Essays on economics of climatic change

This dissertation examines farm adaptation and risk management issues under global climatic change in a tri-Journal article framework. The decision-making environment of a commercial corn, soybean and wheat producer in Henderson County, Kentucky serves as the study locale. The motivation for the study arises from a need to investigate the impact of future weather variability on farm risk management, and the inclusion of multiple risk sources and adaptation avenues in the new decision environment created by global climatic change.; The dissertation examines farm adaptation across different producer risk preferences while providing a range of production risk as well as adaptation avenues under weather variability incorporated future climate scenarios. Production risk included are: uncertainty in crop yields. Output prices and suitable field day availability. Adaptation avenues include enterprise diversification, alternative production practices like plant population, maturity groups and planting dates. custom hiring for field operations and marketing avenues like option to store crop produce. Quadratic programming under an expected mean-variance framework and discrete sequential stochastic programming (DSSP) techniques are employed for the purposes of the study. Future weather scenarios for the study were obtained using estimates from the Goddard Institute for Space Studies (GISS) Global Circulation Model (GCM) for the Southeastern United States.; Results from the study indicate that climatic change is expected to result in positive changes to farm profitability across all levels of producer risk preference. Risk neutral and low levels of risk aversion will gain greatest benefits from the new production environment under climatic change. Adaptation response included movement to greater number of planting dates and greater diversification in alternative production strategies under climatic change. Producers also chose higher maturity groups to tolerate the higher mean temperatures. The analysis suggests that production risk from lack of suitable field days will increase under climatic change calling for increased demand for custom hiring of field operations. Marketing strategy calls for increased number of weeks under storage and a staggered approach to crop sales. The underlying message in this dissertation is that given sufficient avenues for adaptation and knowledge base, producers in the region can manage shocks from future climatic change.