David G. Abler

U.S. agriculture and climate change: New results

We examined the impacts on U.S. agriculture of transient climate change assimulated by 2 global general circulation models focusing on the decades ofthe 2030s and 2090s. We examined historical shifts in the location of cropsand trends in the variability of U.S. average crop yields, finding thatnon-climatic forces have likely dominated the north and westward movement ofcrops and the trends in yield variability. For the simulated future climateswe considered impacts on crops, grazing and pasture, livestock, pesticide use,irrigation water supply and demand, and the sensitivity to international tradeassumptions, finding that the aggregate of these effects were positive for theU.S. consumer but negative, due to declining crop prices, for producers. Weexamined the effects of potential changes in El Niño/SouthernOscillation (ENSO) and impacts on yield variability of changes in mean climateconditions. Increased losses occurred with ENSO intensity and frequencyincreases that could not be completely offset even if the events could beperfectly forecasted. Effects on yield variability of changes in meantemperatures were mixed. We also considered case study interactions ofclimate, agriculture, and the environment focusing on climate effects onnutrient loading to the Chesapeake Bay and groundwater depletion of theEdwards Aquifer that provides water for municipalities and agriculture to theSan Antonio, Texas area. While only case studies, these results suggestenvironmental targets such as pumping limits and changes in farm practices tolimit nutrient run-off would need to be tightened if current environmentalgoals were to be achieved under the climate scenarios we examined

Research Issues in Nonpoint Pollution Control

Research on nonpoint pollution control instruments has focused primarily on incentives applied either to production inputs that affect nonpoint pollution, or to ambient pollution concentrations. Both approaches may in theory yield an efficient solution. However, input-based incentives will generally have to be second-best to make implementation practical. Design issues include which inputs to monitor and the rates to apply to them. The limited research indicates that second-best, input-based incentives can be effective in adjusting input use in environmentally desirable ways. Alternatively, ambient-based incentives have theoretical appeal because efficient policy design appears to be less complex than for input-based incentives. These incentives have no track record nor close analogues that demonstrate potential effectiveness, however. Research on how households and firms might react in response to ambient-based incentives is needed before these instruments can be seriously considered.

The Demand for Food Quality in Rural China

Many studies of food demand do not use actual prices but unit values, obtained by dividing expenditures by the quantity consumed. This can bias empirical analyses because unit values are not exogenous market prices; they reflect household food quality choices within each food category. This article develops a framework for assessing the resulting bias in income and price elasticities of demand and applies the framework to data for rural China. Empirical results indicate that households in rural China tend to consume higher-quality food as income increases, with a greater sensitivity to income for basic foods than for luxury foods. Copyright 2009, Oxford University Press.

Multifunctionality, Agricultural Policy, and Environmental Policy

In addition to supplying food and fiber, agriculture is a source of public goods and externalities. This article addresses two questions. First, do price and income support policies promote a multifunctional agriculture in an effective manner? Second, would policies targeted more directly at multifunctional attributes be more efficient than price and income support policies? The answer to the first question is no, at least for policies targeted at outputs (price supports, export subsidies, etc.). Public goods are not directly linked to production, but rather to land use and agricultural structures. Evidence in response to the second question is sketchier with respect to policies targeted at land.

Environmental policies for agricultural pollution control

Agriculture and water quality - the issues environmental instrumentsfor agriculture indirect approaches to water quality protection in agriculture estimating benefits and costs of pollution control policies - theoretical and methodological issues water quality issues and policies for agriculture in the US water quality issues and policies for agriculture in Western Europe decomposing the effects of trade on the environment. (Part contents).

Parameter Uncertainty in CGE Modeling of the Environmental Impacts of Economic Policies

This study explores the role of parameter uncertainty in CGE modeling of the environmental impacts of macroeconomic and sectoral policies, using Costa Rica as a case for study. A CGE model is constructed which includes eight environmental indicators covering deforestation, pesticides, overfishing, hazardous wastes, inorganic wastes, organic wastes, greenhouse gases, and air pollution. The parameters are treated as random variables drawn from prespecified distributions. Evaluation of each policy option consists of a Monte Carlo experiment. The impacts of the policy options on the environmental indicators are relatively robust to different parameter values, in spite of the wide range of parameter values employed.

