The role of climate and trade policies in the wine sector

Abstract

New production and trade patterns due to climate change and policy interventions are increasingly affecting the wine sector. This paper investigates how patterns of production and trade in main wine producing regions respond to changes in climate and policy interventions. An approach based on a combination of Ricardian trade and climate models suggests that higher temperatures in the main producing regions of wine benefit both production and trade of wine. A gravity-based analysis shows that the effects of policy interventions on the global trade of wine are heterogeneous and dependent on the specific objective of the intervention.