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INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
INTERNATIONAL
TECHNICAL CONFERENCE
ON CLIMATE CHANGE,
AGRICULTURAL TRADE
AND FOOD SECURITY
15 -17 November 2017
FAO Headquarters, Rome Italy
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
Trade, food security and climate change:
Recent literature and policy implications
Andrea Zimmermann, Julian Benda
Trade and Markets Divison, FAO
16 November 2017
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
1. Climate change and food security
2. Trade effects on climate change
3. Climate change effects on agricultural trade
4. Climate and trade policy
Outline
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
Climate change and food security
Dimension of food security Climate change effects on food security Time horizon
Availability - Global mean crop yields of rice, maize and wheat projected to decrease 3-10% per
degree of warming
- Impacts on livestock mediated through reduced feed quantity/quality, pest and disease
prevalence, physical stress; meat, egg and milk yield and quality decrease
- 5-10% decrease in potential fish catch in tropical marine ecosystems
Slow onset,
long-term
Access - Increasing food prices; relocation of production with impacts on prices, trade flows and
food access
Slow onset,
long-term
Utilization - Reduced food safety due to higher rates of microbial growth at increased temperatures
- Reduced quality due to decreases in leaf and grain N, protein and macro- and
micronutrient concentrations associated with increased CO2 concentrations and more
variable and warmer climate
Slow onset,
long-term
Stability - Damage to crops from extreme events (heat waves, droughts, floods, storms, etc.)
- Short-term disruptions of trade routes
Extreme
events, short-
term
Source: Based on Campbell et al. (2016) and Schmidhuber and Tubiello (2007)
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
Trade effects on climate change (CC)
• Trade can affect Greenhouse gas (GHG) emissions
• Accelerating effect on economic growth and the production of
traded goods mixed effects (scale, composition, technique
effects)
• Transportation between trading partners negative effects on
CC
• Empirical evidence
• Mixed effect of GDP on GHG emissions depending on level
of GDP (Jafari et al. 2017); Industrialization increases GHG
emissions, services and agriculture value added reduce
emissions (Rafiq et al. 2016)
• No significant effect of trade and foreign direct investments on
GHG emissions (Jafari et al. 2017); Linear model: no
significant effect of trade openness on GHG emissions, non-
linear model: trade openness contributes to emission
reductions (Rafiq et al. 2016)
• Overall, impact of trade on emissions depends on the relative
magnitude of the emissions induced by transportation and the
net effects of production related aspects of trade
• Rather than restricting trade-induced growth, trade-
related environmental issues should be addressed by
targeted environmental measures accompanying
liberalisation processes
Agricultural trade for CC mitigation
• Agricultural trade can help shift food production to
environments with low carbon intensities
• Dedicated (most suitable) regions could be used for the
production of (new) energy crops
• Mentioned in literature, but not much research
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• CC may lead to significant trade disruptions in
the short term through extreme events
• Long-term changes in trade patterns by
altering the competitive advantages of
countries
• Trade liberalisation as adaptation measure
• Quantative model-based simulations
Climate change effects on agricultural trade
Source: IPCC AR5 Synthesis Report
Climate model
Crop model
Economic (agricultural sector) model
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
Authors Year Main objective Economic model type Scenarios
Nelson et al. 2014a/b Economic impacts of CC Multi-model (5-6 CGE, 4 PE) SSP2 (+ RCP8.5, no CO2)
Von Lampe et al. 2014Economic impacts of CC, model
comparisonMulti-model (6 CGE, 4 PE)
SSP2 (+ RCP8.5, no CO2)
SSP3
Bioenergy
Ahammad et al. 2015 Role of international trade under CC Multi-model (6 CGE, 4 PE)
SSP2 (+ RCP8.5, no CO2)
SSP3
Bioenergy
OECD 2015 Economic impacts of CC CGE SSP2 (+ RCP8.5, no CO2)
Havlík et al. 2015CC impacts and mitigation in the
developing worldPE
SSP4 (+ RCP2.6 w/o mit.) (+ RCP8.5 w/o CO2)
SSP5 ( + RCP2.6 w/o mit.) (+ RCP8.5 w/o CO2)
Van Meijl et al. 2017 Impacts of CC Multi-model (1 IAM, 1 CGE, 3 PE)
SSP1 (+ RCP6.0) (+ mit.) (+ RCP2.6, mit.)
SSP2 (+ RCP6.0) (+ mit.) (+ RCP2.6, mit.)
SSP3 (+ RCP6.0) (+ mit.) (+ RCP2.6, mit.)
