California Institute for Energy and Environment (CIEE)

Economic Impacts of Climate Change on Agricultural Water Use in California describes part of a broad spectrum of studies of the California water system that are being conducted to assess the impacts of climate change on urban and agricultural water agencies.    Study topics include methods for measuring the economic value of water supply reliability to water users in California, and methods for projecting changes in supply reliability caused by climate change.   This report describes preliminary work on the first topic. To measure water supply reliability, researchers collected data on several variables, including water deliveries for project districts spanning 20 years, water rights information, water source information and electricity use data related to groundwater pumping.  To measure the economic value of reliability, they collected land value, water price, water transfers for many years, and cropping by districts. The project found that the average magnitude of change in farmland value due to a potential decrease in water availability appears to be larger than that caused by an increase in temperature. This finding suggests that the impact on the availability and reliability of water supply may be the crucial pathway by which climate change affects California agriculture.