Climatic Change

, Volume 109, Supplement 1, pp 365–386 | Cite as

Economic impacts of climate change on California agriculture

Article

Abstract

Using county-level data from the United States Department of Agriculture’s Census of Agriculture, this study evaluates the effect of weather and climate on agricultural profits in the State of California. The approach is to estimate revenue less variable production cost per acre as a function of land characteristics, weather realizations, and climate. This model is then used to evaluate the effect of two scenarios of climate change for the state of California over the coming century. The preferred estimates indicate that climate change is associated with a negative effect on aggregate agricultural profits by the end of the century. There are significant caveats to this result, including the lack of statistical precision, and keeping water supply and farm prices constant.

Notes

Acknowledgments

We thank Ben Hansen and Katie Kimble for research assistance and three anonymous referees for their comments. We also acknowledge financial support from the California Energy Commission, through a grant to the University of California.

Supplementary material

10584_2011_322_MOESM1_ESM.zip (465 kb)
MOESM 1 (ZIP 465 kb)

References

  1. Adams RM (1989) Global climate change and agriculture: an economic perspective. AJAE 71:1272–1279Google Scholar
  2. Adams RM, Rosenzweig Cynthia, Peart RM, Ritchie JT, McCarl BA, Glyer JD, Curry RB, Jones JW, Boote KJ, Hartwell Allen L Jr (1990) Global climate change and US agriculture. Nature 345:21924CrossRefGoogle Scholar
  3. Fisher AC, Hanemann WM, Roberts MJ, Schlenker W (2010) The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather: Comment. Am Econ Rev, forthcomingGoogle Scholar
  4. Black DA, Kneisner TJ (2003) On the measurement of job risk in hedonic wage models. J Risk Uncertainty 27(3):205–220CrossRefGoogle Scholar
  5. Black S (1999) Do Better Schools Matter? Parental Valuation of Elementary Education. Q J Econ 114Google Scholar
  6. Chay KY, Greenstone M (2005) Does air quality matter? Evidence from the housing market. J Polit Econ 113(April):376–424CrossRefGoogle Scholar
  7. Deschênes O, Greenstone M (2007) The economic impacts of climate change: evidence from agricultural profits and random fluctuations in weather. Am Econ Rev 97(1):354–385CrossRefGoogle Scholar
  8. Deschenes O, Greenstone M (2011) The Economic Impacts of Climate Change: Evidence from Agricultural Profits and Random Fluctuations in Weather: Reply Am Econ Rev, forthcomingGoogle Scholar
  9. Fisher AC, Rubio SJ (1997) Adjusting to climate change: implications of increased variability and asymmetric adjustment costs for investment in water reserves. J Env Econ Manag 34:207–227CrossRefGoogle Scholar
  10. Greenstone M, Gallagher J (2008) Does hazardous waste matter? Evidence from the housing market and the superfund program. Q J Econ 123:951–1003CrossRefGoogle Scholar
  11. Grierson W (2002) Role of Temperature in the Physiology of Crop Plants: Pre- and Post-Harvest. In: Pessarakli M (ed) Handbook of Plant and Crop Physiology. Marcel Dekker, New YorkGoogle Scholar
  12. Hansen LeRoy (1991) Farmer response to changes in climate: the case of corn production. J Agr Econ Res 43(4):18–25Google Scholar
  13. Hodges T (ed) (1991) Predicting Crop Phenology. CRC Press, Boca RatonGoogle Scholar
  14. Johnson SR, Haigh PA (1970) Agricultural land price differentials and their relationship to potentially modifiable aspects of the climate. Rev Econ Stat 52:173–181CrossRefGoogle Scholar
