From this perspective, economists often propose that farmers should pay for the real value of the water they use for irrigation. Because of the presence of subsidies, the real value of water in agriculture is different from the price paid by farmers.It is also different from the cost of delivery, which does not account for the value of water itself. However, what is the real value of water? In the absence of a market and associated market prices, the answer to this question is not straightforward.This paper developed an approach to determine the value generated by irrigation water as a factor of production in agriculture; using biophysical models we estimate the increase in crop production afforded by irrigation with respect to baseline rain-fed conditions. These estimates are then used to determine the maximum price that farmers would accept to pay for irrigation water.They may be excessive when they do not account for output subsidies or cost of investments in irrigation technology, the operating costs of irrigation due to additional labor and energy, and other inputs . In some cases, the annualized cost of irrigation infrastructure,square plastic pot and the maintenance, and operation costs, can be so high that they exceed the water values we have determined .
However, these costs are typically subsidized by the government and farmers only pay for part of them . Thus, our approach would still determine the value of water to the farmers and provide a maximum reference value at which farmers might accept to sell or relinquish their water rights or water allocations to other businesses. The cost of irrigation infrastructures, their maintenance and operation are in general difficult to estimate on a global scale because of lack of data. Whether the assumption ΔPC ≈ 0 is justifiable likely depends on a number of factors, including crop type and value, farm size, irrigation technology, and irrigation water source and its distance to the field. Global datasets for a worldwide validation of this assumption are not available. However, in Australia, the Bureau of Statistics reports the total cost of irrigation by region, including the costs of equipment, infrastructure, water license, and operation, in addition to data on irrigated areas and agricultural water withdrawals . A recent analysis of these data has provided annual water provision costs per unit area of irrigated land. We can use these results to estimate the annual cost of water provision per unit volume of irrigation water and compare them to our estimates of the value of water. We find that provision costs typically range between US$0.01 and $0.02/m3 . While in the case of some staple crops such as wheat or maize the value generated by irrigation is comparable , these water provision costs are overall negligible with respect to the average value of water in agriculture in Australia, which is here estimated at ∼$0.27/m3 , in agreement with estimates based on irrigation and production data from the Australian Bureau of Statistics . As noted below, these values fall within the interval of water prices reported by the Murray– Darling water market, suggesting that in the case of Australia the assumption of negligible provision costs can be overall justified. The values of water found by this study fall within the range of those reported for water markets. In fact, we find median global values of $0.13/m3 , while it has been reported that in 2012 Colorado farmers typically pay $0.02 to $0.08/m3 for irrigation water .
However, in the presence of competitors from the oil industry, farmers are outbid in water market transactions at prices ranging from $0.81 to $1.62/m3 in periods of water scarcity . This suggests that, when demand from another industry that is willing to pay a higher price for water comes into play, farmers sell their water rights if the price exceeds the value of water in agriculture. Our study provides an estimate of such a value. For instance, in 2012 in the case of maize, the value of water in the United States is here estimated at $0.25/m3 , in general agreement with water trade data. For instance, in the Permian Basin in Texas, a computer application has been developed that connects owners of water rights to oil companies and allows them perform water transactions. While farmers would normally pay $0.05/m3 , in periods of water scarcity, competition with shale oil and gas companies have brought the price to up to $2.50/m3 . Overall, in the presence of water markets and demand from oil companies, water prices may increase from $0.03–$0.1/m3 to $2.3–$3.1/m3 . Thus, in the presence of competition with other sectors capable of providing a more efficient use of water the market price of water increases and farmers are outbid by oil companies at prices exceeding the agricultural water use efficiency determined by our study. In the Murray–Darling’s water market the median water price reported between 1998 and 2015 varied between $0.05/m3 and $0.50//m3 in periods of scarcity . These values are of the same order of magnitude as the value of water in agriculture we have estimated for the Murray– Darling Basin . Thus, in this study we calculate the value produced by water in its current use. The general pattern that is observed in the analysis of the economic water efficiency of water consumption is that with the current crop distribution the value of water in agriculture does not necessarily correspond to the “best use” of water because it does not exhibit the maximum water value and is at least one order of magnitude less than that in other sectors . Therefore, in the presence of a water market water consumption is expected to shift from irrigation to the activity that maximizes revenue generation.
