Impact of climate change on international trade: Evidence from South Africa’s wine exports

This study investigates the factors influencing South Africa's wine exports to its top ten trading partners and the impact of climate change on these exports. Using a gravity model and a dataset spanning from 2002 to 2022, the study found that increases in climate change-related factors, such as temperatures and rainfall, negatively affect South Africa’s wine exports. The study also found that other factors, such as South Africa’s GDP per capita and importer’s GDP per capita, positively affect wine exports, while the average distance between South Africa and its export markets, contrary to expectations, also had a positive impact on wine exports. Conversely, perceptions of political instability and the strength of the importer's currency had a detrimental effect on wine exports. Trade agreements, like SADC-FTA and SADC-EU-EPA, positively influenced wine exports. For policymakers and industry stakeholders, the study suggests that it is worthwhile to focus on exporting to economically stable and politically secure markets, engaging in beneficial trade agreements, and implementing measures to mitigate climate change impacts. By adopting these strategies, South Africa can enhance the resilience and competitiveness of its wine industry in the face of evolving global challenges.