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Abstract
The possible impacts of projected climate change on Australian agriculture
are outlined. The characteristics of climate change that underpin the
creation of economic impacts for agriculture are also described and
discussed. Climate change is shown to generate spatially and temporally
diverse impacts, with many regions likely to experience increased downside
risk in agricultural production. Some regions, such as south-west Australia,
are projected to be particularly at risk of adverse outcomes associated with
climate change.
The likely gradual unfolding of climate change, however, may provide
farmers in many regions and industries with sufficient time to utilise or
develop adaptation strategies. Many of these strategies are likely to be
based on farmers’ current responses to climate variability. Investment in
R&D and innovation are likely to be important ingredients in facilitating
farmers’ adaptation to climate change.
Farmers are likely to face additional costs of capital adjustment due to
climate change and investment in long-lived climate-dependent agricultural
assets such as irrigation infrastructure, new vineyards and timber
plantations will become more problematic. Investing in ecological assets in
rural regions, especially where these assets may become stranded by
climate change, is also increasingly made problematic.