(Adapted from a press release by the Caitlin Hayes, Cornell Chronicle)

Climate change and flagging investment in research and development has U.S. agriculture facing its first productivity slowdown in decades. A new study by researchers at Stanford, Cornell, and the University of Maryland estimates the public sector investment needed to reverse course.

In a paper, published March 11 in the Proceedings of the National Academy of Sciences, researchers model both the dampening effects of climate change on U.S. agriculture and the accelerating effects of publicly funded research and development (R&D) – and use the estimates to quantify the investment in research required to maintain agricultural productivity through 2050.

“U.S. agriculture is in many ways a victim of its own success, in that society takes continued progress for granted,” said study senior author David Lobell, the Gloria and Richard Kushel Director of Stanford’s Center on Food Security and the Environment (FSE). “I think it’s hard to overstate the geopolitical, social, and environmental effects of a severe productivity slowdown because few living people have experienced it.”

The researchers find that a 5% to 8% per year growth in research investment is needed – an investment comparable to those made following the two world wars. Alternatively, they find that a fixed $2.2 billion to $3.8 billion per year in additional investment would also offset the climate-induced slowdown.

“We wanted to quantify how much climate change is slowing down productivity and find the compensating increase in R&D that would offset that slowdown,” said senior author Ariel Ortiz-Bobea, associate professor in the Charles H. Dyson School of Applied Economics and Management, in the S.C. Johnson College of Business, and faculty fellow at the Cornell Atkinson Center for Sustainability who did most of the work for the study while visiting fellow at FSE. “What we find is that we need a very steep growth rate – but it’s not unprecedented. We’ve seen the U.S. step up in the past. We can do this, but the time is now.”

The urgency stems from the imminent effects of climate change and because publicly funded R&D in agriculture – which is carried out at universities and research centers – takes time to impact productivity.

“It’s not like an iPhone that can be designed in California, manufactured in China and used in Ithaca,” Ortiz-Bobea said. “The research has to be done in close proximity to the people using it, and then it needs to be adopted by farmers. So, it takes time, and the longer we wait, the longer we stay on a path where we’re less productive, while other nations like China and Brazil are investing heavily in R&D.”

To calculate the impact of climate change, the researchers aggregated data from the past 50 years on how warming temperatures have impacted agricultural outputs – using analyses of weather fluctuations down to 2.5-square-mile plots across the U.S. They found, consistent with previous studies by Ortiz-Bobea and others, that warmer temperatures were associated with lower productivity, estimating that an increase of 3 degrees Celsius (5.4 degrees Fahrenheit) lowers productivity by more than 10%. Similarly, they calculated the gains in productivity from R&D investments – quantified as contributions to a stock of knowledge – over the last 50 years. They then estimated the future impacts of climate change and the potential offsetting impact of R&D – and the dollar amount needed.

“This is the first study to combine the best evidence on how both climate and investment impacts agriculture over time,” Lobell said. “These are both really big, slowly moving factors, like a race between two giant elephants.”

The current public sector investment in R&D is approximately $5 billion, with spending growing only .5% per year from 1970 to 2000 before stagnating. Ortiz-Bobea favors the more incremental investment scenario that adds 5% to 8% funding every year, for a total investment of $208 billion to $434 billion by 2050.

“The current environment is one where any public spending is seen as a waste, and obviously any use of taxpayer dollars should be assessed in a systematic way,” Ortiz-Bobea said. “But decades of research shows that agricultural research has a very high return on investment for the country.”

The alternative, Ortiz-Bobea said, is declining productivity, more government bailouts and increased reliance on other countries, as well as more environmental degradation: as farmers would need to use more land and more chemicals to increase production.

“It is a fork in the road where we need to decide what kind of ag sector we want,” he said.

Publicly funded R&D differs from private R&D in key ways that make them non-interchangeable, the researchers said – namely because innovations and technologies from the private sector often come with commensurate high costs for growers.

“It’s called the ‘innovation treadmill,’ because you may be more productive, but your income stays the same because the cost of these technologies rises,” Ortiz-Bobea said. “Public sector R&D is mostly all gain for farmers, and it’s not just about one technology – it’s a constellation of management practices and having the right information at the right time. Public sector R&D also targets technologies that have a social return that private R&D is not incentivized to generate. There’s a lot the private sector can do, but its incentives are different in nature.”

The researchers’ estimated investment in R&D would maintain agricultural productivity in the face of climate change; to grow the sector, even more is needed, the researchers said.

“We’ve done it before, so it’s about the will,” Ortiz-Bobea said. “This paper is about how bad climate change is but also the ability to do something about it.”

Lobell is also a professor of Earth system science in the Stanford Doerr School of Sustainability, the William Wrigley Senior Fellow at the Stanford Woods Institute for the Environment, and a senior fellow at the Freeman Spogli Institute for International Studies and the Stanford Institute for Economic Policy Research.

Co-authors also include Cornell doctoral student Yurou He; and Robert G. Chambers of the University of Maryland.

Funding was provided by the U.S. Department of Agriculture.