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Trends in Applied Sciences Research
Year: 2012  |  Volume: 7  |  Issue: 10  |  Page No.: 872 - 880

Economic Impact of Climate Change on the Malaysian Palm Oil Production

Zahid Zainal, Mad Nasir Shamsudin, Zainal Abidin Mohamed and Shehu Usman Adam    

Abstract: Climate change had become an important global environmental issue. Studies on different crops had evidenced that adverse impacts accrues to crop plants from climate variability. This could take the form of increase in temperature, flood or pest control challenges. This study has estimated the potential impact of climate change on palm oil production in Malaysia. The Ricardian model was applied to estimate the marginal impact of temperature and rainfall variations. The results show that climate change has significant nonlinear impact on net revenue. The total marginal increase in temperature and rainfall resulted in a declined of RM 40.55, RM 48.69 and RM 37.61 ha-1 for Peninsular, Sabah and Sarawak, respectively. Meanwhile, by projection using regional climate modeling system, PRECIS, the palm oil is predicted to lose an average (RM ha-1) amount of RM 344.12, RM 294.20 and RM 105.62 for Peninsula, Sabah and Sarawak, respectively in year 2099 Based on these results, the development of plant varieties tolerant to high temperatures and water low use is suggested to ease this impact.

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