Technology as an Agricultural Pollution Control Policy

In this paper we consider the market-level impacts of factor-augmenting innovations designed to reduce the use of fertilizers and pesticides, first within the context of a simple two-factor model, and then through a simulation model of the U.S. corn market. In both models, the impacts depend on the output demand elasticity and input substitution elasticities. The principal conclusion of the simulation analysis is that the potential for new techniques to reduce the use of agricultural chemicals is limited. Capital-augmenting innovations would actually raise fertilizer and pesticide usage. Land-augmenting innovations would also tend to increase pesticide usage.

CLIMATE CHANGE, AGRICULTURE, AND WATER QUALITY IN THE CHESAPEAKE BAY REGION

Research on climate change and agriculture has largely focused on production, food prices, and producer incomes. However, societal interest in agriculture is much broader than these issues. The objective of this paper is to analyze the potential impacts of climate change on an important negative externality from agriculture, water quality. We construct a simulation model of maize production in twelve watersheds within the U.S. Chesapeake Bay Region that has economic and watershed components linking climate to productivity, production decisions by maize farmers, and nitrogen loadings delivered to the Chesapeake Bay. Maize is an important crop to study because of its importance to the regions agriculture and because it is a major source of nutrient pollution. The model is run under alternative scenarios regarding the future climate, future baseline (without any climate change), whether farmers respond to climate change, whether there are carbon dioxide (CO2) enrichment effects on maize production, and whether agricultural prices facing the region change due to climate change impacts on global agricultural commodity markets. The simulation results differ from one scenario to another on the magnitude and direction of change in nitrogen deliveries to the Chesapeake Bay. The results are highly sensitive to the choice of future baseline scenario and to whether there are CO2 enrichment effects. The results are also highly sensitive to assumptions about the impact of climate change on commodity prices facing farmers in the Chesapeake Bay region. The results indicate that economic responses by farmers to climate change definitely matter. Assuming that farmers do not respond to changes in temperature, precipitation, and atmosphericCO2 levels could lead to mistaken conclusions about the magnitude and direction of environmental impacts.

The Coordination and Design of Point-Nonpoint Trading Programs and Agri-Environmental Policies

Agricultural agencies have long offered agri-environmental payments that are inadequate to achieve water quality goals, and many state water quality agencies are considering point-nonpoint trading to achieve the needed pollution reductions. This analysis considers both targeted and nontargeted agri-environmental payment schemes, along with a trading program which is not spatially targeted. The degree of improved performance among these policies is found to depend on whether the programs are coordinated or not, whether double-dipping (i.e., when farmers are paid twice—once by each program—to undertake particular pollution control actions) is allowed, and whether the agri-environmental payments are targeted. Under coordination, efficiency gains only occur with double-dipping, so that both programs jointly influence farmers’ marginal decisions. Without coordination, double-dipping may increase or decrease efficiency, depending on how the agri-environmental policy is targeted. Finally, double-dipping may not solely benefit farmers, but can result in a transfer of agricultural subsidies to point sources.

Incorporating zero and missing responses into CVM with open-ended bidding: willingness to pay for blue skies in Beijing

Based on decision theory, this paper suggests a four-hurdle model to deal with zero and missing responses in the contingent valuation method with open-ended bidding, which is used to analyze the willingness to pay for blue skies in Beijing where air pollution is known to be very serious. The mean and the median of the predicted willingness to pay for blue skies per household are, respectively, 120.15 and 128.60 yuan, less than 0.2% of the per capita annual disposal income in Beijing. This is very low compared to results from studies of other countries. The empirical results also indicate that the four-hurdle model is superior to the Tobit model and raw data estimation.