{"id":24785,"date":"2017-11-15T19:30:04","date_gmt":"2017-11-16T00:30:04","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/climate-change-a-tough-nut-to-crack\/"},"modified":"2017-11-15T19:30:04","modified_gmt":"2017-11-16T00:30:04","slug":"climate-change-a-tough-nut-to-crack","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/climate-change-a-tough-nut-to-crack\/","title":{"rendered":"Climate Change \u2013 A Tough Nut to Crack"},"content":{"rendered":"
\"\"
Exhibit 1: United States Department of Agriculture, National Agricultural Statistics Service<\/figcaption><\/figure>\n

Almond production in California, where 80% of the world\u2019s almonds are grown, is at an all-time high [1]. Almonds are specialty crops earning high returns for producers and institutional investors alike [2, 3]. The almond industry contributes heavily to the state\u2019s economy; at $5.1B in 2015, almonds are California\u2019s top export by value [5]. Since 2010, California has experienced an extended drought which has impacted agricultural production and the industry at large. News outlets even reported that \u201calmonds are sucking California dry,\u201d a reference to the amount of water needed for almond farming [4].<\/p>\n

Famoso Nut Company is an almond processing and sales company based in Kern County, California, the largest almond-producing county in the state. Famoso works directly with growers, runs a processing plant for hulling and shelling, and sells almond products and byproducts.<\/p>\n

Survival of the hardiest almonds<\/strong><\/p>\n

Most varieties of almonds require a specific climate to grow – cold winters, wet springs, and dry summers for harvest. Weather pattern shifts (i.e. summer rains, warmer winters) threaten the ideal growing environment in Central California which puts Famoso\u2019s key business input at risk [6].<\/p>\n

Changing weather patterns in the years to come may be manageable for Famoso even as it impacts growers\u2019 total yield. Like grapes produced for wine, not all almonds have the same temperature requirements [7]. In the future, different types of almonds may be more competitive in the region. It is in Famoso\u2019s best interest to proactively work with researchers and growers to closely monitor weather changes and plant accordingly to optimize yields. A \u201cwait and see\u201d approach may otherwise result in low yields which would impact the entire value chain.<\/p>\n

Longer term, if almond trees require relocation to higher latitudes in response to warming temperatures [8], Famoso will have to build strong relationships with growers (who enjoy being able to come to the plant and check on their products) so that the processing plant can serve a larger radius. While transportation and related labor costs may increase from the field to the plant, ultimately, almonds and byproducts from hulling and shelling move south to ports and other buyers, so total transportation costs should not increase drastically [6].<\/p>\n

What to do about water?<\/strong><\/p>\n

\"\"<\/a>
Exhibit 2: State of California Department of Water Resources, 2014 (click to enlarge)<\/figcaption><\/figure>\n

In California, the majority of water is stored in the form of snow in the Sierras. As winter fades, this snowpack melts and replenishes a network of dams and reservoirs (surface water). In recent years, warmer temperatures mean that most water has come in the form of rain and the snowpack is melting earlier and more quickly. Additionally, the state has seen less overall precipitation due to bad droughts [9].<\/p>\n

When surface water is not available, growers pump water from underground aquifers. Property owners currently have rights to underground water sources and can drill wells to pump as much water as they\u2019d like. This is leading to subsidence \u2013 as groundwater is depleted, the land above it collapses because nothing is holding it up. This damage is irreversible and permanently diminishes both water storage capacity and agricultural land in the region. Water districts are currently working with landowners to encourage the community to self-regulate its water usage. To support these efforts, Famoso funded research that resulted in a map which highlighted the best soil types for percolation and shared it with districts and growers. That way, they can most efficiently set aside acreage to flood, which allows water to seep back through the soil and recharge underground water sources [6, 10].<\/p>\n

Without the right incentives, actors may act in their own interest which can lead to irreparable harm for the industry. As a key player in the production value chain, Famoso should work to educate growers and local regulators to influence regulation that can serve as guardrails to protect the longevity of the land.<\/p>\n

Additionally, Famoso should encourage its growers to invest in new irrigation methodology and technology (i.e. sensors). By helping growers understand the payoffs of this large capital investment and even going so far as offering to loan money for improvement projects directly, Famoso could solidify its supplier relationships and also reduce climate change\u2019s impact on its business.<\/p>\n

Additional questions for consideration:<\/strong><\/p>\n

    \n
  1. For every 1\u00b0C increase in average temperature, California risks losing $26B or 1% of GDP [11]. Given the risks associated with depleting water sources, what should the following stakeholders do to address this challenge?<\/li>\n<\/ol>\n