Potential climate‑induced impactson trade: the case of agricultural commoditiesand maritime chokepoints

This study assesses the potential macro-economic effects of climate change affect-ing operations in three maritime chokepoints, i.e., the Panama Canal, the Suez Canal,and the Turkish Straits. The analysis focuses on agricultural commodities. It couplesa “logistics” model of maritime trade flows with a Computable General Equilibriummodel considering three modelling alternatives: (1) increase of “iceberg trade costs”,(2) shadow import tariffs, and (3) shadow export tariffs. Methodologically, we founda comforting qualitative agreement across methodologies in predicting the directionof changes in the main economic variables under scrutiny. However, negative GDPperformances are more frequent and larger using the first method that also tendsto predict lower import contractions than the other two methods. The impact assess-ment, examining storylines of climate-change-induced events delaying chokepointsoperations, highlights that climate change impacts on chokepoints’ operations canconvey detectable effects on production and prices of agricultural commoditiesassociated with negative GDP impacts worldwide. In addition, although trade re-composition generates winners and losers, total losses tend to prevail. The combinedGDP losses of the three chokepoints can reach $34 billion (2014 prices) in 2030. Itshows that weather events in remote locations, such as the Panama Canal, can havecascading effects on the EU, with potential losses of USD 2 billion $ in GDP. NorthAfrica, Middle East and Sub-Saharan Africa are particularly vulnerable. They sufferfrom a drop in imports of agricultural commodities and GDP losses in all the threecases. This impact assessment emphasizes another mechanism at play that couldincrease the asymmetry and the adverse distributional impacts of climate changeon agriculture.