Global Market and Economic Welfare Implications of Changes in Agricultural Yields Due to Climate Change

Electronic version of an article published as (Climate Change Economics, Volume 11, Number 1, 2020, 18 pages) (https://doi.org/10.1142/S2010007820500050) copyright World Scientific Publishing Company (https://www.worldscientific.com/doi/10.1142/S2010007820500050)

Posted: 1 Sep 2020

See all articles by Katherine Calvin

Katherine Calvin

Joint Global Change Research Institute

Bryan K Mignone

ExxonMobil Research and Engineering Company

Haroon S Kheshgi

ExxonMobil Research and Engineering Company

Abigail C Snyder

Government of the United States of America - Pacific Northwest National Laboratory

Pralit Patel

Government of the United States of America - Pacific Northwest National Laboratory

Marshall Wise

Government of the United States of America - Pacific Northwest National Laboratory

Leon E Clarke

Government of the United States of America - Pacific Northwest National Laboratory

Jae Edmonds

Government of the United States of America - Pacific Northwest National Laboratory

Date Written: February 19, 2020

Abstract

The economic welfare effects of climate change on global agriculture will be mediated by several complex biophysical and economic processes. For a given emissions scenario, these include:

(1) the response of the climate system to anthropogenic forcing,

(2) the response of crop yields to climate system and carbon dioxide changes, given baseline improvements in crop yields,

(3) the response of agricultural markets to crop yield changes, and

(4) the economic welfare implications of such market responses.

In this paper, we use information about the first two processes from available climate-crop model comparison studies to analyze implications for the third and fourth processes. Applying the range of crop yield changes in a Global Integrated Assessment Model (GCAM) highlights several important economic relationships. First, we find a consistent relationship between global cropland area and yield change that is approximately orthogonal to the relationship between regional cropland area and yield change. Second, we find that the change in economic welfare, expressed as total surplus change per unit economic output, peaks during the 21st century. Third, we find that, at the global level, changes in yield affect both producer surplus and consumer surplus. Specifically, surplus changes to producers and consumers are always opposite in sign, although which economic actors gain or lose varies with the sign of yield change for any given commodity. Taken together, these results contribute to a growing body of research on climate-induced changes on agriculture by highlighting several economic relationships that are robust to differences in the underlying biophysical responses.

Keywords: integrated assessment, climate change impacts, agricultural economics

JEL Classification: Q54

Suggested Citation

Calvin, Katherine and Mignone, Bryan K and Kheshgi, Haroon S and Snyder, Abigail C and Patel, Pralit and Wise, Marshall and Clarke, Leon E and Edmonds, Jae, Global Market and Economic Welfare Implications of Changes in Agricultural Yields Due to Climate Change (February 19, 2020). Electronic version of an article published as (Climate Change Economics, Volume 11, Number 1, 2020, 18 pages) (https://doi.org/10.1142/S2010007820500050) copyright World Scientific Publishing Company (https://www.worldscientific.com/doi/10.1142/S2010007820500050), Available at SSRN: https://ssrn.com/abstract=3659015

Katherine Calvin (Contact Author)

Joint Global Change Research Institute ( email )

5825 University Research Court, Suite 3500
College Park, MD 20740
United States

Bryan K Mignone

ExxonMobil Research and Engineering Company

1545 Route 22 East
Annandale, NJ 08801
United States

Haroon S Kheshgi

ExxonMobil Research and Engineering Company

1545 Route 22 East
Annandale, NJ 08801
United States

Abigail C Snyder

Government of the United States of America - Pacific Northwest National Laboratory

901 D Street
370 L'Enfant Promenade, S.W.
Washington, DC 20024-2115
United States

Pralit Patel

Government of the United States of America - Pacific Northwest National Laboratory

901 D Street
370 L'Enfant Promenade, S.W.
Washington, DC 20024-2115
United States

Marshall Wise

Government of the United States of America - Pacific Northwest National Laboratory ( email )

901 D Street
370 L'Enfant Promenade, S.W.
Washington, DC 20024-2115
United States

Leon E Clarke

Government of the United States of America - Pacific Northwest National Laboratory ( email )

901 D Street
370 L'Enfant Promenade, S.W.
Washington, DC 20024-2115
United States

Jae Edmonds

Government of the United States of America - Pacific Northwest National Laboratory ( email )

901 D Street
370 L'Enfant Promenade, S.W. Suite 900
Washington, DC 20024-2115
United States
202-646-5243 (Phone)
Not Available (Fax)

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