Federal Crop Insurance and the Disincentive to Adapt to Extreme Heat

Annan, Francis; Schlenker, Wolfram

doi:10.1257/aer.p20151031

Cited by 171 publications

(135 citation statements)

References 2 publications

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“…In addition, cropland increases and pastureland decreases when government payments go up, implying that farmers would put more low-productivity land into crop production to receive more subsidies or crop and livestock insurance payments. These results appear consistent with research indicating that farmers already enrolled in crop and livestock insurance program do not have the incentive to engage in costly adaptation because insurance compensates them for potential loss (Annan and Schlenker 2015).…”

Section: Impacts On Agricultural Land-use Sharessupporting

confidence: 88%

Climate impacts on agricultural land use in the USA: the role of socio-economic scenarios

Sleeter

Abatzoglou

et al. 2017

Climatic Change

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We examine the impacts of climate on net returns from crop and livestock production and the resulting impact on land-use change across the contiguous USA. We first estimate an econometric model to project effects of weather fluctuations on crop and livestock net returns and then use a semi-reduced form land-use share model to study agricultural land-use changes under future climate and socio-economic scenarios. Estimation results show that crop net returns are more sensitive to thermal and less sensitive to moisture variability than livestock net returns; other agricultural land uses substitute cropland use when 30-year averaged degree-days or precipitation are not beneficial for crop production. Under future climate and socio-economic scenarios, we project that crop and livestock net returns are both increasing, but with crop net returns increasing at a higher rate; cropland increases with declines of marginal and pastureland by the end of the twenty-first century. Projections also show that impacts of future climate on agricultural land uses are substantially different and a larger variation of land-use change is evident when socio-economic scenarios are incorporated into the climate impact analysis.

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Section: Impacts On Agricultural Land-use Sharessupporting

confidence: 88%

Climate impacts on agricultural land use in the USA: the role of socio-economic scenarios

Sleeter

Abatzoglou

et al. 2017

Climatic Change

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“…These findings contrast with historical narratives of farmer adaptability, such as the 200-year-long spread of agriculture into previously nonarable land (90,91) and adjustment of cultivars in response to drought (92). These two views of agriculture adaptability remain unreconciled, and identifying obstacles to adaptation, such as poor incentives (93) or high adaptation costs (88), are a critical area for future research.…”

Section: Economic Impacts: Agricultural Yieldsmentioning

confidence: 78%

“…Existing evidence suggests that high costs of adaptation (48,88,105), incentives to adapt (48,93), limited access to credit for financing adaptations (46), limited rationality when planning for future risks (16,188), incorrect or limited information about the benefits of adaptation (89,189), perverse political incentives (190,191) or weak government institutions (187,192), constraints to sharing risk among individuals and groups (193), and access to technologies (90,185) might play substantial roles, although existing evidence is primarily suggestive as it relies on cross-sectional associations.…”

Section: Future Climate Changementioning

confidence: 99%

Social and economic impacts of climate

Carleton

Hsiang

2016

Science

928

509

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BACKGROUND: For centuries, thinkers have considered whether and how climatic conditions influence the nature of societies and the performance of economies. A multidisciplinary renaissance of quantitative empirical research has begun to illuminate key linkages in the coupling of these complex natural and human systems, uncovering notable effects of climate on health, agriculture, economics, conflict, migration, and demographics.ADVANCES: Past scholars of climate-society interactions were limited to theorizing on the basis of anecdotal evidence; advances in computing, data availability, and study design now allow researchers to draw generalizable causal inferences tying climatic events to social outcomes. This endeavor has demonstrated that a range of climate factors have substantial influence on societies and economies, both past and present, with important implications for the future.Temperature, in particular, exerts remarkable influence over human systems at many social scales; heat induces mortality, has lasting impact on fetuses and infants, and incites aggression and violence while lowering human productivity. High temperatures also damage crops, inflate electricity demand, and may trigger population movements within and across national borders. Tropical cyclones cause mortality, damage assets, and reduce economic output for long periods. Precipitation extremes harm economies and populations predominately in agriculturally dependent settings. These effects are often quantitatively substantial; for example, we compute that temperature depresses current U.S. maize yields roughly 48%, warming trends since 1980 elevated conflict risk in Africa by 11%, and future warming may slow global economic growth rates by 0.28 percentage points year −1 . Much research aims to forecast impacts of future climate change, but we point out that society may also benefit from attending to ongoing impacts of climate in the present, because current climatic conditions impose economic and social burdens on populations today that rival in magnitude the projected end-ofcentury impacts of climate change. For instance, we calculate that current temperature climatologies slow global economic growth roughly 0.25 percentage points year −1 , comparable to the additional slowing of 0.28 percentage points year −1 projected from future warming. Both current and future losses can theoretically be avoided if populations adapt to fully insulate themselves from the climate-why this has not already occurred everywhere remains a critical open question. For example, clear patterns of adaptation in health impacts and in response to tropical cyclones contrast strongly with limited adaptation in agricultural and macroeconomic responses to temperature. Although some theories suggest these various levels of adaptation ought to be economically optimal, in the sense that costs of additional adaptive actions should exactly balance the benefits of avoided climate-related losses, there is no evidence that allows us to determine how closely observed "adaptation...

