Climate Change - What Do We Do About It?

Explorations on Agricultural Adaptation

Bruce A. McCarl

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University Distinguished Professor

Department of Agricultural Economics, Texas A&M University

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With contributions from

Yayun Birdy Chen Caroline Yifan Dong

Chengcheng Fei Lingyi Li

Jingyi Liu Mengqiao Liu

Zehao Naomi Liu Yifan Yang

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Seminars at University of Illinois and Heartland Workshop Oct 2025

What Will Be Discussed Here?

Adaptation - main concentration

Why?

Lack of coverage in literature

Inevitable need for ag to adapt

Feeling that incentives for ag mitigation are not so likely in next few years

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Topics

• Why adapt?
• Who acts and where is public action needed?
• Economic and geographic explorations of
• Adaptations that are happening
• Adaptation in modeling
• What work might economists undertake

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What is Our Decision Space?

Impacts Identifying what is happening and what is projected

Adaptation Altering actions to lessen the damages done or exploit opportunities under a current and future changed climate (without any effect on what the climate will be)

Mitigation Altering operations to reduce the amount of future change by limiting greenhouse gas emissions and/or altering other drivers of climate change like albedo

All will occur

McCarl, B.A., and T.W. Hertel, "Climate Change as an Agricultural Economic Research Topic", Applied Economic Perspectives and Policy, 40.1 (2018): 60-78.

Klein, R.J.T., S. Huq, F. Denton, T.E. Downing, R.G. Richels, J.B. Robinson, F.L. Toth, 2007: Inter-relationships between adaptation and mitigation. Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, M.L. Parry, O.F. Canziani, J.P. Palutikof, P.J. van der Linden and C.E. Hanson, Eds., Cambridge University Press 745-777.

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Adaptation

Where Does It Come In?

Climate Change Has Been Found To Have �Impacts on Agriculture�

For example climate change has been found to

• Cause agriculture to operate within a hotter current and future environment with more heat extremes.
• Cause agriculture to operate under altered precipitation with more common and severe extremes
• Alter crop productivity with changed yields, nutrition, and weeds. Also crops and grasses react to increased atmospheric carbon dioxide
• Alter livestock and grassland productivity and nutrition
• Change pest populations, spatial incidence and treatment cost.
• Shift regional advantage
• Reduce technical progress and yield growth rates
• Reduce agricultural total factor productivity
• Cause increases in water scarcity, changes in the timing of availability and enhanced intersectoral competition.
• Increase incidence and severity of damaging extreme events like fires, intense hurricanes, droughts, and heat waves, enhancing ag damages
• Alter variability in climate and, in turn, in agricultural production.

Ag needs to adapt to this

Adaptation and Its Inevitability

Additional Climate Change is Inevitable

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• In Agriculture climate change is impacting outcomes now.

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• About 1⁰ C of additional climate change appears inevitable in next 25 years ~ as much temperature change as has happened in last 100 years
• To maintain ag productivity adaptation is needed

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McCarl, B.A., "Elaborations on climate adaptation in US Agriculture", Choices, 30 (2), 1-5, 2015.

Era 1 – From now until 2045 there is not much less climate change from limiting emissions.

An inevitable amount of committed climate change.

Era 2 – Between 2045 and 2100 mitigation has effects an era of climate choices

3+℃ Todays path??

Who Adapts

Some IPCC Definitions (to me not so good)

Natural ecosystem responses with species reacting to climate

Autonomous Does not constitute a conscious response to climatic stimuli -- triggered by ecological changes in natural systems and by market or welfare changes in human systems.

Planned Adaptation that is the result of a deliberate policy decision, based on an awareness that conditions have changed or are about to change and that action is required to return to, maintain, or achieve a desired state.

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A little better from an Economic Standpoint

Natural ecosystem responses with species reacting to climate

Private Action that is initiated and implemented by individuals, households or private industry. Usually initiated in the actor's rational self-interest. (addresses private goods)

Public Action that is initiated and implemented by governments, NGOs or other broad groups. Public adaptation is usually directed at collective needs. (addresses public goods)

Adaptation forms

Climate Change 2007: Working Group II: Impacts, Adaptation and Vulnerability

Adaptation Action Often Involves a Public Role�

Public can play important role in each type of action

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• Supporter of private actions by
• providing information
• shaping market conditions and
• developing technologies

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• Direct actor (provider of public goods) by
• developing strategies
• providing financial and other resources,
• building projects (infrastructure development).

