Source: UNIVERSITY OF CALIFORNIA, DAVIS submitted to NRP
AGRICULTURE AND CLIMATE CHANGE: IMPACT, ADAPTATION AND MITIGATION ASSESSMENTS
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
HATCH
Reporting Frequency
Annual
Accession No.
1004153
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Oct 1, 2014
Project End Date
Sep 30, 2019
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Recipient Organization
UNIVERSITY OF CALIFORNIA, DAVIS
410 MRAK HALL
DAVIS,CA 95616-8671
Performing Department
Agricultural and Resource Economics
Non Technical Summary
Climate change clearly represents one of the more pressing challenges of our time. Agriculture is one of the economic sectors most vulnerable to climate change because weather is a significant input in agricultural production systems. A large and growing body of research has investigated the effects of climate change on agricultural productivity and agricultural income. The bulk of this research, however, has focused either on broad economic indicators such as farm-level profits or regional farmland values or on the yields of annual field crops such as corn. The empirical evidence from this research suggests potentially large impacts on US agriculture.Research on the impacts of climate change on perennial and specialty crops is limited, as is research on climate change impacts in irrigated systems and in other parts of the world. Methods that address the effects of climate change on field crops such as maize cannot be straightforwardly applied to perennial crops, whose phenology typically responds to weather events in complex ways and over multiple years. Results obtained for rain-fed field crops are not directly transposable to irrigated production systems. Because California derives a large share of its agricultural income from specialty crops, research that focuses specifically on such crops is warranted. Another peculiarity of specialty crops is that the demand facing California farmers is likely more inelastic for such crops than for major field crops, making market adjustments more relevant to ultimate welfare impacts.In addition, impacts of climate change in other world regions are relevant to understand what climate change means for California, because California agriculture is well integrated into world markets. Even if climate change were bad for California agricultural productivity, if impacts were to be worse in other parts of the world, California could still gain from climate change through increases in world agricultural prices.Another gap in the agriculture/climate change research is that of adaptation to climate change. In this project we will develop empirical tools to assess adaptation strategies with a view to increase the resilience of agricultural systems to climatic changes. The role of markets in shaping climate change impacts and providing adaptation pathways is also poorly understood, and we will seek to address this gap. We will also seek to address the role of irrigation in buffering against climate change.Finally, the literature on climate change mitigation from agriculture, that is, on the ways that agriculture could contribute to reductions in greenhouse gas emissions, is still scarce. This is however a very relevant subject in California, who leads the nation in terms of climate policy and has plans to integrate agriculture into its cap-and-trade program through agricultural greenhouse gas offsets and perhaps contain net emissions from agriculture (see for instance the recently released First Update to the AB 32 Scoping Plan). There are large gaps in scientific knowledge regarding (i) the economic potential of California agriculture to supply greenhouse gas offsets and (ii) the best ways to induce the supply of such offsets though policy. One issue of particular interest is that since GHG emissions themselves are difficult to measure at the field or animal level, any realistic incentive scheme will have to rely either on emissions rates computed from detailed biophysical models, or on inputs that enter into the production of greenhouse gases (for instance nitrogen fertilizer). The literature has not much to say regarding the economic efficiency losses arising from such second-best policies. This project seeks to fill this gap in order to inform state policy.
Animal Health Component
50%
Research Effort Categories
Basic
50%
Applied
50%
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
6016050301015%
6036050301010%
6056050301010%
6106050301020%
6116120301020%
6016030301015%
6106110301010%
Knowledge Area
601 - Economics of Agricultural Production and Farm Management; 605 - Natural Resource and Environmental Economics; 603 - Market Economics; 611 - Foreign Policy and Programs; 610 - Domestic Policy Analysis;

Subject Of Investigation
6110 - Economy of the United States and sectors thereof; 6120 - International economy and sectors thereof; 6030 - The farm as an enterprise; 6050 - Communities, areas, and regions;

