Sustainable Supply Chain Management in the Face of Climate Change : Estimating the Impact of Temperature and Precipitation Changes on Brazilian Soybean Yield

Abstract

While climate change is known to pose a variety of highly relevant economic risks, there are still many probable implications and economic fields with a lack of available data and research. This thesis explores the potential interrelations of climate change and global supply change management based on the case of Brazilian soybean supply. The main research question, how a change in temperature and precipitation affects Brazilian soybean yield, is investigated using historical weather and soybean yield data. A panel data crop yield regression model was developed to estimate the impact of changing weather variables on yield productivity. The results suggest that a one-degree Celsius increase in average annual temperature in Brazil leads to a 13.8% decrease in average soybean yield, a 100-millimeter increase in annual precipitation is associated with a 1.5% increase in average soybean yield, and lastly, a one-degree Celsius increase in the average temperature during the driest quarter of the year was found to lead to a 1.6% decrease in average annual soybean yield in Brazil. By contextualizing these results within the global sustainable soybean supply chain management theory, this thesis further adds valuable insights to the existing new climate economy literature and the relevant discussion of the economic implications of climate change. Lastly, this thesis aims to advocate for how increasing available climate data and analysis can limit potentially harmful consequences and encourage further research in the still-developing field of sustainable supply chain management to provide more information to policymakers and decision-makers.