A key strategy for agriculture to adapt to climate change is by switching crops and relocating crop production. We develop an approach to estimate the economic potential of crop reallocation using a Bayesian hierarchical model of yields. We apply the model to six crops in the United States, and show that it outperforms traditional empirical models under cross-validation. The fitted model parameters provide evidence of considerable existing climate adaptation across counties. If crop locations are held constant in the future, total agriculture profits for the six crops will drop by 31% for the temperature patterns of 2070 under RCP 8.5. When crop lands are reallocated to avoid yield decreases and take advantage of yield increases, half of these losses are avoided (16% loss), but 57% of counties are allocated crops different from those currently planted. Our results provide a framework for identifying crop adaptation opportunities, but suggest limits to their potential.

Keep in touch with the Grantham Research Institute at LSE
Sign up to our newsletters and get the latest analysis, research, commentary and details of upcoming events.