However, the focus here is on the estimation of water values in agriculture not on how different uses can compete with one another. In the case of water, such a competition is often limited by the lack of a market as a result of institutional or physical factors . While water markets give a direct assessment of the value of water resulting from the complex interactions among different sectors, their existence is limited to those cases in which suitable trade able property rights have been established. For the rest of the world the value of water can still be determined through its ability to produce value in different economic activities. Our results provide a first global estimate of the value of irrigation water worldwide.Fossil fuel combustion and land use change are contributing to alterations in global climate. Atmospheric [CO2] has recently increased at an average rate of 2.0 μmol mol−1 year−1, which is higher than any measurement period to date over the past 800 000 years . Barring substantial reductions in emissions, atmospheric [CO2] may exceed 900 μmol mol−1 by the end of the 21st century 8.5; IPCC 2013). Rising atmospheric [CO2] has contributed to significant atmospheric warming, and global mean surface temperatures could increase 3 to 4 °C by the middle of the century . Embedded in this climatic warming trend is an increased frequency of extreme temperature events . Atmospheric warming has also been implicated in more frequent and extreme precipitation and drought events , and net declines in soil moisture in many, but not all, regions. Temperature, water availability and atmospheric [CO2] are each important regulators of plant growth, function and development. Thus, climate change will likely influence the ability of agricultural systems to meet a growing global population’s demands for food and fibre. It is expected that food production must increase 70 to 100% by 2050 to meet growing demands . Troublingly, recent trends suggest that yields are not increasing rapidly enough , and climate change and extreme weather events may already be reducing crop yields in some areas . For instance, Australia suffered enormous losses in wheat yield during historic drought in the early 21st century and higher than normal temperatures have contributed to reductions in corn and soybean yields in the United States between 1982 and 1998 . Even with high precipitation, higher temperatures can increase evaporative demand and reduce soil moisture resulting in greater incidence of drought . A recent analysis of maize and soybean yields in the Midwestern United States showed that although field-scale yields are increasing, they have become increasingly sensitive to drought . Alternatively, experimental manipulations have demonstrated that elevated [CO2] can stimulate C3 crop yield ,tall pot stand yet the magnitude of this increase is uncertain under field conditions where temperature and precipitation can influence the CO2 fertilization effect .
Climate change also threatens the ability of forests to meet global demands for wood products . Although forest plantations only account for 5% of global forest cover,they supply roughly 35% of global round wood, with future wood production expected to increase in plantations compared to native forests . Concentrating wood production to smaller areas promotes greater forest protection and mitigation on non-plantation lands , but necessitates sustained productivity over time, which will become more difficult under extreme climatic conditions. Experimental studies have shown that forest trees and plantations may increase productivity under eCO2 , although variability in the growth stimulation is dependent upon variation in soil fertility, temperature and precipitation . Atmospheric warming is generally expected to increase tree and forest growth in cool climates, but have no effect or reduce growth in warm climates . In addition, there is mounting evidence that more frequent and intense heatwaves and drought are leading to lower tree growth rates and increased tree mortality in some regions worldwide . Although fast-growing mono-specific plantations have high rates of C accumulation , lower stand-level genetic diversity may increase their susceptibility to heatwaves and drought stress . Utilization of intraspecific variation in agricultural and forest species responses to climate change may bolster productivity and aid development of greater stress tolerance or resilience . Genotypes of a given species often show markedly different physiological, growth and developmental responses to eCO2, temperature variation and soil water availability, exemplified by genotype-by-environment interactions . Careful examination of genotypes’ plastic responses may reveal individuals that can both increase productivity under optimal conditions, and, in part, sustain production under stressful conditions . Despite the potential utility of intraspecific variation in agricultural and forest species responses to climate change, an integrative understanding of the physiological and genetic factors influencing G × E is lacking, and relationships between genotype plasticity and productivity have rarely been tested in the context of agriculture or forestry. The goal of this paper is to link aspects of plant physiology and genetics that may influence intraspecific variation in agricultural and forest species responses to climate change. In particular, we: conceptualize the importance of intraspecific variation in agricultural and forest species phenotypic plasticity within the context of plant breeding and climate change; highlight some physiological mechanisms underpinning intraspecific variation in agricultural and forest species responses to drought, warming and eCO2; discuss the genetic factors influencing intraspecific variation in phenotypic plasticity;and discuss future directions in G × E climate change research.G × E can take different forms including plasticity arising from changes in variance among genotypes across environments, and plasticity resulting from genotype rank changes among environments . Genotypes may also show variable linear or non-linear responses to continuous environmental variation , which may be important for identifying response thresholds to environmental drivers . A genotype’s plasticity is often indexed based on the slope of its ‘reaction norm’ across an environmental gradient , where steeper slopes represent higher plasticity. A long-standing focus in plant breeding has been to measure and utilize information gained from G × E. Typically, the goal in plant breeding is to produce genotypes that are productive across a range of environments or management conditions . Significant G × E, especially in the context of increasing variability of E, hinders selection of stable genotypes . Plant breeders have therefore attempted to limit G × E by prioritizing genotype stability across environments . Alternatively, breeders have also focused on selecting genotypes with improved productivity or stress tolerance in particular environments . From an ecological and physiological perspective, however, and in the context of climate change, careful examination of G × E and its underlying physiological and genetic mechanisms could be important for identifying genotypes suitable for increased climatic variability.