Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Climate Change and Agricultural Trade: How effective is reform as an adaptation measure?

1,878 views

Published on

World Bank and WTO: Climate Change and Agriculture Trade - Risks and Responses
September 22, 2009
Washington, DC

Published in: Technology, News & Politics
  • Be the first to comment

  • Be the first to like this

Climate Change and Agricultural Trade: How effective is reform as an adaptation measure?

  1. 1. Climate Change and Agricultural Trade: How effective is reform as an adaptation measure? Gerald C. Nelson Senior Research Fellow Environment and Production Technology Division World Bank and WTO Climate Change and Agriculture Trade Risks and Responses 22 September 2009
  2. 2. Preview of Results  Climate change alters comparative advantage  Agricultural trade flows change dramatically  Unchecked climate change will result in a 20 percent increase in malnourished children by 2050  Reduced agricultural protection mitigates the negative effects some  Results still considered preliminary. IFPRI Food Policy Review released October 5 at IFPRI Page 2
  3. 3. Outline  Climate Change Modeling Methodology  Impacts: Crop Supply, Demand, and Trade  Climate Change Adaptation Costs  The Effects of Changes in Protection Page 3
  4. 4. MODELING METHODOLOGY FOR CLIMATE CHANGE IMPACTS
  5. 5. Integrating Location-specific Biophysical and Socioeconomic Modeling is Critical  Climate change will bring location-specific changes • in precipitation, temperature and variability  Need to reconcile • limited resolution of macro-level economic models that operate through equilibrium-driven relationships with • detailed models of dynamic biophysical processes – crop models  Provide more realistic modeling of climate change effects (biophysical and economic) on global/regional agriculture Page 5
  6. 6. Global Change Model Components  GCM climate scenarios • NCAR (wetter) and CSIRO (drier) using SRES A2  DSSAT crop model • Biophysical crop response to temp and precip  ISPAM • Spatial distribution of crops based on crop calendars, soil characteristics, climate of 20 most important crops  IMPACT2009 • Global food supply demand trade model. Results to 2050 with global hydrology
  7. 7. Climate Change Affects Comparative Advantage, Rice Importing Country Page 7 Rice Wheat d w w r P P R2000 W2000 R2050 W2050 Rice imports Wheat exports, 2000 Increases in rice imports and wheat exports, 2050
  8. 8. Climate Change Affects Comparative Advantage, Rice Exporting Country Page 8 Rice Wheat d w w r P P R2000 W2000 R2050 W2050 Rice exports Wheat imports, 2000 Reduction in rice exports and wheat imports, 2050 Key point: Climate change might increase or decrease trade flow. It depends on • Biophysical determinants of relative advantage • Socioeconomic determinants of demand
  9. 9. Rising average temperatures Page 9Source: http://data.giss.nasa.gov/gistemp/graphs/
  10. 10. … could increase much more Page 10 Source: Figure 10.4 in Meehl, et al. (2007)
  11. 11. AVERAGE ANNUAL PRECIPITATION CHANGES BY GCM Watch Sub-Saharan Africa, the Amazon, and South Asia
  12. 12. Change in Precipitation, 2000-2050 CSIRO, A2, AR4
  13. 13. Change in Precipitation, 2000-2050 NCAR, A2, AR4
  14. 14. BIOPHYSICAL PRODUCTION RESULTS Climate-change-only effects on yield and area
  15. 15. Climate induced percentage change in yield in 2050: Irrigated Rice NCAR A2
  16. 16. Climate induced percentage change in yield in 2050: Rainfed Rice NCAR A2
  17. 17. Climate induced percentage change in yield in 2050: Rainfed Maize NCAR A2
  18. 18. Climate induced percentage change in yield in 2050: Irrigated Wheat NCAR A2
  19. 19. FOOD SUPPLY AND DEMAND RESULTS IMPACT2009 Biophysical effects from crop and hydrology models and economic effects from global agriculture model
  20. 20. Impact on International Food Prices Page 20 - 50 100 150 200 250 300 350 400 450 Rice Wheat Maize Soybeans DollarsPerMetricTon 2000 2050 No climate change 2050 CSIRO NoCF 2050 NCAR NoCF Price increases without climate change Greater price increases with climate change