Field Of Science
3010 - Economics;
Goals / Objectives
The overall objective of the project is to improve our understanding of the impacts of climate change on agricultural productivity and agricultural markets, as well as adaptation mechanisms and ways that agriculture could contribute to climate change mitigation. The specific objectives are:1. To predict the likely impacts of climate change on the productivity of various agricultural systems and on related agricultural markets, including (but not limited to) California specialty crops and irrigated crops;2. To investigate possible climate change adaptation pathways and develop recommendations based on cost-benefit analysis, notably (but not limited to) changes in the crop mix and adoption of new varieties;3. To investigate the economic potential of agriculture to contribute to climate change mitigation through carbon sequestration and reductions in greenhouse gases emissions, and develop policy recommendations to help realize this potential.
Project Methods
The methods used will differ according to the specific objectives being pursued. For climate change impact predictions, the gold standard in the field is to use econometric models on historical data and project effects into the future using a wide range of available climate change scenarios. Similar techniques could be used to address the question of adaptation, although the literature is less settled on this aspect. We will extend the econometric approach to climate change impact assessment to cropping systems that are of interest to California agriculture.Regarding mitigation, mathematical programming techniques offer advantages over econometrics, notably their lesser reliance on large datasets and their ability to model detailed behavioral responses such as input intensity adjustments at the crop level. This last point is crucial as changes in agricultural management practices (fertilization rates, tillage) can lead to substantial changes in net GHG emissions from fields. Nonetheless, positive mathematical programming techniques have been criticized for being over-parameterized and relying on scant information for calibration. This project will address this concern by improving existing calibration methods in order to increase model reliability.

Progress 10/01/14 to 09/30/19

Outputs
Target Audience:During the 5-year project we reached out to academic audiences through journal publications, presentations at professional conferences and invited seminars. We reached out to industry through an invited presentation and to the general public through podcasts, media coverage, and outreach publications. We reached out to policy makers through a presentation at USDA. Changes/Problems:A five-year extension to the project was requested and granted last year. What opportunities for training and professional development has the project provided?The project has enabled the training of two graduate students, Xiaomeng Cui (now assistant professor at Jinan University, China) and Matthew Gammans (on the job market) in the area of climate econometrics. How have the results been disseminated to communities of interest?Beyond academic publications and presentations, our results have been disseminated to policy makers (USDA/ERS) and the general public through an extension-type publication as well as news coverage (local TV interview, 2 podcasts, story featured in domestic and and international (French) media). What do you plan to do during the next reporting period to accomplish the goals? Nothing Reported

Impacts
What was accomplished under these goals? The project led to several key publications in the areas of climate change impact assessment and climate change mitigation. Other outputs included the development of new databases, novel econometric models, and novel mathematical programming approaches that will prove useful for the project continuation. (A request for an extension of this project for 5 years was approved last year.) The most important work supported by the project on the issue of climate change mitigation in California is the paper by Garnache and Merel (Journal of Environmental Economics and Management), although three related publications laid out the methodological foundation for the work. The paper investigates the social costs of second-best GHG mitigation policies in California crop agriculture. Adjustments along the land use and input intensity margins are represented within a regionalized optimization model of California crop production calibrated to economic and agronomic information. The model shows that second-best policies relying on spatially aggregated GHG emission factors lead to small abatement efficiency losses, while policies targeting a single GHG lead to moderate losses. In contrast, policies targeting a single input entail large abatement efficiency losses, which nonetheless can be reduced by combining instruments. This paper shows how practical policies relying on limited information may nonetheless incentivize GHG reductions from crop agriculture in California. The most notable published academic work supported by the project on the issue of climate change impact assessment includes the following publications: a book chapter in a Giannini publication (soon to be published), a paper on the impact of climate change on cereal yields (Gammans, Merel, and Ortiz-Bobea in Environmental Research Letters), and a related extension article published in ARE Update. The book chapter provides a broad review of scientific work related to the impacts of climate change on California water supplies and agricultural outcomes. It also provides a unique set of geographically explicit future climatic projections for the state based on state-of-the-art climate models. The Environmental Research Letters article and the related ARE Update article use original econometric models to relate wheat and barley yields to weather realizations in France and predict climate change impacts on crop yields. This work shows that not unlike the US, France is expected to experience reduced yields for key crops, although the effects are predicted to be smaller in magnitude. This work has been featured in various local and international media outlets, including industry news. It was also presented to the North American Maltsters Guild in February 2019. To explore the conditions under which adaptation can take place, a workshop on the potential for market-based responses to climate change involving ten economists, political scientists, civil engineers, and policy scholars was held at the Hoover Institution, Stanford University, in November 2017. I was invited to speak there regarding climatic adaptation in agriculture. Building upon the contributions presented at the workshop and the discussions that ensued, the co-authored paper published in the journal Climate Change Economics explains how market signals encourage adaptation through land markets. It also identifies impediments to critical market signals, provides related policy recommendations, and points to promising new technologies. In agriculture, one critical but still relatively unexplored avenue for climate adaptation is changes in land use. Besides crop switching, increasing cropping intensity represents a promising adaptation avenue as it allows two or more harvests on the same land base. In the US, the main form of multiple cropping is a winter-wheat/soybean system, whereby winter wheat is planted in the fall and soybeans are planted the following calendar year immediately following the wheat harvest. While only a small share of total US soybeans is currently double-cropped with wheat, agronomic work suggests that warming may relax climatic constraints in a way that could encourage more double cropping (DC). In a new study, my co-authors and I exploit observational information on the propensity of soy farmers to double crop to predict the effects of warming on DC expansion. The main innovation of this work is that unlike agronomic models, an econometric model relating DC propensity to climate variables better accounts (even if implicitly) for economic drivers of adoption, such as production costs or the opportunity costs of land. Our findings indicate that expansion of DC will happen under warming in the US, but not to an extent that will significantly mitigate the yield decreases predicted to result from increased heat exposure.

