Potential climate-induced impacts on trade: the case of agricultural commodities and maritime chokepoints

Ramon Key (), Ramiro Parrado, Elisa Delpiazzo, Richard King and Francesco Bosello
Additional contact information
Ramon Key: Centro Euro-mediterraneo sui Cambiamenti Climatici (CMCC)
Ramiro Parrado: Centro Euro-mediterraneo sui Cambiamenti Climatici (CMCC)
Elisa Delpiazzo: Centro Euro-mediterraneo sui Cambiamenti Climatici (CMCC)
Richard King: Chatham House, The Royal Institute of International Affairs
Francesco Bosello: Centro Euro-mediterraneo sui Cambiamenti Climatici (CMCC)

Journal of Shipping and Trade, 2024, vol. 9, issue 1, 1-23

Abstract: Abstract This study assesses the potential macro-economic effects of climate change affecting operations in three maritime chokepoints, i.e., the Panama Canal, the Suez Canal, and the Turkish Straits. The analysis focuses on agricultural commodities. It couples a “logistics” model of maritime trade flows with a Computable General Equilibrium model considering three modelling alternatives: (1) increase of “iceberg trade costs”, (2) shadow import tariffs, and (3) shadow export tariffs. Methodologically, we found a comforting qualitative agreement across methodologies in predicting the direction of changes in the main economic variables under scrutiny. However, negative GDP performances are more frequent and larger using the first method that also tends to predict lower import contractions than the other two methods. The impact assessment, examining storylines of climate-change-induced events delaying chokepoints operations, highlights that climate change impacts on chokepoints’ operations can convey detectable effects on production and prices of agricultural commodities associated with negative GDP impacts worldwide. In addition, although trade re-composition generates winners and losers, total losses tend to prevail. The combined GDP losses of the three chokepoints can reach $34 billion (2014 prices) in 2030. It shows that weather events in remote locations, such as the Panama Canal, can have cascading effects on the EU, with potential losses of USD 2 billion $ in GDP. North Africa, Middle East and Sub-Saharan Africa are particularly vulnerable. They suffer from a drop in imports of agricultural commodities and GDP losses in all the three cases. This impact assessment emphasizes another mechanism at play that could increase the asymmetry and the adverse distributional impacts of climate change on agriculture.

Keywords: Trade; Chokepoints; Agricultural trade; Climate-change; CGE modeling (search for similar items in EconPapers)
Date: 2024
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1186/s41072-024-00170-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

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:spr:josatr:v:9:y:2024:i:1:d:10.1186_s41072-024-00170-3

Ordering information: This journal article can be ordered from
https://jshippingandtrade.springeropen.com/

DOI: 10.1186/s41072-024-00170-3

Access Statistics for this article

Journal of Shipping and Trade is currently edited by Kee-Hung Lai

More articles in Journal of Shipping and Trade from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().