Climate Change and Agriculture: An Economic Valuation of Flood Risk Mitigation

¹ Department of Economics, Faculty Economics and Business, Universitas Muhammadiyah Yogyakarta, Indonesia
² Ungku Aziz Centre for Development Studies, Universiti Malaya, Malaysia
³ Magister Ekonomi, Post Graduate Program, Universitas Muhammadiyah Yogyakarta, Indonesia

^* Corresponding author: endahsaptuty@umy.ac.id

Abstract

Climate change has a negative impact especially on agriculture. Due to unpredictable seasonal changes and floods, agricultural land can be damaged. Mitigation strategies are needed to anticipate more serious impacts from the threat of climate change. According to this research, farmers in Temanggung, Indonesia, are willing to pay (WTP) for climate change mitigation programs because their land is flooded. We examined the ways in which social capital influences tobacco farmers’ willingness to contribute to climate change mitigation as well as the other factors that affect climate change mitigation. To monetarily assess farmers’ preferences for planned mitigation programs, we use the contingent valuation method (CVM). This method ensures the inherent value of addressing climate issues in the agricultural sector of Temanggung, Indonesia. Sample farmers received a prepared questionnaire. This study found that 78% of people surveyed were willing to pay IDR 17,000.00 (USD 1.05) for climate change mitigation programs and several factors, including assets, social capital, and flood characteristics, had a greater influence on their willingness to pay. This research will help policymakers create better mitigation frameworks to combat the adverse impacts of climate change, especially on the agricultural sector.