Pretty much everyone knows about climate change and many have some idea what the changes will be. But it’s unclear what the costs of climate change will be to Rhode Island. During the spring 2014 semester, I studied the economics of climate change in Dr. Corey Lang’s EEC 355 class. A major component of this course was a semester-long project working to monetize the impacts of climate change in Rhode Island. My group examined RI agriculture, while other groups studied topics such as fisheries and maritime transportation.
The first of four parts of the project involved researching the background of the sector. For agriculture, this entailed its worth to the state in terms of number of jobs, percentage of annual revenue along with the appropriate figures, and the prevalence of the industry in the state including its market base and variety of cultivated goods. Research into past data from the Rhode Island Census Bureau and the USDA agricultural cash receipts revealed that agriculture in Rhode Island makes up 0.5% of Rhode Island’s industry (≈$17.6 million), and 2,396 people rely on agriculture in Rhode Island to make a living.
The second task was to research the basic science of climate change in order to examine which impacts would most affect the state and sector in question. We found that the biggest threats to Rhode Island’s agriculture were not in simple temperature change alone, but in that and the changing weather patterns that could potentially change the state’s growing season averages.
The third part of the project was the most involved. The impacts were examined and monetized to determine the overall impacts to the state caused by climate change. We chose a number of impacts that form the majority of the sector’s worth: greenhouses, nurseries and turf (64.5% of Rhode Island’s agricultural revenue), corn (5.8%), dairy products (2.7-3%), and apples (2.6%). Depending on the impact chosen, different methods were used to assess their monetary value. Once the initial value was determined, it was discounted to the present day and totaled to find an all-encompassing total value with a present-day discount value. After research and projection, we estimated that climate change by the end of the century would cause an estimated revenue loss of $227,458,890.00. This translates to a total present value of $96,664,001.71 at a 1% social discount rate.
Lastly, we explored how adaptation could cushion or eliminate the negative effects of climate change on agriculture. We looked specifically at the use of genetically modified crops (GMOs), irrigation, increased use of greenhouses and the use of crop insurance. The increased use of GMOs was determined to be more detrimental than helpful and was dismissed as a likely tactic for use. The other options underwent cost-benefit analysis to determine whether or not the plan was an appropriate solution. We came to the conclusion that all of the remaining adaption plans would provide some benefit if they were all used moderately.
Though I took the course as an elective, I found this course and project essential to my education as an ENRE student. The project encouraged me to learn core competencies needed in the field of Environment and Natural Resource Economics and in my future career. Students involved in this project hone important skills from writing to cost/benefit analysis to excel. I personally learned a valuable lesson in group work and developed skills that will remain with me as an asset in my search for a career and in my daily work to follow.
by: Ellen Richer ’16
Environmental & Natural Resource Economics & General Business Double Major
August 5th, 2014