Economic impacts of climate-related changes to California agriculture

Abstract

California agriculture is driven by the interactions between technology, resources, and market demands. Future production is a balance between the rates of change in these variables and environmental factors including climate change. With tight statewide water supplies and agriculture being an important part of the California economy, quantifying the economic consequences of changes in these variables is important for addressing related policy questions. We estimate the economic effects of climate change on California crop farming by year 2050 using the Statewide Agricultural Production Model (SWAP). With climate warming, crop yields are expected to decline, production costs to increase, and water supplies to fall. These negative effects may be partially offset by higher crop prices and technological improvements. Results indicate that gross agricultural revenues across all regions are reduced under climate change, as is water usage. However, given the climate-induced reductions in water supply and crop yields, reductions in revenue are proportionally less due to shifting crop demands, technological change, and a shift to higher value less water intensive crops. Given the long time horizon required in this study, the results should not be considered a projection or forecast, but as a probable outcome of the interaction of several uncertain driving forces.

The economic impacts of climate change on the Chilean agricultural sector. A non-linear agricultural supply model

“…The PMP considers the farmer's optimization process, allowing for a perfect calibration of area planted, for the full range of agricultural activities, avoiding the dependency between parameters and constraints. The approach followed in this paper is extensively used in agricultural economics due to its accuracy when the model calibration is based on a single base year (complemented with exogenous price elasticities) (Heckelei and Britz, 2005;Howitt et al, 2010;Medellín-Azuara et al, 2011).…”

“…Other applications include the estimation of the economic value of water and land (Howitt et al, 2001;Iglesias and Blanco, 2008;Medellín-Azuara et al, 2009;Kan et al, 2009), and climate change impacts (Henseler et al, 2009;Howitt et al, 2010;Medellín-Azuara et al, 2011;Howitt et al, 2012) (for reviews of other case studies see Heckelei et al, 2012).…”

“…In general, there are a growing number of studies addressing climate change impacts using economic models and, hence, taking into account farmers' adaptation strategies (Fischer et al, 2005;Howitt et al, 2010;Nelson et al, 2010;Medellín-Azuara et al, 2011;Nelson et al, 2013;von Lampe et al, 2014). However, the economic impacts of climate change on the Chilean agricultural sector have mainly been analyzed through the use of econometric techniques, or by using simple accounting methods, disregarding the adaptation options available for the farmers.…”

Vulnerability of California specialty crops to projected mid-century temperature changes

“…Limited and uncertain supply of both surface water and groundwater is an important constraint on California agriculture (Mukherjee and Schwabe 2014), and water availability will likely change under future climate due to changes in precipitation and evaporative demand. However, the exact patterns of changing water availability are difficult to predict, not only due to inherent uncertainties in climate modeling (CCTAG 2015) but also due to complexities of water policy in California (Joyce et al 2011). Medellin-Azuara et al (2011 concluded Bthe major effects of climate change on California agriculture are manifest through water shortages.Ŝ econd, the use of subjective temperature sensitivity metrics for each crop (on a scale of 1 to 4) prioritizes simplicity and ease of interpretation, but a single integer cannot fully describe a crop's climate response.…”

An Equity Autopsy: Exploring the Role of Water Rights in Water Allocations and Impacts for the Central Valley Project during the 2012–2016 California Drought

“…Agriculture largely rode out the drought by continuing to deplete the already vastly overdrafted groundwater, but at a cost of $590 million in that year alone. Statewide figures mask the uneven socioeconomic impacts of the drought, which fell disproportionately on agricultural areas south of the Sacramento/San Joaquin Bay Delta in the San Joaquin Valley [3][4][5].…”