Does crop insurance inhibit climate change technology adoption?

Changing temperatures and precipitation patterns from climate change are a major risk to crop yields. Producers have technology options for mitigating this with one such termed drainage water recycling (DWR). DWR involves diverting subsurface ponds where it is stored later irrigation. Crop insurance may interfere adoption by providing producers another avenue manage risk. It hypothesized that government-subsidized reduces adoption. Based on real options, analysis considers two policy regimes: when in effect not. In Poisson jump process, further the of producers’ returns jumping facing disaster. Results indicate has minimal adoption, most scenarios, thresholds too large producer invest adaptation without additional financial incentives. The baseline scenario, no impact, requires revenue $1,114/acre, or 1.57 times current conventional revenue.