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• Influencer of natural adaptation by
• managing the unmanaged (move species, habitat)

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McCarl, B.A., A.W. Thayer, and J.P.H. Jones, "The Challenge of Climate Change Adaptation: An Economically Oriented Review", Journal of Agricultural and Applied Economics, Volume 48, Issue 4 November 2016, pp.321-344, 2016.

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Adaptation Action Directions by Party

Mainly Private

• Altered management, facility investment, enterprise choice, or resource use
• Altered locations of production, transport /processing

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Mainly Public

• Altered emergency response procedures
• Changes in regulations and standards to facilitate private actions
• Managing the unmanaged (e.g. moving butterfly populations or tree seeds).
• Direct capital investments in infrastructure (e.g., water management, roads)

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Both Public and Private

• Technology development (e.g., develop crop varieties)
• Creation/dissemination of adaptive information (through extension or other)
• Education (e.g., investment in adaptation ability)
• Adaptation institutions (e.g., altered insurance or early warning approaches)
• Incentives for Alterations in individual behavior (public incentives)
• Assistance in implementing adaptation (loans or facilitating migration).

Conceptual Framework for Climate Adaptation – Climate Effect on Yield

Schlenker, W. and Roberts, M.J., 2009. Nonlinear temperature effects indicate severe damages to US crop yields under climate change. Proceedings of the National Academy of sciences, 106(37), pp.15594-15598.

Muxi Cheng , “Three Essays on Climate Change Impacts on the U.S. Livestock Sector” , Texas A&M University, May, 2024

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Ag become less productive at extreme temperature

Sweet spot in between

There is an inflection Point

Many have found such relationships for crops, our team for livestock

Multicrop Adaptation Framework

Best enterprise depends on temperature

Higher temperatures lead to enterprise switching

Zilberman, D., Liu, X., Roland-Holst, D. and Sunding, D., 2004. The economics of climate change in agriculture. Mitigation and Adaptation Strategies for Global Change, 9, pp.365-382.

Some Analytical

Economic and Geographic Explorations

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• Observe adaptation to get insights on possibilities

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• Project adaptation through modeling
• Structural modeling
• Econometric Projection

A Few Private Autonomous

Adaptations We Have Seen

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Reporting from Several Dissertations

1977

2021

Adaptations in Production Location for Corn Grain

County Yield relative to continental average

Harvested Acreage

Best

places

shifted

north

& west

Acres

shifted

north

& west

Plus

reduced in

South

east

1977

2021

Jingyi Liu, dissertation

1977

2021

County Yield relative to Continental Average

Harvested Acreage

Best places

expanded

north & west

Out of south

east

Acres shifted

north & west

Plus left

South east

1977

2021

Adaptations in Production Location for Soybeans

Jingyi Liu, dissertation

1977

2021

Canada here we come

Oats Harvested Acreage

Acres shifted

north & west

Into Canada Plus left

Dakotas & Minn

1977

2021

Spring Wheat Harvested Acreage

Acres shifted

north & west

Into Canada Plus left

Most of US

Adaptations in Production Location for Wheat and Oats

Jingyi Liu, dissertation

More of Canada here we come - Centroids

Spring Wheat Oats Barley Pasture(southwest)

Soybeans Corn Cotton (East)

Adaptations in Production Location

Jingyi Liu, dissertation

Corn replaced by Upland Cotton & other hay

Jingyi Liu, dissertation

Acres shifted south & east

Acres shifted

north & west, the Northcentral clusters weaken

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Corn Acreage

1977

2021

Upland Cotton

Acres shifted north & west

Other hay Acreage

Cows In Cow Calf Operations as percent of National Total

• Movesd North and West
• Decline in Texas, Oklahoma, and Arkansas.
• Increase in Northern Plains and Mountain West.
• Herd has become more geographically concentrated.

1997

2022

• Strong consolidation into the Midwest and North Carolina.
• Decline in small, scattered operations elsewhere.
• Northward shift in concentration from Iowa and Illinois toward Minnesota.

Hog Inventory (Head)

Cowcalf and hogs

Cattle on Feed Inventory (Head)

• Feedlot operations have become increasingly concentrated in the High Plains region—Texas, Oklahoma, Kansas, and Nebraska

1977

2022

Crop nutrition

total kcal

Calorie Yield per acre Relative to National Average

Autonomous actions-- Cattle breeds

Angus breeders spread across Texas.

Brahman/ Brangus breeders are located in Southeast Texas, where the temperature-humidity index (THI) values for summer are high.

