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

Abstract

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.

Impact of climate change on global agricultural markets under different shared socioeconomic pathways

“…Food security is projected to decrease with climate change especially as more extreme events such as droughts result in effects across multiple regions and sectors (IPCC, 2020). Although at significant costs, research-and-development-led adaptation could contribute to a slower cropland expansion, improved food security through lower prices, and to environmental sustainability (Baldos et al, 2020).…”

“…The effects of climate change on global food production and food security through crop yield levels and variability are receiving increasing attention because negative impacts on major crops are expected (Müller and Robertson, 2014;Rosenzweig et al, 2014;Carraro, 2016;Iizumi et al, 2017;Zhao et al, 2017;Schauberger et al, 2017;Schleussner et al, 2018;Huffman et al, 2018;Arora et al, 2020). Investments in agricultural research and development (R&D) needed for offsetting some of these yield losses (Baldos et al, 2020), and the implications of changing levels of yields and variability of these yields for crop insurance (Tack et al, 2018) have also been estimated.…”

Impact of Digitalisation on Corporate Finance in the Agricultural Sector

“…So, scientists study various aspects of digitalisation issues: investment-related [21], manufacturing [22], and financial [23]. Digitalisation of corporations is considered as an essential prerequisite for government regulation of the dairy industry [24].…”

Climate Change and hunger: Estimating costs of adaptation in the agrifood system

“…These were the most recent comprehensive estimates as of the Intergovernmental Panel on Climate Change's (IPCC) Fifth Assessment Report (Chambwera et al 2014), and arguably the most robust (O'Garra and Mourato 2016). A recent study by Baldos, Fuglie, and Hertel (2020) focused on national public spending on R&D at aggregate regional levels; they estimated that climate adaptation costs that offset climate impacts on crop yields would cost a total of US$187 to US$1,384 billion from 2020 to 2040.…”