There is increasing evidence suggestingthat climate change will negatively impact agriculturalproduction in South Asia. Decreased domestic production maymake South Asian countries more dependent on imports. Theextent to which South Asia will need to increase its importsas a result of climate change will presumably depend on thedegree to which the latter will affect domestic output. Theeffects of climate change on agriculture may well differsubstantially for individual South Asian countries andindeed for regions within a given country which can beapproximated by food production units. This calls for ananalysis of climate change effects on trade flows underalternative trade policy regimes both for agriculture andnon-agricultural sectors. The specific objectives of thepaper include the following: analyze the extent to whichagricultural production in South Asia and elsewhere in theworld may be affected by different scenarios regardingclimate change; analyze the extent to which changes indomestic production in South Asia resulting from climatechange will lead to increased demand for imports by SouthAsian countries; analyze the effects of increased importdemand in South Asia and changing exportable surpluseselsewhere on world market prices of major agriculturalcommodities consumed in South Asia; to the extent that SouthAsian governments allow transmission of changes in worldmarket prices to domestic prices, analyze the potentialwelfare effects of changes in the latter; analyze if, and towhat extent, worldwide trade liberalization andimplementation of South Asian Free Trade Area (SAFTA) willdampen the effects of climate change on domesticagricultural prices in South Asia. In this context, thereport is organized as follows: chapter one givesintroduction. Chapter two describes the methodology used -with particular attention to how different models andmodeling techniques are linked to produce an as accurate aspossible assessment based on state-of-the-art knowledge.Chapter three provides an up-to-date analysis of trade flowsand policies, and production patterns for key food productsin South Asia to explain the context in which climate changeis taking place. Chapter four describes the climate changescenarios and illustrates their consequences for crop yieldsat a global level and for South Asia - and in particularshows the vulnerability of the region to these changes.Baseline design, simulations, and results are discussed inchapter five. The final chapter six provides a shortsummary, discusses the limitations of the analysis, andderives suggestions and guidelines for future research.
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