Topics - April 23, 2012
Warming set to make corn prices pop
PARIS, April 22, 2012 (AFP) - Climate change will more than quadruple US corn prices in years of peak volatility, environmental scientists said on Sunday.
In a study of the factors that drive up prices in the world's key market for corn, more frequent heatwaves, predicted as a result of global warming, proved far more important than government policies to promote biofuels or than higher oil prices. "Severe heat is the big hammer," said Noah Diffenbaugh of Stanford University in California. "Even one or two degrees of global warming is likely to substantially increase heatwaves that lead to low-yield years and more price volatility." The study found that climate change would increase year-on-year corn price volatility by a factor of 4.1. The fluctuations were based on a projection for 2020-40 compared to volatility in recent history.
The study, published in Nature Climate Change, used a computer scenario based on warming that ultimately reaches 2.0 degrees Celsius (3.6 degrees Fahrenheit) over pre-industrial times. Many climate scientists say 2 C (3.6 F), enshrined as a goal by the UN, is an under-estimate. Current trends of carbon emissions are placing Earth on a track for warming of 3 C (5.4 F) or more, according to some estimates. This figure is the overall global average, so it disguises big regional variations, including seasonal bouts of extreme weather. Before the results of the study became clear, it was not obvious to Diffenaugh that climate change would be a more important factor than higher oil prices or government policies to promote biofuels. "Frankly, I was surprised that climate had the largest effect of these three influences. These are substantial changes in price volatility that come from relatively moderate global warming," Diffenaugh noted. The researchers found that climate's yo-yo effect was accentuated by government support for biofuels. By growing corn for fuel, this removed a buffer of surplus grain, making the market more inelastic. "Our results suggest that energy policy decisions are likely to interact with climate change to affect corn price volatility, and that the market effect of a binding biofuel mandate is likely to intensify as the climate warms," said Diffenbaugh. Unless corn farmers increase their crops' heat tolerance by as much as 3.3 C (6 F), areas of high production will have to move north from the current US corn belt, the researchers said in a press release.
"By the time today's elementary schoolers graduate from colleage, the US corn belt could be forced to move to the Canadian border to escape devastating heat waves brought on by rising global temperatures," it said.