The sweltering temperatures exacerbated by climate change have dealt a multibillion-dollar blow to American farmers and the public insurance program that protects them from devastating losses.
These costs threaten to wreak havoc on the domestic agricultural sector and U.S. taxpayers, who subsidize the federal insurance program that protects farmers from financial shocks such as falling crop prices and volatile yields, new research shows. .
A recent study in Environmental research letters by climate scientists at Stanford University examined the impact of the global warning on the U.S. crop insurance program, which Congress established in the 1930s to revive domestic agriculture in the wake of the Dust Bowl.
The conclusions were striking.
Climate-driven temperature increases generated around $ 27 billion in insurance payments to farmers between 1991 and 2017, according to the study. These losses represented almost 20% of total program payments during this period.
And those numbers are expected to increase as climate change intensifies.
“This is further proof that global warming is already having an impact on people and ecosystems, and it is further proof that [climate change] has financial costs that run into the billions, âsaid Noah Diffenbaugh, professor of earth system science at Stanford.
âAnd that’s important for understanding climate change, understanding climate risks andâ¦ for assessing the value of mitigation and adaptation actions,â Diffenbaugh added.
Using temperature readings and data from the Department of Agriculture on crop insurance payments or indemnities, the researchers examined the relationship between insurance losses and temperature variations at the county level. over the 26 growing seasons. Then, using climate model simulations, they calculated the insurance losses that would have occurred in a hypothetical scenario – also known as a âcounterfactualâ – in which global warming did not exist.
By comparing “actual and counterfactual claims aggregated over all years and all counties for all [United States]”Diffenbaugh said, his team was able to attribute $ 27 billion in insurance claims and payments to climate-related trends.
“This approach quantifies whether the benefits in a given county are higher or lower during a year in which the temperature or precipitation is higher or lower than the average for that county,” the researchers wrote.
In 2012, for example, when much of the United States experienced severe drought and record summer temperatures, crop allowances exceeded $ 18 billion, making it the costliest year for the insurance program. The study estimated that climate-related temperature trends were responsible for $ 8.8 billion of these payments.
It’s a grim conclusion, Diffenbaugh said, given the growing body of research that shows that “we can expect the types of conditions that occurred in 2012 to occur much more frequently in today’s climate – and even if the goals of the Paris Agreement are met and global warming is kept below 2 degrees of warming.
âThe risks are increasing,â he said.
The study came as lawmakers and regulators pay increased attention to the risks that global warming poses to economic sectors, the financial system and the global economy in general. President Biden signed an executive order in May that launched an administration-wide effort to address the risks posed by global warming to public and private assets.
Environmentalists, climate finance experts and some researchers argue that the United States needs to prepare more quickly for the financial effects of rising temperatures.
âIt’s clear at this point that we’re not adapted to the climate change that’s already happened,â Diffenbaugh said. “And as this study shows and as other studies have shown, it’s costing us a lot.”
Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2021. E&E News provides essential information for energy and environment professionals.