No CO2
Blanco et al. 2017 CC impacts on agriculture PE SSP2 (+ RCP8.5 w/o CO2)
Wiebe et al. 2015 CC impacts on agriculture Multi-model (3 CGE, 2 PE)
SSP1 (+ RCP4.5 w/o trade liberalised)
SSP2 (+ RCP6.0)
SSP3 (+RCP8.5 w/o trade restricted)
No CO2
Baldos and Hertel 2015 Role of international trade in CC Simple PE model SSP2 (+RCP8.5 w/o CO2 w/o markets integrated)
Costinot 2016 CC impacts on comparative advantages Simple CGE
SRES A1FI + free allocation of production + free trade
SRES A1FI + free trade
SRES A1FI + free allocation of production
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
Climate change effects on trade
• Focus usually on yield, production and price
responses
• All studies find an increasing role of trade under CC
(often not quantified)
• World regions with more favourable growing
conditions under CC export more, adversely affected
regions use imports to buffer production losses
Liberalisation effects
• Fully integrated world markets net global effect
of CC critical for long-run food security
• Trade barriers regional impacts of CC
relatively more important
• Liberalisation scenarios
• All tariffs and export subsidies on agri-food trade
removed / trade more restricted (Wiebe et al. 2015)
• Markets segmented/integrated (Baldos and Hertel
2015)
• Trade more restricted as part of SSP assumptions
(Havlík et al. 2015)
• Full trade liberalisation (Costinot et al. 2016)
• All studies confirm the important role of trade in
adapting to CC
• Price increases lower
• Malnutrition outcomes smaller
Results
Adversely affected (more net
imports/less net exports)
Positively affected (more net
exports/less net imports)
India (1/5)
Sub-Sahara Africa (3/5)
South Asia (2/5)
Eastern Asia and Pacific (1/5)
USA (1/5)
European Union (1/5)
Australia and New Zealand (1/5)
Canada (2/5)
Brazil (1/5)
China (1/5)
Eastern Europe and Central Asia
(2/5)
USA (1/5)
INTERNATIONAL TECHNICAL CONFERENCE ON
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• First global accord to combat CC and adapt to its effects
• Reduce overall GHG emissions so that the increase in the global mean temperature
remains below 2°C relative to pre-industrial levels, ideally below 1.5°C
• Nationally Determined Contributions (NDCs): Domestic mitigation and adaptation
plans
• 164 parties submitted their NDCs (of 170 ratified)
• First official stocktaking planned for 2018
• Patterns of NDCs
• Generally, developed economies‘ NDCs are very broad in their commitment, while developing
economies‘ NDCs are much more elaborate and detailed
• Mentioning of adaptation measures almost only in developing countries‘ NDCs
• Often developing countries‘ commitments split into targets unconditional and conditional on foreign
support (financing, technology transfers, etc.)
• NDCs often very vague, but strong interlinkages with international trade policy (TradeLab 2017,
Brandi 2017)
Paris Agreement 2015
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Policy
categoryPotential climate policy Related WTO positions and disciplines
Taxes and
emission
trading
schemes
Aim: Internalize environmental costs of GHG emissions
Examples: Carbon taxes, emission trading schemes
Disparities in domestic levels of carbon pricing and risk of ‘carbon leakage’
Border measures to counterbalance these disparities may be implemented
(e.g. carbon tariffs)
Legality of carbon tariffs has not been tested in a WTO
dispute settlement
GATT, Article XX; Agreement on Agriculture (AoA) -
Market access
Subsidies
Aim: Promote the development and use of climate-friendly goods and
technologies
Examples: Support for biomass production as a measure to mitigate climate
change
Agreement on Subsidies and Countervailing Measures
(SCM); AoA - Domestic support
Regulations
and standards
Aims: Promote the use of climate-friendly goods and technologies, promote
food safety
Examples: Carbon labelling initiatives, regulations concerning food safety
Problem if these discriminate against imports
WTO encourages the use of international standards to
reduce the likelihood of dispute settlements
Technical Barriers to Trade agreement (TBT); Sanitary
and Phytosanitary measures (SPS) agreement
Support to
developing
countries
Assistance for climate change mitigation/adaptation to developing countries
is explicitly provided for in the Paris Agreement
Examples: Support for development of drought resistant crops, more
efficient irrigation systems
Special and Differential Treatment (SDT) for developing
countries; SDT in the AoA provides for special treatment
of domestic support (as part of development
programmes) for investment subsidies and agricultural
input subsidies
Source: Based on Blandford (2013) and WTO-UNEP (2009)
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
Climate change and trade
• CC affects food security
• Trade can affect GHG emissions, but also
serve as means for mitigating climate
change (further research needed)
• CC affects agricultural trade
• Trade disruptions through extreme events
• Long-term changes in trade patterns by altering
competitive advantages
• Trade important for CC adaptation
• How well markets can adapt to CC determined
by the extent of trade openness
• Systematic comparison difficult, most studies
focus on different model outcomes
• Only few traded commodities and major
importers/exporters considered
• Relative magnitude of trade responses varies
depending on model specification
Climate and trade policy
• Paris Agreement
• Nationally Determined Contributions (NDCs)
very vague
• Interlinkages between climate and international
trade policy
• Commitments under the Paris Agreement
may not always be compatible with those
taken under WTO rules
• Further research on the interlinkages and
potential conflicts between climate and
agricultural trade policies needed
Conclusions
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
• Ahammad, H. et al., 2015. The role of international trade under a changing climate: Insights from global economic modelling, in: Elbehri, A. (Ed.), Climate Change and Food Systems:
Global Assessments and Implications for Food Security and Trade. Food and Agriculture Organization of the United Nations, Rome.