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“…Notable exceptions are Lobell et al (2011a), who used precipitation centered around flowering (anthesis) in statistical models based on historical data of trials in Africa, and Ortiz-Bobea and Just (2013) controlled for the vegetative, flowering, and grain-filling stages. Instead, many approaches employ total precipitation over the growing season (Annan and Schlenker, 2015;Burke and Emerick, 2016;Roberts et al, 2013;Roberts, 2006, 2009), monthly mean growing season precipitation (Urban et al, 2012) or the average of a subset of the season (Urban et al, 2015a). Studies for Germany commonly separate the season into the periods May to July and August to October Wechsung, 2015, 2016;Conradt et al, 2016), thus dividing exactly the time interval most susceptible to water stress and 5 averaging over periods with diverse effects (e.g.…”

mentioning

confidence: 99%

“…Transferring those adaptation potential to future impacts diminishes the estimated losses. However, various issues need to be considered when employing such an approach, such as the costs of adaptation and wrong institutional incentives Annan and Schlenker, 2015). Also, Schlenker et al (2013) argued that higher average humidity levels in the south diminish the correlation between heat and measures based 30 on evapotranspirative demand.…”

mentioning

confidence: 99%

The Effect of Soil Moisture Anomalies on Maize Yield in Germany

Peichl¹,

Thober²,

Meyer³

et al. 2017

Preprint

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Abstract. Crop models routinely use meteorological variations to estimate crop yield. Soil moisture, however, is the primary source of water for plant growth. The aim of this study is to investigate the intra-seasonal predictability of soil moisture to estimate silage maize yield in Germany. It is also evaluated how approaches considering soil moisture perform compared to those using only meteorological variables. Silage maize is one of the most widely cultivated crops in Germany because it is used as a main biomass supplier for energy production in the course of the German Energy Transition. Reduced form fixed 5 effect panel models are employed to investigate the relationships in this study. These models are estimated for each month of the growing season to gain insights into the time varying effects of soil moisture and meteorological variables. Temperature, precipitation, and potential evapotranspiration are used as meteorological variables. Soil moisture is transformed into anomalies which provide a measure for the inter-annual variation within each month. The main result of this study is that soil moisture anomalies have predictive skills which vary in magnitude and direction depending on the month. For instance, dry soil moisture 10 anomalies in August and September reduce silage maize yield more than 10 % other factors being equal. On the contrary, dry anomalies in May increase crop yield up to 7 % because absolute soil water content is higher in May compared to August due to its seasonality. With respect to the meteorological terms, models using both temperature and precipitation have higher predictabilities than models using only one meteorological variable. Also, models employing only temperature exhibit elevated effects.

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Federal Crop Insurance and the Disincentive to Adapt to Extreme Heat

Cited by 171 publications

References 2 publications

Climate impacts on agricultural land use in the USA: the role of socio-economic scenarios

Climate impacts on agricultural land use in the USA: the role of socio-economic scenarios

Social and economic impacts of climate

The Effect of Soil Moisture Anomalies on Maize Yield in Germany

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