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The Impact of Climate Change on U.S. Agriculture: The Roles of Adaptation Techniques and Emissions Reductions

Timothy Neal () and Michael Keane ()

No 2018-08, Discussion Papers from School of Economics, The University of New South Wales

Abstract: We investigate the impact of climate change on U.S. agricultural productivity using county-level yield and weather data from 1950 to 2015. We present two new methods of modelling how producers adapt agricultural techniques to harsh temperatures, including a new panel data estimator that allows for two-dimensional fixed-effects in slopes. We find evidence of adaptation to geographic and temporal variation in climate, but it has stalled since 1989. We show that adaptation implies fixed-effects slope heterogeneity in the relationship between crop yield and temperature, and ignoring this leads to biased estimates of temperature sensitivity. We use our estimates to project corn yields to 2100 using a variety of climate models and emission scenarios, and find that unmitigated climate change will have severe effects on yields. Our models indicate that adaptation techniques can mitigate 10 to 45% of the damage, but significant emissions reductions can mitigate far more (i.e., 42 to 91%).

JEL-codes: C23 C54 D24 Q15 Q51 Q54 Q55 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-eff and nep-env
Date: 2018-05
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Handle: RePEc:swe:wpaper:2018-08