Economic Implications for Farmers in Adopting Climate Adaptation Measures in Italian Agriculture

Abstract

The purpose of this paper is to provide an assessment of the economic convenience of adopting adaptation measures to climate change at farm level. Concerns raised about climate risks on agriculture indicate that adaptation of the agricultural sector to climate change is necessary to mitigate the negative consequences of climate change. Despite many opportunities to implement climate adaptation measures at farm level, there are several obstacles to their adoption. Farmers’ decision to implement adaptation measures lies in the difficulty of accessing knowledge about adaptation practices and in the lack of resources for upfront investments required by adaptation. The need to investigate economic convenience in terms of costs and benefits of adopting adaptation measures to prevent or reduce damage from adverse climatic events by farmers arises from this consideration. More importantly, climate protection and management of climate change are European environmental policy objectives. However, adaptation to climate change remains complex, and literature on the costs and benefit of agricultural adaptation is limited. Based on these considerations, this paper provides an analysis of the economic convenience of adopting adaptation measures in Italian farms. The economic convenience to implement adaptation measures is calculated on the reduction of the impact of climate damage. Our results show the economic convenience of adaptation measures. These findings help to improve the still too limited access to information on adaptation policies at farm level as well as the benefits that adaptation produces in economic and environmental terms, on human and ecosystem health. This study supports farmers’ decisions in adopting climate adaptation measures and provides information for policy makers to identify specific financial instruments for adaptation measures.