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Zhang, Y.W., A.D. Hagerman, and B.A. McCarl, "How climate factors influence the spatial distribution of Texas cattle breeds", Climatic Change, Volume 118, Issue 2, 183-195, 2013.

Beef Caloric Yield �

per acre from Grassland Relative to National Average

Total Crop Plus Beef Caloric Yield �Relative to National Average

1975

2018

Down stream effects

US Grain Elevator Employment Percent of National

US Animal Slaughter Employment

1975

2018

In both cases shifted north & west with more concentration

Naomi Liu, dissertation

Land Use and Crop Adaptation �Aricing from Econometrics on Historical Data

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Lingyi Li, “Three Essays on Water Management Strategy, Climate Change Impacts on Agricultural Land Uses, and Grass-Fed Beef Market” Texas A&M University, August, 2024

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Mu, J.E., B.A. McCarl, and A.M. Wein, "Adaptation to climate change: changes in farmland use and stocking rate in the U. S", Mitigation and Adaptation Strategies for Global Change, doi:10. 1007/s11027-012-9384-4, 2012.

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Jiyun Park, Essays on Impacts of Climate Change on the Agricultural Sector in the U.S., Ph.D. Dissertation, Texas A&M University, June 2012

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Cho, S.J., and B.A. McCarl, "Climate change influences on crop mix shifts in the United States", Scientific Reports, volume 7, Article number: 40845, 2017

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Grassland vs crop analysis

Grasslands dominate at hot and cold temperatures

Older analysis ignoring grass

Wheat when cold

Then corn and soy

Then cotton and sorghum

Public Facilitation of Private Adaptation

Genetic Engineered Crops

Caroline Dong, dissertation

Background on GE crops

• Why is GE crop use a climate change adaptation
• HT addresses herbicide tolerance and addresses weeds. Climate link - Some weeds being stimulated by CO2 and weed ranges expanding.
• BT addresses insects. Climate link - Some insect ranges expanding.
• Some have talked about drought tolerance

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Econometric based findings on �GE adoption implications

• Found GE dampened the northward movement of corn and soybean production location induced by climate factors

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• Confirmed the GE’s positive impact on crop yield and crop yield stability.

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• Econometrically we found GE adoption had a mitigating effect on crop climate sensitivity in
• average crop yield (strong)
• crop climate sensitivity in yield variance (less strong)
• Crop production location change in response to climate shifts.

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Extrapolation from Econometric exploration on �GE versus non GE effects on crop Yields

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Cotton has the most significant yield gain and yield risk reduction

The benefit for soybean is less significant

Clear yield gain and yield risk reduction under GE adoption

Extrapolation of Econometric Results on GE versus non GE effects on changes in harvested acres�Crop Centroids 1974-2020 Shifts

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GE moderated the northward movement but strengthened the westward movement

Some modeling of Adaptation

Implications

Caroline Dong, dissertation

Future cropping and Infrastructure�Excess supply and demand for corn under scenarios

Note northward shifts in excess supply

plus southern/central shifts in excess demand

Attavanich, W., B.A. McCarl, Z. Ahmedov, S.W. Fuller, and D.V. Vedenov, "Climate Change and Infrastructure: Effects of Climate Change on U.s. Grain Transport", Nature Climate Change, on line at doi:10.1038/nclimate1892, VOL 3 , 638-643, 2013.

Future cropping and Infrastructure Transport effects of Crop mix shifts�Total grain shipments to port areas for export

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1,000 tonnes

• In most cases less to Gulf
• More to PNW, Lakes and Atlantic

Future cropping and Infrastructure Infrastructure Implications

• More volume in north with corn replacing yields at 4x the bushels
• Road and bridge implications
• Grain elevator needs
• Climate change may well cause Lower Mississippi River to receive reduced grain shipments with more going to Lakes, East and West coast ports
• Upper Mississippi River is likely to receive higher grain shipments especially from Minnesota and North Dakota.
• Enlarging or improving conditions of locks and dams in that segment might be appropriate.

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Value of Adaptation ($ Million) - Mali

Loss = 105

15

2

6

38

90

102

98

67

Adaptations Considered

36% loss recovered

Climate Change Effects and Adaptation internationally

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Butt, T.A., B.A. McCarl, and A.O. Kergna, "Policies For Reducing Agricultural Sector Vulnerability To Climate Change In Mali", Climate Policy, Volume 5, 583-598, 2006.

