Addressing climate change adaptation with a stochastic integrated assessment model: Analysis of common agricultural policy measures

Abstract

Stochastic agro-economic model GLOBIOM is used to demonstrate how best to design and evaluate the CAP’s financial and structural measures, both individually and jointly, in the face of inherent uncertainty and risk. The model accounts for plausible shocks simultaneously and derives measures that are robust against all shock scenarios; it can thus help avoid the irreversibility and sunk costs that occur in unexpected scenarios.To allow adequate agricultural production, we show that the distribution of CAP funds needs to account for exposure to risks, security targets, and the synergies between policy measures, including production, trade, storage, and irrigation technologies.