Adaptation to transboundary climate risks in trade: investigating actors and strategies for an emerging challenge

Birgit Bednar-Friedl, Nina Knittel, Joachim Raich and Kevin M. Adams

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: There is growing recognition that international trade can transmit climate risks across borders, requiring new forms of and approaches to adaptation. This advanced review synthesizes knowledge on how, by whom and where adaptation actions can be taken in the agriculture and industrial sectors to reduce these transboundary climate risks (TCRs). We find a material difference in the literature on TCRs in agriculture as compared with industrial sectors. Operational and market risks, in particular reductions in food availability, dominate in agriculture, while supply chain and trade-related risks are highlighted for industry. While the origin of the risk (source) is the primary target of adaptation to agricultural TCRs, the general governance structure, such as UNFCCC and WTO deliberations, are important targets in both sectors. Adaptation at the country of destination and along the trade network is of minor importance in both sectors. Regarding the type of adaptation option, agriculture heavily relies on trade policy, agricultural adaptation, and adaptation planning and coordination, while in industry knowledge creation, research and development, and risk management are seen as essential. Governments and the international community are identified as key actors, complemented by businesses and research as critical players in industry. Some measures, such as protectionist trade policies and irrigation, are controversial as they shift risks across countries and sectors, rather than reduce them. While more research is needed, this review shows that a critical mass of evidence on adaptation to TCRs is beginning to emerge, particularly underscoring the importance of international coordination mechanisms. This article is categorized under:. Vulnerability and Adaptation to Climate Change > Institutions for Adaptation Vulnerability and Adaptation to Climate Change > Multilevel and Transnational Climate Change Governance.

Keywords: adaption; agriculture; industry; trade; transboundary climate risk (search for similar items in EconPapers)
JEL-codes: L81 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2022-03-01
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: View citations in EconPapers (2)

Published in Wiley Interdisciplinary Reviews: Climate Change, 1, March, 2022, 13(2). ISSN: 1757-7780

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