(The) impact of climate-related physical risk on agriculture in Korea under the national self-sufficiency policy

Abstract

The climate-related physical risk has brought about changes in agriculture, which are closely related to human life as a source of food and income. International trade has emerged as a buffer against the impact of climate change, but trade has recently failed to function, such as an export ban for domestic food security in the country. For countries that rely heavily on trade, policies are necessary to protect their agriculture from changes in crop productivity and trade patterns caused by climate change. This study conducts the assessment of climate impact in consideration of (1) the direct impact of climate change on agricultural productivity in Korea, which is highly dependent on imports, (2) the indirect impact of global agricultural changes on domestic agriculture through trade, and (3) the interactive impact of climate change and self-sufficiency policies. Applying the crop yield shock in a GCAM-AgLU highlights several important consequences of climate impact. First, the impact of domestic climate change would be overwhelmed by the impact of global climate change in terms of all market measures. Second, global climate change gives either positive (rice and wheat) or negative impacts (soybeans) on producer revenues but unilaterally increases consumer expenditures on both staples and nonstaples. Third, introducing the self-sufficiency measures for wheat and soybeans only intensifies the positive impacts of climate change on producer revenues at the expense of modest increases in consumer expenditures on both staples and nonstaples.