The Impacts of Climate Changes on Trade Balance of Agricultural Sector of Iran

Abstract

The study investigated the impact of climate change on Iran's agricultural trade balance, focusing on precipitation and temperature as key climatic components. Using the ARDL econometric model, the findings revealed that increased temperatures positively affect the trade balance, whereas decreased precipitation exacerbates trade deficits in the agricultural sector. This confirms the significant influence of climate change on agricultural trade. The analysis also highlighted a declining trend in Iran's trade balance, driven by increased food imports to mitigate climate change shocks and maintain food security. However, given international sanctions and foreign exchange constraints, relying heavily on trade is not sustainable. To strengthen food security, the study recommends enhancing the agricultural sector's resilience to climate change. Suggested measures include adopting water-saving technologies, advancing eugenics research to develop drought-resistant crop varieties, and implementing climate-smart agricultural practices. These strategies aim to reduce dependency on imports and adapt effectively to climate challenges.