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  1. The effects of climate change on natural systems will be substantial, widespread, and likely irreversible. Warmer temperatures and changing precipitation patterns have already contributed to forest dieback and pushed some species toward extinction. Natural systems contribute to human welfare both as an input to the production of consumption goods and through the provision of nonuse values (i.e., existence and bequest values). But because they are often unpriced, it can be difficult to constrain these benefits. Understanding how climate change effects on the natural capital stock affect human well-being, and therefore the social cost of carbon (SCC), requires understanding not just the biophysical effects of climate change but also the particular role they play in supporting human welfare. This article reviews a range of topics from natural capital accounting through climate change economics important for quantifying the ecological costs of climate change and integrating these costs into SCC calculations. Expected final online publication date for the Annual Review of Resource Economics, Volume 14 is October 2022. Please see for revised estimates.
    Free, publicly-accessible full text available October 5, 2023
  2. Abstract

    A rich body of evidence from local-scale experiments and observational studies has revealed stabilizing effects of biodiversity on ecosystem functioning. However, whether these effects emerge across entire regions and continents remains largely overlooked. Here we combine data on the distribution of more than 57,500 plant species and remote-sensing observations throughout the entire Western Hemisphere to investigate the role of multiple facets of plant diversity (species richness, phylogenetic diversity, and functional diversity) in mediating the sensitivity of ecosystems to climate variability at the regional-scale over the past 20 years. We show that, across multiple biomes, regions of greater plant diversity exhibit lower sensitivity (more stable over time) to temperature variability at the interannual and seasonal-scales. While these areas can display lower sensitivity to interannual variability in precipitation, they emerge as highly sensitive to precipitation seasonality. Conserving landscapes of greater diversity may help stabilize ecosystem functioning under climate change, possibly securing the continuous provisions of productivity-related ecosystem service to people.

  3. Free, publicly-accessible full text available March 3, 2023
  4. Abstract

    Climate change is expected to increase the scarcity and variability of fresh water supplies in some regions with important implications for irrigated agriculture. By allowing for increased flexibility in response to scarcity and by incentivizing the allocation of water to higher value use, markets can play an important role in limiting the economic losses associated with droughts. Using data on water demand, the seniority of water rights, county agricultural reports, high-resolution data on cropping patterns, and agronomic estimates of crop water requirements, we estimate the benefits of market-based allocations of surface water for California’s Central Valley. Specifically, we estimate the value of irrigation water and compare the agricultural costs of water shortages under the existing legal framework and under an alternate system that allows for trading of water. We find that a more efficient allocation of curtailments could reduce the costs of water shortages by as much as $362 million dollars per year or 4.4% of the net agricultural revenue in California in expectation, implying that institutional and market reform may offer important opportunities for adaptation.

  5. Abstract

    The direct impacts of climate change on crop yields and human health are individually well-studied, but the interaction between the two have received little attention. Here we analyze the consequences of global warming for agricultural workers and the crops they cultivate using a global economic model (GTAP) with explicit treatment of the physiological impacts of heat stress on humans’ ability to work. Based on two metrics of heat stress and two labor functions, combined with a meta-analysis of crop yields, we provide an analysis of climate, impacts both on agricultural labor force, as well as on staple crop yields, thereby accounting for the interacting effect of climate change on both land and labor. Here we analyze the two sets of impacts on staple crops, while also expanding the labor impacts to highlight the potential importance on non-staple crops. We find, worldwide, labor and yield impacts within staple grains are equally important at +3C warming, relative to the 1986–2005 baseline. Furthermore, the widely overlooked labor impacts are dominant in two of the most vulnerable regions: sub-Saharan Africa and Southeast Asia. In those regions, heat stress with 3C global warming could reduce labor capacity in agriculture by 30%–50%, increasing food pricesmore »and requiring much higher levels of employment in the farm sector. The global welfare loss at this level of warming could reach $136 billion, with crop prices rising by 5%, relative to baseline.

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  6. Abstract

    Many studies have estimated the adverse effects of climate change on crop yields, however, this literature almost universally assumes a constant geographic distribution of crops in the future. Movement of growing areas to limit exposure to adverse climate conditions has been discussed as a theoretical adaptive response but has not previously been quantified or demonstrated at a global scale. Here, we assess how changes in rainfed crop area have already mediated growing season temperature trends for rainfed maize, wheat, rice, and soybean using spatially-explicit climate and crop area data from 1973 to 2012. Our results suggest that the most damaging impacts of warming on rainfed maize, wheat, and rice have been substantially moderated by the migration of these crops over time and the expansion of irrigation. However, continued migration may incur substantial environmental costs and will depend on socio-economic and political factors in addition to land suitability and climate.