Publications

  • Type: Journal Articles Status: Other Year Published: 2021 Citation: Matthew Gammans, Pierre Merel and Ariel Ortiz-Bobea. Double-cropping as an adaptation to climate change in the United States. manuscript ready for submission.
  • Type: Journal Articles Status: Other Year Published: 2021 Citation: Xiaomeng Cui, Matthew Gammans, and Pierre Merel. Do climate signals matter? Evidence from agriculture. manuscript in preparation.
  • Type: Book Chapters Status: Accepted Year Published: 2020 Citation: Katrina Jessoe, Pierre Merel and Ariel Ortiz-Bobea. Climate change and California agriculture. In California agriculture: Dimensions and Issues, eds. Philip L Martin, Rachael E Goodhue and Brian D Wright.
  • Type: Journal Articles Status: Submitted Year Published: 2021 Citation: Matthew Gammans and Pierre Merel. Climate econometrics: Can the panel approach account for long-run adaptation? Submitted to the Journal of Environmental Economics and Management.


Progress 10/01/17 to 09/30/18

Outputs
Target Audience:During the review period we reached out mainly to academics through two new publications, departmental seminar presentations (UC Davis, UC Berkeley) and presentations at professional meetings (AAEA 2018), as well as participation in a multidisciplinary workshop on climatic adaptation organized by the Hoover Institution at Stanford University (November 2017) and a Climate Economics workshop organized at UC Berkeley (January 2018). Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The project has enabled the continued training of a graduate student, Matthew Gammans. The other student, Xiaomeng Cui, graduated from our program and took a faculty position at Jinan University, China. How have the results been disseminated to communities of interest?During this review period, dissemination of results has been limited to academic audiences. What do you plan to do during the next reporting period to accomplish the goals?The main goal is to publish our important manuscript "Climate Econometrics." A follow-up paper is in the pipeline with two student co-authors, looking again at cereal yields but estimating climate impacts in a more flexible and robust framework. Another goal is to complete a first draft of the manuscript on double cropping and submit it for publication to a scientific journal (we are targeting a PNAS/Nature Climate Change outlet). We expect the double-cropping project, once completed, to generate quite a bit of discussion in the scientific, media, and farming communities.

Impacts
What was accomplished under these goals? During the period, significant effort was put into the project "Climate Econometrics: Can the panel approach account for long-run adaptation?" A new empirical section was added that investigates adaptation in French (wheat) and US (corn) cereal yields as well as responses of country-level GDP per capita to temperature and precipitation. New methodological results were added. The paper is currently under submission. The paper was presented at the AAEA 2018 annual meeting. We also began new work on double-cropping in the US. We view double cropping as a potential climatic adaptation strategy. We are using satellite data on land use to identify double-cropping of soybeans with winter wheat and relating the propensity to double crop to climatic indicators in a cross-sectional setting. Panel data on soybean yields at the county level is then used to infer the yield penalty associated with the planting of wheat during winter months. The goal of this project is to predict the expansion (if any) of double cropping in the US under climate change, as well as any attendant increase in calorie production (accounting for the added wheat harvest and the soybean yield penalty). Early results suggest limited scope for net expansion of double cropping under warming in the US, but rather a displacement of the area double cropped northwards. A manuscript is in preparation. Finally, two new manuscripts were prepared, submitted, and accepted for publication during the period. The first one is a review paper published in the Annual Review of Resource Economics. This paper addresses some important issues in climate econometrics, with a focus on the use of panel data. The second paper is a multi-disciplinary piece that highlights the critical role of markets in climatic adaptation. My contribution there was to take stock of the relevant literature and current empirical challenges associated with measuring market-mediated adaptation to climatic change in agriculture.

