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Climate change undeniably impacts agriculture and natural resources, enterprises and markets. For informed decision making, there is a need for information on climate change adaptation possibilities and mitigation alternatives. Mathematical programming has been used to address the economic aspects of such questions and allows analysis as climate change moves the environment into previously unobserved conditions. It allows us to model spatial and dynamic features of the issue and analyze heretofore unobserved adaptation and mitigation possibilities. This review provides an overview of and references for modeling techniques, conceptual issues, and major assumptions involved with using mathematical programming as a climate change economic analyzing engine, along with a brief comparison with other methods. We also review a number of studies applying mathematical programming to examine climate change impacts, adaptation, and mitigation issues in the agricultural and natural resources arena. Finally, we present a very brief discussion on research needs. Expected final online publication date for the Annual Review of Resource Economics, Volume 15 is October 2023. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates. 

Abstract In the United States, thermal power plant electrical generators (EGs) are large water diverters and consumptive users who need water for cooling. Retrofitting existing cooling systems to dry cooling and building new facilities with dry cooling can save water and reduce EG's vulnerability to drought. However, this can be an expensive source of water. We estimate that the cost of water saved by retrofitting cooling in existing EGs ranges from $0.04/m³to $18/m³depending on facility characteristics. Also water savings from building new EGs with dry cooling ranges in cost per unit water from $1.29/m³to $2.24/m³. We compare costs with that for water development projects identified in the Texas State Water Plan. We find the water cost from converting to dry cooling is lower than many of the water development possibilities. We then estimate the impact of climate change on the cost of water saved, finding climate change can increase EG water use by up to 9.3% and lower the costs of water saved. Generally, it appears that water planners might consider cooling alterations as a cost competitive water development alternative whose cost would be further decreased by climate change. 

Abstract Climate change and increasing demands are stressing water allocation. In many places, water reallocation and expensive water development actions are being undertaken with more likely to be stimulated by climate change. Here we examine reallocation and development actions between and within municipal, agricultural, and energy industry users in a water‐scarce region and examine how climate change stimulates further actions. We built a regional agricultural, water and electricity two‐stage stochastic model that simulates optimal strategies in South Central Texas. We find that climate change significantly expands water development, causes agricultural water use reduction and reallocation to municipal interests.