Adaptation to climate change of products under geographical indication
Loïc Henry  1@  , Stéphane De Cara  1@  
1 : Economie Publique  (ECO-PUB)  -  Website
Institut National de la Recherche Agronomique : UMR0210, AgroParisTech
F-78850 Thiverval-Grignon -  France

Current specifications and rules that define the conditions of production of agricultural goods under geographical indication are not likely to be suited to future weather conditions. This paper explores the mechanisms that frame the adaptation of the supply control of geographical indication in the face of climate change. To do so, we develop an analytical framework based on recent works in modern Ricardian trade models. Those works explain reallocation of land across producers through the shifts in comparative advantage induced by the spatially differentiated effect of climate change. We extend this framework to account for the case of geographical indication. We introduce supply control as \emph{ex ante} restrictions on inputs, e.g. land, which result in some degree of market power on the GI good and impede a flexible reallocation of production across producers. Our analytical framework captures a simple trade-off at the core of the supply control adjustment to future weather conditions: loosening specifications to allow more flexibility in land allocation or maintaining current specifications to increase the price premium. The balance between these two opposite forces is determined by the change in the productivity differential across individuals induced by climate change and the degree of market power attainable under new climate conditions. 


footer.html