German researcher: Free trade can cushion impact of climate change on agriculture

Free trade could mitigate a lot of the adverse effects of climate change on the agricultural sector. But it certainly isn't a silver bullet. [Shutterstock]

This article is part of our special report Germany’s agricultural challenges.

Poor harvests, hunger and rising food prices: climate change threatens food production around the world. The solution to all of this could be free trade, researcher Hermann Lotze-Campen told EURACTIV Germany.

Hermann Lotze-Campen is chair of the department for Climate Impacts and Vulnerabilities at the Postdam Institute for Climate Impact Research (PIK) and is the co-author of a new study on the influence of climate change on economic losses in agriculture.

He spoke to’s Nicole Sagener.

A new PIK study, which you co-authored, says that even a small increase in average temperature may have consequences on regional crops. Can this be quantified?

We brought together two global computer simulation models. One calculated crop yield changes as a result of climate change, based on temperature change and fluctuating rainfall levels. The other was an agro-economic model that takes into account changing crop yields. By bringing them together, we have tried to determine how agricultural prices are going to change and what kind of losses producers and consumers can expect to experience.

One thing is certain: Crop yield fluctuations as a result of climate change will lead to economic losses towards the end of the century. These losses will total about 0.8% of global economic output or about $2.5 trillion. If, in what we call scenario one, trade is not further liberalised and stays at the same level it is today, then the figure will be even higher.

In scenario two, if agricultural trade is liberalised even further and a part of food production moved to other regions, then the figure could be more than halved to about 0.3% of global economic output. Production could take place in areas where the effects of climate change are less profound or where there are more options to be had.

What exactly are we talking about when you say free trade?

At the moment, completely free trade is obviously not going to happen. It’s more a question of gradually reducing trade barriers in the agricultural sector, like tariffs and other measures, in order to make agricultural trade easier. This matter has already been discussed at length, particularly by the World Trade Organisation.

What positive conclusions can be drawn from your investigation?

We can generally assume that the temperate zones will be less affected by climate change and could even benefit from a slight increase, for example in Scandinavia and Canada. Poorer countries, however, in the tropics and sub-tropics will be harder hit. If trade were to be more open and more diversified, then these countries could import more when their harvests are poor or fail completely. In a more open trade system, food prices would decrease and the population of poorer countries would be hugely benefitted.

However, this is a simplification. One must naturally take into account that some exports will also have to be made, however, our specific agricultural sector model did not factor this in.

Wouldn’t more free trade mean that EU exports would muscle out food production in developing countries or would make future enterprises less likely to be set up?

Agricultural trade and its political aspects are undoubtedly a complex web. At the moment, rich countries ring-fence and protect domestic production of sugar, meat and cotton. These products can be competitively produced in many tropical countries under fair conditions.

Our model assumes that the market would be opened in both directions though. Free trade can’t just be a one-way street. Markets would have to be opened in conjunction with better education, social security systems and improvements to local technology and technology transfer measures in poor countries.

In 2050, there will be around 9 billion people on this planet and it is a figure that is often used to justify policies about industrial agriculture. But a 2008 report by over 400 scientists, commissioned by the World Bank and the UN, showed that we already produce enough food to feed that many people, but the hungry are too poor to buy it. Why is free trade still important then?

We want to dispel the myth that every country has to or should be able to produce enough food to feed itself. Anywhere, even Germany, can experience crop failure. That is why we argue that countries shouldn’t target self-sufficiency, because of the threat to food security posed by climate change. They should concentrate on being able to react quickly and flexibly.

North America, Europe and parts of Asia are comparatively moderate in their approaches towards this, but as they consist of the countries that have contributed most to climate change and will be less affected by it, this whole issue becomes a matter of justice.

What role does resource protection have to play?

Of course, use of land for agriculture will increase if not kept in check. If there were more flexible trading systems in place then production could be shifted to where conditions are more favourable. This could mean more efficient use of resources and better land management. Supportive policy measures to prevent, in particular, deforestation in tropical areas have to be implemented independent of trade of course.

Trade is not the only deciding factor. Of course, other measures have to be taken in order to counter the potential negative effects of international trade. Politically, this has to be complemented by an adequate framework for water, nature and soil protection.

Soil quality is becoming a more prevalent issue, is enough being done politically?

Land use rights and soil protection need to be put under the spotlight more, because they are going to play an ever greater role in the future. Regulation will become ever more important in ensuring that agricultural land and forests are managed correctly. In Europe, a soil protection directive has been bandied about for years at EU level. Our analysis was ultimately about whether we should plump for higher or lower national self-sufficiency and for more flexibility when it comes to the global food supply.

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