Transcript Slide 1

Potential Impacts of Climate
Change on Great Lakes Farms
and Forests
Brent Sohngen
Department of Agricultural, Environmental &
Development Economics
[email protected]
Outline of Presentation
• Trends affecting US agriculture and forestry
 Rising demand for both forest and farm land
• Climate will affect production, land value, and
where we produce crops
– Alters what we can produce, when we can produce it
and where.
– But driving force in the foreseeable future will be other
land demands.
• Markets influence adaptation.
Note: References provided upon request
2
Trend: Economic Growth
1980
2010
• http://www.imf.org/external/datamapper/index.php
Future Economic Growth
70,000
OECD
Non-OECD Asia
Billion 2005 US$
60,000
2.2%/yr
Non-OECD Latin America
50,000
5.7%/yr
40,000
30,000
20,000
10,000
3.7%/yr
0
2006
2010
2015
2020
2025
2030
• Energy Information Administration, International Energy Outlook
2009 (http://www.eia.doe.gov/oiaf/ieo/pdf/world.pdf)
Trend: Population growth is slowing….
Date
1500
1750
1800
1850
1900
1950
1975
2000
1800-1850
1850-1900
1900-1950
1950-1975
1975-2000
Africa
Asia
85
106
107
111
133
217
400
780
225
498
630
801
925
1335
2262
3460
0.07%
0.36%
0.98%
2.45%
2.67%
0.48%
0.29%
0.73%
2.11%
1.70%
Latin
Amer.
Europe
NA
millions
40
74
1
16
167
2
24
208
7
38
284
26
74
430
82
162
572
166
318
822
243
513
960
314
Rate of Change in Population
0.92%
0.62%
2.62%
1.33%
0.83%
2.30%
1.57%
0.57%
1.41%
2.70%
1.45%
1.52%
1.91%
0.62%
1.03%
Oceania
World
2
2
2
2
6
13
21
30
427
791
978
1262
1650
2465
4066
6057
0.00%
2.20%
1.55%
1.92%
1.43%
0.51%
0.54%
0.80%
2.00%
1.59%
From Southgate, et al. (2007), Table 2.4
But, income per household is rising…
• Rising wealth
• A rising middle class in
Asia and Latin America.
Proportion of Income spent on
Different commodities as income
rises
• Demands
–
–
–
–
Different types of food.
Different types of housing.
Ecosystem services
Do we still prefer homes in
the country?
Reimer and Hertel, 2003
6
As income rises, the demand for land
shifts to environmental services.
6000000
Environmental Kuznets Curve
Trends in CRP Land
5000000
Acres
4000000
Environmental
Degradation
3000000
Ohio
2000000
Environment
Worsens
Environment
Improves
Great Lakes
1000000
0
1986
1991
1996
2001
2006
Source: USDA - FSA
Income per
Capita
7
Source: USDA – Forest Service, Forest Inventory and Analysis
Technical Change: Global Crop Yields
Tweeten and Thompson (2009)
8
Policies are increasing pressure on the
landscape
• Energy Independence and Security Act (2007)
– 36 billion gallons of ethanol, of which only 15
billion gallons from corn-based ethanol by 2022.
– Similar legislation in Europe
 Raises energy prices, increases demand for land
to do something besides food.
9
Pressure on our land base grows…
• Population and income shifts will continue to
– increase demand for meat and higher value
agricultural products
– Increase the demand for wood (more bigger
homes/construction).
– Increases demands on land.
• Biofuel policy will further increase demand for
land
• Rising incomes lead to greater demand for
ecosystem/carbon services
10
Climate Change Forests and Agriculture
• Agriculture and forestry are two of the most studied sectors
– Already “climate adapted”.
• Agriculture and food security are, arguably, two of the most
important concerns.
• What matters
–
–
–
–
–
Change in average temperature & precipitation
CO2 fertilization
Adaptation…
Change in variability (highs/lows; day/night)
Extreme events
7/17/2015
11
Output depends on climate
• Optimal output globally
occurs at an average
temperature of around 12
degrees C.
