IDEAS home Printed from https://ideas.repec.org/a/nat/natcli/v2y2012i7d10.1038_nclimate1491.html
   My bibliography  Save this article

Response of corn markets to climate volatility under alternative energy futures

Author

Listed:
  • Noah S. Diffenbaugh

    (Stanford University
    Purdue University
    Purdue Climate Change Research Center, Purdue University)

  • Thomas W. Hertel

    (Purdue Climate Change Research Center, Purdue University
    Purdue University)

  • Martin Scherer

    (Stanford University)

  • Monika Verma

    (Stanford University
    Purdue University)

Abstract

Several factors can either increase or buffer the effects of climate change on the volatility of grain prices. A study shows that US corn price volatility is more sensitive to near-term climate change than to energy policy or agriculture–energy market integration. A biofuels mandate increases price sensitivity to climate change by more than 50%.

Suggested Citation

  • Noah S. Diffenbaugh & Thomas W. Hertel & Martin Scherer & Monika Verma, 2012. "Response of corn markets to climate volatility under alternative energy futures," Nature Climate Change, Nature, vol. 2(7), pages 514-518, July.
    • Handle: RePEc:nat:natcli:v:2:y:2012:i:7:d:10.1038_nclimate1491
    DOI: 10.1038/nclimate1491
    as

