Sunday, August 12, 2007

American Agriculture and Global Warming

Continuing the Sunday morning link-dump (stuff I meant to post, forgot to post, thought I posted or simply lost).

In a new paper, economists Olivier Deschênes of the University of California at Santa Barbara and Michael Greenstone of the Massachusetts Institute of Technology attempt to measure how the U.S. agricultural sector will fare.

Their conclusion: Not as bad as you might expect. “If anything, climate change appears to be slightly beneficial for profits and yields,” they write.

Long-run climate change predictions from these agriculture census data and weather models indicate that climate change will add to annual agricultural sector profits by 4 percent or $1.3 billion (in 2002 dollars).

“Additionally, the analysis indicates that the predicted increases in temperature and precipitation will have virtually no effect on yields among the most important crops,” the authors write. This suggests that effects on profits aren’t because of short-run price increases.

Although the results indicate that the overall effect on U.S. agriculture is likely to be positive, some areas will be hurt by climate change. California, in particular, will be adversely affected. In the Fifth District, North Carolina is also expected to take a big hit.

From the Federal Reserve Bank of Richmond