An Investigation into the Relationship Between Climate Change and Trade in Zimbabwe

A number of questions has been raised on the existence of the relationship between climate change and trade. Some have asked what the short- and long-term consequences of climate change on trade are while others want to know if the optimal combination of trade and environmental policies harness the benefits of trade while minimizing the environmental costs. Other questions raised were on the effects of trade or trade liberalization on the environment or how the changing natural environment (e.g. climate change) impact or modify trade patterns. A review of this literature reveals that the world needs to know how trade and climate change interact with each other. This study therefore examines the causal relationship between climate change and trade in Zimbabwe as well as the existence of a long- and short-run relationship between the two variables using secondary data for the period 1990-2022. From the results, the impact of climate change on trade volumes in the short run is largely insignificant, but is significant in the long run, all else constant. For Zimbabwe which relies on agriculture exports, trade is negatively impacted as climate change likely affects farm produce. As global emissions rise, that negative trajectory is likely to be observed on trade volumes. It is therefore recommended that more climate resistant farming methods, like the already adopted “Pfumvudza” have to be initiated to ensure consistent. With the world moving towards environmentally friendly goods export diversity is also necessary to cancel out the risk associated with climate variability. There is also need of some form of moral suasion so that businesses invest participate in climate change adaptation.