Sunday, August 17, 2014
Olive Oil Production as a Test of Our Ability to Adapt to Climate Change
Joe Romm's blog reports some doom and gloom about olive oil production. This tasty (and healthy) oil is mainly grown in Spain, Italy and Greece with these three nations producing 97% of the European Union's total production and the EU produces 73% of the world's olive oil output. (Source). Spain produces 62% of the EU's total and it is suffering from mega-drought. What will be the short term and medium term consequences of this drought? Given that this production is highly spatially localized, what adaptation could occur? The Internet says that olive oil can be preserved for two years so storage will be one adaptation strategy as future "Hotelling inventory" papers will be written. As of now, I will merely leave this as a challenge that we face. Will for profit farmers figure out a way to adapt? Will households who use olive oil figure out strategies to adapt? This would appear to be a case where the pessimists are right that climate change will cause large impacts on our well being (as measured by lost consumer surplus). Are they right? I will report back on this.