IDEAS home Printed from https://ideas.repec.org/a/eee/agiwat/v221y2019icp430-448.html
   My bibliography  Save this article

Computing the economic value of climate information for water stress management exemplified by crop production in Austria

Author

Listed:
  • Mitter, Hermine
  • Schmid, Erwin

Abstract

Climate information appears to be underutilized in water stress management in agriculture. A systematic analysis of potential impacts related to multi-seasonal dry spells, effective adaptation measures, and the economic value of climate information (VoI) may inform decision-making and facilitate the uptake and use of climate information. Hence, we have developed an integrated modeling framework consisting of a statistical climate model, a crop rotation model, a bio-physical process model, a portfolio optimization model, the computation of the economic value of climate information, and a spatial hot spot analysis and applied it to the context of water stress management in crop production in Austria. Results from the integrated modeling framework show that the average economic value of climate information ranges between 13 and 99 €/ha for Austrian cropland, depending on the scenario of multi-seasonal dry spells and the farmers’ risk aversion level. On average, the value of climate information is highest on flat and productive soils, for root and oil crops, under more extreme multi-seasonal dry spells, and if farmers are highly risk averse. Quantifying the value of climate information may guide data provision efforts and highlight agricultural production regions, which would particularly benefit from such information to improve water stress management.

Suggested Citation

  • Mitter, Hermine & Schmid, Erwin, 2019. "Computing the economic value of climate information for water stress management exemplified by crop production in Austria," Agricultural Water Management, Elsevier, vol. 221(C), pages 430-448.
    • Handle: RePEc:eee:agiwat:v:221:y:2019:i:c:p:430-448
    DOI: 10.1016/j.agwat.2019.04.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378377418317347
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.agwat.2019.04.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Molden, D., 1997. "Accounting for water use and productivity," IWMI Books, Reports H021374, International Water Management Institute.
    2. Balkovič, Juraj & van der Velde, Marijn & Schmid, Erwin & Skalský, Rastislav & Khabarov, Nikolay & Obersteiner, Michael & Stürmer, Bernhard & Xiong, Wei, 2013. "Pan-European crop modelling with EPIC: Implementation, up-scaling and regional crop yield validation," Agricultural Systems, Elsevier, vol. 120(C), pages 61-75.
    3. Justin Sheffield & Eric F. Wood & Michael L. Roderick, 2012. "Little change in global drought over the past 60 years," Nature, Nature, vol. 491(7424), pages 435-438, November.
    4. Alpizar, Francisco & Carlsson, Fredrik & Naranjo, Maria A., 2011. "The effect of ambiguous risk, and coordination on farmers' adaptation to climate change — A framed field experiment," Ecological Economics, Elsevier, vol. 70(12), pages 2317-2326.
    5. Schönhart, Martin & Mitter, Hermine & Schmid, Erwin & Heinrich, Georg & Gobiet, Andreas, 2014. "Integrated Analysis of Climate Change Impacts and Adaptation Measures in Austrian Agriculture," German Journal of Agricultural Economics, Humboldt-Universitaet zu Berlin, Department for Agricultural Economics, vol. 63(03), pages 1-21, September.
    6. Feusthuber, Elisabeth & Mitter, Hermine & Schönhart, Martin & Schmid, Erwin, 2017. "Integrated modelling of efficient crop management strategies in response to economic damage potentials of the Western Corn Rootworm in Austria," Agricultural Systems, Elsevier, vol. 157(C), pages 93-106.
    7. Christine Heumesser & Sabine Fuss & Jana Szolgayová & Franziska Strauss & Erwin Schmid, 2012. "Investment in Irrigation Systems under Precipitation Uncertainty," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(11), pages 3113-3137, September.
    8. Stockle, Claudio O. & Williams, Jimmy R. & Rosenberg, Norman J. & Jones, C. Allan, 1992. "A method for estimating the direct and climatic effects of rising atmospheric carbon dioxide on growth and yield of crops: Part I--Modification of the EPIC model for climate change analysis," Agricultural Systems, Elsevier, vol. 38(3), pages 225-238.
    9. Nicky J. Welton & Howard H. Z. Thom, 2015. "Value of Information," Medical Decision Making, , vol. 35(5), pages 564-566, July.
    10. Hampicke, Ulrich, 2011. "Climate change economics and discounted utilitarianism," Ecological Economics, Elsevier, vol. 72(C), pages 45-52.
    11. Marijn Velde & Francesco Tubiello & Anton Vrieling & Fayçal Bouraoui, 2012. "Impacts of extreme weather on wheat and maize in France: evaluating regional crop simulations against observed data," Climatic Change, Springer, vol. 113(3), pages 751-765, August.
    12. Mintewab Bezabih & Mare Sarr, 2012. "Risk Preferences and Environmental Uncertainty: Implications for Crop Diversification Decisions in Ethiopia," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(4), pages 483-505, December.
