Adapting to Drought Through International Free Trade
In a world where people and nations do not trade, you can only consume what you produce. If you want a cup of coffee and can’t trade with anyone then you better know how to make one. International trade breaks the link between consumption and production. When nasty drought occurs in one nations, but not in others, then there are opportunities for international trade in food commodities. Restrictions to free trade such as tariffs and quotas only impede this implicit insurance for consumers. This simple logic is why I liked what I read in this recent article. As I argued in my Climatopolis book, international trade will be a major climate change adaptation strategy. Consumers face less price volatility when imports represent a credible option.