A New Normal?

Over at G-FEED, short for Global Food, Environment and Economics Dynamics,  a new site and blog by an interdisciplinary group of scholars, David Lobell has offered his first post in which he considers whether this summer's heat wave is "the new normal."

I've done rough back-of-the-envelope extrapolations from earlier work that suggest, with respect to temperatures, this summer will be the new normal (average or expected outcome) in about 10-15 years.  Rainfall is a different story, but check out G-FEED...

David Lobell on World News with Diane Sawyer

Last night my colleague David Lobell was on World News with Diane Sawyer.

Tracking the Heat and Drought

Most commentators attribute this year's bad crop progress with drought--a lack of rainfall.  The problem with traditional drought measures is that they don't predict crop outcomes especially well.  Our measure of extreme heat--degree days above 29C--predicts crop outcomes a lot better.

Extreme heat is correlated with traditional drought measures, but only very roughly.  But it probably has a stronger association with water stress in plants, since there tends to more evaporation and evapotransporation when it's very hot (vapor pressure deficit increases).  Also, heat can have its own direct damaging effects on plants.

So, here's the current situation for extreme heat and precipitation the US relative to history since 1960.  We obtain a single nationwide index by weighting counties by trend production.  County level measures are derived from our own daily fine-scale (4km grid) weather data, which combines PRISM monthly data with daily weather station data.

These plots were generated by my colleague Wolfram Schlenker.  We're also going to start cross-posting at our joint site G-FEED, a group that includes Wolfram as well as David Lobell, Solomon Hsiang and Jarrod Welch.

The gray lines show earlier years, the hottest prior to this year being 1988 and 1983, which had really bad crop outcomes.  The driest year was also 1988; but 1983 is one of the lines in the middle somewhere.

From the extreme heat measure, it looks like we're on track for the worst yield outcome (relative to trend) in over 50 years. Precipitation doesn't look quite as bad, but close.

One key feature that I think makes this year especially bad:  the slope of the extreme heat line during the month of July appears to be the steepest on record while the precip line for July appears to be the shallowest on record.  This could turn out a good bit worse than 1988.

Actually, it's not Obamacare for Our Corn

It was a great line by Steven Colbert and Bruce Babcock.  But it's not true.  Federal crop insurance has way more Big Government and a lot less efficiency than Obamacare.

A few differences:

1. Obamacare has subsidies for low-income households; crop insurance has huge subsidies for all the farmers, regardless of farm size or farm household wealth.

2. Obamacare lets the private market determine premiums and pay indemnities; crop insurance policies and premiums are all set by the government, and the government pays most indemnities, with private insurance companies basically getting fat commissions for marketing government policies.

3. Obamacare requires everyone be insured, which forces pooling; crop insurance isn't mandatory, so they have to just crank up the subsidies.  In 1995 they tried to require enrollment in the insurance program in order to qualify for other kinds of subsidies, but farmers complained and so they rolled back this requirement.  They've also threatened many times not to give disaster assistance unless farmers are insured, but usually they give farmers disaster payments regardless of whether they insure.

But like health insurance, crop insurance wouldn't exist without government involvement.

It will be interesting to see how big those indemnity checks will be this year.

Heat, Drought and the Cattle Cycle

News coverage of crop losses has actually has been pretty good. It has emphasized losses for consumers and gains for farmers, who are insured and get higher prices.

But why do they always call it drought?  I know rainfall is well below normal, but it's the heat too.

One interesting thing that I think I've brought up before on this blog:  In the short run meat prices can actually fall, as livestock farmers cull herds and some of their breeding stock.  Of course that blip in extra supply means less future supply and higher prices next year.  The resulting "cattle cycle" was historically emphasized by freshwater macro types looking for fundamental causes for business cycles.  I'll leave it to you to decide whether cattle cycles bear any resemblance to the macroeconomic business cycle we're currently experiencing.

