The role of trade towards building resilient adaptation to climate change in African agriculture
Casella, Henri
The role of trade towards building resilient adaptation to climate change in African agriculture - 2023.
6
The paper reports on evidence regarding how trade can help Africa adapt to climate change (CC) along three dimensions: (i) fast-onset events from short-lived extreme occurrences (e.g., floods, extreme temperatures); (ii) slow-onset events (e.g., rise in average temperatures and sea-level rise); (iii) trade facilitation policies. Fast-onset events Trade reduces the magnitude of extreme events such as droughts. But policy reactions to large shocks can increase the magnitude of a shock. During the South African drought of 2015-16, policies had spillover effects in neighboring countries. Following the 2008-09 financial crisis, export restrictions by major crop exporters and reduction in tariffs by importers magnified the shock. Policy coordination is needed to control spillover effects. Slow-onset events Modelling efforts have concentrated on exploring the ‘margins’ of adjustment to CC: changes in production levels of existing crops; switches in crops; changes in land utilization; relocation of labor to urban areas/migration; adjustments in the volume of trade at different scales (regional or international). All reviewed models show that enlarging the adjustment channels mitigates the magnitude of welfare loss from CC expected throughout the twenty-first century. Analyzing the changes in welfare suggests two conclusions. First, adjustments in crop selection and in bilateral trade partners contribute approximately equally to reducing the costs of adjustments. Second, the expected sharp increase in food prices resulting from warming is likely to hit SSA most strongly. Trade facilitation A functioning global system of trade is a public good that will become more valuable under CC. Free and unfettered access to the global food supply (and other key products) must be ensured, especially for Africa. This requires the harmonization of trade and climate policies. To start with, in addition to eliminating harmful subsidies (e.g., for fossil fuels or fishing), developed countries could conclude a plurilateral Environmental Goods Agreement (EGA). Such an agreement would be a triple victory for trade, for the environment and for African agriculture, which requires tariff-free access to Environmental Goods Targeted for Adaptation (EGTA) to climate change. This paper examines tariffs on environmental goods. Secondly, provisions for environmental preservation should be included in the architecture of African trade agreements. The paper concludes that African countries could improve the functioning of continental policy architecture through several measures. First, by removing EGTAs from exclusion lists in the AfCFTA while simultaneously reducing barriers to trade on EGTAs and EPPs (environmentally preferable products). Second, preserving the environment should be mainstreamed in the African trade architecture by including environmental provisions. Codes JEL : Q50, Q56, F18, F64.
The role of trade towards building resilient adaptation to climate change in African agriculture - 2023.
6
The paper reports on evidence regarding how trade can help Africa adapt to climate change (CC) along three dimensions: (i) fast-onset events from short-lived extreme occurrences (e.g., floods, extreme temperatures); (ii) slow-onset events (e.g., rise in average temperatures and sea-level rise); (iii) trade facilitation policies. Fast-onset events Trade reduces the magnitude of extreme events such as droughts. But policy reactions to large shocks can increase the magnitude of a shock. During the South African drought of 2015-16, policies had spillover effects in neighboring countries. Following the 2008-09 financial crisis, export restrictions by major crop exporters and reduction in tariffs by importers magnified the shock. Policy coordination is needed to control spillover effects. Slow-onset events Modelling efforts have concentrated on exploring the ‘margins’ of adjustment to CC: changes in production levels of existing crops; switches in crops; changes in land utilization; relocation of labor to urban areas/migration; adjustments in the volume of trade at different scales (regional or international). All reviewed models show that enlarging the adjustment channels mitigates the magnitude of welfare loss from CC expected throughout the twenty-first century. Analyzing the changes in welfare suggests two conclusions. First, adjustments in crop selection and in bilateral trade partners contribute approximately equally to reducing the costs of adjustments. Second, the expected sharp increase in food prices resulting from warming is likely to hit SSA most strongly. Trade facilitation A functioning global system of trade is a public good that will become more valuable under CC. Free and unfettered access to the global food supply (and other key products) must be ensured, especially for Africa. This requires the harmonization of trade and climate policies. To start with, in addition to eliminating harmful subsidies (e.g., for fossil fuels or fishing), developed countries could conclude a plurilateral Environmental Goods Agreement (EGA). Such an agreement would be a triple victory for trade, for the environment and for African agriculture, which requires tariff-free access to Environmental Goods Targeted for Adaptation (EGTA) to climate change. This paper examines tariffs on environmental goods. Secondly, provisions for environmental preservation should be included in the architecture of African trade agreements. The paper concludes that African countries could improve the functioning of continental policy architecture through several measures. First, by removing EGTAs from exclusion lists in the AfCFTA while simultaneously reducing barriers to trade on EGTAs and EPPs (environmentally preferable products). Second, preserving the environment should be mainstreamed in the African trade architecture by including environmental provisions. Codes JEL : Q50, Q56, F18, F64.
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