Water 2011, 3(2), 526-550; doi:10.3390/w3020526
Article

Trade Liberalization and Climate Change: A Computable General Equilibrium Analysis of the Impacts on Global Agriculture

1email, 1,2,* email and 3,4,5,6email
Received: 30 March 2011; in revised form: 18 April 2011 / Accepted: 20 April 2011 / Published: 6 May 2011
(This article belongs to the Special Issue Managing Water Resources and Development in a Changing Climate)
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Abstract: Based on predicted changes in the magnitude and distribution of global precipitation, temperature and river flow under the A1B and A2 scenarios of the Intergovernmental Panel on Climate Change Special Report on Emissions Scenarios (IPCC SRES), this study assesses the potential impacts of climate change and CO2 fertilization on global agriculture, and its interactions with trade liberalization, as proposed for the Doha Development Round. The analysis uses the new version of the GTAP-W model, which distinguishes between rainfed and irrigated agriculture and implements water as an explicit factor of production for irrigated agriculture. Significant reductions in agricultural tariffs lead to modest changes in regional water use. Patterns are non-linear. On the regional level, water use may go up for partial liberalization, and down for more complete liberalization. This is because different crops respond differently to tariff reductions, and because trade and competition matter too. Moreover, trade liberalization tends to reduce water use in water scarce regions, and increase water use in water abundant regions, even though water markets do not exist in most countries. Considering impacts of climate change, the results show that global food production, welfare and GDP fall over time while food prices increase. Larger changes are observed under the SRES A2 scenario for the medium term (2020) and under the SRES A1B scenario for the long term (2050). Combining scenarios of future climate change with trade liberalization, countries are affected differently. However, the overall effect on welfare does not change much.
Keywords: climate change; computable general equilibrium; trade liberalization; water policy; water scarcity
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MDPI and ACS Style

Calzadilla, A.; Rehdanz, K.; Tol, R.S. Trade Liberalization and Climate Change: A Computable General Equilibrium Analysis of the Impacts on Global Agriculture. Water 2011, 3, 526-550.

AMA Style

Calzadilla A, Rehdanz K, Tol RS. Trade Liberalization and Climate Change: A Computable General Equilibrium Analysis of the Impacts on Global Agriculture. Water. 2011; 3(2):526-550.

Chicago/Turabian Style

Calzadilla, Alvaro; Rehdanz, Katrin; Tol, Richard S.J. 2011. "Trade Liberalization and Climate Change: A Computable General Equilibrium Analysis of the Impacts on Global Agriculture." Water 3, no. 2: 526-550.

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