Publications

  • Type: Journal Articles Status: Accepted Year Published: 2018 Citation: Carter, Colin, Cui, Xiaomeng, Ghanem, Dalia and Pierre Merel. Identifying the Economic Impacts of Climate Change on Agriculture. Annual Review of Resource Economics, 10:361-380.
  • Type: Journal Articles Status: Accepted Year Published: 2019 Citation: Anderson, Sarah E., Terry L. Anderson, Alice C. Hill, Matthew E. Kahn, Howard Kunreuther, Gary D. Libecap, Hari Mantripragada, Pierre Merel, Andrew J. Plantinga, and V. Kerry Smith. The critical role of markets in climate change adaptation. Climate Change Economics, forthcoming.
  • Type: Journal Articles Status: Submitted Year Published: 2018 Citation: Merel, Pierre and Matthew Gammans. Climate Econometrics: Can the Panel Approach Account for Long-Run Adaptation? Manuscript, University of California, Davis.


Progress 10/01/16 to 09/30/17

Outputs
Target Audience:During the reporting period we reached out to (i) academics in the discipline through 3 accepted publications and invited seminar presentations (Purdue, UC Berkeley) and professional meetings (AAEA 2017), (ii) the general scientific audience through a publication in a scientific journal on climate change and cereal yields (Environmental Research Letters-ERL), (iii) policy makers through an invited seminar presentation at USDA/ERS, (iv) the general public through an extension article in ARE Update as well as media coverage of the article published in ERL (departmental and college webpage, UC Science Today podcast, Yale Climate Connections podcast, CBS SF Bay Area online article, CBS Sacramento TV interview, and news coverage in France) Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The project has allowed the training of two graduate students (Xiaomeng Cui and Matthew Gammans). How have the results been disseminated to communities of interest?Beyond academic publications and presentations, our results have been disseminated to policy makers (USDA/ERS) and the general public through an extension-type publication as well as news coverage (local TV interview, 2 podcasts, story featured in domestic and and international (French) media). What do you plan to do during the next reporting period to accomplish the goals?Beyond the new manuscript mentioned above regarding climate adaptation, which still needs work before it can be submitted for publication, I plan on continue work on double-cropping in the US with my colleague Ariel Ortiz-Bobea. We have preliminary evidence that climate change would likely expand the area under wheat-soybeans double cropping in the US, but we are still working on the model. I also have a review article on estimating climate impacts on agriculture in the pipeline, as well as a book chapter on climate change and California agriculture.

Impacts
What was accomplished under these goals? Three academic articles and one extension article were published. The first two articles (published in the European Review of Agricultural Economics and the Journal of the Association of Environmental and Resource Economists, respectively) make methodological contributions to the ex ante analysis of environmental policy, and include applications to nitrogen pollution reduction and greenhouse gas mitigation from agricultural lands in California. The third paper published in Environmental Research Letters uses historical panel data from France to relate wheat and barley yields to weather anomalies. The results are used to predict the impacts of changes in temperature and precipitation from climate change on cereal yields. The analysis reveals negative impacts under most climate scenarios, but also suggests that continued trends in yield growth due to technological improvements would compensate the negative effects of climate change on yields. This reporting period was also rich in new research projects. A new manuscript was produced, that will likely be split into two separate publications. This work addresses the issue of adaptation to climate change, as revealed by historical data, for instance county-level yields. We propose a novel estimation framework that allows one to disentangle short-run effects of weather shocks from long-run adaptation to climate shifts. Preliminary results on French cereal yields suggest statistically significant and economically meaningful long-run adaptation to changes in temperature and precipitation.

Publications

  • Type: Journal Articles Status: Published Year Published: 2017 Citation: Gammans, Matthew, Pierre Merel and Ariel Ortiz-Bobea. Negative impacts of climate change on cereal yields: statistical evidence from France. Environmental Research Letters 12 (2017) 054007.
  • Type: Journal Articles Status: Published Year Published: 2017 Citation: Garnache, Cloe and Pierre Merel. The Social Costs of Environmental Goods Provision: A Cautionary Guide to the Revealed-Preference Approach. Journal of the Association of Environmental and Resource Economists 4(4):1025-1052.
  • Type: Journal Articles Status: Published Year Published: 2017 Citation: Gammans, Matthew, Pierre Merel and Ariel Ortiz-Bobea. The Impact of Climate Change on Grain Production: The Case of French Cereals. ARE Update 20(6) (2017):1-4.
  • Type: Journal Articles Status: Other Year Published: 2017 Citation: Merel, Pierre and Matthew Gammans. Climate Econometrics: Can the Panel Approach Account for Long-Run Adaptation? Manuscript, University of California, Davis.


