By 2050, climate change will have effects on water availability and on crop yields which vary significantly by region and crop. Under the same time frame, and unrelated to climate change, yields will increase due to technological innovations and the market for "middle-class" crops will grow significantly with growth in income and population. Changes in yield alter crop profitability, changes in water availability change the types of crops grown and the extent of the land area they use, and changes in market conditions impact the relative profitability of crops. Taking all of these considerations into account, what is the net effect on Central Valley agriculture and, by way of extension, agriculture in other arid regions? The net effect of climate change on agriculture can be summarized in terms of change in total irrigated crop land, water use, and agricultural revenues.

Without climate change, agricultural land use is expected to decrease by 7.3% in California's Central Valley by 2050. This is mostly driven by an increasing urban footprint as urban areas continue to expand into agricultural land. Under climate change, agricultural land use would be reduced by another 18.7%, for a total combined reduction of 26%. The additional decrease in land use is largely due to a reduction in water availability. Reduced water availability pushes marginal agricultural land out of production. So, in the future, California will have a smaller agricultural sector, in terms of total land use, both due to expanding urban footprint and reduced water availability.

Without climate change, total agricultural water use, applied water, will decrease by about 7% by 2050 to 23.9 maf by 2050. This is the result of a contraction in total irrigated land area and a shifting mix of crops in response to evolving markets. Under climate change however, total agricultural water use is expected to fall by an additional 19.3%, for a total reduction of 26.3% by 2050. The additional decrease in water use under climate change is due to several factors in response to a decrease in water availability. Adaptation of agricultural production to climate drives cropping patterns to more profitable and less water intensive crops making total water use reduce more than total land use in agriculture.

The combined effect of a change in total land use, water use, and shifting cropping pattern translates into changes in total agricultural revenues. Without climate change, agricultural revenues in the Central Valley are expected to increase from $20 billion in 2005 to $28.4 billion in 2050, an increase of 42%. Under climate change, agricultural revenues in the Central Valley are expected to increase from $20 billion in 2005 to $25.2 billion in 2050, a lesser increase of 26%. In short, climate change by year 2050 is likely to reduce agricultural revenues relative to a case of no climate change, such as the historical climate pattern. However, revenues will increase from the base year of 2005, as adjustments are made, including the more profitable and less water intensive crops that make up the 2050 future crop mix.

Figure 1 summarizes the percent change in water availability, agricultural land use, and agricultural revenues between 2005 and 2050 under the case of climate change and the case of no climate change, the historical climate.

In isolation, the effects of climate change will have detrimental effects on agricultural production and revenues. However, the revenue losses are partially compensated by higher crop prices, technology, and adaptation to less water intensive crops. Figure 1 succinctly summarizes the future of agriculture in California's Central Valley under climate change. Water deliveries will be significantly decreased since water shortages for crops are expected to be a major outcome of climate change. Land use decreases mirror changes in water availability, and reflect the need to accommodate the 2050 urban footprint as well as a shifting of cropping patterns into higher valued crops on less land. This unused cropland with minimal water supplies will pose a challenge for conversion to environmental habitat.