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Climate change shifts the distributions of a set of climatic variables, including temperature, precipitation, humidity, wind speed, sunshine duration, and evaporation. This paper explores the importance of those additional climatic variables other than temperature and precipitation. Using the county-level agricultural data from 1980 to 2010 in China, we find that those additional climatic variables, especially humidity and wind speed, are critical for crop growth. Therefore, omitting those variables is likely to bias the predicted impacts of climate change on crop yields. In particular, omitting humidity tends to overpredict the cost of climate change on crop yields, while ignoring wind speed is likely to underpredict the effect. Our preferred specification indicates that climate change is likely to decrease the yields of rice, wheat, and corn in China by 36.25%, 18.26%, and 45.10%, respectively, by the end of this century. [ABSTRACT FROM AUTHOR]

Abstract: Adaptation to exogenous change occurs on both intensive and extensive margins. Whether and how one accounts for human adaptation directly affects estimates of the economic consequences of environmental change, estimates that are both critical in informing policy decisions and notoriously difficult to value. This paper introduces and applies an analytical framework for placing an economic value on adaptation. We explore the issue first in a stylized model that facilitates making concrete generalizations about the kinds of adaptations that generate high or low economic value. We then test the soundness of our insights by incorporating learning and adaptive decision-making into a structural dynamic forestry model where climate change is imposed exogenously and agents respond optimally. Using downscaled climate projections integrated with site- and species-specific timber productivity data, we estimate the economic value of adaptation to climate change within the California timber industry. We find on the intensive margin, changing the rotation intervals will yield a low value of adaptation, but on the extensive margin, replanting more suitable tree species can yield significant value. [Copyright &y& Elsevier]