Progress 10/01/15 to 09/30/16

Outputs
Target Audience:The audience targeted during this period is mostly academic (students, peer faculty, journal referees, conference participants). Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The project has allowed a young PhD student to attend his first professional conference and present early research results to an academic audience (in summer 2016). How have the results been disseminated to communities of interest?Results have been disseminated within academia (university seminar presentations at University of Gottingen, Purdue university and professional conferences in Europe and the US). What do you plan to do during the next reporting period to accomplish the goals?Dissemination of results from recently accepted papers to a non-academic audience should begin. Papers still in the pipeline will hopefully be accepted. In addition, two new projects should start: one related to double-cropping in the US, and one related to measuring adaptation to climate change in crop agriculture.

Impacts
What was accomplished under these goals? An important contribution to the analysis of agriculture's role in greenhouse house mitigation was published in the Journal of Environmental Economics and Management. This study shows that cropping systems in California could be managed in a carbon-friendly way that contributes non-negligible quantities to the state's greenhouse gas reduction targets. Two other papers moved along the pipeline and are at the resubmission stage. A new manuscript was written on the impact of climate change on wheat and barley yields in Western Europe. This manuscript is also at the resubmission stage.

Publications

  • Type: Journal Articles Status: Published Year Published: 2017 Citation: Garnache, Cloe, Pierre Merel, Juhwan Lee and Johan Six. The social costs of second-best policies: Evidence from agricultural GHG mitigation. Journal of Environmental Economics and Management, 82:39-73.
  • Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Garnache, Cloe and Pierre Merel. The social costs of environmental goods provision: A cautionary guide to the revealed-preference approach. Revisions requested from: Journal of the Association of Environmental and Resource Economists.
  • Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Garnache, Cloe, Pierre Merel, Richard Howitt and Juhwan Lee. Calibration of shadow values in constrained optimisation models of agricultural supply. Second revisions requested from: European Review of Agricultural Economics.
  • Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Gammans, Matthew, Pierre Merel and Ariel Ortiz-Bobea. Negative impacts of climate change on cereal yields: statistical evidence from France. Revisions requested from: Environmental Research Letters.


Progress 10/01/14 to 09/30/15

Outputs
Target Audience:Research is still ongoing and publications are being completed and sent out for review. Changes/Problems: Nothing Reported What opportunities for training and professional development has the project provided?The cereal yield impact assessment project has allowed me to train two graduate students on econometric methods of climate change impact assessment using panel data. How have the results been disseminated to communities of interest?The results from all the above mentioned projects are preliminary and have not been massively disseminated yet. Some manuscripts have been presented at invited university seminars/workshops (Cornell University, Michigan State University, Iowa State University). Preliminary results for California have been shared informally with staff from the California Air Resources Board. What do you plan to do during the next reporting period to accomplish the goals?The main goal for the next review period is to complete the publication process for some or all of the manuscripts currently in the pipeline. One is at the revise and resubmit stage, others are under submission, one still in preparation. The research on climate change and cereal yields should be completed, sent for review, and presented in academic settings. A total of three manuscripts have already been submitted for presentation at annual professional meetings in the US and in Europe, and I am awaiting responses from conference organizers.

Impacts
What was accomplished under these goals? In addition to the publication and three manuscripts listed above, which all contribute (either methodologically or empirically) to the assessment of the greenhouse gas mitigation potential of agriculture (with a focus on California crops), I am completing another project on the impact of climate change on wheat and barley cereal yields, using a long historical panel of weather and crop yields for France. I expect the manuscript to be completed by the end of Winter quarter 2016. This research shows that wheat and barley yields are sensitive to high temperatures during summer, and this sensitivity is predicted to result in yield losses in the medium and long term. However these losses are somewhat less severe than those predicted for US corn using a similar empirical approach. This research also suggests that the shift from spring to winter varieties could reduce the detrimental yield impacts of climate change.

Publications

  • Type: Journal Articles Status: Published Year Published: 2015 Citation: Merel, Pierre and Richard Howitt. Theory and Application of Positive Mathematical Programming in Agriculture and the Environment. Annual Review of Resource Economics, 2014, Vol. 6, pp. 451-470.
  • Type: Journal Articles Status: Under Review Year Published: 2016 Citation: Garnache, Cloe, Pierre Merel, Juhwan Lee and Johan Six. The social costs of second-best policies: Evidence from greenhouse gas mitigation. Revisions requested from the Journal of Environmental Economics and Management.
  • Type: Journal Articles Status: Submitted Year Published: 2016 Citation: Garnache, Cloe and Pierre Merel. On the derivation of second-best marginal abatement cost curves.
  • Type: Journal Articles Status: Submitted Year Published: 2016 Citation: Garnache, Cloe, Pierre Merel, Richard Howitt and Juhwan Lee. Calibration of shadow values in constrained optimization models of agricultural supply.