Climate Change, Agricultural Productivity and its Impacts on the Food Industry: A General Equilibrium Analysis

This paper analyses the impacts of climate change of food processing sectors worldwide. Specifically, we analyze the impacts that changes in agricultural productivity might have for seven food industry sectors, namely meat, vegetable oils and fats, dairy, sugar, processed rice, other food products and beverage and tobacco products. We analyze two different scenarios of crops yield changes based on Müller et al. (2009), one with full CO2 fertilization and one without CO2 fertilization. We use a general equilibrium approach, given the advantages that this methodology provides for worldwide analysis of productivity and its impacts on production, trade and prices of primary agriculture, and ultimately, food processing sectors. We use the GTAP computable general model with version 7 of the GTAP database, with a base year of 2004. We aggregate this database into 10 regions and 12 sectors, with special emphasis on food processing sectors. The results show that overall, the impacts on food processing depends whether we consider CO2 fertilization or not.

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 Record created 2017-04-01, last modified 2018-01-22

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