Climate Change and Canadian Agriculture and Forests

1. Climate Change and Canadian Agriculture and Forests Robert Mendelsohn Yale University Brent Sohngen Ohio State University Impacts and Adaptations

2. Introduction • Climate Change will Affect Canadian Agriculture and Forestry by Changing Productive Area Changing Productivity Changing Global Prices Impacts and Adaptations

3. 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 Impacts and Adaptations

4. 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 Impacts and Adaptations

5. 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 Impacts and Adaptations

6. 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 Impacts and Adaptations

7. Global Timber Prices Impacts and Adaptations

8. 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 Impacts and Adaptations

9. Results • Agricultural Production will likely increase • Forest Production will likely increase • Impact on farmers and foresters depends on global prices • Consumers will benefit Impacts and Adaptations

10. 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 Impacts and Adaptations

11. Present Value of Forestry Impacts Impacts and Adaptations

12. Forestry Impacts • Dieback lowers Canadian Benefits • Large Benefits for Consumers in All Scenarios • Annual Forestry Effects are about $0.5-$3 billion (USD) benefit Impacts and Adaptations

13. Conclusion • Canada likely beneficiary of warming • Benefits in agriculture, forestry, and energy • Small losses in other economic sectors (coast, water) Impacts and Adaptations

14. 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 Impacts and Adaptations

15. Adaptation • Allow markets to adapt • Allow farmers to increase farms • Allow forest concessions to determine their own harvest rates • Adjust public infrastructure as needed Impacts and Adaptations