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Saturday, December 14, 2013

Climate Change and the Rise of Scottish Wine Production?

The NY Times reports that agricultural land can be used for its highest value! Comparative advantage can shift as climate conditions change. Yes, there are adjustment costs and new contingencies but this example shows you free markets adapt to changing "fundamental conditions". What is the future of wheat production?  Should you be buying land in Canada?   This is free market climate change adaptation. Is this a perfect substitute for strong mitigation efforts now?  No, but that was never the choice.  The real issue is how we allocate our scarce resources given the new realities we have created for ourselves.  This reorganization of economic activity helps to sharply reduce the impact of climate change.   How much is "sharply"? That's up to us to make that happen.