Agriculture and climate change in global scenarios: why don't the models agree

Agriculture is unique among economic sectors in the nature of impacts from climate change. The production activity that transforms inputs into agricultural outputs involves direct use of weather inputs (temperature, solar radiation available to the plant, and precipitation). Previous studies of the impacts of climate change on agriculture have reported substantial differences in outcomes such as prices, production, and trade arising from differences in model inputs and model specification. This article presents climate change results and underlying determinants from a model comparison exercise with 10 of the leading global economic models that include significant representation of agriculture. By harmonizing key drivers that include climate change effects, differences in model outcomes were reduced. The particular choice of climate change drivers for this comparison activity results in large and negative productivity effects. All models respond with higher prices. Producer behavior differs by model with some emphasizing area response and others yield response. Demand response is least important. The differences reflect both differences in model specification and perspectives on the future. The results from this study highlight the need to more fully compare the deep model parameters, to generate a call for a combination of econometric and validation studies to narrow the degree of uncertainty and variability in these parameters and to move to Monte Carlo type simulations to better map the contours of economic uncertainty.     

Agriculture and global climate stabilization: a public good analysis

The stabilization of global climate presents one of the most complex problems in public good provision the world has faced. Continuation of “business as usual” policies, leading to warming of more than 2 degrees over the next year, will produce significant damage to agricultural systems and catastrophic damage to the natural ecosystems that ultimately support agriculture. The best solution to the public goods problem is a “contract and converge” agreement in which the ultimate outcome is a common global entitlement to CO₂ emissions per person.     

The economic impacts of technology and climate change: New evidence from U.S. corn yields

Over the past century, U.S. farmers have been offered a steady stream of new agricultural technologies, and more recently, experienced climate change. Because these two events have been occurring simultaneously, identifying their separate effects is difficult, and misimputation is easy. This article explicitly examines the economics of technical change and the interaction between weather and technology as revealed in a half century of panel data on U.S. Midwest rainfed state‐average corn yields. Observed yields reflect two components: yield potential and damage to the potential caused by weather and pests. Yield potential is modeled as a stochastic production frontier where nitrogen fertilization, public corn research, and introduction and adoption of biotech corn seeds impact yield potential and excess heat impacts nitrogen productivity. The yield‐damage/damage‐control function permits biotech corn plants to abate adverse effects of weather and pest events. Results include the following: nitrogen use, public corn research, and biotech seed‐corn adoption increase yield potential; soil moisture stress reduces yield potential, and excess heat severely reduces nitrogen productivity. Biotech corn plants abate yield damage caused by soil moisture stress but not excess heat.     

Modeling climate change and agriculture: an introduction to the special issue

This issue of Agricultural Economics is a special issue containing articles on model performance in assessing the effects of climate change, bioenergy policy, and socioeconomics on agriculture. The contributions present results from a global economic model intercomparison activity undertaken as part of the AgMIP Project ( www.agmip.org ). The origins of the comparison activities can be traced to a project that was organized by the OECD in late 2010 to compare results from three models. The current phase of the research includes 10 models and was designed in part to support of the IPCC fifth assessment report (AR5). The special issue includes seven peer‐reviewed articles that present thematic results from a range of modeling strategies, with partial and general equilibrium modeling as a high level distinction but a myriad of differences within these two model types. A central common element is harmonization on biophysical effects using crop models and socioeconomic effects using drivers from the Shared Socioeconomic Pathways developed as part of the AR5 process. The special issue provides broad insights into how the modeling communities approached the interactions of climate, socioeconomics, bioenergy policy on agricultural outcomes, including land use, prices, consumption, and production.     

Climate change: scenarios,impacts, policy,and development opportunities

This article is divided into three parts. First, it provides an overview of the main outcomes of the last IPCC assessment report, both in terms of economic drivers of greenhouse gas (GHG) emissions, and in terms of impacts of climate change, in particular for the agriculture sector. Then, it focuses on policy options and their optimal design, taking into account technological availability, international cooperation, and above all the stringency of the remaining carbon budget. Finally, it analyzes the size and direction of investment decisions required to stabilize GHG emissions and their implications for economic development.     

