Costs of adjustment to climate change

The present paper argues that the costs of climate change are primarily adjustment costs. The central result is that climate change will reduce welfare whenever it occurs more rapidly than the rate at which capital stocks (interpreted broadly to include natural resource stocks) would naturally adjust through market processes. The costs of climate change can be large even when lands are close to their climatic optimum, or evenly distributed both above and below that optimum.

Climate change, human impacts, and the resilience of coral reefs

The diversity, frequency, and scale of human impacts on coral reefs are increasing to the extent that reefs are threatened globally. Projected increases in carbon dioxide and temperature over the next 50 years exceed the conditions under which coral reefs have flourished over the past half-million years. However, reefs will change rather than disappear entirely, with some species already showing far greater tolerance to climate change and coral bleaching than others. International integration of management strategies that support reef resilience need to be vigorously implemented, and complemented by strong policy decisions to reduce the rate of global warming.

Implications of seasonal climate forecasts on world wheat trade: a stochastic, dynamic analysis

Improvements in seasonal climate forecasts have potential economic implications for international agriculture. A stochastic, dynamic simulation model of the international wheat economy is developed to estimate the potential effects of seasonal climate forecasts for various countries' wheat production, exports and world trade. Previous studies have generally ignored the stochastic and dynamic aspects of the effects associated with the use of climate forecasts. This study shows the importance of these aspects. In particular with free trade, the use of seasonal forecasts results in increased producer surplus across all exporting countries. In fact, producers appear to capture a large share of the economic surplus created by using the forecasts. Further, the stochastic dimensions suggest that while the expected long-run benefits of seasonal forecasts are positive, considerable year-to-year variation in the distribution of benefits between producers and consumers should be expected. The possibility exists for an economic measure to increase or decrease over a 20-year horizon, depending on the particular sequence of years.