Determining climate effects on US total agricultural productivity

Abstract

The sensitivity of agricultural productivity to climate has not been sufficiently quantified. The total factor productivity (TFP) of the US agricultural economy has grown continuously for over half a century, with most of the growth typically attributed to technical change. Many studies have examined the effects of local climate on partial productivity measures such as crop yields and economic returns, but these measures cannot account for national-level impacts. Quantifying the relationships between TFP and climate is critical to understanding whether current US agricultural productivity growth will continue into the future. We analyze correlations between regional climate variations and national TFP changes, identify key climate indices, and build a multivariate regression model predicting the growth of agricultural TFP based on a physical understanding of its historical relationship with climate. We show that temperature and precipitation in distinct agricultural regions and seasons explain ~70% of variations in TFP growth during 1981-2010. To date, the aggregate effects of these regional climate trends on TFP have been outweighed by improvements in technology. Should these relationships continue, however, the projected climate changes could cause TFP to drop by an average 2.84 to 4.34% per year under medium to high emissions scenarios. As a result, TFP could fall to pre-1980 levels by 2050 even when accounting for present rates of innovation. Our analysis provides an empirical foundation for integrated assessment by linking regional climate effects to national economic outcomes, offering a more objective resource for policy making.