Can a Warmer Climate Save Northern Agriculture?

Agriculture at high latitudes is expected to be the main beneficiary of a man-made climate change. A numerical model, using Norway as a case, is employed to analyze the impacts of a warmer climate on northern agriculture. The computations indicate that the current degree of self-sufficiency can be achieved with 15% less budget support and higher economic welfare. However, it may be argued that environmental goods, such as landscape and biodiversity preservation, and settlement, are more important than self-sufficiency for northern agriculture. It is demonstrated that, in that case, welfare gains are substantially lower, and can even be negative.