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changes and brought the SCC back to
US$50. That is merely a first step. Together
with eight colleagues, I lay out seven further
steps in a recent Nature Comment8. Perhaps
the most important one is to seek broad
input and restore trust in government- and
science-based policy-making.
Restoring trust includes making
necessary judgement calls explicit. The most
important such call involves converting
(far-distant) climate damages into today’s
dollars. The choice is consequential, and it
is indeed a choice. That does not mean that
anything goes. Experts broadly agree that
values a century hence should be discounted
by between 1 and 3% (ref. 9). Expert
agreement or not, however, the final decision
rests with elected officials. The Obama-era
interagency working group made just that
call explicit, presenting three discount rates:
5%, 3% and 2.5%, leading to SCCs of around
US$15, US$50 and US$75, respectively. The
central 3% rate came from 2003 guidance by
the US Office of Management and Budget.
Applying the exact same logic today would
FOOD SECURITY
Climate change upsets agriculture
Raising agricultural productivity has been essential for global food security and conserving land. Now, research
quantifies how climate change has slowed agricultural productivity growth around the world.
Keith Fuglie
W
riting in 1798, Thomas Malthus1
saw population growth inevitably
outstripping the ability of natural
resources to supply food, with catastrophic
consequences for human welfare. However,
technological change that raises agricultural
productivity has been the antidote against a
Malthusian crisis. Since the early twentieth
century, sustained growth in agricultural
productivity has increased food supply per
capita, reduced food prices and conserved
natural resources, even as the world’s
population soared (Fig. 1). Sustaining this
productivity growth, however, is under stress
from climate change. Writing in this issue of
Nature Climate Change, Ariel Ortiz-Bobea
and colleagues2 find that between 1961 and
2020, climate change slowed the growth
rate in agricultural total factor productivity
(TFP), the cumulative effect of which
was to lower agricultural TFP globally by
21% Fig. 1.
294
lead to a central rate of around 2%. New
York State took that step recently10. Its
SCC, otherwise based on the exact same
Obama-era calculations, is US$125.
Meanwhile, the one step the Biden
administration will not and cannot scrap is
the need for benefit–cost analysis. As long
as there is a need for tallying the benefits of
cutting CO2, there is a need for the SCC.
A target-based approach might supplement
that analysis, but it is no replacement —
particularly in a country like the USA,
where, unlike in the UK and elsewhere,
cutting CO2 to meet a particular climate goal
is not the law of the land. The real irony of
Stern and Stiglitz’s critique1, though, is that
its ‘alternative’ approach might lead to a
lower implied CO2 price than updating
SCC calculations.
Gernot Wagner    ✉
Department of Environmental Studies and Robert F.
Wagner Graduate School of Public Service, New York
University, New York, NY, USA.
✉e-mail: gwagner@nyu.edu
TFP is an economic measure that
lies at the heart of long-term economic
growth, especially the kind that raises the
real welfare of countries and people. TFP
is how much real output (the goods and
services we consume) is produced from
the total economic resources (land, labour
and capital) used to produce it. Steady
improvement in agricultural TFP has meant
that the world has avoided a Malthusian
crisis — where the food needs from a rising
population outstrip the capability of the
Earth’s resources to meet it. Under constant
TFP, doubling output requires doubling
the inputs (and the same per capita). But if
improved technologies and better ways of
doing things can be developed, it may be
possible to get more out of the same inputs.
This is growth in TFP, and it adds higher
per capita wealth to society. In the case of
agriculture, it means that less land (and other
resources) are needed to meet food demand.
Nature Climate Change | VOL 11 | April 2021 | 293–299 | www.nature.com/natureclimatechange
Published online: 29 March 2021
https://doi.org/10.1038/s41558-021-01018-5
References
1. Stern, N. & Stiglitz, J. E. The Social Cost of Carbon, Risk,
Distribution, Market Failures: An Alternative Approach
Working Paper 28472 (National Bureau of Economic Analysis,
2021).
2. Nordhaus, W. D. Science 258, 1315–1319 (1992).
3. Moore, F. C. & Diaz, D. B. Nat. Clim. Change 5, 127–131
(2015).
4. Jensen, S. & Traeger, C. Pricing Climate Risk (UC Berkeley, 2016);
https://bit.ly/30bG6rp
5. Anthoff, D. & Emmerling, J. J. Assoc. Environ. Resour. Econ. 6,
243–273 (2019).
6. Hänsel, M. C. et al. Nat. Clim. Change 10, 781–789 (2020).
7. Protecting Public Health and the Environment and Restoring
Science To Tackle the Climate Crisis (The White House, 2021);
http://bit.ly/2OZwiyv
8. Wagner, G. et al. Nature 590, 548–550 (2021).
9. Drupp, M. A., Freeman, M. C., Groom, B. & Nesje, F. Am. Econ. J.
Econ. Polic. 10, 109–134 (2018).
❐ 10. DEC announces finalization of ‘value of carbon’ guidance to help
measure impacts of greenhouse gas emissions. New York State,
Department of Environmental Conservation https://www.dec.
ny.gov/press/122070.html (2020).
Competing interests
The author declares no competing interests.
What is new about the approach
Ortiz-Bobea et al. have used is that they
link the growth rate in agricultural TFP
to climate data on temperature and
precipitation. Most previous assessments
of the productivity effect of climate change
on agriculture have focused on crop yields,
and primarily on the major cereal staples.
The advantages of using sector-wide TFP
to assess productivity impacts are that
it (i) encompasses the entire set of crop
and livestock commodities; (ii) includes
productivity impacts not just on land, but
also on other resources; and (iii) takes into
account actions producers may take to offset
the effects of bad weather. For example,
climate change may affect the productivity
of agricultural labour; the effect of heat
stress on the productivity of farm workers
could be as great as or greater than its effect
on crops3. Farmers also adjust planting and
harvesting dates, switch crops and extend
 news & views