    Download full text from publisher

    File URL: https://www.nature.com/articles/nclimate1491
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1038/nclimate1491?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 look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gohin, Alexandre & Treguer, David, 2010. "On the (De)Stabilization Effects of Biofuels: Relative Contributions of Policy Instruments and Market Forces," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(1), pages 1-15.
    2. Jeffrey J. Reimer, 2007. "Assessing Global Computable General Equilibrium Model Validity Using Agricultural Price Volatility," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 383-397.
    3. Wyatt Thompson & Seth Meyer & Pat Westhoff, 2010. "The New Markets for Renewable Identification Numbers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(4), pages 588-603.
    4. Wyatt Thompson & Seth Meyer & Pat Westhoff, 2010. "The New Markets for Renewable Identification Numbers," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 32(4), pages 588-603.
    5. Farzad Taheripour & Thomas W. Hertel & Wallace E. Tyner, 2011. "Implications of biofuels mandates for the global livestock industry: a computable general equilibrium analysis," Agricultural Economics, International Association of Agricultural Economists, vol. 42(3), pages 325-342, May.
    6. Brian D. Wright, 2011. "The Economics of Grain Price Volatility," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 33(1), pages 32-58.
    7. Beckman, Jayson & Hertel, Thomas & Tyner, Wallace, 2011. "Validating energy-oriented CGE models," Energy Economics, Elsevier, vol. 33(5), pages 799-806, September.
    8. Thompson, Wyatt & Meyer, Seth D., 2011. "Epa Mandate Waivers Create New Uncertainties In Biodiesel Markets," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 26(2), pages 1-5.
    9. Noah Diffenbaugh & Martin Scherer, 2011. "Observational and model evidence of global emergence of permanent, unprecedented heat in the 20th and 21st centuries," Climatic Change, Springer, vol. 107(3), pages 615-624, August.
    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. Rodrigo Mesa-Arango & Badri Narayanan & Satish V. Ukkusuri, 2019. "The Impact of International Crises on Maritime Transportation Based Global Value Chains," Networks and Spatial Economics, Springer, vol. 19(2), pages 381-408, June.
    2. Tran, A. Nam & Welch, Jarrod R. & Lobell, David & Roberts, Michael J. & Schlenker, Wolfram, 2012. "Commodity Prices and Volatility in Response to Anticipated Climate Change," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124827, Agricultural and Applied Economics Association.
    3. Erik Nelson & Virginia Matzek, 2016. "Carbon Credits Compete Poorly With Agricultural Commodities In An Optimized Model Of Land Use In Northern California," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 7(04), pages 1-24, November.
    4. De Lipsis, Vincenzo & Agnolucci, Paolo, 2024. "Climate change and the US wheat commodity market," Journal of Economic Dynamics and Control, Elsevier, vol. 161(C).
    5. Brown, Molly & Antle, John & Backlund, Peter & Carr, Edward & Easterling, Bill & Walsh, Margaret & Ammann, Caspar & Attavanich, Witsanu & Barrett, Chris & Bellemare, Marc & Dancheck, Violet & Funk, Ch, 2015. "Climate Change, Global Food Security and the U.S. Food System," MPRA Paper 105772, University Library of Munich, Germany.
    6. Zhao, Xin & Calvin, Katherine & Patel, Pralit & Abigail, Snyder & Wise, Marshall & Waldhoff, Stephanie & Hejazi, Mohamad & Edmonds, James, 2021. "Impacts of interannual climate and biophysical variability on global agriculture markets," Conference papers 333245, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    7. Cao, Yan & Cheng, Sheng & Li, Xinran, 2024. "Co-movements between heterogeneous crude oil and food markets: Does temperature change really matter?," Research in International Business and Finance, Elsevier, vol. 67(PB).
    8. Francisco Costa & Fabien Forge & Jason Garred & João Paulo Pessoa, 2023. "The Impact of Climate Change on Risk and Return in Indian Agriculture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 85(1), pages 1-27, May.
    9. Countryman, Amanda M. & Litvinov, Valentyn & Kolodiazhnyi, Ivan & Bogonos, Mariia & Nivievskyi, Oleg, 2024. "Agricultural and Economywide Effects of the War in Ukraine," Commissioned Papers 344185, International Agricultural Trade Research Consortium.
    10. Philip Abbott, 2014. "Biofuels, Binding Constraints, and Agricultural Commodity Price Volatility," NBER Chapters, in: The Economics of Food Price Volatility, pages 91-131, National Bureau of Economic Research, Inc.
    11. Nong, Duy, 2020. "Development of the electricity-environmental policy CGE model (GTAP-E-PowerS): A case of the carbon tax in South Africa," Energy Policy, Elsevier, vol. 140(C).
    12. Massimo Peri, 2017. "Climate variability and the volatility of global maize and soybean prices," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 9(4), pages 673-683, August.
    13. Nong, Duy & Nguyen, Duong Binh & Nguyen, Trung H. & Wang, Can & Siriwardana, Mahinda, 2020. "A stronger energy strategy for a new era of economic development in Vietnam: A quantitative assessment," Energy Policy, Elsevier, vol. 144(C).
    14. John Weyant, 2017. "Some Contributions of Integrated Assessment Models of Global Climate Change," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 11(1), pages 115-137.
    15. Ehsanreza Sajedinia & Wallace E. Tyner, 2021. "Use of General Equilibrium Models in Evaluating Biofuels Policies," World Scientific Book Chapters, in: Peter Dixon & Joseph Francois & Dominique van der Mensbrugghe (ed.), POLICY ANALYSIS AND MODELING OF THE GLOBAL ECONOMY A Festschrift Celebrating Thomas Hertel, chapter 14, pages 437-465, World Scientific Publishing Co. Pte. Ltd..
    16. Abokyi, Emmanuel & Asiedu, Kofi Fred, 2021. "Agricultural policy and commodity price stabilisation in Ghana: The role of buffer stockholding operations," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 16(4), December.
    17. Mohammad Torshizi & Richard Gray, 2022. "Adaptability and variety adoption: Implications for plant breeding policy in a changing climate," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 66(4), pages 842-859, October.
    18. Walsh, Michael J. & Gerber Van Doren, Léda & Shete, Nilam & Prakash, Akshay & Salim, Usama, 2018. "Financial tradeoffs of energy and food uses of algal biomass under stochastic conditions," Applied Energy, Elsevier, vol. 210(C), pages 591-603.
    19. Hao, Na & Colson, Gregory & Seong, Byeongchan & Park, Cheolwoo & Wetzstein, Michael, 2015. "Drought, ethanol, and livestock," Energy Economics, Elsevier, vol. 49(C), pages 301-307.
    20. Nong, Duy & Nguyen, Trung H. & Wang, Can & Van Khuc, Quy, 2020. "The environmental and economic impact of the emissions trading scheme (ETS) in Vietnam," Energy Policy, Elsevier, vol. 140(C).
    21. David R Just, 2023. "On the policy relevance of agricultural economics," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(4), pages 1256-1276.
    22. Noah Diffenbaugh & Filippo Giorgi, 2012. "Climate change hotspots in the CMIP5 global climate model ensemble," Climatic Change, Springer, vol. 114(3), pages 813-822, October.
    23. Agie Wandala Putra & Jatna Supriatna & Raldi Hendro Koestoer & Tri Edhi Budhi Soesilo, 2021. "Differences in Local Rice Price Volatility, Climate, and Macroeconomic Determinants in the Indonesian Market," Sustainability, MDPI, vol. 13(8), pages 1-21, April.
    24. Thompson, Wyatt & Lu, Yaqiong & Gerlt, Scott & Yang, Xianyu & Campbell, J. Elliott & Kueppers, Lara M. & Snyder, Mark A., 2018. "Automatic Responses of Crop Stocks and Policies Buffer Climate Change Effects on Crop Markets and Price Volatility," Ecological Economics, Elsevier, vol. 152(C), pages 98-105.
    25. Hervé OTT, 2012. "Fertilizer markets and its interplay with commodity and food prices," JRC Research Reports JRC73043, Joint Research Centre.

