Abstract
We investigate climate change impacts transferred via foreign trade to Germany, a country that is heavily engaged in international trade. Specifically, we look at temperature changes and the associated labour productivity losses at a global scale until 2050. We assess the effects on Germany’s imports and exports by means of a global computable general equilibrium (CGE) model. To address uncertainty, we account for three Shared Socioeconomic Pathways (SSP1, SSP2 and SSP3) and two Representative Concentration Pathways (RCP4.5 and RCP8.5) using projections from five global climate models. We find that average annual labour productivity for high intensity work declines by up to 31% for RCP4.5 (and up to 38% for RCP8.5) in Southeast Asia and the Middle East by 2050, all relative to a 2050 baseline without climate change. As a consequence, for RCP8.5, Germany’s imports from regions outside Europe are lower by up to 2.46%, while imports from within Europe partly compensate this reduction. Also, Germany’s exports to regions outside Europe are lower, but total exports increase by up to 0.16% due to higher exports to EU regions. Germany’s GDP and welfare, however, are negatively affected with a loss of up to − 0.41% and − 0.46%, respectively. The results highlight that overall positive trade effects for Germany constitute a comparative improvement rather than an absolute gain with climate change.
Highlights
Climate change impact assessments to date largely neglect impacts occurring beyond the borders of the region at focus
All general circulation model (GCM) projections agree on the sign of future Wet Bulb Globe Temperature (WBGT) and work ability levels, i.e. a rise in WBGT and accompanying decline in work ability, but there are differences in magnitude
To explore the altered trade patterns for the German economy caused by regional and sectoral shifts, we focus on RCP4.5 relative to the SSP2 baseline scenario without climate change using the HadGEM2-ES GCM
Summary
Climate change impact assessments to date largely neglect impacts occurring beyond the borders of the region at focus. Despite a strong global economic integration, there is a vast literature focussing only on climate change impacts that occur within Europe or specific European countries (Aaheim et al 2012; Ciscar et al 2011, 2014; Eskeland and Mideksa 2010; Golombek et al 2012; Roudier et al 2016; Wachsmuth et al 2013). The European Environment Agency (2017) emphasises that there is strong evidence for European countries being sensitive to climate change impacts occurring beyond European borders, as demonstrated by economic effects of weather-related global price volatilities or impacts on transportation networks such as ports. By only including the direct (i.e. within region) impact on countries or focus regions, the true magnitude of economic consequences of climate change might be substantially underestimated. We argue that it is crucial to include the impacts in non-European countries and their transnational effects on Europe through foreign trade channels
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