Ebi, K.L., J. Padgham, M. Doumbia, A.O. Kergna, J.B. Smith, T.A. Butt, and B.A. McCarl, "Smallholders Adaptation to Climate Change in Mali", Climatic Change, DOI 10.1007/s10584-011-0160-3, 108: 423-436, 2011.

Butt, T.A., B.A. McCarl, J.P. Angerer, P.R. Dyke, and J.W. Stuth, "Food Security Implications of Climate Change in Developing Countries: Findings From A Case Study in Mali", Climatic Change, volume 68 (3), February, 355-378, 2005.

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Climate Change Effects and Adaptation Internationally�Mali Risk of Hunger - With and Without Adaptation

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69

75

42

49

Percent of Population

Without adaptation

With adaptation

HADCM: Hadley Coupled Model�CGCM: Canadian Global Coupled Model

Some General Concerns

Regarding adaptation

Caroline Dong, dissertation

Climate change and its continual progression raises a new demand on agriculture action as well as research and extension

Traditionally in agriculture we adapted management or did research on yield improvement with some alterations for say pest resistance or adopting new varieties

We could count on weather being stationary but now this is likely not so.

So we must devote resources to changing management and technological adaptation to maintain productivity at a spot

Adaptation and the Treadmill

Limited evidence indicates a gap between global adaptation needs and current fund expenditures

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We Are Under Investing in Ag Adaptation

Global estimates of the need for adaptation funds are variously estimated in the range of US$70 to US$100 billion annually with $10 billion for agriculture, Actual ag expenditures less than 5% in 2011

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As of 2022 adaptation finance flows to developing countries were US$28 billion but the adaptation finance gap, is estimated at US$187-359 billion per year. 

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Need to pick best projects

Chambwera, M., G. Heal, C. Dubeux, S. Hallegatte, L. Leclerc, A. Markandya, B.A. McCarl, R. Mechler, and J. Neumann, "Economics of Adaptation", IPCC WG II Contribution to The Fifth Assessment Report, Climate Change 2013: Impacts, Adaptation and Vulnerability, Cambridge 2014

UNFCC ag estimate is from McCarl, B.A., Adaptation Options for Agriculture, Forestry and Fisheries, A Report to the UNFCCC Secretariat Financial and Technical Support Division, 2007. http://unfccc.int/files/cooperation_and_support/financial_mechanism/application/pdf/mccarl.pdf

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UNEP Adaptaiton Gap Report https://www.unep.org/resources/adaptation-gap-report-2024

Can We Adapt Through R&D?�Maybe Not As Funds Shifting Away From Production

• Shift toward food processing, marketing and cost reduction (less on production enhancement) (Alston et al, 2009)

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• Graph based on data from CRIS by Chengcheng Fei

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• US public Agricultural R&D investment has trended downward since 2007 with a small increase since 2014

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• Adaptation and Mitigation are key tasks
• To maintain the current productivity level and reduce further damage
• Funding competition on adaptation from CRIS data

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• Climate change efforts are further diluting R&D productivity funds
• Mitigation also competing I have gotten a dozen or so contacts on sequestration in recent past

Climate Change Adaptation and Mitigation Are Taking More of R&D Investment

What Work Economists Might Undertake

• Identify the economics of potential adaptation strategies and where the strategies are most relevant
• Identify actions that have been used and their broader implications
• Propose and evaluate incentive schemes and needs for private versus public adaptation support
• Develop adaptation proposal evaluation procedures
• Identify costs of adaptation including transaction costs

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Thank You For Your Attention

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Questions?

• Crops –a) altering timing; b) changing varieties; c) more heat and drought tolerant crops; d) importing mixes from lower latitudes and elevations; e) changing crop rotations; f) changing rotation age; g) altering pest mgt.
• Nutrients – a) changing fertilization; b) precision application; c) organic additions; d) time release forms; and e) legumes in rotation.
• Water – a) irrigation; b) improving water application and its timing; c) adding drainage; d) managing salinity; e) harvesting water; f) integrating fertilization and irrigation; g) leveling, contouring; and h) using weather information.
• Soil mgt – a) altering tillage; b) reducing erosion and increasing water retention; c) terraces, buffer strips etc.; c) deep-rooted vegetation; d) reducing disturbance; e) enhancing organic; f) reducing compaction; g) liming; h) increasing soil coverage; and j) biochar addition.
• Land use – a) mix between crops, grasslands, forest, and wetlands; and b) more intensive production facilities like greenhouses.
• Diversification – a) diversification between crops, livestock, grasslands, agroforestry, grass varieties, animal species and breeds, and greenhouses b) changing the balance between farm and off-farm income sources.

