Whilst Southerners are concerned about drought and rising sea levels, climate change could be good news for Scottish farmers, according to research at the University of Stirling.

The research, funded by the Economic and Social Research Council, found rising temperatures and increased CO2 levels could mean increased yields and a boost to local economies, according to Professor Nick Hanley, who led the project.

The findings are based on a series of interlinked models, which analysed the effects of projected changes in Scotland's weather on land use, regional economies and biodiversity. The possible effects of reform to the EU Common Agricultural Policy (CAP) were also taken into account.

The linked models were used to predict both management and climate change scenarios in 2020, 2050 and 2080.

"We were quite surprised to find that global warming is not necessarily a bad thing," said Nick Hanley. "Rising temperatures will permit farmers to grow more productive, faster developing crops and increase the intensity of livestock farming. At the same time, the extra C02 in the atmosphere will reduce the need for artificial fertilisers and this will offset any negative economic effects of climate change."

But the professor cautioned against excessive optimism. "Yields may go up," he said, "but prices will depend on changes in the marketplace rather than the weather."

The research also found significant regional variations in the effects of climate change. The knock-on effects of increased farm income would be felt most strongly in the lowland south-west region of Scotland, and least in the hill farming areas of the North West.

The only area which might experience poorer yields was the low-lying, low rainfall coastal south east, where irrigation might be needed in the long term, the report says.

The study found little evidence of changes to biodiversity as a result of shifting patterns of land use and management. "The indirect effects of climate change seem to be small, but there will also be direct effects which could not be predicted from our data," said Nick Hanley.