• With climate change,
output increases in colder
places, and decreases in
warmer places
Global Optimal
Temperature
12º C
• Great Lakes states are
slightly colder than 12
degrees C.
Nordhaus (2006), PNAS
12
Agriculture: Global yield impacts
Crop yields & climate
change:
• Temperate Zone:
Yields likely to
increase with 1-3 C
average temp.
increase.
•Tropical Zone:
More susceptible to
temp. increases.
From IPCC, WG II, 2007
Major Studies on US Agriculture &
Climate Change
• Adams et al. (1990): -10% to +10%
• Mendelsohn et al., (1994): -5.7% to + 1.2 %
• Adams et al. (1995): -1.5% to +0.9%
• Reilly et al. (2003): -$0.1 to -$5.0 bill.
– Production actually increases. Loss is caused by price declines due to greater
production. Southern US more susceptible.
• More recent studies suggest broader range of impacts:
– Schlenker et al. (2006): -11% to -21% per acre
– Deschenes and Greenstone (2007): +$1.3 bill.
– Massetti and Mendelsohn (2010): +$15 bill., or +1.5%
14
US $$ Impacts/Land
• Mendelsohn et al., (1994): -5.7% to + 1.2 %
Change
In Farm
Value
15
Major Studies on US Agriculture &
Climate Change
• Adams et al. (1990): -10% to +10%
• Mendelsohn et al., (1994): -5.7% to + 1.2 %
• Adams et al. (1995): -1.5% to +0.9%
• Reilly et al. (2003): -$0.1 to -$5.0 bill.
– Production actually increases. Loss is caused by price declines due to greater
production. Southern US more susceptible.
• More recent studies suggest broader range of impacts:
– Schlenker et al. (2006): -11% to -21% per acre
– Deschenes and Greenstone (2007): +$1.3 bill.
– Massetti and Mendelsohn (2010): +$15 bill., or +1.5%
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Agricultural Production Impacts
(Reilly et al., 2003)
Hadley Climate Center
Canadian Climate Center
2030
+2.1C
-4% Pr
2030
+1.4C
+6% Pr
2095
+5.8C
+17% Pr
2095
+3.3C
+33% Pr
Major Studies on US Agriculture &
Climate Change
• Adams et al. (1990): -10% to +10%
• Mendelsohn et al., (1994): -5.7% to + 1.2 %
• Adams et al. (1995): -1.5% to +0.9%
• Reilly et al. (2003): -$0.1 to -$5.0 bill.
– Production actually increases. Loss is caused by price declines due to greater
production. Southern US more susceptible.
• More recent studies suggest broader range of impacts:
– Schlenker et al. (2005, 2006): -11% to -21% per acre
– Deschenes and Greenstone (2007): +$1.3 bill.
– Massetti and Mendelsohn (2010): +$15 bill., or +1.5%
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Adaptation is critical: What we
produce will change…
• Doering et al. (2002) and Schlenker and Roberts (2009) indicate that
major crops (corn, soy, cotton) have maximum temperature
thresholds (exposure to max temps for 1 day).
• Corn and soybean yields:
– 2020 – 2049: Decrease 20% to 30%
– 2070 - 2090: Decrease 40% to 80%
• Do not account for technical change or adaptation (e.g., shifting
varieties)
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From Schlenker and Roberts (2009), PNAS
Several key points emerge from
economic studies of agriculture
• Adaptation is critical – all economic studies stress this.
• Adapting to weather is different than adapting to climate
(Massetti and Mendelsohn).
– Farmers already deal with weather and have many instruments
available to handle uncertainty:
• Forward contracting, crop insurance, retained earnings, diversification,
etc.
– Adapting to climate change by shifting to new varieties, altering
production practices (drainagin, irrigation, nutrient mgmt), and
ultimately taking on new crops will occur slowly, and with little
direction.
