Utilising farm-level panel data to estimate climate change impacts and adaptation potentials

We combine farm accounting data with high-resolution meteorological data, and climate scenarios to estimate climate change impacts and adaptation potentials at the farm level. To do so, we adapt the seminal model of Moore and Lobell (2014) who applied panel data econometrics to data aggregated from the farm to the regional (subnational) level. We discuss and empirically investigate the advantages and challenges of applying such models to farm-level data, including issues of endogeneity of explanatory variables, heterogeneity of farm responses to weather shocks, measurement errors in meteorological variables, and aggregation bias. Empirical investigations into these issues reveal that endogeneity due to measurement errors in temperature and precipitation variables, as well as heterogeneous responses of farms toward climate change may be problematic. Moreover, depending on how data are aggregated, results differ substantially compared to farm-level analysis. Based on data from Austria and two climate scenarios (Effective Measures and High Emission) for 2040, we estimate that the profits of farms will decline, on average, by 4.4% (Effective Measures) and 10% (High Emission). Adaptation options help to considerably ameliorate the adverse situation under both scenarios. Our results reinforce the need for mitigation and adaptation to climate change.     

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.     

Farmers’ constraints,governmental support and climate change adaptation: Evidence from Guangdong Province,China

While climate change is widely acknowledged, the role of government support in adaptation is less understood. We narrow this knowledge gap by modelling adaptation as a three‐stage process where a farmer sequentially decides: (i) whether there is a need for adaptation; (ii) whether there are constraints that prevent adaptation; and (iii) whether such constraints are removed through government support. We develop a triple‐hurdle model to describe this decision‐making process and empirically estimate the impact of government support using a rural household survey from Guangdong Province, China. It is found that government support is positively associated with raising the odds of adaptation by about one quarter. This magnitude is larger than the estimates in recent literature, suggesting government support is more effective for farmers bound by constraints. Therefore, for cost‐effective policy outcomes there is a need to identify the constraints and the farmers facing them.     

Classical decision rules and adaptation to climate change*

One approach to rationalising policies for addressing potentially catastrophic climate change when such policies may prove unnecessary is to suppose the policies provide a form of social insurance even in the presence of pure uncertainty. Then, provided the policies are effective, such insurance can be justified as a precautionary or minimax response. Even if the policies are potentially ineffective however, intervention can be justified as an attempt to minimise the regret experienced by future generations. This reasoning extends to justify ‘all weather’ policies provided such policies always reduce policy costs. If, however, policy decisions provide ‘all weather’ benefits in only certain states of the world, this rationale breaks down. Minimising regret can establish a case for ‘mixed’ policy responses provided adopting a policy mix precludes the chance that intervention will fail altogether. Precautionary policies and policies which minimise regret are computed for a simple, dynamic, adaptive climate change planning problem and sufficient conditions for policy maker pessimism provided.     

极端气候变化背景下灾害移民的社会适应策略探析

在极端气候变化日渐加剧的背景下,极端气候事件频发,对人类生命财产安全的威胁日益加剧,人口迁移成为受灾民众适应性的行为选择。从政策、安置规划、社会资本3个层面对灾害移民的适应性策略进行了初步探析,认为要基于灾害移民需求,创新灾害移民政策;因地制宜,创新安置规划方式;借助产业结构调整、人力资本开发,加强社会资本建设,以增强灾害移民面对极端气候事件的适应性,最大限度减轻极端气候变化的灾害影响。     

Understanding the adoption of climate change adaptation strategies among smallholder farmers: Evidence from land reform beneficiaries in South Africa

Climatic change has a negative impact on people’s livelihoods, agriculture, freshwater supply and other natural resources that are important for human survival. Therefore, understanding how rural smallholder farmers perceive climate change, climate variability, and factors that influence their choices would facilitate a better understanding of how these farmers adapt to the negative impacts of climate change. A Zero-inflated double hurdle model was employed to estimate the factors influencing farmers’ adoption of adaptation strategies and intensity of adoption at the household level in South Africa. Different socioeconomic factors such as gender, age, and experience in crop farming, institutional factors like access to extension services, and access to climate change information significantly influenced the adoption of climate change adaptation strategies among beneficiaries of land reform in South Africa. Concerning intensity of adoption, age, educational level, farming experience, on-farm training, off-farm income, access to information through ICT and locational variables are the significant determinants of intensity of adaptation strategies. Thus, education attainment, non-farm employment, farming experience are significant incentives to enhance smallholder farmers' adaptive capacity through the adoption of many adaptation approaches. This study therefore concluded that farm-level policy efforts that aim to improve rural development should focus on farmers’ education, on-farm demonstration and non-farm employment opportunities that seek to engage the farmers, particularly during the off-cropping season. The income from non-farm employment can be plough-back into farm operations such as the adoption of soil and water conservation, use of improved planting varieties, insurance, among others to mitigate climate variability and subsequently increase productivity. Policies and investment strategies of the government should be geared towards supporting education, providing on-farm demonstration trainings, and disseminating information about climate change adaptation strategies, particularly for smallholder farmers in the country. Thus, the government, stakeholders, and donor agencies must provide capacity-building innovations around the agricultural extension system and education on climate change using information and communication technologies.     

