Overview

Atmospheric concentrations of carbon dioxide, methane, nitrous oxide, and other greenhouse gases have increased substantially since pre-industrial times, and are expected to continue their steep rate of increase if current emission patterns continue. The major human source of greenhouse gas emissions is burning fossil fuels. ERS research focuses on how changes in global climate may affect both U.S. and world agricultural production, and investigates those agricultural practices—such as conservation tillage or winter cover crops—that can mitigate climate change by reducing emissions or increasing carbon sequestration.

 Fluctuations of CO2 and temperature have roughly mirrored each other over the last 160,000 years. Over the last century, the Earth has warmed about 1° F; the 1995 Report of the UN-sponsored Intergovernmental Panel on Climate Change (IPCC) concluded that there is a discernible human influence on global climate through greenhouse gas accumulations in the atmosphere. ERS research on climate change has two major components: the longrun impacts of greenhouse gas accumulation on agriculture throughout the world, and the economics of options for agriculture to reduce greenhouse gas accumulation.

Longrun Impacts on Agriculture

Farming occurs in those areas where potential agricultural productivity is consistently high. Agricultural productivity, in turn, depends on climate's influence on basic growing conditions such as air temperature, soil temperature, and soil moisture. Another factor is the concentration of carbon dioxide in the atmosphere, which affects crop productivity through its influence on water use and photosynthesis. Changes in climate and atmospheric concentrations of CO2, therefore, would have longrun impacts on the world's ability to produce agricultural commodities.

Farmers would respond to these changes in agricultural possibilities by adopting alternative production systems (such as changing crop and livestock varieties, employing irrigation, etc.) and by expanding (or abandoning) agricultural lands. Agricultural land could expand either in areas currently suitable for agricultural production or into areas that are currently unsuitable but that develop productive possibilities under global climate change. But adaptations would not end there. The agricultural modifications would generate additional responses from producers in other sectors as well as from domestic and foreign consumers.

ERS's research on the longrun economic impacts accounts for both the immediate effects on agricultural possibilities and the subsequent economic responses, particularly in the agriculture sector. The scope of ERS's research is also global in order to examine the distribution of economic impacts round the world and its effects on international trade. Recent analyses of projected increases in global temperature of 2.8 to 5.2°C (5.0 to 9.4°F) indicate that climate change would likely inhibit world agricultural production by the end of the 21st century. Impacts on U.S. agricultural production, however, are indeterminant. Other analyses, however, indicate that the direct growth-promoting effects on crops generated by a 225-ppmv (parts per million by volume) increase in atmospheric CO2 would likely boost world and U.S. agricultural production. Both sets of analyses are limited in one or more crucial ways. Hence, the net effects of greenhouse gas emissions on agriculture remain uncertain.

Mitigation Options in Agriculture

The three major greenhouse gases emitted by agriculture are carbon dioxide, methane, and nitrous oxide. U.S. agriculture represents a small source of carbon emissions, but emits nearly three-quarters of U.S. nitrous oxide emissions and about a third of methane emissions. Mitigation options include better management of nitrogen fertilizers (nitrous oxide) and livestock waste (methane). A number of farm management practices could remove carbon from the atmosphere and incorporate it into soils, thereby creating a carbon “sink.”

The international community is developing a system of commitments toward emission reductions, linked with a series of flexibility instruments to allow trades among parties. The economic impact on the agricultural sector of any treaty would depend upon resolution of a number of outstanding issues in the international negotiations and the mix of domestic policies chosen to implement the treaty.

Features

Economics of Sequestering Carbon in the U.S. Agricultural Sector—Atmospheric concentrations of greenhouse gases can be reduced by withdrawing carbon from the atmosphere and sequestering it in soils and biomass. This report analyzes the performance of alternative incentive designs and payment levels if farmers were paid to adopt land uses and management practices that raise soil carbon levels. Amber Waves summary article (March 2004).

Economic Impacts of Carbon Charges on U.S. Agriculture—Evaluates the farm sector impacts that would result from implementing a system of carbon-based charges on energy-intensive inputs. The analysis emphasizes production costs, crop acreage, commodity prices, input use, farm income, and farm welfare. The charges considered—$14, $100, and $200 per metric ton of carbon—were developed from the literature and are consistent with reducing U.S. greenhouse gas emissions to 1990 levels, minus 7 percent, by 2010 under different levels of carbon trading and developing country participation. Impacts are relatively modest for a charge of $14 per mt. Producer and consumer surplus decline less than 0.5 percent relative to baseline conditions, and price increases and production declines across crop and livestock commodities are all less than 1 percent. As the carbon charge increases, farm sector impacts become more pronounced and the significance of the aggregate effect becomes more subjective. Climatic Change (9/01)

Recommended Readings

Agricultural Adaptation to Climate Change: Issues of Longrun Sustainability—Early evaluations of the effects of climate change on agriculture, which did not account for economic adjustments or consider the broader economic and environmental implications of such changes, overestimated the negative effects of climate change. This report focuses on economic adaptation and concludes there is considerably more sectoral flexibility and adaptability than found in other analyses.

World Agriculture and Climate Change: Economic Adaptations (AER-703)—A comprehensive, economically consistent projection of how climate change might alter the location and intensity of farming. Directly links detailed climate projections with distributions of land and water resources, and estimates the economic effects in the major resource-using sectors (crop, livestock, and forestry).

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Related Briefing Rooms

Conservation and Environmental Policy
Global Resources and Productivity

Questions and Answers

Important research questions and answers on issues of climate change impacts, agriculture's role, and policies to reduce global climate change.

Related Links

USDA Global Change Program Office—USDA-wide coordinator of agriculture, rural, and forestry-related global change program and policy issues.

U.S. Global Change Research Program—Provides the foundation for improving predictions of seasonal-to-interannual climate fluctuations and long-term climate change.

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