NBER Working Paper Series
October 2021
Abstract
Post-war growth in agricultural productivity outpaced the US non-farm economy, spurred by steadily increasing crop yields. We argue that rising atmospheric CO2 is responsible for a significant share of these yield gains. We present a novel methodology to estimate the CO2 fertilization effect using data from NASA's Orbiting Carbon Observatory-2 (OCO-2) satellite. Our study complements the many field experiments by regressing county yields on local CO2 levels across the majority of US cropland under actual growing conditions. For identification, we utilize year-to-year anomalies from county-specific trends, an instrument for those CO2 anomalies using wind patterns, and a spatial first-differences approach. We consistently find a large CO2 fertilization effect: a 1 ppm increase in CO2 equates to a 0.4%, 0.6%, 1% yield increase for corn, soybeans, and wheat, respectively. In a thought exercise, we apply the CO2 fertilization effect we estimated in our sample from 2015-2021 backwards to 1940, and, assuming no other limiting factors, find that CO2 was the dominant driver of yield growth—with implications for estimates of future climate change damages.
Citation
Taylor, Charles A., and Wolfram Schlenker. "Environmental Drivers of Agricultural Productivity Growth: CO2 Fertilization of US Field Crops." NBER Working Paper Series, October 2021.