模型模拟华北地区气候变化对冬小麦产量的影响

该文利用IPCC AR4模式资料和基于多年观测资料生成的格点数据,建立降水、最高/最低气温的统计降尺度关系,获取华北地区高分辨率未来气候情景空间分布;利用作物模型模拟IPCC-B1情景下冬小麦生长期和产量变化。结果表明:最高/最低气温模拟结果与观测值比较,相关系数(R2)大于0.70;降水模拟结果与观测值比较,相关系数最小为0.63;IPCC-B1情景下,华北地区冬小麦生长期总体上变短,产量下降。     

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.     

全球气候变化对海岛旅游地的影响与启示

气候既是海岛旅游业发展的自然条件,又是主要的资源,全球气候的异常变化影响海岛旅游资源的数量与质量、客流的空间与季节移动,并导致传统海岛旅游目的地的萎缩。全球气候变化对我国海岛旅游业的影响日益显著,必须及时调整海岛旅游发展的对策：大力发展生态旅游、可持续旅游;探究旅游者对气候变化的适应;改善海岛旅游目的地服务设施;重新进行海岛旅游规划;重视旅游主体人群的教育,以适应全球气候变化带来的巨大影响。     

An accelerating treadmill and an overlooked contradiction in industrial agriculture: Climate change and nitrogen fertilizer

In this article, we explore if and why farmers are responding to the impacts of climate change with practices that increase greenhouse gas emissions. Our examination focuses on heavy rainfall events and Midwestern corn farmers' nitrogen fertilizer management. Due to climate change, the frequency and intensity of heavy rain events is increasing across the Midwest. These events increase nitrogen loss to the environment and introduces economic risks to farmers. Drawing from a theoretical framework that merges O'Connor's second contradiction of capitalism and Schnaiberg's treadmill of production, we argue farmers' responses to these events reflect the second contradiction, increasing contributions to climate change, and are shaped by treadmill‐like political‐economic pressures. We examine this using a qualitative sample of 154 farmers across Indiana, Iowa, and Michigan. Given profit imperatives, adapting farmers in our sample primarily used increased nitrogen application rates to reduce their vulnerability to heavy rains. As nitrogen rate is directly associated with nitrous oxide emissions, this adaptive strategy is effective but increases agricultural contributions to climate change. This preliminarily suggests that the political‐economic structure encourages farmers to respond to climate change in ways that accelerate the environmental contradictions of industrial agriculture.     

Adaptation in agriculture: historic effects of heat waves and droughts on UK agriculture

Extreme weather events are expected to increase in frequency and/or severity under climate change. Recent examples of these types of events, such as the heat wave in Europe in 2003, have caused considerable damage to crops and agriculture and substantial economic damage. If similar damage was incurred every time such an event occurred in the future, it would cause increasingly serious loss to social welfare and the economy as the frequency or intensity of these events increased. However, agriculture has a history of adapting to shocks, and in this paper we aim to determine whether there has been a systematic reduction in damage from historic extreme events over time in the agricultural sector in the UK. The impact of comparable droughts or heat waves over the past four decades is compared, and for many commodities there appears to have been a reduction in damage over time, to the point where recent events have had a minimal impact on production, indicating that the sector is relatively well adapted to the current climate. We discuss whether this type of adaptation can be sustained into the future under more rapid rates of change, or whether the ‘low-hanging’ fruits of adaptation have been picked.     

Economic impacts of climate change on the Australian dairy sector

We analyse the economic implications of climate‐driven pressures on the pasture‐based dairy sector in Australia. We use an integrated assessment model that includes a climate scenario generator, a climate‐biophysical response framework and an economywide analytical framework. For the climate scenario generator, we use data from the OzClim database of the Commonwealth Scientific and Industrial Research Organisation. For the climate‐biophysical response framework, we use the DairyMod model with inputs of changes in climate variables from OzClim to quantify climate change effects on pasture growth and productivity. For the economywide analytical framework, we use the National Integrated Assessment Model to quantify the economic implications of these effects on the dairy sector. The simulated pattern of regional changes in dairy output is not a simple function of the changes in dairy productivity. Our results show that the relative size of productivity changes across regions affects the relative competitive advantage of dairy‐producing regions. Several factors affect the regional distribution of simulated dairy‐output changes, including substitution among sources of dairy output and competition for inputs like supplementary feed. An increased output in regions with moderate reductions in dairy productivity may occur because the severely climate‐affected regions absorb the greatest loss in output.     

A real options analysis of Australian wheat production under climate change

A significant portion of the world's agricultural systems currently operate at the extreme end of the climate conditions that are considered to be suitable for crop and livestock production. Under these conditions, even moderate climate changes are anticipated to drive substantial transformational changes to agricultural systems. Transformations require new investments and infrastructure and can leave some assets stranded. These transformations can be partially or wholly irreversible, and hysteresis effects can make switching difficult and mistakes costly to reverse. This study demonstrates how a real options decision framework, ‘Real Options for Adaptive Decisions’ (ROADs), can be used to investigate how uncertainties about the climate affect the adaptation and transformation of agricultural systems. By building upon recent developments in the mathematics of stochastic optimisation, we extend traditional economic analyses of agricultural investment decisions based on net present values to better represent incomplete knowledge and uncertainty. We report results from a case study in South Australia that describes the transition pathways farmers might follow as their industries are transformed in response to climate change.     

