How adoption rates, timing, and ceilings affect the value of ENSO-based climate forecasts

Abstract

An international wheat trade model incorporating climate variability is used to simulate different scenarios when wheat producers in the USA, Canada, and Australia adopt El Niño/Southern Oscillation (ENSO)-based climate forecasts for use in production decisions. Adoption timing and rates are varied across countries in the different scenarios. The results are consistent between the scenarios examined. Early adopters benefit the most, there is no incentive for more producers to adopt after 60 to 95% have adopted (meaning the adoption ceiling has been reached), and slower adoption corresponds to ceilings closer to 60 than 95%. When individual countries must decide whether or not to invest in ENSO technology and producer education programs to encourage adoption, results indicate the dominant strategy for each country is to invest. This is especially true if producers in other countries are adopting the use of climate forecasts. © 2007 Springer Science+Business Media B.V.