The Misinterpretation of Climate Forecasts and Their Economic Impacts to the Agriculture Sector

Abstract

This thesis uses climate forecasts conducted by the Climate Prediction Center to analyze the economic effects on the agriculture sector in the Western United States. We use a variety of different skill scores alongside a water consumptive use model developed for the Lower Colorado River irrigation area. Using various skill scores to evaluate the effectiveness of a given climate forecast, we attempt to model the factors that affect skill scores. Our results show climate forecast skill has not uniformly improved in the last twelve years. We also discovered forecast skill did not differ between climate divisions when forecasting precipitation; however it did when forecasting temperature. We then use our results along with an agriculture water use model to simulate possible decisions urban water managers must make on water purchases and the economic ramifications of their decisions. We found regardless of planning method, managers cannot rely completely upon current climate forecasts.