Agriculture is one of the most exposed sectors to climate change. The Climate change, trade and global food security – a global assessment of transboundary climate risks in agricultural commodity flows report reveals for the first time in detail which countries are exposed to transboundary climate risks (TCRs) through agricultural trade and which countries are important sources of risk.
The report assesses six key commodities: staple commodities (maize, rice and wheat), highly embedded commodities (soy and sugar cane) and luxury commodities (coffee).
The results suggest that all countries are exposed to transboundary climate risks, regardless of development, power or wealth. Countries in Europe and North America are both highly exposed to TCRs through foreign imports and can be major sources of risk for others who depend on their exports for food security. While addressing climate risks has historically been understood as a challenge for developing countries and adaptation planning has often been conducted at a national, regional or local level, the report argues this framing of adaptation is out of date and insufficient for achieving the Paris Agreement’s Global Goal on Adaptation.
“Achieving global food security is fundamentally linked to taking climate action,” said lead author Kevin M. Adams.
Where climate change threatens agricultural production around the globe, countries can unwittingly import or export those risks to their trading partners. As we have seen with Covid-19, international trade and supply chains link our countries and communities together across great distances, for better and for worse. As we anticipate increased impacts due to climate change, the global community needs to come together to assure market stability and allow food to be purchased at affordable prices, or risk social upheaval and new geopolitical challenges.
Kevin M Adams, lead author.
The US, China and Brazil are significant sources of climate risk for global commodity markets. This is particularly problematic for importers that depend on that trade for food security or other economic activity. Key examples include countries in Central and Latin America and the Caribbean that depend on US imports and countries in Asia and Africa who import food from China. Small Island Developing States and small globally integrated countries like Singapore and Sweden are also especially vulnerable. In contrast, Russia, a large commodity exporter, may plausibly experience increased agricultural production due to climate change, including of maize, soy and rice, though often not enough to offset risks elsewhere.
Countries, companies and communities don’t have enough visibility on their exposure to transboundary climate risks. Adapting to climate changes requires that countries and companies work together across borders to improve climate resilience for everyone. There are opportunities for free trade agreements and under WTO rules, to address transboundary climate risks and all adaptation assessments need to include these risks.
Magnus Benzie, co-author and Research Fellow at Stockholm Environment Institute.
“Adaptation to climate change has long been a priority for developing countries. But our results underscore that it is in everyone’s interest to adapt and to do so together. As an international community, we are only as resilient as the most vulnerable among us. There is an urgent need and a clear opportunity for multilateral cooperation around climate change and trade, including working together to invest in systemic resilience”, said Adams.
Overall the report concludes that traditional approaches to managing risk in supply chains, such as substituting high-risk links with more resilient ones, or hedging risk across a diverse spread of suppliers, are unlikely to prove effective over long term or more extreme scenarios. Climate change drives systemic risk and will occur everywhere at once. Countries need to work together via multilateral institutions and processes to achieve the mutually-beneficial goal of systemic resilience in global agricultural markets.
Key findings per commodity
The report assesses the potential for future risks based on today’s pattern of international agricultural trade. It does not consider the dynamic effects of changes in trade patterns, improved technology or the effect of changes in commodity prices. It also assumes that global CO2 emissions stay on today’s trajectory. The report suggests that coordinated investments to build the resilience of key agricultural producers may be an important adaptation strategy that delivers shared benefits to producers and consumers.
The methodology excludes extreme weather events, which means that the results are likely a conservative estimate of the overall level of systemic risk.
In the film “Climate risks to global food trade” lead author Kevin M. Adams at the London School of Economics (previously with SEI and Mistra Geopolitics) summarizes key insights from the report. Key results for each of the six commodities are highlighted below.
Design and development by Soapbox.