Application of the Ricardian approach to investigating the effect of climate change on agricultural land rent

Today climate change is one of the most important environmental challenges of 21 century that cause serious economic consequences. This study has been done due to important of climate change and its effect on agricultural sector with purpose of investigating the effect of climate variables on land rent in Golestan province by using Ricardian approach and panel data at 1981 to 2011. Thus, temperature, precipitation and production cost data have been used. The results of Ricardian model show that temperature and precipitation variables have a negative and a positive effect on agricultural rent, respectively. In other words with increase 17.25°Cof temperature, rent of agricultural land have been reduced and with increase 259.72 mm of precipitation, rent of agricultural land have been increase. Also the results of different scenarios during past years show that climate change had negative effect and decrease 38 percent rent of products in future. According these results, development of new varieties and new hybrids of resistant products and improve of water resources management to tackle the problem of water shortage, risk of temperature changes and other weather conditions have been suggested.