  15. Kaiser HM, Riha SJ, Wilks DS, Rossiter DG, Sampath R (1993) A farm-level analysis of economic and agronomic impacts of gradual climate warming. Amer J Agr Econ 75:387–398CrossRefGoogle Scholar
  16. Karl TR, Trenberth KE (2003) Modern global climate change. Science 302:1719–1723CrossRefGoogle Scholar
  17. Kaufmann RK, Snell SE (1997) A biophysical model of corn yield: integrating climatic and social determinants. Am J Agric Econ 79:178–190CrossRefGoogle Scholar
  18. Kaylen MS, Wade JW, Frank DB (2002) Stochastic trend, weather and U.S. corn yield variability. Appl Econ 24(5):513–518CrossRefGoogle Scholar
  19. Kelly DL, Kolstad CD, Mitchell GT (2005) Adjustment costs from environmental change. J Environ Econ Manag 50(2):468–495CrossRefGoogle Scholar
  20. Kirwan BE (2005) The Incidence of U.S. Agriculture Subsidies on Farmland Rental Rates. Unpublished doctoral dissertation, MIT, Cambridge, MassachusettsGoogle Scholar
  21. Lobell DB, Cahill KN, Field C (2007) Historical effects of temperature and precipitation on California crop yields. Clim Chang 81:187–203CrossRefGoogle Scholar
  22. McFadden D (1984) Welfare Analysis of Incomplete Adjustment to Climatic Change. In: Kerry Smith V, Witte Ann Dryden (eds) Advances in Applied Micro-Economics. 3. JAI Press, Greenwich, ConnecticutGoogle Scholar
  23. Mendelsohn R, Nordhaus WD, Shaw D (1994) The impact of global warming on agriculture: a Ricardian approach. Am Econ Rev 84:753–771Google Scholar
  24. Miglietta F, Magliulo V, Bindi M, Cerio L, Vaccari FP, Loduca V, Peressotti A (1998) Free air CO2 enrichment of potato (Solanum tuberosum L.): development, growth and yield. Glob Chang Biol 4:163–172CrossRefGoogle Scholar
  25. Perrin RK, Smith VK (1990) Measuring the Potential Economic Effects of Climatic Change on North Carolina Agriculture. North Carolina State UniversityGoogle Scholar
  26. Ritchie JT, NeSmith DS (1991) Temperature and Crop Development. In: Hanks J, Ritchie JT (eds) Modeling Plant and Soil Systems. American Society of Agronomy, Madison, WisconsinGoogle Scholar
  27. Rosenzweig C, Parry ML (1994) Potential impact of climate change on world food supply. Nature 367:133–138CrossRefGoogle Scholar
  28. Schimmelpfennig D, Lewandrowski J, Reilly J, Tsigas M, Parry I (1996) Agricultural Adaptation to Climate Change: Issues of Long Run Sustainability. U.S. Department of Agriculture Report AER-740, Washington, D.CGoogle Scholar
  29. Schlenker W, Roberts MJ (2009) Nonlinear temperature effects indicate severe damages to U.S. crop yields under climate change. Proc Natl Acad Sci 106(37):15594–15598CrossRefGoogle Scholar
  30. Schlenker W, Michael Hanemann W, Fisher AC (2005) Will U.S. agriculture really benefit from the global warming? accounting for irrigation in the Hedonic approach. Am Econ Rev 95(1):395–406CrossRefGoogle Scholar
  31. Schlenker W, Michael Hanemann W, Fisher AC (2006) The impact of global warming on U.S. agriculture: an econometric analysis of optimal growing conditions. Rev Econ Stat 88(1):113–125Google Scholar
  32. Schlenker W, Michael Hanemann W, Fisher AC (2007) Water availability, degree days, and the potential impact of climate change on irrigated agriculture in California. Clim Chang 81(1):19–38CrossRefGoogle Scholar
  33. Thompson LM (1986) Climatic change, weather variability, and corn production. Agron J 78:649–653CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media B.V. 2011

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of CaliforniaSanta BarbaraUSA
  2. 2.IZA and NBERSanta BarbaraUSA
  3. 3.RFF and NBERSanta BarbaraUSA

Personalised recommendations