What role do government policies which distort market competition play in impeding farmers’ climate change adaptation? We study this question in the context of India, where longer-run adaptation to climate change has been inadequate — posing a considerable risk to its ∼250 million agricultural workers. We exploit spatial discontinuities in intermediary market power, created by state-level laws that restrict farmer-intermediary transactions to the same state, to determine how spatial competition affects farmers’ adaptation. We find that a farmer selling in the 75th percentile of the competition index compared to one that faces the 25th percentile of the competition index achieves a 4.9 percent higher output for each additional day of extreme heat. This effect is driven by increased input usage by farmers in anticipation of higher prices after climate shocks, an effect limited only to to high competition areas. We then propose and estimate a quantitative spatial trade model with intermediary market power to examine the welfare implications of higher competition for adaptation. Our structural estimates suggest that the farmer’s economic loss (i.e. their climate damage function) due to extreme weather could be mitigated by 13.8 percent if government regulation distorting market competition are dismantled. These results highlight the importance of understanding the political economy of reforming these competition-distorting laws to accelerate climate change adaptation.

We study how flood impacts, resilience, and adaptation differ across cities worldwide. Combining 3,931 major floods (2000–2023) with data on 9,468 cities in 175 countries, we show: (i) floods reduce urban economic activity by 4.5 percent on average, with losses 3.5 times larger in low-income coun- tries; (ii) cities are becoming more resilient, as sensitivity of economic activity and mortality to floods declines over time, driven by experience-based learning; and (iii) adaptation mechanisms vary by in- come — dams mitigate losses globally, while migration and critical infrastructure enhance resilience only in high-income cities. The disproportionate flood impacts and limited adaptation effectiveness in developing nations highlight an adaptation gap.

Water suppliers are showing greater interest in using different mechanisms to promote conservation. One such mechanism is conducting home water audits, which involves assessing water use and providing tailored suggestions for conserving water for residential customers. Yet, very little is known about the economic impacts of these water audits. This paper helps fill this gap by implementing a natural field experiment in the United Kingdom. The experiment randomly allocates 45,000 water customers to a control group or to treatment groups that receive different behavioral encouragements to take-up an online water audit. Our analysis yields three main findings. First, encouraging subjects to participate in an audit with financial incentives reduces household consumption by about 17 percent over two months. Furthermore, we find that the size of the financial incentive used to encourage conservation matters for take-up, but not conservation. Second, although there are substantial improvements in water conservation for some interventions, they do not appear to yield net benefits of more than £1 per person in most cases. We also implement a marginal value of public funds approach that considers benefits and costs and reach a similar conclusion. Third, we find that targeting high users could double the effectiveness of the financial incentive interventions.