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Journal of EU Research in Business
Effects of Climate Change on Agricultural Trade Capability in the European Food Market
E. Nur Ozkan-Gunay1 and Halit Fedai2
1Department of International Trade, Bogazici University, Istanbul, Turkey
2International Trade Management Program, Bogazici University, Istanbul, Turkey
Volume 2011 (2011), Article ID 949944, Journal of EU Research in Business, 21 pages
DOI: 10.5171/2011.949944
Copyright © 2011 E. Nur Ozkan-Gunay
and Halit Fedai. This is an open access article distributed under the
Creative Commons Attribution License unported 3.0, which permits
unrestricted use, distribution, and reproduction in any medium,
provided that original work is properly cited.
Abstract
Climate
change and global food security issues will continue to be at the
center of policy debates as long global warming prolongs due to
increasing greenhouse gas emissions. Since agriculture is very
vulnerable to climate change, various climate change scenarios are
projected for the impact of climate change on the agricultural sector.
However, there are conflicting hypotheses regarding the relation
between climate change and agricultural production, and agricultural
trade as well, in the literature. In this study, the major determinants
of agricultural trade capability, including climate change indicators
are analyzed in the European food market. First of all, Turkey
and its major rivals are included in the analysis because Turkey
is one of the major agricultural exporters and ranks the 16th in global
agricultural market. The share of the first 16 countries covers 60% of
agricultural exports in the world. Secondly, the major rivals of Turkey
are determined in the European food market and categorized as emerging
and developing countries. Then, panel data models are employed to
analyze the main determinants of agricultural trade for 16 countries
for the period of 1990-2008. The empirical evidence supports that
climate change affects the agricultural trade capability of food
exporters in the European Market. Fixed Effect Model results reveal
that particulate emission damage decreases agricultural trade
capability of emerging and developed countries in the European food
market. In addition, carbon dioxide emission level is favorable for
agricultural trade capability in developed countries due to usage of
energy sources and the efficiency in agricultural production.
Contradicting results are applicable for emerging countries since the
carbon dioxide emission level is favorable mainly for the industrial
sector. Furthermore, carbon dioxide intensity is also negatively
correlated with the agricultural trade capability of both emerging and
developed countries.
KeyWords: Climate change, agricultural trade capability, European food market
KeyWords: Climate change, agricultural trade capability, European food market
