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Global agriculture consumes substantial resources and produces significant pollution. By shifting its production to new locations, and inducing changes in technology and input use, trade has a substantial impact on environmental sustainability of the world's food systems, but due to suboptimal environmental policy, the exact nature of these impacts is in dispute. We review the literature on agricultural trade and environmental sustainability, highlighting the different approaches taken in ecology versus economics. While useful in identifying environmental costs, much of the ecological literature does not compare these costs to a trade-free counterfactual and can therefore be misleading. Further, by moving production to places with more resources and increasing production efficiency, trade can reduce the environmental impact of food production. On the other hand, trade can also limit the effectiveness of domestic environmental policy because production can be shifted to countries with less stringent regulations. However, recently, consumers are leveraging trade policy to induce exporters to improve environmental sustainability. While such policies are gaining traction in wealthy countries, evidence suggests that such measures will not reach their potential without buy-in from decision makers in the countries where the environmental damages are occurring. Expected final online publication date for the Annual Review ofmore »Resource Economics, Volume 13 is October 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.« less

Demand-side restrictions on high-deforestation commodities are expanding as a climate policy, but their impact on reducing tropical deforestation and emissions has yet to be quantified. Here we model the effects of demand-side restrictions on high-deforestation palm oil in Europe on deforestation and emissions in Indonesia. We do so by integrating a model of global trade with a spatially explicit model of land-use change in Indonesia. We estimate a European ban on high-deforestation palm oil from 2000 to 2015 would have led to a 8.9% global price premium on low-deforestation palm oil, resulting in 21 374 ha yr⁻¹(1.60%) less deforestation and 21.1 million tCO₂yr⁻¹(1.91%) less emissions from deforestation in Indonesia relative to what occurred. A hypothetical Indonesia-wide carbon price would have achieved equivalent emission reductions at $0.81/tCO₂. Impacts of a ban are small because: 52% of Europe’s imports of high-deforestation palm oil would have shifted to non-participating countries; the price elasticity of supply of high-deforestation oil palm cropland is small (0.13); and conversion to oil palm was responsible for only 32% of deforestation in Indonesia. If demand-side restrictions succeed in substantially reducing deforestation, it is likely to be through non-price pathways.

This paper describes an innovative graduate course in agricultural economics that has evolved over the past decade and attracts students from across the Purdue University campus. Its novel combination of guest lectures on key sustainability topics, and intensive, computer-based lab assignments with the SIMPLE model of global food and environmental security, prepares students to undertake innovative projects. These independent projects are presented to the class, written up, and submitted in lieu of a final exam. The topics covered are quite diverse and range from the impacts of women empowerment on food security, to the consequences of heat stress on farm workers, and the impact of reducing food waste. The course has spawned two dozen published journal articles, inspired MS and PhD theses, and facilitated a number of important interdisciplinary projects. The complete syllabus, lab assignments, and detailed course design are made available for others to use and adapt to their own circumstances. Future versions of the course will seek to incorporate explicitly spatial analysis of agriculture, land, water, and environmental quality outcomes.

The direct impacts of climate change on crop yields and human health are individually well-studied, but the interaction between the two have received little attention. Here we analyze the consequences of global warming for agricultural workers and the crops they cultivate using a global economic model (GTAP) with explicit treatment of the physiological impacts of heat stress on humans’ ability to work. Based on two metrics of heat stress and two labor functions, combined with a meta-analysis of crop yields, we provide an analysis of climate, impacts both on agricultural labor force, as well as on staple crop yields, thereby accounting for the interacting effect of climate change on both land and labor. Here we analyze the two sets of impacts on staple crops, while also expanding the labor impacts to highlight the potential importance on non-staple crops. We find, worldwide, labor and yield impacts within staple grains are equally important at +3^∘C warming, relative to the 1986–2005 baseline. Furthermore, the widely overlooked labor impacts are dominant in two of the most vulnerable regions: sub-Saharan Africa and Southeast Asia. In those regions, heat stress with 3^∘C global warming could reduce labor capacity in agriculture by 30%–50%, increasing food pricesmore »and requiring much higher levels of employment in the farm sector. The global welfare loss at this level of warming could reach $136 billion, with crop prices rising by 5%, relative to baseline.

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