Evaluating the economic impacts of crop yield change and sea level rise induced by climate change on Taiwan's agricultural sector

This article investigates the effects of sea level rise and climate change induced crop yield alterations on Taiwan as well as possible adaptation strategies. For sea level rise of up to 5 meters, as much as 4.9% of total acreage and 16% of rice acreage would be lost. The empirical findings show that the sea level damages range from NT$ 0.84 to 4.10 billion while crop yield losses range from NT$ 1.79 to 2.55 billion. We investigate alternative adaptation strategies finding crop yield technological progress and tariff reduction could significantly mitigate these effects.     

Impacts of considering climate variability on investment decisions in Ethiopia

Extreme interannual variability of precipitation within Ethiopia is not uncommon, inducing droughts or floods and often creating serious repercussions on agricultural and nonagricultural commodities. A dynamic climate module is integrated into an economy‐wide model containing a detailed zonal level agricultural structure. This coupled climate‐economic model is used to evaluate the effects of climate variability on prospective irrigation and infrastructure investment strategies, and the ensuing country‐wide economy. The linkages between the dynamic climate module and the economic model are created by the introduction of a climate‐yield factor (CYF), defined at the crop level and varied across Ethiopian zones. Nine sets of variable climate (VC) data are processed by the coupled model, generating stochastic wet and dry shocks, producing an ensemble of potential economic prediction indicators. Analysis of gross domestic product and poverty rate reveal a significant overestimation of the country's future welfare under all investment strategies when climate variability is ignored. The coupled model ensemble is further utilized for risk assessment to guide Ethiopian policy and planning.     

Climate change,weather shocks,and violent conflict: a critical look at the evidence

We use cross‐country data to explore whether temperature and rainfall shocks trigger violent conflict, or not. We include a wide range of country and time samples, and explore whether the impact of weather shocks is conditional on income or political regimes. Our overall conclusion is sobering. Notwithstanding the attention this topic has attracted from the media and policy makers, we find little robust evidence linking weather shocks to the onset of conflict.     

Warming temperatures will likely induce higher premium rates and government outlays for the U.S. crop insurance program

Likely climate change impacts include damages to agricultural production resulting from increased exposure to extreme heat. Considerable uncertainty remains regarding impacts on crop insurance programs. We utilize a panel of U.S. corn yield data to predict the effect of warming temperatures on the mean and variance of yields, as well as crop insurance premium rates and producer subsidies. While we focus on corn, we demonstrate that the subsidy impacts are likely to carry over to other major program crops. We find that warming decreases mean yields and increases yield risk on average, which results in higher premium rates. Under a 1°C warming scenario, we find that premium rates at the 90% coverage level will increase by 39% on average; however, there is considerable statistical uncertainty around this average as the 95% confidence interval spans from 22% to 61%. We also find evidence of extensive cross‐sectional differences as the county‐level rate impacts range from a 10% reduction to a 63% increase. Results indicate that exposure to extreme heat and changes in the coefficient of variation are large drivers of the impacts. Under the 1°C warming scenario, we find that annual subsidy payments for the crop insurance program could increase by as much as $1.5 billion, representing a 22% increase relative to current levels. This estimate increases to 3.7 billion (57%) under a 2°C warming scenario. Our results correspond to a very specific counterfactual: the marginal effect of warming temperatures under current technology, production, and crop insurance enrollments. These impacts are shown to be smaller than the forecasted impacts under a commonly used end‐of‐century general circulation model for even the most optimistic CO₂ emissions projection.     

Evidence of climate change impacts on crop comparative advantage and land use

Relative agricultural productivity shocks emerging from climate change will alter regional cropland use. Land allocations are sensitive to crop profits that in turn depend on yield effects induced by changes in climate and technology. We develop and apply an integrated framework to assess the impact of climate change on agricultural productivity and land use for the U.S. Northern Great Plains. Crop-specific yield–weather models reveal crop comparative advantage due to differential yield impacts of weather across the region's major crops, that is, alfalfa, wheat, soybeans, and maize. We define crop profits as a function of the weather-driven yields, which are then used to model land use allocation decisions. This ultimately allows us to simulate the impact of climate change under the RCP4.5 emissions scenario on land allocated to the region's major crops as well as to grass/pasture. Upon removing the trends effects in yields, climate change is projected to lower yields by 33–64% over 2031–2055 relative to 1981–2005, with soybean being the least and alfalfa the most affected crops. Yield projections applied to the land use model at present-day input costs and output prices reveals that Dakotas’ grass acreage will increase by up to 23%, displacing croplands. Wheat acreage is expected to increase by up to 54% in select southeastern counties of North Dakota and South Dakota, where maize/soy acreage had increased by up to 58% during 1995–2016.     