• Markets are important for adaptation (Adams, Reilly, et al.).
– Prices are a vital component of any adaptation strategy.
– Markets and society will benefit from ensuring free trade in
agricultural commodities.
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Forests: Ohio and Great Lakes States
A2
• Impacts from
– Temperature change
– Precipitation change
– Carbon fertilization
–
–
–
–
Rate of growth
Disturbance
Competition
Species range
B1
MIROC
HAD
CSIRO
A2
• These factors alter
A1B
A1B
B1
MIROC
HAD
CSIRO
Maps courtesy of R. Neislon,
USDA – Forest Service
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Forests: Ohio and Great Lakes States
• Impacts from
– Temperature change
– Precipitation change
– Carbon fertilization
Norby et al. (2006, PNAS) :
Doubling CO2 leads to
approximately
26% increase in NPP.
• These factors alter
–
–
–
–
Rate of growth
Disturbance
Competition
Species range
Duke Forest FACE site
nicholas.duke.edu
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Forests: Ohio and Great Lakes States
• Impacts from
– Temperature change
– Precipitation change
– Carbon fertilization
volume
• These factors alter
–
–
–
–
Rate of growth
Disturbance
Competition
Species range
age
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Forests: Ohio and Great Lakes States
• Impacts from
– Temperature change
– Precipitation change
– Carbon fertilization
http://forestecology.cfans.umn.edu/research.html
• These factors alter
–
–
–
–
Rate of growth
Disturbance
Competition
Species range
forestnet.com
24
Forests: Ohio and Great Lakes States
• Impacts from
– Temperature change
– Precipitation change
– Carbon fertilization
• These factors alter
–
–
–
–
Rate of growth
Disturbance
Competition
Species range
USDA Forest Service:
http://www.nrs.fs.fed.us/atlas/tree
25
State of Analysis in Forestry
Adaptation of Forests and People to Climate Change. 2009. Alexander Buck, Pia Katila and Risto
Seppälä. (eds.). IUFRO World Series Volume 22. Helsinki. 224 p.
Projected ecosystem shifts by 2030
1990
MC1
1990
LPJ
2030 Hadley
2030 Hadley
2030 CGM1
2030 CGM1
Bachelet et al. (2003)
Projected ecosystem shifts by 2090
1990
MC1
1990
LPJ
2090 Hadley
2090 Hadley
2090 CGM1
2090 CGM1
Bachelet et al. (2003)
Integration of Ecosystem effects:
CO2 fertilization + Δ in growth +
disturbance + species shifts.
Hadley
CGM1
Bachelet et al., (2004)
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Ecosystem models leave people and
markets out!
• How will people adapt?
–
–
–
–
Salvaging losses from dieback and disturbance
Pre-emptively harvesting as growth rates change
Regenerating new species as climate changes
Altering thinning and competition management
regimes
• Some changes in direct response to climate
change in specific locations (e.g., a disturbance
occurs)
• Other changes in direct response to changes in
prices (e.g., changes that occur elsewhere)
– The Great Lakes States are not “an island”!
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Effects of climate change on timber
output.
Effect of climate change on timber output
Average across climate scenarios
Regeneration => Stocks not affected by dieback
Dieback => Additional 1.6 million ha’s of dieback/yr (+38%) in NA
Regeneration Scenarios
PNW
120
150
South
100
PNW
South
N Conifer
100
Temp Dec
80
N Conifer
Temp Dec
Mountain
60
Million m3 per year
Million m3 per year
Dieback Scenarios
40
20
0
-20
Mountain
50
0
-50
-40
-100
-60
-80
1995
2005
2015
2025
2035
2045
2055
2065
2075
2085
2095
-150
1995
Year
2005
2015
2025
2035
Year
2045
2055
2065
2075
Sohngen and Sedjo (2005)
2085
31
2095
Role of international markets
• Output elsewhere rises more than US
• Prices fall (10-15%)
• Despite higher harvests in some regions/scenarios, negative
impacts on US producers/landowners due to lower prices
– $1.4-$2.1 billion annual effect nationally.