    13. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    14. Jean-Paul Chavas & Rulon D. Pope, 1984. "Information: Its Measurement and Valuation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 66(5), pages 705-710.
    15. Gerald C. Nelson & Dominique Mensbrugghe & Helal Ahammad & Elodie Blanc & Katherine Calvin & Tomoko Hasegawa & Petr Havlik & Edwina Heyhoe & Page Kyle & Hermann Lotze-Campen & Martin Lampe & Daniel Ma, 2014. "Agriculture and climate change in global scenarios: why don't the models agree," Agricultural Economics, International Association of Agricultural Economists, vol. 45(1), pages 85-101, January.
    16. Cabrera, Victor E. & Letson, David & Podesta, Guillermo, 2007. "The value of climate information when farm programs matter," Agricultural Systems, Elsevier, vol. 93(1-3), pages 25-42, March.
    17. Yoav Benjamini & Yosef Hochberg, 2000. "On the Adaptive Control of the False Discovery Rate in Multiple Testing With Independent Statistics," Journal of Educational and Behavioral Statistics, , vol. 25(1), pages 60-83, March.
    18. Choi, Hyung Sik & Schneider, Uwe A. & Rasche, Livia & Cui, Junbo & Schmid, Erwin & Held, Hermann, 2015. "Potential effects of perfect seasonal climate forecasting on agricultural markets, welfare and land use: A case study of Spain," Agricultural Systems, Elsevier, vol. 133(C), pages 177-189.
    19. Daryanto, Stefani & Wang, Lixin & Jacinthe, Pierre-André, 2017. "Global synthesis of drought effects on cereal, legume, tuber and root crops production: A review," Agricultural Water Management, Elsevier, vol. 179(C), pages 18-33.
    20. Kusunose, Yoko & Mahmood, Rezaul, 2016. "Imperfect forecasts and decision making in agriculture," Agricultural Systems, Elsevier, vol. 146(C), pages 103-110.
    21. Schönhart, Martin & Mitter, Hermine & Schmid, Erwin & Heinrich, Georg & Gobiet, Andreas, 2014. "Integrated Analysis of Climate Change Impacts and Adaptation Measures in Austrian Agriculture," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 63(3).
    22. Jason Crean & Kevin Parton & John Mullen & Peter Hayman, 2015. "Valuing seasonal climate forecasts in a state-contingent manner," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(1), pages 61-77, January.
    23. Salvatore Di Falco, 2014. "Adaptation to climate change in Sub-Saharan agriculture: assessing the evidence and rethinking the drivers," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 41(3), pages 405-430.
    24. Crean, Jason & Parton, Kevin & Mullen, John & Hayman, Peter, 2015. "Valuing seasonal climate forecasts in a state-contingent manner," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 59(1), January.
    25. Martin Lampe & Dirk Willenbockel & Helal Ahammad & Elodie Blanc & Yongxia Cai & Katherine Calvin & Shinichiro Fujimori & Tomoko Hasegawa & Petr Havlik & Edwina Heyhoe & Page Kyle & Hermann Lotze-Campe, 2014. "Why do global long-term scenarios for agriculture differ? An overview of the AgMIP Global Economic Model Intercomparison," Agricultural Economics, International Association of Agricultural Economists, vol. 45(1), pages 3-20, January.
    26. Molden, David J., 1997. "Accounting for water use and productivity," IWMI Books, International Water Management Institute, number 113623.
    27. Kirchner, Mathias & Schmidt, Johannes & Kindermann, Georg & Kulmer, Veronika & Mitter, Hermine & Prettenthaler, Franz & Rüdisser, Johannes & Schauppenlehner, Thomas & Schönhart, Martin & Strauss, Fran, 2015. "Ecosystem services and economic development in Austrian agricultural landscapes — The impact of policy and climate change scenarios on trade-offs and synergies," Ecological Economics, Elsevier, vol. 109(C), pages 161-174.
    28. Chavas, Jean-Paul, 2004. "Risk Analysis in Theory and Practice," Elsevier Monographs, Elsevier, edition 1, number 9780121706210.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Apostolos Arsenopoulos & Vangelis Marinakis & Konstantinos Koasidis & Andriana Stavrakaki & John Psarras, 2020. "Assessing Resilience to Energy Poverty in Europe through a Multi-Criteria Analysis Framework," Sustainability, MDPI, vol. 12(12), pages 1-22, June.
    2. Mitter, Hermine & Schmid, Erwin, 2021. "Informing groundwater policies in semi-arid agricultural production regions under stochastic climate scenario impacts," Ecological Economics, Elsevier, vol. 180(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mitter, H. & Schmid, E., 2018. "The economic value of climate information for water stress management in crop production: an Austrian case study," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277099, International Association of Agricultural Economists.
    2. Mitter, Hermine & Heumesser, Christine & Schmid, Erwin, 2014. "Modelling robust crop production portfolios to assess agricultural vulnerability to climate change," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182702, European Association of Agricultural Economists.
