Somewhere Julian Simon is smiling. Even NPR is reporting how proactive farmers are making investments to reduce the output risk they face from climate change. A direct quote:
"He (Gene Snetselaar) says farmers are buying new equipment to cope with the weather changes, including adding planters so they can get crops in faster during a wet spring, and new grain wagons with tracks like a military tank, instead of wheels."
Human capital is proving to be a useful input in devising new solutions for farmers. Here is another NPR Quote:
"In a test field east of Des Moines, Iowa, Watkins and Iowa State University agronomist Matt Liebman are looking for a way to help farmers adapt to soil erosion caused by torrential rain events that are becoming more common.
Liebman has helped develop a new technique for curbing erosion by planting strips of native prairie plants at strategic locations within cornfields. The deep-rooted, resilient prairie plants can help hold the soil in place as climate change produces more violent storms with heavy rains.
"We slow down the water, and allow more of it to seep into the ground, rather than run off," Liebman says. "We want to retain the nutrients that might be washed out into the stream and keep them on the crop fields.""
Julian Simon repeatedly reminded the "doom and gloomers" of the power of human ingenuity in the face of an anticipated challenge. Climate change will offer the ultimate test of Simon's optimism. Are we nimble problem solvers or are we ignorant victims who are blissfully unaware of what we have collectively unleashed? I'm with Simon.
Now the $64,000 dollar question is how much of climate change's impact will be offset by human ingenuity? The reason this is such a hard question to answer is that we would need a good climate model of what climate change will do to us both individually and collectively and we would need an economic model of how successful will endogenous technological innovation will be. What will be the price and quality of a highly energy efficient air conditioner in the year 2050? While I don't know the answer to this question, I believe in a law of large numbers that if enough entrepreneurs recognize the potential profits they could earn devising such an adaptation friendly product then at least one of them will succeed and we will all benefit. While Zuckerberg and Bezos focused on the Internet as their pet focus, future entrepreneurs will focus on climate change adaptation. Perhaps Elon Musk's many children have inherited their dad's good nose for hard problems that offer big economic and social returns.