To assess the impact of climate change on agriculture in German districts, a Ricardian analysis accounting for spatial autocorrelation is used. The analysis relies on land rental prices from agricultural statistics and climate data from the network of German weather observation stations. The results of the cross-sectional analysis show a significant correlation between land rents and increasing mean temperatures, as well as (except for East Germany) a significant increase of land rents along with declining spring precipitation. Next, climate data from the regional climate model REMO are used to calculate local land rent changes under different IPCC scenarios for a time horizon between 2011 and 2040. The overall result is an increase in land rents which relates to 5-6 % of net German agricultural income. In West Germany the increase in land rents rises from the north to south, because of the higher temperature increases in the South of Germany. East Germany shows a greater increase in land rents than West Germany, due to the presently more unfavourable climatic water balance which profits from the increase in spring precipitation. However, agricultural income in Germany might decrease in the long run, when the changes in the climatic conditions will be more severe than those simulated in this study. We plan to extend and improve the research in this field. Different approaches to consider soil qualities at district level shall be compared. In order to understand farmers’ adaptation to different climatic conditions multinomial logit models will be used to investigate how German land use structures depend on the climate. Furthermore, a typology of related transaction costs shall be devised. This will allow the identification of those regions where the adaptation needs and the corresponding costs are likely to be relatively high.


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