The fourth industrial revolution,agricultural and rural innovation,and implications for public policy and investments: a case of India

The Indian Government and public–private partnerships are developing and disseminating a dizzying number of innovative, networked solutions, broadly known as the Digital India initiative, to increase the efficiency of safety nets and worker productivity and to improve life. Yet, challenges to turn the power of information and other technologies into a farmer‐friendly technological revolution for India's 156 million rural households are considerable, including: (1) reliable, up‐to‐date, location‐specific message content for a diverse agriculture to help stratified households shift to productive, knowledge‐intensive agriculture as a business—government, private sector, and civil society have big roles to play; (2) digital literacy, i.e., teaching farmers how to choose and use apps, even where the digital divide is absent; apps are, or soon to be, in regional languages; and (3) monitoring actual use and impacts on users’ lives by understanding the adoption and adaptation processes. These challenges call for bottom‐up, complementary investments in physical, human, and institutional capital, and farmer‐friendly e‐platforms, while forging ahead with many top‐down policy and institutional reforms currently underway, in which progress is real and constraints holding back greater success are better understood.     

Productivity and efficiency impact of climate change and agroecology on Bangladesh agriculture

The paper estimates the impacts of climate change, agroecological and socio-economic characteristics on agricultural productivity and efficiency changes in Bangladesh agriculture using a rich panel dataset of 17 regions covering a period of 61-years (1948–2008). Results revealed that land has the most dominant role in increasing agricultural production followed by labour and irrigation. The contribution of non-cereal crops (i.e., potatoes, pulses, oilseeds, jute and cash crops) to total production are also significant, ranging from 2 to 8% per annum. An increase in annual-rainfall and long-term-temperature (LTT) significantly enhance production. Production is significantly higher in floodplain agroecologies. However, production efficiency fluctuated sharply and declined overtime. The mean efficiency score of 0.74 implies substantial room to improve production by resource reallocation. Average farm size, crop specialization and investment in R&D significantly improve efficiency whereas increases in annual temperature-variability and LTT significantly reduce efficiency. Efficiency is significantly lower in low-lying floodplain and coastal-plain agroecologies. Policy implications include investments in diversifying cropping portfolio into other cereals (i.e., wheat and maize), research to develop crop varieties suited to changing climatic conditions and specific agroecological regions, and land/tenurial reforms to consolidate farm size to enhance productivity and efficiency of Bangladesh agriculture.     

Modeling linkages between climate policy and land use: an overview

Agriculture and forestry play an important role in emitting and storing greenhouse gases. For an efficient and cost-effective climate policy, it is therefore important to include land use, land-use change, and forestry (LULUCF) explicitly in economy-climate models. This article gives an overview and assessment of existing approaches to include LULUCF into partial and general equilibrium economy-climate models. For each class of models, we describe different examples, their treatment of land, and their potential for and applicability to policy analysis, as well as their shortcomings. We identify data requirements and conceptual problems, and provide suggestions for future research.     

Marginal Abatement Cost Curves for UK Agricultural Greenhouse Gas Emissions

This article addresses the challenge of developing a ‘bottom‐up’ marginal abatement cost curve (MACC) for greenhouse gas (GHG) emissions from UK agriculture. An MACC illustrates the costs of specific crop, soil and livestock abatement measures against a ‘business as usual’ scenario. The results indicate that in 2022 under a specific policy scenario, around 5.38 Mt CO₂ equivalent (e) could be abated at negative or zero cost. A further 17% of agricultural GHG emissions (7.85 Mt CO₂e) could be abated at a lower unit cost than the UK Government’s 2022 shadow price of carbon [£34 (tCO₂e)^?1]. The article discusses a range of methodological hurdles that complicate cost‐effectiveness appraisal of abatement in agriculture relative to other sectors.     

