Change search
ReferencesLink to record
Permanent link

Direct link
Could Free Trade Alleviate Effects of Climate Change: a Worldwide Analysis with Emphasis on Morocco and Turkey
Department of Agricultural Economics, Purdue University, West Lafayette.
European Comission Joint Research Center, Institute for Prospective Technological Studies, Seville.
Purdue University, West Lafayette.
Department of Economics, TED University Ankara.
2014 (English)Report (Refereed)
Abstract [en]

This paper examines the interaction of globalization through trade liberalization and climate change, globally with a special focus on Morocco and Turkey. We use the GTAP model, which is a global general equilibrium model, to investigate trade liberalization welfare impacts under climate change, and its ability to provide mitigation and/or adaptation to potential losses. Our hypothesis was that trade liberalization would at least partially offset potential welfare losses induced by negative productivity shocks on agriculture. Our findings suggest that the world as a whole benefits the more trade is liberalized. For instance, under an unrealistic multilateral trade liberalization scenario, average net global welfare increases by +US$76,676 million. Hence, initial average welfare loss under climate change, which reached -US$31,775 million, is totally offset. Nonetheless, as we move away from complete trade liberalization to limited trade liberalization at the regional and sector levels, the gains realized are minimal and offset only marginally climate-induced welfare losses. At the regional level, most regions under trade liberalization do not experience large enough welfare gains to offset welfare losses triggered by negative productivity impacts in agriculture. The exceptions are countries/regions which are projected to benefit from climate change. For Morocco, tariff elimination under all scenarios on average induces additional welfare loss compared with the climate change only scenario. Despite the gains in allocative efficiency accruing from trade liberalization, the latter are generally low and are offset by the substantial negative contribution of the terms of trade and investment savings effects. For Turkey, trade liberalization induces net welfare gains under all scenarios. Nonetheless, these gains are not large enough to offset totally the initial loss under climate change. These results are primarily driven by the combined effect of allocative efficiency and terms of trade effects.

Place, publisher, year, edition, pages
World Institute for Development Economics Research , 2014. , 66 p.
, WIDER Working Paper, ISSN 1798-7237 ; 2014:100
Research subject
URN: urn:nbn:se:ltu:diva-24242Local ID: a3a47fe3-f795-4f48-bb4a-495cf8f75985ISBN: 978-92-9230-821-6 (PDF)OAI: diva2:997293
Uppr├Ąttat; 2014; 20160707 (andbra)Available from: 2016-09-29 Created: 2016-09-29

Open Access in DiVA

fulltext(1050 kB)0 downloads
File information
File name FULLTEXT01.pdfFile size 1050 kBChecksum SHA-512
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Ouraich, Ismail

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 1 hits
ReferencesLink to record
Permanent link

Direct link