Transporting goods and damages. The role of trade on the distribution of climate change costs

Impacts from climate change vary signicantly across world regions. Whereas regions in tropical and subtropical areas will sufer severely from the eects of climate change, are the impact estimates for regions in more northern latitudes relative moderate. But regions can not be considered as independent from each others exposure. In this paper we examine the spillover of climate change impacts between regions through international trade within a climate sensitive, dynamic CGE model with international trade. Under the emission scenario SRES A1B we observe at the end of the twenty-first century regional losses between 2 and 13 % GDP relative to a scenario without climate change. By means of a decomposition method we show that such a spillover of damages through international trade has a signicant influence, positive or negative, on the total costs of climate change for a region. For regions with low exposure to climate change and high adaptive capacities, spillover effects are responsible for a third of total costs from climate change.