250 10 in global agricultural output or real

(inflation-adjusted) commodity prices.
The long-term trend since the early-to-mid
twentieth century has been for agricultural
Indexes of agricultural prices and production (1977–1979 = 100)

output to grow faster than population,

200 8
leading to substantial enrichment of

Population and hectares of cropland (billions)

diets, and for the real price of agricultural
commodities to decline, leading to greater
affordability of food4. This has also reduced
150 6 incentives to convert undisturbed land for
agriculture, which has averted substantial
greenhouse gas emissions5. If climate
change was causing agricultural TFP to
stagnate, we would expect to see these
100 4 trends reversed.
A further slowing or stagnation in global
agricultural TFP is likely to exacerbate food
insecurity and environmental degradation.
50 2 The authors call for revitalized investment
in agricultural research and development,
which has been the main engine driving
TFP growth in this sector6. There may also
be solutions on the demand side. The report
0 0 of the EAT-Lancet Commission7 calls for
1900 1920 1940 1960 1980 2000 2020 2040
changing the composition of our diets away
Agricultural prices Agricultural production World population Cropland from foods thought to be unhealthy for
humans and the environment.
In any case, the work by Ortiz-Bobea
Fig. 1 | World population, agricultural production, prices and cropland since 1900. Agricultural et al. highlights that the race described by
production has grown faster than world population, and agricultural prices have fallen relative to the Malthus in 1798 between supply-enhancing
price of manufactured goods, since the early 1900s. Most agricultural growth has come from raising productivity growth and population-
productivity. Figure adapted with permission from ref. 8, World Bank. and income-induced demand growth
is back on. ❐

irrigation in the face of adverse weather. seasons of each country, and estimate a Keith Fuglie    ✉
Historical TFP includes these broader ‘response function’. They establish that Economic Research Service, United States
considerations. agricultural TFP falls (or grows more Department of Agriculture, Washington DC, USA.
The authors use a dataset developed slowly) in hotter and dryer years, and, ✉e-mail: keith.fuglie@usda.gov
by the US Department of Agriculture’s conversely, faster in cooler years (and wetter
(USDA) Economic Research Service that years up to a point). They then use this Published online: 1 April 2021
provides annual indexes (beginning from relationship to estimate how long-term https://doi.org/10.1038/s41558-021-01017-6
1961) of agricultural TFP for most countries changes in temperature and precipitation
of the world. The growth rate in the index patterns attributed to anthropogenic climate References
gives the growth rate in agricultural TFP. change (determined from seven Global 1. Malthus, T. R. An Essay on the Principle of Population
(J. Johnson, 1798).
Over a long time period, agricultural TFP Circulation Models) may have affected 2. Ortiz-Bobea, A., Ault, T. R., Carrillo, C. M., Chambers, R. G. &
has edged upward in most countries — trend growth in each country’s agricultural Lobell, D. B. Nat. Clim. Change https://doi.org/10.1038/s41558-
according to Ortiz-Bobea et al., global TFP. They find that the approximately 1 ºC 021-01000-1 (2021).
3. Hertel, T. W. & de Lima, C. Z. Food Policy 95, 101954 (2020).
agricultural TFP was about 76% higher increase in global temperature from climate 4. Giovanni, F. Feeding the World: An Economic History of
in 2015 than it was in 1961 (71% higher if change since 1970 shaved off 21% of global Agriculture, 1800–2000 (Princeton Univ. Press, 2005).
the USDA method for global averaging is agricultural TFP. The effects have been even 5. Villoria, N. Environ. Res. Lett. 14, 125002 (2019).
6. Alston, J. M., Beddow, J. M. & Pardey, P. G. Science 325,
used). But there is a lot of annual fluctuation more pronounced in sub-Saharan Africa, 1209–1210 (2009).
around this trend, especially due to weather. the world’s poorest and most food-insecure 7. Willet, W. et al. Lancet 393, 447–492 (2019).
Agricultural TFP falls below trend when region, where climate change reduced 8. Fuglie, K., Gautam, M., Goyal, A. & Maloney, W. F. Harvesting
Prosperity: Technology and Productivity Growth in Agriculture
drought, heatwaves or floods strike, and agricultural TFP by 34%. Furthermore, the (World Bank, 2019).
rises above trend in years of exceptionally effect of changes in average temperature and
favourable weather. precipitation on agricultural TFP is getting Acknowledgements
To see how fluctuations in weather affect more severe over time. The views expressed are the author’s own and should not be
fluctuations in the index of agricultural TFP, Surprisingly, despite the apparently attributed to the Economic Research Service or the USDA.
Ortiz-Bobea et al. assemble historical data large impact of climate change on
on annual temperatures and precipitation agricultural TFP, this impact is yet to show Competing interests
for the agricultural areas and growing much influence on the rate of growth The author declares no competing interests.

Nature Climate Change | VOL 11 | April 2021 | 293–299 | www.nature.com/natureclimatechange 295