Since the lifecycle is shorter, chicken prices will rise sooner, as will eggs and dairy products.  Retail price increases won't be huge, though.  Retail prices are still mostly made up of labor and transportation costs.

Obamacare for Our Corn

This has to be the funnest thing an agricultural economist could ever do...

Great job Bruce!

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
U.S. Agriculture & Drought Disaster - Bruce Babcock
www.colbertnation.com
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Fingerprinting Climate Change

I'd like to think I helped inspire Krugman to write his column today, since he linked here the other day from his blog.  Hardly anyone reads this thing, but if the right people read it, maybe it can have some second-hand impact?  This and my slightly easing schedule inspires me to try getting back to it.

Hansen's climate dice paper shows how much the relative frequency of extremely warm temperatures has increased.  But how is it that scientists know warming is due to greenhouse gas concentrations (primarily CO2)?

Earlier this summer I got to attend a workshop in Banff on climate change detection and attribution, a research area dedicated to precisely this question.  Besides a few token impacts guys like myself, the workshop was attended mainly by top people in detection and attribution.  It was interesting for me to see the technical side of this, which basically involves some sophisticated statistical modelling.

The basic idea is to look at how the "fingerprint" of warming matches the core predictions of the various climate models.  This fingerprint includes much more than the amount of surface-temperature global warming.  They pay attention to the pattern of warming across different latitudes.  The climate models predict more surface warming in the polar regions and especially the north, as compared to equatorial regions. Most compelling to my mind, is the fingerprint of predicted warming and cooling in different layers of the atmosphere.   Unique to greenhouse gas emissions, the models actually predict cooling in the lower stratosphere, but more warming in the upper troposphere in equatorial latitudes.  I understand physicists predicted this distinct fingerprint before they had even begun measuring temperatures throughout the troposphere and stratosphere. 

Here is a picture from Ben Santer's talk that illustrates the model-predicted pattern of warming from GHG in comparison to other factors that might cause warming.

And here's what data on actual warming look like:

In a nutshell, this is why the real climate scientists--about 97% of them--are not only convinced that climate change is real, but that it is due to greenhouse gas emissions and is human induced.
(If you dig around the link to the workshop you can find a video of my talk on agricultural impacts....)

The Heat: Is it Weather or is it Climate Change?

Update 2: Even more kudos to Krugman for linking here and expanding on my first point.  It's amazing what a link from him does to visit numbers on this little ol' blog.

Update: Kudos to Paul Krugman to drawing attention to the issue.

So, the Midwest is getting crushed by heat and drought, and crop prices are reaching new record highs.

I'm a little depressed but not at all surprised by this.  But that sentiment kind of matches everything in our economic, political and environmental world.  Aside from some major life changes and general busyness, it's probably a reason I haven't been blogging much---there's really not much to say that hasn't already been said many times.

Anyhow, to reiterate a few basic points:

1. The usual politically-correct line is that we cannot tell whether its weather or climate change.  The weather fluctuates and heat waves happen. But the data show that the relative frequency of extreme events like this has increased tremendously.  Just look a few posts back or read Jim Hansen's Climate Dice paper (PDF).  Statistically speaking, this is almost surely climate change.

2. This kind of heat for the US Midwest is already past due. I haven't crunched this season's numbers yet, but eyeballing it, this summer--about like 1988--is probably about what we should expect to be typical in the relatively near future.

3. Some new 'drought tolerant' varieties were rolled out this year. I guess we'll see how they do.  So far it seems markets are not all that impressed.

4. Don't cry for the farmers.  Prices are going up proportionately way more than yields will go down, so farm income is likely to rise on average.  And besides, they have a sweetheart deal on subsidized crop insurance.  Then they'll get disaster payments.  Unlike health care and education for poor children, safety nets for wealthy farmers has always been a prerogative with happy bipartisan support. There are probably a few farmers out there that will get hurt by this, but far more farmers will get  richer off this heat and drought than go bankrupt.

5. The biggest losers are consumers, especially the poor in food-importing developing countries.