Recent price spikes1,2 have raised concern that climate change could increase food insecurity by reducing grain yields in the coming decades3,4. However, commodity price volatility is also influenced by other factors5,6, which may either exacerbate or buffer the effects of climate change. Here we show that US corn price volatility exhibits higher sensitivity to near-term climate change than to energy policy influences or agriculture-energy market integration, and that the presence of a biofuels mandate enhances the sensitivity to climate change by more than 50%. The climate change impact is driven primarily by intensification of severe hot conditions in the primary corn-growing region of the US, which causes US corn price volatility to increase sharply in response to global warming projected over the next three decades. Closer integration of agriculture and energy markets moderates the effects of climate change, unless the biofuels mandate becomes binding, in which case corn price volatility is instead exacerbated. However, in spite of the substantial impact on US corn price volatility, we find relatively small impact on food prices. Our findings highlight the critical importance of interactions between energy policies, energy-agriculture linkages, and climate change.

work is licensed under a Creative Commons IGO 3.0 AttributionNonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http://creativecommons.org/licenses/by-nc-nd/3.0/igo/ legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed.Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license.Note that link provided above includes additional terms and conditions of the license. Since the initial publication of this Technical Paper, others have sought to extend the sample of countries covered in the GTAP-POV module. This has led to the development of improved techniques for dealing with challenges posed by the household survey data. This revised version of the technical paper includes four appendices which provide STATA code to accomplish key steps in the process of constructing a GTAP-POV module for an individual country. We have also included a new section at the end of part 3 of the paper in which we compare patterns of poverty across the full range of countries available to us at this point in time. Our hope is that this Technical Paper will continue to inspire members of the GTAP network, as well as others, to contribute additional poverty modules. Eventually we hope to cover most developing countries. This would permit more definitive analysis of the poverty impacts of global economic and environmental policies.JEL Classification: C54, D58, I32, Q12

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The goal of this technical paper is to provide sufficient detail to permit readers to bring into the GTAP poverty framework additional countries for which suitable household data are available. With the inputs from processed household data – as per the guidelines provided here – the poverty framework can be readily used to assess the likely poverty impacts of global economic policies across a wide range of developing countries, in a fashion which enables systematic cross-country comparisons.