Recent Findings from Purdue University Provides New Insights into Climate Change (Does Crop Insurance Inhibit Climate Change Technology Adoption?): Climate Change

2022 MAR 23 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- New research on Climate Change is the subject of a report. According to news reporting from West Lafayette, Indiana, by NewsRx journalists, research stated, “Changing temperatures and precipitation patterns from climate change are a major risk to crop yields. Producers have technology options for mitigating this risk with one such technology termed drainage water recycling (DWR).”

The news correspondents obtained a quote from the research from Purdue University, “DWR involves diverting subsurface drainage water to ponds where it is stored for later irrigation. Crop insurance may interfere with DWR adoption by providing producers with another avenue to manage climate change risk. It is hypothesized that government-subsidized crop insurance reduces climate change technology adoption. Based on real options, this analysis considers two policy regimes: when crop insurance is in effect and not. In a Poisson jump process, it further considers the insurance effect of producers’ returns jumping when facing a crop disaster. Results indicate crop insurance has a minimal effect on DWR adoption, and in most scenarios, the DWR adoption thresholds are too large for a producer to invest for climate change adaptation without additional financial incentives.”

According to the news reporters, the research concluded: “The baseline DWR adoption scenario, with no crop insurance impact, requires revenue of $1,114/acre, or 1.57 times current conventional revenue.”

This research has been peer-reviewed.

For more information on this research see: Does Crop Insurance Inhibit Climate Change Technology Adoption? Mitigation and Adaptation Strategies for Global Change, 2022;27(3). Mitigation and Adaptation Strategies for Global Change can be contacted at: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands. (Springer - www.springer.com; Mitigation and Adaptation Strategies for Global Change - http://www.springerlink.com/content/1381-2386/)

Our news journalists report that additional information may be obtained by contacting Nathanael M. Thompson, Purdue University, Dept. of Agricultural Economics, West Lafayette, IN 47907, United States. Additional authors for this research include Sarah C. Sellars, Michael E. Wetzstein, Laura Bowling, Keith Cherkauer, Jane Frankenberger, Ben Reinhart and Charlotte Lee.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1007/s11027-022-09998-1. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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