Assessing the Importance of Accounting for the Impacts of Global Climate Change on Relative Competitiveness and International Trade in the Agricultural Sector

Abstract

Climate change is expected to cause substantial changes in agricultural productivity across the globe. Because the impacts will differ between crops, production practices, and regions, there will be changes in the relative profitability of alternative land uses and effects on the relative competitiveness of production in different countries. However, many previous studies have focused on climate change impacts in one country or region without explicitly assessing the importance of impacts on the rest of the world in determining the net impacts on the focus country or region. Even when they include endogenous trade flows, domestic partial equilibrium models generally do not capture productivity changes in the rest of the world in detail and therefore do not adequately address impacts on relative competitiveness, international trade, and global markets and associated food security outcomes. In this study, we apply the GLObal BIOsphere Model (GLOBIOM), which is a detailed global partial equilibrium model of agriculture, forestry, and bioenergy to evaluate the relative contribution of direct climate change impacts on agriculture occurring within a country vs. those taking place in the rest of the world. We run a set of scenarios for multiple major agricultural regions comparing the outcomes when climate impacts are applied only to that region relative to applied to all regions of the world, using multiple climate scenarios and alternative assumptions regarding trade flexibility. This enables us to compare the relative importance of accounting for impacts outside the country of interest and the extent to which the relative impacts differ for developing vs. developed countries as well as for major commodity exporters vs. importers.