Regeneration
Dieback
600
NA
Change in harvest (Million m3)
CHange in Harvest (Million m3)
600
ROW
500
400
300
200
500
NA
ROW
400
300
200
100
0
100
-100
-200
0
1995
2005
2015
2025
2035
2045
Year
2055
2065
2075
2085
2095
1995
2005
2015
2025
2035
2045
Year
2055
Sohngen and Sedjo (2005)
2065
2075
2085
2095
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Timber: US Impacts on producers
Forest Fires/Dieback
Moderate/Regeneration
+ 2.5 C
+5C
Sohngen and Mendelsohn (2000)
Projected land use with climate change
Regions
Crop
Area by land use in 2002
Pasture
Forest
Urban
Range
Total
West
Mountain
Plains
Midwest
Northeast
South
21.5
42.7
130.3
133.9
15.7
53.4
4.0
8.3
28.1
29.4
7.5
44.1
39.3
25.5
9.2
77.2
78.4
177.0
7.9
5.7
9.8
17.6
14.8
29.3
33.2
186.6
178.3
0.1
0.0
4.2
105.9
268.8
355.6
258.3
116.5
308.0
National
397.6
121.4
406.6
85.2
402.2
1413.1
Area by land use in 2052
pasture
forest
urban
range
Regions
crop
Total From Haim et al., 2010
West
Mountain
Plains
Midwest
Northeast
South
8.5
40.1
101.9
124.2
13.9
51.2
5.7
7.2
39.6
19.3
5.2
23.8
33.5
27.9
31.7
65.4
68.0
163.4
36.0
8.9
32.2
48.7
29.3
59.7
22.2
184.7
150.2
0.7
0.0
10.1
105.9
268.8
355.6
258.3
116.4
308.0
National
339.7
100.8
389.9
214.7
367.9
1413.1
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Climate Changes Projections for
Ohio/Great Lakes
Variable
Temperature (⁰C)
Precipitation
Agricultural Returns
Forestry Returns
2030
2090
+ 1 to 1.5 ⁰C
+ 2 to 4.5 ⁰C
+ (mostly in winter)
+ (mostly in winter)
+ (0% to 2%)
+/- (-5% to +5%)
MI, MN, WI, IA ++
IL, IN, OH +
MI, MN, WI, IA +
IL, IN, OH -
+/- (-1% to +50%)
+/- (-5% to +255%)
Quite a bit of uncertainty due to confounding influences
CO2 fert is a plus, but extreme hot weather is negative.
Growth of trees increases, but potential dieback increases
35
How do landowners use climate
change information?
• Farmers are already adapting
– increasing number of
varieties, e.g., days to
maturity
– Infrastructure (drying;
drainage)
• Uncertainty is still very large
with climate projections
– Suggests that current
responses should be modest.
From IPCC, 2007, WG I SPM
• Will see increasing changes
by 2030; potentially dramatic
changes by 2090.
36
Forestland Owner Concerns
• How to manage the trees you have.
• How to adapt to changing disturbance patterns.
– Not enough evidence to start anticipating disturbance yet.
• How to plan for future forest when regenerating
– When should you account for climate change?
• How to manage market signals for timber outputs and
land value.
– 10-15% price effect in the next 30 years caused by climate
change is small compared to recent demand shock….
37
Conclusions
• Land gets more valuable
– Underlying trends in income, population and policy will have
stronger effects on farms and forests in the next 10-50 years
than climate.
• Agriculture: Adaptation likely modest in next 25 years; more
substantial beyond that.
– Gains in northern GL states; holding steady to losses in lower GL
states by 2050.
– No major changes now; continue trying new hybrids/varieties as
they come available.
• Forests: Ecological shifts modest in next 25 years; larger
beyond that, particularly in northern GL states.
– Output and land value could benefit in near term.
– Losses may accrue due to global impacts.
7/17/2015
38