The Crucial Role of International Trade in Adaptation to Climate Change

50 Pages Posted: 5 Nov 2018

See all articles by Christophe Gouel

Christophe Gouel

French National Institute for Agricultural Research (INRA) - UMR Economie Publique; CGIAR - Markets, Trade, and Institutions Division

David Laborde

International Food Policy Research Institute (IFPRI)

Date Written: November 2018

Abstract

Climate change effects on agricultural yields will be uneven over the world with a few countries, mostly in high latitudes, that may experience gains, while most will see average yield decrease. This paper aims at quantifying the role of international trade in attenuating the effects of climate change by allowing the expression of the new climate-induced pattern of comparative advantages. To do this, we develop a quantitative general equilibrium trade model where the representation of acreage and land use choices is inspired from modern Ricardian trade models but also consistent with theoretical and empirical literature on land use choices. The model is calibrated on spatially explicit information about potential yields before and after climate change coming from the agronomic literature. The results show that the climate-induced yield changes generate large price movements that incentivize adjustments in acreage and trade. The new trade pattern is very different from the current one, showing the important role of trade flows in adapting to climate change. This is confirmed by larger welfare losses from climate change when adjustments in trade flows are constrained versus when they are not.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Gouel, Christophe Benoit and Laborde, David, The Crucial Role of International Trade in Adaptation to Climate Change (November 2018). NBER Working Paper No. w25221. Available at SSRN: https://ssrn.com/abstract=3278521

Christophe Benoit Gouel (Contact Author)

French National Institute for Agricultural Research (INRA) - UMR Economie Publique ( email )

Centre de Grignon
BP01
Thiverval-Grignon, 78850
France

HOME PAGE: http://christophegouel.com/

CGIAR - Markets, Trade, and Institutions Division ( email )

United States

David Laborde

International Food Policy Research Institute (IFPRI) ( email )

United States

Register to save articles to
your library

Register

Paper statistics

Downloads
8
Abstract Views
39
PlumX Metrics