Cooling Externality of Large-Scale Irrigation
We provide novel evidence that large-scale irrigation heterogeneously shifts the temperature distribution towards cooler temperatures during the months of the growing season relative to the rest of the year. We employ a triple-difference estimator using a 59-year-long panel of weather records paired with the fraction of a county that is irrigated in 393 counties over the Ogallala aquifer. Cooling-by-irrigation propagates downwind and reduces the upper tail of the temperature distribution by up to 3C (5F) during the month of August, which has positive externalities on downwind crop yields ($120 million per year) and temperature-induced excess mortality ($240 million per year) that are of equal magnitude as the direct benefits of irrigation by enhancing heat tolerance ($440 million per year). The observed cooling helps explain why the US has seen less warming, especially of very hot temperatures, than what climate models project. Our findings highlight that weather shocks in highly irrigated areas are not exogenous but are influenced by human responses in the form of irrigation.
We would like to thank Jonathan Proctor and participants at the 2022 NBER EEE Summer Institute for comments on an earlier draft of the paper. This work was supported by the U.S. Department of Energy, Office of Science, Biological and Environmental Research Program, Earth and Environmental Systems Modeling, MultiSector Dynamics, Contract No. DE-SC0022141. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.