  21. 21. Climate Change Plus Economic Impacts on Rice Production Page 21 - 50 100 150 200 250 South Asia East Asia and the Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa Sub-Saharan Africa MillionMetricTons 2000 2050 no CC 2050 with CC
  22. 22. Impacts on Maize Production Page 22 - 50 100 150 200 250 300 South Asia East Asia and the Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa Sub-Saharan Africa MillionMetricTons 2000 2050 No CC 2050 with CC
  23. 23. Impacts on Wheat Production Page 23 - 50 100 150 200 250 300 South Asia East Asia and the Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa Sub-Saharan Africa MillionMetricTons 2000 2050 No CC 2050 with CC
  24. 24. Impacts on Cereal Trade Flows Page 24 CSIRO developing country imports are about 150 million mt
  25. 25. Impact on Per Capita Calorie Availability Page 25 Per capita calorie availability increases without climate change Per capita calorie availability falls with climate change
  26. 26. Impact on Childhood Malnutrition Page 26 - 10 20 30 40 50 60 70 80 South Asia East Asia and Pacific Europe and Central Asia Latin America and Caribbean Middle East and North Africa Sub Saharan Africa MillionsofChildren 2000 2050 No CC 2050 with CC Child malnutrition falls without climate change except in SSA Child malnutrition increases with climate change
  27. 27. CLIMATE CHANGE ADAPTATION COSTS
  28. 28. Our Definition of Agricultural Adaptation  Agricultural investments that reduce child malnutrition with climate change to the level with no climate change  What types of investments considered? • Agricultural research • Irrigation expansion and efficiency improvements • Rural roads Page 28
  29. 29. Adaptation Costs are Large!  Required additional annual expenditure • Wetter NCAR scenario = US$7.1 billion • Drier CSIRO scenario = US$7.3 billion  Regional level • Sub-Saharan Africa - 40% of the total, mainly for rural roads • South Asia - US$1.5 billion, research and irrigation efficiency • Latin America and Caribbean - US$1.2 billion per year, research • East Asia and the Pacific - $1 billion per year, research and irrigation efficiency Page 29
  30. 30. Developed Country Adaptation Expenditures Help  With additional investments in the developed countries, spillover effects to the developing world reduce the need for adaptation investments slightly  NCAR scenario, developing country adaptation costs • Developing countries investments only -> US$7.1 billion • With additional developed country productivity investments -> US$6.8 billion Page 30
  31. 31. What about changes in protection?  Protection in IMPACT defined as PSE and CSE  Two experiments • Double protection – multiply PSE and CSE by 2 • Eliminate protection – set PSE and CSE to 0 Page 31    1 1PS PW MI PSE        1 1PD PW MI CSE    
  32. 32. 2000 Maize Prices, Protection Experiments Page 32 - 20 40 60 80 100 120 140 160 180 200 Argentina Australia Brazil China France India USA PS (US$) PS (US$) complete liberalization PS (US$) double protection Compare Brazil liberalization To France liberalization Double protection has greater effect than elimination
  33. 33. Results from the Experiments: 2050 Cereal Trade Flow Changes Page 33 -200 -150 -100 -50 0 50 100 150 200 South Asia East Asia and the Pacific Europe and Central Asia Latin America and the Caribbean Middle East and North Africa Sub-Saharan Africa Developed Countries Developing Countries NCAR NCAR-IncLib NCAR-IncPro CSIRO CSIRO-IncLib CSIRO-IncPro Millionmt
  34. 34. Results from the Experiments: 2050 Child Malnutrition Changes Page 34 Baseline protection Increased Protection No Protection Baseline protection Increased Protection No Protection Baseline protection Increased Protection No Protection 110 115 120 125 130 135 140 Developing Countries Millionmalnourishedchildren No Climate Change NCAR CSIRO
  35. 35. Conclusions  Climate change will have negative impacts on agricultural production and food security in developing countries  Agriculture is critical for • Employment • Economic development and • Food security  Argues for significant expenditures to reduce the adverse impacts of climate change  Reduced agricultural protection (border and domestic) helps some. Page 35
  36. 36. www.ifpri.org Thank you

×