Working Paper: Estimating the Effect of Climate Change on Crop Yields and Farmland Values: The Importance of Extreme Temperatures

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These are the slides used by William Schlenker at a February 12, 2008 Climate Economics Seminar at the EPA National Center for Environmental Economics. He summarized a paper written with Anthony Fisher, Michael Hanemann, and Michael Roberts as part of the Climate Economics Seminar Series at NCEE. The paper pairs a panel of yearly crop yields in the United States with a fine-scale weather data set that incorporates the whole distribution of temperatures between the minimum and maximum within each day and across all days in the growing season. Yields increase in temperature until about 29°C for corn, 30°C for soybeans, and 32°C for cotton, but temperatures above these thresholds become very harmful. The slope of the decline above the optimum is significantly steeper than the incline below it. This has strong implications for global warming which is predicted to increase the frequency of temperatures above the critical threshold that are harmful for yields. Area-weighted average yields given current growing regions are predicted to decrease by 31-43% under the slowest warming scenario and 67-79% under the most rapid warming scenario by the end of the century. There is limited potential for adaptation within a crop species as the same nonlinear and asymmetric relationship is found if we look only at the time series or cross-section, and the latter should pick up how farmers adapt to warmer climates.
A cross-sectional analysis of farmland values that accounts for an even wider set of adaptation possibilities gives comparable, robust impacts. Mean impacts range from a 27 decrease under the slow warming scenario to a 69 decrease under the fast warming scenario by the end of the century. The increased frequency of very hot temperatures is again responsible for the largest share of the predicted impacts.

Keywords
Subject:	1. Benefits Analysis 1. Benefits Analysis - Valuation 1. Benefits Analysis - Valuation - Cost of Damages Avoided 1. Benefits Analysis - Valuation - Cost of Damages Avoided - Resource/Environmental Harms	Media:	Air

Paper Information
Author(s):		Institution Issuing Paper:	Columbia University

Status:	Final version working paper	Primary Content:	Empirical
Series Title:	Climate Economics Seminars
Paper Date:	02/12/2008	Pages:	60
Electronic Copy Paper #: File Description: Adobe Acrobat PDF, 4.93 MB File Attachment:

Working Paper: Estimating the Effect of Climate Change on Crop Yields and Farmland Values: The Importance of Extreme Temperatures

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