    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. Philip Abbott, 2014. "Biofuels, Binding Constraints, and Agricultural Commodity Price Volatility," NBER Chapters, in: The Economics of Food Price Volatility, pages 91-131, National Bureau of Economic Research, Inc.
    2. Jared C. Carbone & Linda T.M. Bui & Don Fullerton & Sergey Paltsev & Ian Sue Wing, 2022. "When and How to Use Economy-Wide Models for Environmental Policy Analysis," Annual Review of Resource Economics, Annual Reviews, vol. 14(1), pages 447-465, October.
    3. Michiel van Dijk & George Philippidis & Geert Woltjer, 2016. "Catching up with history: A methodology to validate global CGE models," FOODSECURE Technical papers 9, LEI Wageningen UR.
    4. Cui, Hao (David) & Tyner, Wally, 2017. "Modeling Land Intensification Response in GTAP: Implications for Biofuels Induced Land Use Change," Conference papers 332812, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Thompson, Wyatt & Lu, Yaqiong & Gerlt, Scott & Yang, Xianyu & Campbell, J. Elliott & Kueppers, Lara M. & Snyder, Mark A., 2018. "Automatic Responses of Crop Stocks and Policies Buffer Climate Change Effects on Crop Markets and Price Volatility," Ecological Economics, Elsevier, vol. 152(C), pages 98-105.
    6. Artavia, Marco & Grethe, Harald & Zimmermann, Georg, 2015. "Stochastic market modeling with Gaussian Quadratures: Do rotations of Stroud's octahedron matter?," Economic Modelling, Elsevier, vol. 45(C), pages 155-168.
    7. Whistance, Jarrett & Ripplinger, David & Thompson, Wyatt, 2016. "Biofuel-related price transmission using Renewable Identification Number prices to signal mandate regime," Energy Economics, Elsevier, vol. 55(C), pages 19-29.
    8. JunJie Wu & Christian Langpap, 2015. "The Price and Welfare Effects of Biofuel Mandates and Subsidies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(1), pages 35-57, September.
    9. Christensen, Adam & Siddiqui, Sauleh, 2015. "Fuel price impacts and compliance costs associated with the Renewable Fuel Standard (RFS)," Energy Policy, Elsevier, vol. 86(C), pages 614-624.
    10. Hong, Chanyoung & Yang, Heewon & Hwang, Wonsik & Lee, Jeong-Dong, 2014. "Validation of an R&D-based computable general equilibrium model," Economic Modelling, Elsevier, vol. 42(C), pages 454-463.
    11. Glotin, David & Bourgeois, Cyril & Giraudet, Louis-Gaëtan & Quirion, Philippe, 2019. "Prediction is difficult, even when it's about the past: A hindcast experiment using Res-IRF, an integrated energy-economy model," Energy Economics, Elsevier, vol. 84(S1).
    12. Soon, Byung Min & Thompson, Wyatt, 2020. "Non-tariff barrier on chicken imports into Russia: Impact on production, trade and prices," Journal of Policy Modeling, Elsevier, vol. 42(3), pages 583-596.
    13. Miguel Carriquiry & Amani Elobeid & Jerome Dumortier & Ryan Goodrich, 2020. "Incorporating Sub‐National Brazilian Agricultural Production and Land‐Use into U.S. Biofuel Policy Evaluation," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(3), pages 497-523, September.
    14. Banse, M. & Tabeau, A. & van Meijl, H. & Woltjer, G. & Prins, Anne Gerdien, 2011. "Global impact of multinational biofuel mandates on land use, feedstock prices, international trade and green gasses emissions," Conference papers 332128, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    15. Condon, Nicole & Klemick, Heather & Wolverton, Ann, 2015. "Impacts of ethanol policy on corn prices: A review and meta-analysis of recent evidence," Food Policy, Elsevier, vol. 51(C), pages 63-73.
    16. Christensen, Adam & Hobbs, Benjamin, 2016. "A model of state and federal biofuel policy: Feasibility assessment of the California Low Carbon Fuel Standard," Applied Energy, Elsevier, vol. 169(C), pages 799-812.
    17. Gabriel E Lade & C -Y Cynthia Lin Lawell & Aaron Smith, 2018. "Policy Shocks and Market-Based Regulations: Evidence from the Renewable Fuel Standard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 707-731.
    18. Jayson Beckman & Carmen Estrades & Angel Aguiar, 2019. "Export taxes, food prices and poverty: a global CGE evaluation," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 11(1), pages 233-247, February.
    19. Johansson, R. & Meyer, S. & Whistance, J. & Thompson, W. & Debnath, D., 2020. "Greenhouse gas emission reduction and cost from the United States biofuels mandate," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    20. Gbadebo Oladosu & Siwa Msangi, 2013. "Biofuel-Food Market Interactions: A Review of Modeling Approaches and Findings," Agriculture, MDPI, vol. 3(1), pages 1-19, February.

    More about this item

    Statistics

    Access and download statistics

    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:nat:natcli:v:2:y:2012:i:7:d:10.1038_nclimate1491. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.nature.com .

    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.