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.     

Ecosystem-based adaptation in cities: An analysis of European urban climate adaptation plans

Ecosystem-based adaptation (EbA) measures have been increasingly promoted in the literature, as well as in policies and practices, for their environmental and socio-economic co-benefits. The recent scientific literature has shown a growing interest to assess climate adaptation plans at the urban level, in recognition of the important role played by urban areas in addressing climate change challenges. However, little information is available on the combination of these two issues, i.e., the actual inclusion of EbA measures in climate adaptation plans at the urban level. This paper addresses this gap by developing a framework to analyze the treatment of EbA in urban level climate planning, and apply it to a sample of climate adaptation plans in Europe. The framework consists of a classification of EbA measures, and a scoring system to evaluate how well they are reflected in different components of the plans. The results suggest that there is in general good awareness in plans of EbA measures, and of their potential role in addressing climate change challenges. However, their treatment in climate adaptation plans at the urban level often lacks sufficient baseline information, as well as convincing implementation actions. The paper concludes by offering recommendations to improve future practice, in terms of enhancing the baseline information to improve the proposal and design of EbA measures, improving the treatment of co-benefits associated to EbA measures, and strengthening coordination with other planning tools. Possible future development of this works include the integration of the proposed EbA classification, and the analysis of a larger sample of territorial plans.     

Climate change adaptation in agriculture: A computable general equilibrium analysis of land-use change in Nepal

This paper investigates the feasibility of changes in cropland-use as an adaptation strategy to minimise the economy-wide costs of climate change on agriculture. Nepal makes an interesting case study as it is one of the most vulnerable agricultural economies within South Asia. We develop a comparative static multi-household computable general equilibrium (CGE) model for Nepal, with a nested set of constant elasticity of transformation (CET) functional forms, to model the allocation of land within different agricultural sectors. Land transformation elasticities in these CET functions are allowed to reflect the ease of switching from one crop to another based on their agronomic characteristics. The results suggest that, in the long run, farmers in Nepal tend to allocate land to crops that are comparatively less impacted by climate change, such as paddy, thereby minimising the economy-wide impacts of climate change. Furthermore, the results reveal that land-use change tends to reduce the income disparity between different household groups by significantly moderating the income losses of marginal farmers. Therefore, it is suggested that policy makers in Nepal should prioritise schemes such as providing climate-smart paddy varieties (i.e., those that are resistant to heat, drought and floods) to farmers, subsidising fertilizers, improving agronomic practices, and educating farmers to switch from crops that are highly impacted by climate change to those that are not, such as paddy.     

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.     

The impact of climate change on the external cost of pesticide applications in US agriculture

Agricultural pesticides have adverse impacts on the environment and human health. These impacts are sensitive to climate change because pest pressure and optimal pesticide application rates vary with weather and climate conditions. This study uses the Pesticide Environmental Accounting (PEA) tool and statistically estimated relationships between pesticide applications, weather and climate to compute the impacts of climate change on the external cost of pesticide applications. Using data from 32 US states, 56 crops and 325 pesticides, the current average external cost of pesticide use in US agriculture is calculated at US$42 per hectare. Under projected climate change this value increases up to $72 per hectare by 2100.     

Crop Insurance as a Strategy for Adapting to Climate Change

Financial insurance for extreme events can play an important role in hedging against the implications of climate change. This paper combines a comprehensive estimation strategy and a unique panel dataset to study the role of financial insurance in farmers' welfare under uncertainty. Data are drawn from a large Italian farm panel dataset. We find that (i) demand for insurance products is likely to increase in response to climatic conditions, and (ii) that the use of insurance reduces the extent of risk exposure. We also find that farms growing more crops are less likely to adopt the insurance scheme. This confirms what is found in the theoretical literature. Crop diversification can be a substitute for financial insurance in hedging against the impact of risk exposure on welfare.     

The adoption and impact of engineering‐type measures to address climate change: evidence from the major grain‐producing areas in China

Employing an endogenous switching regression model, we investigate the drivers underlying the adaptations made by farm households and their impacts on crop net incomes for adopters and nonadopters, based on a large panel survey data set across the major grain‐producing provinces in China. The results show that: (i) access to public climate information and technical or physical support increases the likelihood that farmers adapt to climate change by undertaking irrigation and/or drainage measures; and (ii) decisions to adapt increased crop yield, but they did not significantly increase crop profit margins. This point appears to have been ignored by previous studies. Based on these new empirical results, the paper suggests that government should continue to provide climate information and various types of supports to improve farmers’ adaptation abilities and help to reduce the levels of factor input by, for example, substituting organic for chemical fertiliser inputs. Such government‐led policies should be supported alongside the implementation of domestic agricultural supply‐side reform.