CE55 - Sociétés et territoires en transition

Adaptation to Climate Change with Inefficient Land Markets – ACCLIMATE

Submission summary

By modifying the profitability of the different uses (agriculture, forest, urban, other), climate change is suspected to induce land-use changes. Indeed, landowners are likely to adapt to such changes and to switch towards the most profitable activities under new climatic conditions. Assuming that land markers are efficient, the literature has assessed the impacts (and related costs) of climate change for the land-use sector. While convenient, this assumption is questioned by many real-world examples where land regulations prevent landowners to freely sell (or rent) their property.

The main hypothesis of ACCLIMATE is that the majority of existing land market regulations taking place worldwide favor the agricultural use (over the others), which constrains landowners’ adaptation to climate change. This mechanism would have three consequences. First, existing land regulations would lead to inefficient land-use allocations under future climate conditions. Second, existing land regulations would incur additional costs to the land-use sector on top of the initial costs of climate change. Third, the existing assessment of the costs of climate change for the land-use sector would be biased.

ACCLIMATE investigates how land market inefficiencies constrain landowners to adapt to climate change. Our theoretical analysis will analytically inform on the costs of climate change for the land-use sector under land regulations, shedding lights on the properties of the biases in previous studies. Our empirical analyses will exploit the spatially and temporally heterogeneous climate changes across France since 1990 to assess the impacts of land regulations on landowners’ adaptation. Based on the theoretical model and the estimated coefficients, we will simulate how different land reforms could reduce the costs of landowners’ adaptation to climate change and how it could affect land-use allocation across France.

Project coordination

François Bareille (Paris Saclay Applied Economics)

The author of this summary is the project coordinator, who is responsible for the content of this summary. The ANR declines any responsibility as for its contents.

Partner

Paris Saclay Applied Economics

Help of the ANR 170,936 euros
Beginning and duration of the scientific project: December 2022 - 36 Months

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