In search of factors that explain the impact of climate change on international trade

Alejandra Martínez – Martínez, Silviano Esteve – Pérez, Salvador Gil – Pareja and Rafael Llorca - Vivero
Additional contact information
Alejandra Martínez – Martínez: Departamento de Estructura Económica, Facultad de Economía. Avda, de los Naranjos s/n. 46022, Valencia, Spain
Silviano Esteve – Pérez: Departamento de Estructura Económica, Facultad de Economía. Avda, de los Naranjos s/n. 46022, Valencia, Spain
Salvador Gil – Pareja: Departamento de Estructura Económica, Facultad de Economía. Avda, de los Naranjos s/n. 46022, Valencia, Spain
Rafael Llorca - Vivero: Departamento de Estructura Económica, Facultad de Economía. Avda, de los Naranjos s/n. 46022, Valencia, Spain

No 2310, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: Climate change impacts international trade. The literature suggests that thisrelationship is driven by the damage to infrastructure and reduced productivitycaused by this global phenomenon. Furthermore, recent research indicates thatthe impact on energy consumption could explain the real effects of disasters inthe United States. Using a sample of 67 countries during the period 1986–2016,we analyze whether the secular increase in global temperatures and theoccurrence of drastic climate events (wildfires, floods, extreme temperatures,epidemics, insect infestations, storms, droughts, and landslides) affectcountries’ energy consumption and labor productivity, which can subsequentlyimpact international trade. By estimating a theory-based gravity model, ourresults suggest that energy intensity is the channel through which risingtemperatures affect international trade. Furthermore, the impact of events oninternational trade does not seem to be channeled through either energyefficiency or labor productivity. A deeper analysis suggests the key role playedby China in this regard. The Chinese government’s enormous investment ininfrastructure since 1998 to manage these types of disasters seems to be themost reasonable explanation.

Keywords: climate change; energy consumption; productivity; extreme weather events; international trade (search for similar items in EconPapers)
JEL-codes: C1 F14 F15 (search for similar items in EconPapers)
Date: 2023-12
New Economics Papers: this item is included in nep-agr, nep-env and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://repecsrv.uv.es/paper/RePEc/pdf/eec_2310.pdf First version, 2310 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eec:wpaper:2310

Access Statistics for this paper

More papers in Working Papers from Department of Applied Economics II, Universidad de Valencia Contact information at EDIRC.
Bibliographic data for series maintained by Vicente Esteve ().