Trade can moderate climate damages by reallocating production across regions and allowing economies to import from less-affected suppliers. However, climate change can also affect the transportation infrastructure trade depends on. I study how climate-induced capacity constraints at critical transportation nodes affect trade and welfare. The Panama Canal provides a setting to trace this mechanism, as its lock system depends on rainfall-supplied freshwater, making operating capacity sensitive to lake levels. I first use observed hydrological variation to estimate effects on Canal operations and bilateral trade. I then develop a structural maritime network model with endogenous routing to quantify how the hydrological conditions change routes, market access, trade flows, and welfare. The reduced-form results reveal a nonlinear response to water scarcity: a month below the Authority’s 82-foot water-security threshold reduces Canal throughput by about 8%; during those low-water months, bilateral trade falls by approximately 1% for the average Canal-dependent pair, with larger losses where bypassing the Canal requires longer detours and gains along alternative routes. In the structural model, the transport-cost shock associated with a month below 82 feet generates an average trade decline of approximately 4% among Canal-exposed pairs as routing and market access adjust throughout the network. Welfare losses concentrate in Latin America, the Caribbean, and the United States, while some economies along alternative maritime corridors gain. The income-weighted global welfare effect is close to zero, masking substantial redistribution across economies.

Global population growth has increased food demand, particularly in emerging economies such as Latin America. There, the subsequent increase in livestock production has been a main driver of greenhouse gas emissions and deforestation. Silvopasture emerges as a promising solution for both economic and environmental sustainability. However, to be successful, cattle ranchers need to implement (set-up) and afterwards adopt (continued use after implementation) silvopasture. Although resources have been invested in the implementation of silvopastoral systems in Colombia, adoption rates remain variable. In this study, we aim to understand the barriers to adoption of silvopasture in Colombia by surveying 182 ranchers who received technical assistance and payment for ecosystem services to implement silvopasture in Colombia. We used survey results and precipitation and temperature data to identify socioeconomic and environmental variables that could explain the varying levels of adoption among ranchers. Our results indicate that high precipitation and temperature during the dry season have a negative impact on adoption. Ranchers who have experienced food insecurity are more likely to adopt while ranchers with larger farms, tractors, and water pumps, all indicators of good economic status, are less likely to adopt silvopastoral applications. Collectively, our data suggests that ranchers facing economic and environmental challenges are more likely to adopt silvopastoral technologies. This highlights the need for future implementation programs to focus on socially and environmentally vulnerable farmers, who stand to benefit the most and are more likely to maintain these practices long-term.