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Climate Change and Agriculture In South Asia: Looking for An Optimal Trade Policy

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  • Laborde, David

Abstract

This paper aims to study how alternative trade policies will help mitigate the effects of climate change in agriculture in South Asia. We use a modified version of MIRAGE CGE for long term projections and allowing modeling of climate change effects (impact on yield) at a subregional level (163 geographical units at the world level) to simulate the effects of 13 SRES scenarios in 8 different trade policy landscapes. Based on these results, we discuss the ranking of trade policy options based on expected values but also in terms of variance using the theory of decision in uncertainty. Choices between unilateral and regional strategies for the countries of the sub regions are compared. Our results confirm that South Asia will be one of the most adversely affected regions in terms of the impacts of climate change on agricultural yield. Both the overall level of economic activity and trade flows will react to this change (-0.5 percent of real income for the region in average, up to -4 percent for Pakistan). Beyond national real income, we also look at the distributional effects of climate change. Unskilled worker real wages, proxy for poor people income, are largely and generally negatively impacted by climate change. We show that trade policies weakly affect the overall economic impact of climate change but leads to more significant changes for the poor.

Suggested Citation

  • Laborde, David, 2011. "Climate Change and Agriculture In South Asia: Looking for An Optimal Trade Policy," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 104526, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea11:104526
    DOI: 10.22004/ag.econ.104526
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    References listed on IDEAS

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    1. Ganesh-Kumar, A. & Roy, Devesh & Gulati, Ashok (ed.), 2010. "Liberalizing Foodgrains: Experiences, Impacts and Lessons from South Asia," OUP Catalogue, Oxford University Press, number 9780198066958.
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    Cited by:

    1. Muhammad Zeshan & Muhammad Shakeel, 2023. "Adaptations And Mitigation Policies To Climate Change: A Dynamic Cge-We Model," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 68(06), pages 2169-2193, December.
    2. Debashis Chakraborty & Sacchidananda Mukherjee, 2013. "Do Foreign Trade and Investment Lead to Higher CO2 Emissions? Evidence from Cross-Country Empirical Estimates," Review of Market Integration, India Development Foundation, vol. 5(3), pages 329-361, December.
    3. Ismail Ouraich & Hasan Dudu & Wallace E. Tyner & Erol Cakmak, 2014. "Could Free Trade Alleviate Effects of Climate Change?: A Worldwide Analysis with Emphasis on Morocco and Turkey," WIDER Working Paper Series wp-2014-100, World Institute for Development Economic Research (UNU-WIDER).
    4. Maganga, Assa & Malakini, Memory, 2015. "Agrarian Impact of Climate Change in Malawi: A Quantile Ricardian Analysis," 2015 Conference, August 9-14, 2015, Milan, Italy 212208, International Association of Agricultural Economists.
    5. Hasan, Dudu & Erol, Cakmak, 2014. "Climate Change, Agriculture And Trade Liberalization: A Dynamic Cge Analysis For Turkey," 2014 Third Congress, June 25-27, 2014, Alghero, Italy 172964, Italian Association of Agricultural and Applied Economics (AIEAA).
    6. Ouraich, Ismail & Dudu, Hasan & Tyner, Wallace E. & Cakmak, Erol, 2014. "Could free trade alleviate effects of climate change? A worldwide analysis with emphasis on Morocco and Turkey," WIDER Working Paper Series 100, World Institute for Development Economic Research (UNU-WIDER).

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    Keywords

    Environmental Economics and Policy; International Relations/Trade;

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