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Abstract

Climate change not only entails gradual changes, but also climate variability is predicted to increase. Extreme weather events are expected to affect food security, among other things because yield losses lead to rising food price volatility. We project the potential effect of heat-stress induced yield losses on food price volatility and global economic welfare. For this purpose we use a non-linear partial equilibrium trade model with which we assess global maize, rice, soy and wheat markets. Maize and rice are affected the most, with partially dramatic price volatility increases. In the case of soy, the increase is lower, but still considerable. For wheat, results are mixed. Depending on the scenario, price volatility slightly decreases or significantly increases. Consequences for global economic welfare also strongly depend on the scenario. Losses either increase moderately or they about double.

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