An analysis of public adaptation to climate change using agricultural water schemes in South America

This paper provides an analysis of public adaptation to climate change using agricultural water schemes in South American farms. Unlike other studies of adaptation, this paper examines the differences between private irrigation and public irrigation schemes based on around 1400 farm surveys collected across seven countries in South America which recorded detailed water schemes. We analyze the choice of water schemes in the first stage and the land values for each scheme in the second stage. We find that public irrigations do not increase in response to a warmer climate, but private irrigations do. On the other hand, we find that public irrigation schemes are provided primarily as a response to water scarcity. Moreover, we find that private irrigations are taken gradually while public irrigations are provided as a lump sum, resulting in either too much or too little provision. Therefore, public adaptations to climate change will likely involve two inefficiencies. No provision of irrigation in a hotter climate may result from a lack of knowledge. Overprovision of irrigation in dry zones may result from a lump-sum provision of a public good.