Fundamental Ag Adaptation Forms with Examples

McCarl, B.A., Adaptation Options for Agriculture, Forestry and Fisheries, A Report to the UNFCCC Secretariat Financial and Technical Support Division, 2007. http://unfccc.int/files/cooperation_and_support/financial_mechanism/application/pdf/mccarl.pdf

McCarl, B.A., A.W. Thayer, and J.P.H. Jones, "The Challenge of Climate Change Adaptation: An Economically Oriented Review", Journal of Agricultural and Applied Economics, Volume 48, Issue 4 November 2016, pp.321-344, 2016.

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• Livestock – a) stocking rates; b) feed additives; c) feed and fodder storage; d) sanitary conditions; e) veterinary practices; f) herd replenishment; g) grazing and supplemental feeding and h) breeds and species.
• Grassland improvement – a) grass species mix; b) management; c) erosion control; d) restoring degraded; e) deeper rooted species and f) providing nutrients.
• Fire management – a) procedures for prevention, detection, control, restriction, and suppression; b) patchwork patterns to suppress fire spread; and c) emergency protocols for asset movement that facilitate damage reduction.
• Risk management – a) schemes for risk sharing through insurance, land tenure, contracting and financing; b) early warning weather forecasting; c) commodity pooling; d) use of cooperatives; and e) adjusting/using crop share arrangements.
• Information provision and assembly – a) improving education; b) expanding outreach and extension; c) providing adaptation information through media.

Fundamental Ag Adaptation Forms with Examples

McCarl, B.A., Adaptation Options for Agriculture, Forestry and Fisheries, A Report to the UNFCCC Secretariat Financial and Technical Support Division, 2007. http://unfccc.int/files/cooperation_and_support/financial_mechanism/application/pdf/mccarl.pdf

McCarl, B.A., A.W. Thayer, and J.P.H. Jones, "The Challenge of Climate Change Adaptation: An Economically Oriented Review", Journal of Agricultural and Applied Economics, Volume 48, Issue 4 November 2016, pp.321-344, 2016.

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Can We Adapt Through R&D?�Maybe Not As Funds Shifting Away From Production

• Shift toward food processing, marketing and cost reduction (less on production enhancement) (Alston et al, 2009)

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• Graph based on data from CRIS by Chengcheng Fei

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• US public Agricultural R&D investment has trended downward since 2007 with a small increase since 2014

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• Adaptation and Mitigation are key tasks
• To maintain the current productivity level and reduce further damage
• Funding competition on adaptation from CRIS data

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• Climate change efforts are further diluting R&D productivity funds
• Mitigation also competing I have gotten a dozen or so contacts on sequestration in recent past

Climate Change Adaptation and Mitigation Are Taking More of R&D Investment

Adaptations in Production Location for Cotton Upland

and other hay

Cotton Upland Harvested Acreage

Jingyi Liu, dissertation

Acres shifted south & east, only in US

Acres shifted

north & west, the Northeast clusters weaken

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Other hay Harvested Acreage

1977

2021

1977

2021

Share of Upland Cotton Harvest Acres

1975

2020

• Decline in California and southern Arizona.
• Shift northward from central Texas into the High Plains and Kansas, while decreasing in Oklahoma.
• Slight rebound in the Southeast (Georgia–Alabama–Carolinas).

Share of Potatoes Harvest Acres

1980

2010

• Scattered southern production declined sharply.
• Concentrated growth in Idaho, Washington, and Oregon.
• Significant expansion in Maine.

Share of Barley Area

• Shifted northwest into the Northern Plains and Canada, with reduced production across the U.S.

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1977

2022

Share of Pasture Other Hay

• No huge shift, but production expanded slightly northward into southern Canada, while remaining widespread across the U.S. interior.

1977

2022

Share of Alfalfa Area

• Shifted northward, with less production in the U.S. South

1977

2022

Share of Tomatoes (in the Open) Harvest Acres

1997

2022

• Strong concentration in California and Florida.
• Sharp decline in production across other regions.

Share of Tomatoes (in the Open) Harvest Acres

1997

2022

• Decline in southern California, with production concentrating in the Central Valley.
• Decrease across Florida counties, especially in the south.
• Overall contraction toward a few high-production regions.

Share of Potatoes Production

1980

2010

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• Scattered southern production declined sharply.
• Concentrated growth in Idaho, Washington, and Oregon.
• Significant expansion in Maine.