Climate change is affecting prospects for trade and economic development around the world as extreme and sudden weather events and natural hazards increase in frequency and intensity. Extreme events, such as hurricanes or floods, can damage roads, railways, bridges and ports, and also disrupt air transport, limiting mobility for goods as well as people. In addition, slow-onset impacts, such as sea level rise, pose serious risks to infrastructure on which global trade depends. These and other impacts are causing disruption, delays and increased costs, which could decimate patterns of international trade.

The complex and interconnected nature of global value chains that shape today’s international trade system also means that disruption in key locations can have an exaggerated effect for the global economy. There is mounting evidence that the global economy is particularly exposed to the impacts of climate change in several critical economic sectors that heavily depend on imports from a small number of geographically concentrated production centres and supply chains in climate vulnerable regions.

This report assesses the current literature on how risks and impacts from climate change will affect physical infrastructure important for global trade. The authors focus on three areas – marine transport, land-based transport and air transport – and explore how climate impacts such as sea-level rise, flooding, drought, storms, heat, and water scarcity will affect global trade in the next 25 to 30 years and beyond. The authors also discuss the importance of each area for global trade and provide examples of recent climate-related disruptions in important trade chokepoints, such as the Suez Canal.

The paper concludes with a discussion of what climate impacts imply for trade infrastructure and of how to climate-proof the international trade system.

The report was funded by the European Climate Foundation.