    3. Schönhart, Martin & Trautvetter, Helene & Parajka, Juraj & Blaschke, Alfred Paul & Hepp, Gerold & Kirchner, Mathias & Mitter, Hermine & Schmid, Erwin & Strenn, Birgit & Zessner, Matthias, 2018. "Modelled impacts of policies and climate change on land use and water quality in Austria," Land Use Policy, Elsevier, vol. 76(C), pages 500-514.
    4. Mitter, Hermine & Schmid, Erwin, 2021. "Informing groundwater policies in semi-arid agricultural production regions under stochastic climate scenario impacts," Ecological Economics, Elsevier, vol. 180(C).
    5. Palazzo,Amanda & Valin,Hugo Jean Pierre & Batka,Miroslav & Havlík,Petr, 2019. "Investment Needs for Irrigation Infrastructure along Different Socioeconomic Pathways," Policy Research Working Paper Series 8744, The World Bank.
    6. Dono, Gabriele & Cortignani, Raffaele & Dell'Unto, Davide & Deligios, Paola & Doro, Luca & Lacetera, Nicola & Mula, Laura & Pasqui, Massimiliano & Quaresima, Sara & Vitali, Andrea & Roggero, Pier Paol, 2016. "Winners and losers from climate change in agriculture: Insights from a case study in the Mediterranean basin," Agricultural Systems, Elsevier, vol. 147(C), pages 65-75.
    7. Kirchner, Mathias & Schönhart, Martin & Schmid, Erwin, 2016. "Spatial impacts of the CAP post-2013 and climate change scenarios on agricultural intensification and environment in Austria," Ecological Economics, Elsevier, vol. 123(C), pages 35-56.
    8. Abdul Quddoos & Klaus Salhofer & Ulrich B. Morawetz, 2023. "Utilising farm‐level panel data to estimate climate change impacts and adaptation potentials," Journal of Agricultural Economics, Wiley Blackwell, vol. 74(1), pages 75-99, February.
    9. Jiang, Yiwen & Zhang, Lanhui & Zhang, Baoqing & He, Chansheng & Jin, Xin & Bai, Xiao, 2016. "Modeling irrigation management for water conservation by DSSAT-maize model in arid northwestern China," Agricultural Water Management, Elsevier, vol. 177(C), pages 37-45.
    10. Schönhart, Martin & Schauppenlehner, Thomas & Kuttner, Michael & Kirchner, Mathias & Schmid, Erwin, 2016. "Climate change impacts on farm production, landscape appearance, and the environment: Policy scenario results from an integrated field-farm-landscape model in Austria," Agricultural Systems, Elsevier, vol. 145(C), pages 39-50.
    11. Jayatilleke S. Bandara & Yiyong Cai, 2014. "The impact of climate change on food crop productivity, food prices and food security in South Asia," Economic Analysis and Policy, Elsevier, vol. 44(4), pages 451-465.
    12. Mohammad Alauddin & Upali A. Amarasinghe & Bharat R. Sharma, 2014. "Four decades of rice water productivity in Bangladesh: A spatio-temporal analysis of district level panel data," Economic Analysis and Policy, Elsevier, vol. 44(1), pages 51-64.
    13. Venot, Jean-Philippe & Sharma, Bharat R. & Rao, K. V. G. K., 2008. "The lower Krishna Basin trajectory: relationships between basin development and downstream environmental degradation," IWMI Research Reports H041463, International Water Management Institute.
    14. Kang, Shaozhong & Hao, Xinmei & Du, Taisheng & Tong, Ling & Su, Xiaoling & Lu, Hongna & Li, Xiaolin & Huo, Zailin & Li, Sien & Ding, Risheng, 2017. "Improving agricultural water productivity to ensure food security in China under changing environment: From research to practice," Agricultural Water Management, Elsevier, vol. 179(C), pages 5-17.
    15. H. Charles J. Godfray & Sherman Robinson, 2015. "Contrasting approaches to projecting long-run global food security," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 31(1), pages 26-44.
    16. Elke Stehfest & Willem-Jan Zeist & Hugo Valin & Petr Havlik & Alexander Popp & Page Kyle & Andrzej Tabeau & Daniel Mason-D’Croz & Tomoko Hasegawa & Benjamin L. Bodirsky & Katherine Calvin & Jonathan C, 2019. "Key determinants of global land-use projections," Nature Communications, Nature, vol. 10(1), pages 1-10, December.
    17. Lei, Kaixuan & Chang, Jianxia & Long, Ruihao & Wang, Yimin & Zhang, Hongxue, 2022. "Cascade hydropower station risk operation under the condition of inflow uncertainty," Energy, Elsevier, vol. 244(PA).
    18. Karner, Katrin & Schmid, Erwin & Schneider, Uwe A. & Mitter, Hermine, 2021. "Computing stochastic Pareto frontiers between economic and environmental goals for a semi-arid agricultural production region in Austria," Ecological Economics, Elsevier, vol. 185(C).
    19. Ahmad, M.D. & Turral, H. & Nazeer, A., 2009. "Diagnosing irrigation performance and water productivity through satellite remote sensing and secondary data in a large irrigation system of Pakistan," Agricultural Water Management, Elsevier, vol. 96(4), pages 551-564, April.
    20. Ireneusz Cymes & Ewa Dragańska & Zbigniew Brodziński, 2022. "Potential Possibilities of Using Groundwater for Crop Irrigation in the Context of Climate Change," Agriculture, MDPI, vol. 12(6), pages 1-14, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:agiwat:v:221:y:2019:i:c:p:430-448. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/agwat .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.