This dissertation investigates: (1) the climate change effects on the mean and higher order moments of crop yield distributions; (2) the effects of irrigation with and without its interactive terms with climate variables; (3) the climate effects on crop mix and climate change adaptation. The first essay explores how the climate change impacts the crop yield distribution. Using the flexible moment based approach, this study infers that external climate factors influence not only mean crop yield and variability, but also its higher order moments, skewness and kurtosis. The climate effects on each moment vary by crops. The second essay examines the irrigation effects on the mean crop yield. While the irrigation effects estimated from the model with irrigation dummy are constant regardless of climate conditions, the irrigation effects estimated from the model with irrigation dummy and interactive variables between irrigation and climate are affected by external climate factors. This study shows that as temperature increases, the irrigation effects are decreased and irrigation reduces damages from extreme temperature conditions. Precipitation and PDSI effects are also diminished under irrigation. The third essay explores the effects of climate on crop producers' choice. Our findings point out that the climate factors have significant impacts on crop choice and future climate change will alter the crop mix. Under the projected climate change of increasing temperature and precipitation, wheat and soybeans cropland will be switched to upland cotton. The major producing locations of upland cotton, rice, and soybeans will be shifted to the north. However, most of corn will be still cultivated in the Corn Belt and changes in acreage planted will not be significant.

Climate factors like precipitation and temperature, being closely intertwined with agriculture, make a changing climate a big concern for the entire human race and its basic survival. Adaptation to climate is a long-running characteristic of agriculture evidenced by the varying types and forms of agricultural enterprises associated with differing climatic conditions. Nevertheless climate change poses a substantial, additional adaptation challenge for agriculture. Mitigation encompasses efforts to reduce the current and future extent of climate change. Biofuels production, for instance, expands agriculture’s role in climate change mitigation. This dissertation encompasses adaptation and mitigation strategies as a response to climate change in the U.S. by examining comprehensively scientific findings on agricultural adaptation to climate change; developing information on the costs and benefits of select adaptations to examine what adaptations are most desirable, for which society can further devote its resources; and studying how ethanol prices are interrelated across, and transmitted within the U.S., and the markets that play an important role in these dynamics. Quantitative analysis using the Forestry and Agricultural Sector Optimization Model (FASOM) shows adaptation to be highly beneficial to agriculture. On-farm varietal and other adaptations contributions outweigh a mix shift northwards significantly, implying progressive technical change and significant returns to adaptation research and investment focused on farm management and varietal adaptations could be quite beneficial over time. Northward shift of corn-acre weighted centroids observed indicates that substantial production potential may shift across regions with the possibility of less production in the South, and more in the North, and thereby, potential redistribution of income. Time series techniques employed to study ethanol price dynamics show that the markets studied are co-integrated and strongly related, with the observable high levels of interaction between all nine cities. Information is transmitted rapidly between these markets. Price seems to be discovered (where shocks originate from) in regions of high demand and perhaps shortages, like Los Angeles and Chicago (metropolitan population centers). The Maximum Likelihood approach following Spiller and Huang’s model however shows cities may not belong to the same economic market and the possibility of arbitrage does not exist between all markets.