July 31, 2012
Climate change could open trade opportunities for some vulnerable nations, Stanford researchers say
The study, the most long-range and detailed of its kind to date, forecasts the occurrence of severe dry years during the next nine decades in Tanzania and its key trading partners.
By Rob Jordan
Sharifa Idd Mumbi in her maize field in Morogoro, Tanzania. (Photo: Courtesy of the Bill and Melinda Gates Foundation)
The economy of one of the world's least-developed countries could actually benefit from climate change by increasing exports of corn to the United States and other nations, according to a study by researchers at Stanford University, the World Bank and Purdue University.
The study, published online this month in the Review of Development Economics, shows that Tanzania, an African country better known for safaris and Mount Kilimanjaro, has the potential to substantially increase its exports of corn (called maize there) and take advantage of higher commodity prices with a variety of trading partners due to predicted dry and hot weather that could affect those countries' usual sources for the crop.
In years that major consumer countries such as the United States, China and India are forecast to experience severe dry conditions, Tanzania's weather will likely be comparatively wet. Similarly, in the relatively few years this century that it is expected to have severe dry weather, Tanzania could import corn from trading partners experiencing better growing conditions.
"This study highlights how government policies can influence the impact that we experience from the climate system," said study co-author Noah Diffenbaugh, an assistant professor of environmental Earth system science at Stanford's School of Earth Sciences and a center fellow at the Stanford Woods Institute for the Environment. "Tanzania is a particularly interesting case, as it has the potential to benefit from climate change if climate model predictions of decreasing drought in East Africa prove to be correct, and if trade policies are constructed to take advantage of those new opportunities."
Tightening restrictions on crop exports during times of climate instability may seem like a logical way to ensure domestic food availability and price stability. In fact, the study warns, trade restrictions such as those that Tanzania has instituted several times in recent years prevent such countries from buffering their poor citizens in bad climate years and from taking advantage of economic opportunities in good climate years.
The study, the most long-range and detailed of its kind to date, uses economic, climatic and agricultural data and computational models to forecast the occurrence of severe dry years during the next nine decades in Tanzania and its key trading partners.
The authors began by analyzing historical years in which Tanzania experienced grain surpluses or deficits. They found that a closed trade policy increased poverty in both kinds of years, by limiting the ability to offset shortfalls with imports during deficit years and limiting the ability to profit from exports during surplus years.
The authors then attempted to predict how often Tanzania and key trading partners will experience severely dry years in response to continued global warming.
Among the predictions: during an average of 96 percent of the years that the United States and China are predicted to have extremely dry conditions, Tanzania will not experience similarly dry weather. For India, that percentage increases to 97 percent. Similarly, the study's climate models suggest that Tanzania is likely to have adequate growing season moisture in most of the years that its key African trading partners experience severe dry weather.
Among Tanzania's trading partners, the United States, China, Canada and Russia are most likely to consistently experience adequate growing conditions in years when Tanzania does not.
When compared with its key trading partners, Tanzania's dry years during the 21st century will often coincide with non-dry years in the other countries. Having a diverse mix of trading partners could help hedge against a coincidence of severe dry weather within and outside of Africa, the study's results suggest.
The findings are relevant to grain-growing countries around the world. Those countries stand to profit from exports in years when trading partners are enduring severe dry and/or hot weather. Likewise, they can buffer themselves against bad growing weather at home by importing from grain-rich regions less affected by such weather during that particular year.
"This study highlights the importance of trade in either buffering or exacerbating the effects of climate stresses on the poor," said Diffenbaugh. "We find that these effects are already taking place in the current climate, and that they could become even more important in the future as the co-occurrence of good and bad years between different regions changes in response to global warming."
The study was led by Syud Amer Ahmed of the World Bank's Development and Research Group, Agriculture and Rural Development. Study co-authors also include Thomas W. Hertel, professor of agricultural economics at Purdue University, and William J. Martin of the World Bank.
A grant from the Trust Fund for Environmentally and Socially Sustainable Development made the study possible.
Rob Jordan is the communications writer for the Stanford Woods Institute for the Environment.