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FSE’s David Lobell finds that an increase of more than two degrees Celsius in average global temperature is likely to cause yields of wheat, rice and maize to fall throughout the 21st century. Early adaptation could increase projected yields by up to 15 percent.

If global temperatures continue to rise, the amount of crops farmers can harvest will sharply decline during the next 100 years.

Stanford professor David Lobell and an international team of climate scientists modeled future crop yields under several global climate scenarios throughout the 21st century. They found that if average global temperatures rise by more than two degrees Celsius, farmers are likely to get less wheat, rice and maize out of each plot of land. Yields are expected to fall by an average of 4.9 percent for every one degree Celsius rise in average temperature. Year-to-year variability of harvests is also expected to rise, as drought and flooding become more frequent. Crop yield losses will speed up throughout the century, with declines in yield beginning around 2030 and with the fastest drop happening in the second half of the century.

Lobell, an associate professor of Environmental Earth System Science and the associate director of the Center on Food Security and the Environment at Stanford, reviewed over 1,700 published studies with a team of climate scientists from the United States, United Kingdom and Australia. The team found that if farmers adapt to climate change within the next few years, they have a better chance of avoiding or even reversing the predicted decline of wheat and rice yields in some regions. Agricultural adaptation strategies like irrigating fields and developing new crop breeds could increase projected yields between 7 percent and 15 percent.

The new study also highlights the need for better data on the potential future impacts of other factors that affect crop yields, like the prevalence of pests and plant diseases, and the availability of water supply. A full version of the study can be found online at Nature Climate Change.

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In a new book, Gi-Wook Shin and Larry Diamond analyze the challenges and opportunities confronting the maturing democracies in South Korea and Taiwan. Much depends on the political leadership in those two countries rising above narrow interests to craft thoughtful and realistic public policies.
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Japan has the highest debt to GDP ratio among advanced countries, and many studies find that the current fiscal regime of Japan is not sustainable. Yet, the Japanese government bond continues to enjoy low and stable interest rates. The most plausible explanation for such an apparent anomaly is that the bonds are predominantly held by the Japanese residents, who are willing to absorb increasing amount of Japanese Government Bonds (JGB) without requiring high yields. Even if the Japanese residents continue to invest their new saving into the government bonds, however, Japan's fiscal situation is not sustainable, which this paper shows through simulations under various scenarios. In all of the scenarios that assume the fiscal policy stance of the Japanese government does not change in the future, we find that the amount of government debt will exceed the private sector financial assets available for the government debt purchase in the next 10 years or so. The paper also shows that sufficiently large tax increases and/or expenditure cuts in the future would put the government debt on a sustainable path. Thus, if the market believes that Japan will embark on such fiscal consolidation in the next 10 years, at most, the low JGB yields are justifiable. If and when the expectation changes, however, a fiscal crisis can be triggered even before the government debt hits the ceiling of the private sector financial assets.

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Takeo Hoshi
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