• Baldos, U.L.C., Hertel, T.W., 2015. The role of international trade in managing food security risks from climate change. Food Secur. 7, 275–290.
• Blanco, M. et al., 2017. Climate change impacts on EU agriculture: A regionalized perspective taking into account market-driven adjustments. Agric. Syst. 156, 52–66.
• Blandford, D., 2013. International Trade Disciplines and Policy Measures to Address Climate Change Mitigation and Adaptation in Agriculture. E15Initiative. Geneva: International Centre
for Trade and Sustainable Development (ICTSD) and World Economic Forum.
• Brandi, C., 2017. Trade Elements in Countries’ Climate Contributions under the Paris Agreement. Geneva: International Centre for Trade and Sustainable Development (ICTSD).
• Campbell, B.M. et al., 2016. Reducing risks to food security from climate change. Glob. Food Secur., 2nd International Global Food Security Conference 11, 34–43.
• Costinot, A., Donaldson, D., Smith, C., 2016. Evolving Comparative Advantage and the Impact of Climate Change in Agricultural Markets: Evidence from 1.7 Million Fields around the
World. J. Polit. Econ. 124, 205–248.
• Havlík, P. et al., 2015. Climate Change Impacts and Mitigation in the Developing World (Policy Research Working Paper No. 7477). World Bank Group.
• Jafari, Y. et al., 2017. Economic liberalization and the environmental Kuznets curve: some empirical evidence. J. Econ. Dev. 42.
• Nelson, G.C. et al., 2014a. Climate change effects on agriculture: Economic responses to biophysical shocks. Proc. Natl. Acad. Sci. 111, 3274–3279.
• Nelson, G.C. et al., 2014b. Agriculture and climate change in global scenarios: why don’t the models agree. Agric. Econ. 45, 85–101.
• OECD, 2015. The economic consequences of climate change. OECD publishing, Paris.
• Rafiq, S., Salim, R., Apergis, N., 2016. Agriculture, trade openness and emissions: an empirical analysis and policy options. Aust. J. Agric. Resour. Econ. 60, 348–365.
• Schmidhuber, J., Tubiello, F.N., 2007. Global food security under climate change. Proc. Natl. Acad. Sci. 104, 19703–19708.
• TradeLab, 2017. UNFCCC Nationally Determined Contributions: Climate Change and Trade. CTEI-2017-02, CTEI Working Papers.
• Van Meijl, H. et al., 2017. Challenges of global agriculture in a climate change context by 2050 (AgCLIM50).
• von Lampe, M. et al., 2014. Why do global long-term scenarios for agriculture differ? An overview of the AgMIP Global Economic Model Intercomparison. Agric. Econ. 45, 3–20.
• Wiebe, K. et al., 2015. Climate change impacts on agriculture in 2050 under a range of plausible socioeconomic and emissions scenarios. Environ. Res. Lett. 10, 085010.
• WTO-UNEP, 2009. Trade and Climate Change. WTO-UNEP Report.
References
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
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For further information please contact [email protected]
INTERNATIONAL TECHNICAL CONFERENCE ON
CLIMATE CHANGE, AGRICULTURAL TRADE AND FOOD SECURITY
Trade, food security and climate change:
Recent literature and policy implications
Andrea Zimmermann, Julian Benda
Trade and Markets Division, FAO
16 November 2017