualtemperatureshas risensharply

7. Economic impact of climate change • Brou (2005) shows that the average weight of freshcocoabeansduringharvestdependson the magnitude of the rainfall, and more generallyon the level of agro-climaticdrought. • Climatevariability have a significant effect onagriculturalproduction. Indeed, deterioratedweatherconditionscancause a decline of agriculturalproduction. • What is the impact of a decline of x% of agriculturalproductionthroughout the economy?

8. METHODOLOGY • Construction of a Computable General Equilibrium Model • Social AccountingMatrix (SAM) with 2006 as benchmark year is divided into twenty-five (23) accounts as follows:2 accounts for factors of production: capital and labor;4 accounts of economic agents: households, businesses, government, rest of world;7 accounts for taxes and state grants: Grants / production taxes on income and assets, non-deductible VAT, taxes on imports excluding VAT, excise duties and export taxes, other indirect taxes products, other taxes / Producer3 branch accounts : agriculture , industry, services;3 accounts of composite products: agricultural product, industrial product, services product;3 accounts of product external trade: agricultural product, industrial product, merchant services1 accumulation account.

9. The choice of functional forms and formulation of equations is essentially based on the model EXTER 2 of Decaluwé, Martens and Savard (2001) • Main hypothesis of the model: • Factors of production are substitutable according to a Cobb-Douglas relationship, • There is a perfect complement to Leontief, • Consumers have a utility function Cobb-Douglas • The labor is perfectly mobile between the industries of production and capital is specific to each industry of service production • Factors of production are internationally immobile • Domestic producers face export demand to price elasticity over

10. MAIN RESULTS Impact of a decreaseof 10% of agricultural production with Computable General Equilibrium Model

11. RECOMMENDATIONS • Effective implementation of the National Reforestation Programme: the results achieved since 1926 (nearly 300,000 ha of plantations carried out) are still largely insufficient to cover the deficit of 6% (2 million ha) of forest cover • Adoption of incentives for the development of community reforestation • Creation of a Forest Department in the National Centre for Agronomic Research (NCAR) to revive the activities of the Forest Research

12. CONCLUSION • Côte d'Ivoire is an agricultural country (agricultural sector represent around 30% of GDP) • Significant degradation of its forest resources are significantly degradated, and contribute to increase climate variability and change. • A negative impact on agricultural production due mainly to bad weather has a significant influence on the country's wealth and reducing poverty. • Bring the Ivorianforestcoverage rate to a levelhigherthan 20%, essential to the ecological balance and economicdevelopment of the country.

13. THANK YOU