Stockholm Institute of Transition Economics (SITE) cordially invites you to join the online brown bag seminar with Nick Hagerty presenting a working paper titled`Adaptation to Surface Water Scarcity in Irrigated Agriculture´.

Adaptation to surface water scarcity in irrigated agriculture

Abstract

How much do societies adapt to environmental change? I provide evidence on this question by studying surface water, a resource that is projected to become scarcer in much of the world yet is critical to sectors such as irrigated agriculture. To identify adaptation, I compare the long-run and short-run effects of water scarcity on agriculture, which I estimate using institutional variation in water allocation in California. First, I estimate long-run effects using spatial discontinuities in average water supplies at the borders between neighboring water utilities, where farmland is otherwise similar. Then, I estimate short-run effects using weather-driven fluctuations in water supplies from year to year. Using high-resolution satellite data on land use, I find that surface water scarcity reduces crop area and crop revenue (as predicted by crop choices) in both the short run and the long run. Differing crop substitution patterns imply that farmers adapt over the long run, but adaptation does not mitigate the impacts of water scarcity on agricultural output. Absent new investments or policy changes, projected declines in surface water supplies are likely to notably reduce the land area and output of agriculture.