Changes to total liabilities are more influential than price volatility and yield volatility on the cost of the Federal Crop Insurance Program’s premium subsidies, though all were found to be significant.

All climate change scenarios considered suggest that climate change will lower domestic production of corn, soybeans and wheat relative to a future scenario with climate identical to that of the past three decades. All else equal, this implies that prices would be higher than they would otherwise, which implies higher premiums and higher subsidies.

Yield volatility increases under most (but not all) climate scenarios and crops, increasing the frequency and/or depth of losses, and thus increasing premiums and subsidies. On the other hand, changes to price volatility differ by crop and scenario.

Much depends on the severity of future warming. This study compares two scenarios representing differing future rates of greenhouse gas emissions and, consequently, differing severities of climate change. Under the moderate emissions scenario, the cost of today’s Federal Crop Insurance Program would be about 3.5% higher than under a future with a climate similar to that of the recent past. Under the higher emissions scenario, this cost increase is 22%.