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

Uris Lantz C. Baldos, Keith O. Fuglie and Thomas Hertel

Agricultural Economics, 2020, vol. 51, issue 2, 207-220

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.

Date: 2020
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