Do Western and Eastern Europe have the same agricultural climate response? Taking adaptive capacity into account

Current cross-sectional methodologies measuring climate change impacts assume that regions at the same latitude face a similar climate response and therefore have the same adaptive capacity. This paper proves that assumption to be erroneous in the European Union. It does so by ameliorating the Ricardian methodology by restricting which farmers (and therefore which adaptation options) are allowed in the dataset. In doing so, a comparative Ricardian methodology is suggested that makes it possible to examine, for the first time, how the climate responsiveness of a region changes if adaptive capacity changes. The paper combines climate, soil, geographic, socio-economic, and farm-level data in a linear mixed-effect model and examines whether Eastern and Western Europe have the same climate responses and how these responses change if regional adaptive capacity increases. The paper concludes that both regions currently have a significantly different climate response, but that if Eastern Europe were to implement the same adaptation options as Western Europe, it could avoid a large decrease in land value and even benefit from climate change depending on the climate scenario.