The crucial role of domestic and international market-mediated adaptation to climate change

Le rôle crucial des adaptations au changement climatique domestiques et internationales médiées par le marché

Christophe Gouel and David Laborde Debucquet

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Abstract: Climate change effects on agricultural yields will be uneven over the world. A few countries, mostly in high latitudes, may experience gains, while most will see average yield decrease. This paper aims to quantify the role of market-mediated adjustments in attenuating the effects of climate change by allowing the expression of the new climate-induced pattern of comparative advantages within and between countries. To do this, we develop a quantitative general equilibrium trade model where the representation of land use choice is inspired from modern Ricardian trade models. We use spatially explicit information from the agronomic literature about potential yields before and after climate change for calibration and counterfactual simulations. The results show that the climate-induced yield changes generate large price movements that incentivize adjustments in production and trade. Both production and trade adjustments contribute to reducing welfare losses globally, with production adjustments making the larger contribution.

Keywords: Adaptation; Agriculture; Climate change; International trade; Land use; Commerce international; Usage des sols; Changement climatique (search for similar items in EconPapers)
Date: 2021-03
New Economics Papers: this item is included in nep-env and nep-int
Note: View the original document on HAL open archive server: https://hal.inrae.fr/hal-03116428v1
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Published in Journal of Environmental Economics and Management, 2021, 106, ⟨10.1016/j.jeem.2020.102408⟩

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Related works:
Journal Article: The crucial role of domestic and international market-mediated adaptation to climate change (2021)
Working Paper: The Crucial Role of International Trade in Adaptation to Climate Change (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03116428

DOI: 10.1016/j.jeem.2020.102408

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