“Ground-Level Ozone and Corn Yields in the United States”
Abstract: US Corn yields have been growing exponentially since 1950. Technological breakthroughs (new varieties, fertilizer, machinery) have traditionally been identified as key driver of this growth. In the last 25 years (1990-2014), yields have grown at an average rate of 1.5% per year. While a warming climate is predicted to decrease yields over the next decade, projections are net of any trend, which have been treated as exogenous. Understanding the drivers of this trend is crucial for future food security. We provide new empirical evidence that there exists a nonlinear effect of ozone on US corn yields. Our county-level panel analysis links observed historic corn yields to various air pollution measures constructed from finescaled hourly pollution monitor data. We find a statistically significant critical threshold of 65 ppb for hourly daytime ozone, above which yields decline linearly in ozone. This is considerably higher than the 40 ppb threshold derived in controlled experiments that is used as a standard in Europe. Our linear exposure model gives superior yield predictions than the newly proposed secondary standard W126 by EPA. The reduction in peak ozone levels over the 25years is responsible for 44% of the observed trend in average corn yields. Further reductions will have no yield effect as peak ozone is now below 65ppb. A back-of-the envelope calculation reveals that the elimination of peak ozone have reduced global food prices of the four basic stale crops by roughly 10% and increased consumer surplus of these commodities by 100billion annually. While US farmers have seen increased yields, the reduction in prices offset these gains. Farmers outside the US lost through lower prices.