Adapting the designated area of geographical indications to climate change

This paper examines the agricultural supply relocation of products under geographical indication (GI) labels as an option to adapt to climate change. I develop a stylized framework that endogenously relates the delineation of the production area of the GI product to the distribution of specific geographical characteristics and their influence on the quality of the product and the corresponding comparative advantages. The model can then study how the GI production area responds to climate-related changes in the production conditions. The model shows that the GI production area can marginally expand as climate change worsens the production conditions, but it may disappear under more severe degradations. This opportunity to relocate current GIs hinges on striking a careful balance between mitigating climate-induced yield losses and altering quality, but it is also threatened by political economy barriers that govern the redistribution of GI rents.