The research cost of adapting agriculture to climate change: A global analysis to 2050

Investments in agricultural research and development (R&D) made over the next few decades will likely prove critical in offsetting adverse climate change impacts on the global food system. In this study, we offer cost estimates of public R&D-led adaptation to climate change grounded in an explicit framework relating the flow of annual R&D expenditures to building knowledge capital and thereby raising productivity in agriculture. Our research uses a comprehensive collection of historical public agricultural R&D expenditure and a literature review of elasticity estimates linking knowledge stocks to agricultural productivity growth for key world regions. Given climate-driven crop yield projections generated from extreme combinations of crop and global circulation models, we find that offsetting crop yield losses projected by climate and crop models over 2006–2050 would require increased R&D adaptation investments of between $187 billion and $1,384 billion (in 2005 $PPP) if we invest between 2020 and 2040. This is 16–118% higher than global R&D investment if present spending trends continue. Although these costs are significant, worldwide R&D-led climate adaptation could offer favorable economic returns. Moreover, R&D-led adaptation could deliver gains in food security and environmental sustainability by mitigating food price increases and slowing cropland expansion.     

ICT and agricultural productivity: evidence from cross-country data

This article carries out agricultural production function estimations, based on data for the period 1995–2000 on 81 countries, to present empirical evidence on the relationship between the adoption of information and communication technology (ICT) and agricultural productivity. It is found that new ICT has a significantly positive impact on agricultural productivity. The evidence suggests that the adoption of modern industrial inputs in agricultural production relies on the information and communication infrastructure. However, the empirical evidence from this study also suggests that new ICT could be a factor for the divergence between countries in terms of overall agricultural productivity. Not only do we find that the ICT adoption levels of the richer countries are much higher than those of the poorer countries, but also that returns from ICT in agricultural production of the richer countries are about two times higher than those of the poorer countries. A plausible explanation for the poorer countries' relatively low productivity elasticity of ICT is the lack of important complementary factors, such as a substantial base of human capital.     

Prices of American Pinot Noir wines: climate, craftsmanship, critics

Pinot Noir, a variety originating from Burgundy in France, is the most expensive category of table wine produced in North America. This article is aimed at analyzing its price determinants and focuses on climate, critical scores, and variables related to the winemaker. The main findings are as follows: (1) Pinot Noir prices are mainly determined by temperature and precipitation. General temperature increases are not beneficial. In fact, the optimal climate is similar to that in Burgundy. (2) The second most important variable is the winemaker. His or her skill and reputation have a significant impact on prices. (3) Expert knowledge, in the form of critical scores, has little explanatory value.     

Competition for land in the global bioeconomy

The global land use implications of biofuel expansion have received considerable attention in the literature over the past decade. Model‐based estimates of the emissions from cropland expansion have been used to assess the environmental impacts of biofuel policies. And integrated assessment models have estimated the potential for biofuels to contribute to greenhouse gas (GHG) abatement over the coming century. All of these studies feature, explicitly or implicitly, competition between biofuel feed stocks and other land uses. However, the economic mechanisms governing this competition, as well as the contribution of biofuels to global land use change, have not received the close scrutiny that they deserve. The purpose of this article is to offer a deeper look at these factors. We begin with a comparative static analysis which assesses the impact of exogenously specified forecasts of biofuel expansion over the period: 2006–2035. Global land use change is decomposed according to the three key margins of economic response: extensive supply, intensive supply, and demand. Under the International Energy Agency's “New Policies” scenario, biofuels account for nearly one‐fifth of global land use change over the 2006–2035 period. The article also offers a comparative dynamic analysis which determines the optimal path for first and second generation biofuels over the course of the entire 21st century. In the absence of GHG regulation, the welfare‐maximizing path for global land use, in the face of 3% annual growth in oil prices, allocates 225 Mha to biofuel feed stocks by 2100, with the associated biofuels accounting for about 30% of global liquid fuel consumption. This area expansion is somewhat diminished by expected climate change impacts on agriculture, while it is significantly increased by an aggressive GHG emissions target and by advances in conversion efficiency of second generation biofuels.     

The mountain environment,a driver for adaptation to climate change

The mountain environment is perceived today by vine-growers as a strong structural constraint. Yet in the current context of climate change, in which we turn to genetics, irrigation or innovation in cultural practices to maintain production quality, could the mountain environment emerge as a solution for adapting to climate change in vine-growing? Here we explore the role of cooperative policies that may be deployed on the territorial scale, using an agent-based model. Our model was based on the viticulture of the Banyuls–Collioures AOC area, which is characterized by small-scale vine-growers and marked by widespread involvement in cooperative systems. The simulation results showed an important role of cooperative policies not only to conserve narrow production window and required vine quality, but also in respect of the emblematic landscape structure. These results should foster vine-growers to strengthen their cooperatives and adequately use these organizations to mitigate future climate change impacts.