Adaptation to Climate Change: Evidence from US Agriculture

Burke, Marshall; Emerick, Kyle

doi:10.1257/pol.20130025

“…More recently, with the aim of capturing adaptation, some papers have introduced the so-called long-difference approach, exploiting a mixture between the cross-sectional and the time-series identification strategies [20,43]. The general idea is based on the fact that, since changes in climate are gradual, averaging across long time-spans should offer the possibility to pick up both direct and belief effects (i.e., adaptation) of climate change, because people only adjust their beliefs when environmental changes are expected to be persistent [32].…”

Section: Panel Data Modelsmentioning

confidence: 99%

“…The general idea is based on the fact that, since changes in climate are gradual, averaging across long time-spans should offer the possibility to pick up both direct and belief effects (i.e., adaptation) of climate change, because people only adjust their beliefs when environmental changes are expected to be persistent [32]. However, studies comparing climate-change effects with short-and long-run data frequency have often found that the magnitude of the estimated impacts of climate change on agricultural productivity are not so different [20,43]. These results, implying no or little adaptation effects in agriculture, are compatible with two different interpretations.…”

Section: Panel Data Modelsmentioning

confidence: 99%

Climate Change, Agriculture and Migration: A Survey

Falco

¹

,

Donzelli

²

,

Olper

³

2018

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This paper proposes a selective review of the classical economics-based literature on climate change and migration, focusing on the extent to which agriculture might be considered a key mediating channel linking climate change to migration. Overall, climate change is expected to have large and negative effects on the global economy. These effects are even more evident whenever the economic sector considered is the agricultural one, particularly in developing countries. Hence, migration can be viewed as a specific form of adaptation implemented by individuals and households, enabling them to cope, among other things, with weather-induced risk. We show that the importance of agriculture emerges from both plenty of micro-level country studies and relatively few macro-level analyses using cross-sectional data over longer time periods. Thus, policy actions targeted to sustainable agriculture and rural development can both help tackle the challenges posed by climate change and create opportunities in the face of growing migration issues. However, we also stress that much of the current evidence is based on statistical associations that have nothing to do with causal inferences. This calls for the use of a more structural approach and more sophisticated research designs, enabling the researchers to better discriminate among different mechanisms concurrently at work. In addition, further research should be addressed to the role played by food security, a complex dimension largely missing in the current debates on climate change and migration.

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“…In contrast, in our case of a temporary shock, future temperature dynamics do not matter since the shock materializes in the first period only. 21 Recent empirical studies on the potential gains induced by adaptation to climate change in the U.S. are Deschnes and Greenstone (2011), Burke and Emerick (2016) and Park (2016).…”

Section: Temperature Shocks Adaptation and Welfare Costsmentioning

confidence: 99%

Temperature shocks and welfare costs

Donadelli

¹

,

Jüppner

²

,

Riedel

³

et al. 2017

Journal of Economic Dynamics and Control

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This paper examines the welfare implications of rising temperatures. Using a standard VAR, we empirically show that a temperature shock has a sizable, negative and statistically significant impact on TFP, output, and labor productivity. We rationalize these findings within a production economy featuring long-run temperature risk. In the model, macro-aggregates drop in response to a temperature shock, consistent with the novel evidence in the data. Such adverse effects are long-lasting. Over a 50-year horizon, a one-standard deviation temperature shock lowers both cumulative output and labor productivity growth by 1.4 percentage points. Based on the model, we also show that temperature risk is associated with non-negligible welfare costs which amount to 18.4% of the agent's lifetime utility and grow exponentially with the size of the impact of temperature on TFP. Finally, we show that faster adaptation to temperature shocks results in lower welfare costs. These welfare benefits become substantially higher in the presence of permanent improvements in the speed of adaptation.JEL classification: E30, G12, Q0

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“…Recent research suggests that increasing adaptation efforts may entail substantial costs (see Burke and Emerick, 2016;Park, 2016). Lastly, we do not study other possible adaptation mechanisms in our model.…”

mentioning

confidence: 99%

Temperature Shocks and Welfare Costs

Donadelli

¹

,

Jüppner

²

,

Riedel

³

et al. 2017

View full text Add to dashboard Cite

This paper examines the welfare implications of rising temperatures. Using a standard VAR, we empirically show that a temperature shock has a sizable, negative and statistically significant impact on TFP, output, and labor productivity. We rationalize these findings within a production economy featuring long-run temperature risk. In the model, macro-aggregates drop in response to a temperature shock, consistent with the novel evidence in the data. Such adverse effects are long-lasting. Over a 50-year horizon, a one-standard deviation temperature shock lowers both cumulative output and labor productivity growth by 1.4 percentage points. Based on the model, we also show that temperature risk is associated with non-negligible welfare costs which amount to 18.4% of the agent's lifetime utility and grow exponentially with the size of the impact of temperature on TFP. Finally, we show that faster adaptation to temperature shocks results in lower welfare costs. These welfare benefits become substantially higher in the presence of permanent improvements in the speed of adaptation.JEL classification: E30, G12, Q0

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Adaptation to Climate Change: Evidence from US Agriculture

Cited by 413 publications

References 39 publications

Climate Change, Agriculture and Migration: A Survey

Climate Change, Agriculture and Migration: A Survey

Temperature shocks and welfare costs

Temperature Shocks and Welfare Costs

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