Climate Change and Canadian Agriculture and Forests Robert Mendelsohn Yale University Brent Sohngen Ohio State University 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Introduction Climate Change will Affect Canadian Agriculture and Forestry by Changing Productive Area Changing Productivity Changing Global Prices 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Canadian Farming Area Warming is expected to increase area suitable for agriculture Agriculture in northern regions in US expected to increase by 18-30% for 2.5C and –3 to 40% for 5C Farming area in southern Canada even more likely to increase 4/26/2019 Impacts and Adaptations

Canadian Forestry Area Large increase in northern boreal expected Most of this increase is inaccessible Commercial forest likely to expand Especially eastern softwoods and boreal 4/26/2019 Impacts and Adaptations

Agricultural Productivity Productivity per ha likely to increase from warming Productivity will increase from carbon fertilization Unknown what effect precipitation will have Unknown what effect interannual variation will have 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Forest Productivity Productivity per ha likely to increase from warming and carbon fertilization: 18-30% Unknown what effect precipitation will have Unknown what effect interannual variation will have 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Global Timber Prices 4/26/2019 Impacts and Adaptations

Global Prices Will Fall Climate Change likely to increase global production Global prices are expected to fall Fall less in dieback case-biome change assumed to cause lost inventory 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Results Agricultural Production will likely increase Forest Production will likely increase Impact on farmers and foresters depends on global prices Consumers will benefit 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Farm Impacts Production could increase 16 to 50% with 2.5C warming and –12% to +50% with 5C warming Annual welfare increases of $7 billion (USD) in 2.5C and 5C scenarios Price effects mitigate production effects 4/26/2019 Impacts and Adaptations

Present Value of Forestry Impacts Scenario Producer (Billion USD) Consumer Hamburg Regeneration $24.2 (10.7%) $29.4 (19.9%) Dieback -$8.7 (-3.8%) $17.0 (11.4%) Schlesinger $40.1 (17.7%) $24.7 (16.6%) $4.9 (2.2%) $10.7 (7.2%) 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Forestry Impacts Dieback lowers Canadian Benefits Large Benefits for Consumers in All Scenarios Annual Forestry Effects are about $0.5-$3 billion (USD) benefit 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Conclusion Canada likely beneficiary of warming Benefits in agriculture, forestry, and energy Small losses in other economic sectors (coast, water) 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Sequestration Canada has opportunity to sequester substantial carbon in forests: 0.75 billion tons by 2050 and 2.0 billion tons by 2100 Lengthen rotations Reduce fires Harvest mature timber Warming will increase forest area 4/26/2019 Impacts and Adaptations

Impacts and Adaptations Allow markets to adapt Allow farmers to increase farms Allow forest concessions to determine their own harvest rates Adjust public infrastructure as needed 4/26/2019 Impacts and Adaptations