Conference Agenda

Climate change threatens agricultural land use, but the capacity of market prices to buffer these impacts remains fundamentally unknown. While higher prices can incentivize farmers to maintain cultivation, this adaptation may be inefficient if it occurs in different locations than where climate stress is most severe. Here, we develop an integrated econometric framework that leverages three satellite land-cover products (CDL, MODIS, Annual NLCD) to quantify the causal effects of climate and price on US cropland change from 2008-2020. Our methodological approach, which accounts for classification uncertainty, reveals that price-induced expansion occurs primarily on marginal lands at the extensive margin of cultivation. We find a significant spatial misalignment: price incentives drive expansion in regions like the Great Plains, while climate-induced losses are concentrated in core agricultural zones like the Southeast. Projecting forward, we identify a large Adaptation Gap, with the price premiums required to offset climate damages (17.9-47.3%) far exceeding projected market price increases under moderate to severe warming scenarios. Our results suggest that relying on market forces alone is an inefficient and potentially perverse strategy for ensuring agricultural resilience, highlighting the need for spatially targeted adaptation policies.