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Economic Impact of Climate Change: Simulations with a Regionalized Climate-Economy Model
Abstract
Climate change affects the physical and biological system in many regions of the world. The extent to which human systems will suffer economically from climate change depends on the adaptive capabilities within a region as well as across regions. We use an economic General-Equilibrium model and an Ocean-Atmosphere model in a regionally and sectorally disaggregated framework to analyze adaptation to climate change in different regions of the world. It turns out that vulnerability to climate impacts differs significantly across regions and that the overall adjustment of the economic system quite reduces the direct climate impacts.
... It is known that sea level rise negatively impacts coastal economies through several physical shocks. For example, the increase in global mean temperature causes the thermal expansion of ocean water, which coupled with the melting of land-based icebergs and mountain glaciers results in a rise in sea levels (Deke et al., 2001). In addition, climate change also increases the speed of sea level rise by changing both the probability and severity of extreme weather events, such as storms and floods (Wu, 2016). ...
... However, other damages are more difficult to quantify, for example, the increasing vulnerability of coastal areas. Considering the difficulty of measuring the damage from sea level rise in monetary units, this is often quantified in terms of physical units (Deke et al., 2001), such as acres and percentages of land lost. Therefore, this study quantifies the physical damage caused by climate change as the percentage loss of construction land and cropland in coastal regions. ...
Among the climate change-induced threats to coastal regions, sea level rise is considered as the most serious one. Most large and prosperous cities in China are located along coastal regions and are thus likely to suffer huge economic impacts when a sea level rise occurs. The effects on coastal regions can also be transmitted to inland regions through movement of labor and trade, thus affecting regional disparity. To strengthen evidence-based policies of abatement and adaptation, it is essential to assess the economic impacts of sea level rise in addition to the physical impacts already investigated in the literature. Based on data from GIS analysis of flooded areas, this study uses a state-of-the-art technique (TERM-China, a multiregional general equilibrium model of China) to evaluate the economic impacts of sea level rise. The simulation results suggest that if the sea level rise coincides with sudden-onset extreme storm surges, the coastal regions' GDP loss would reach 11% in 2050, wherein Tianjin, Shanghai, and Jiangsu would have the most severe losses with over a 20% decline in their individual GDP in 2050. At the sectoral level, high capital-intensive sectors have more significant output losses. Our results also indicate that sea level rise could cause more unemployment in developed coastal regions, drive people to other developing inland regions, and even convert some mega-cities into middle-scale cities.
... SLR induced losses of land and capital in coastal areas can induce a domino effect on the global economy. Computable General Equilibrium (CGE) models have been used to assess the wider economic implications of various SLR scenarios with and without adaptation (Bosello, Eboli, and Pierfederici 2012, Bosello, Roson, and Tol 2007, Darwin and Tol 2001, Deke et al. 2001. In this paper, the latest global SLR scenarios of DIVA are used to update the assessment of the broader economic impact of SLR-induced coastal land and capital loss. ...
... A part of the literature though has considered dynamic modelling structures. Deke et al. (2001), using the DART model, consider a recursive dynamic CGE to investigate the effects of different coastal protection costs. These costs are introduced to the model as a decrease of investments on the capital accumulation process. ...
... Partial equilibrium models alternatively are based on the analysis of part of the overall economy such as a single market (single commodity) or subsets of markets or sectors (Sadoulet and De Janvry 1995). In agriculture, partial equilibrium models mainly analyze adaptation at farm or household levels (Maddison 2006;Mendelsohn 2008a, 2008b;Hassan and Nhemachena 2008) whereas general equilibrium models are employed to analyse the impact and adaptation at national or global levels (Darwin et al. 1995;Winters et al. 1996;Yates andStrzepek 1998 Nodrhaus andYang 1996;Deke et al. 2001;Roson 2003). ...
... They indicated that the high income countries could be the major losers from cooperation. Deke et al. (2001) used the CGE approach to analyse adaptation to climate change in different regions of the world. The said study result showed that vulnerability to climate impact differs significantly across regions and that the overall adjustment of the economic system reduces the direct economic impacts. ...
... Furthermore, CGE models can provide estimates of economic impacts, such as changes in GDP, trade, inputs, prices and a host of other variables which are important to decision-makers. Examples of such studies include Deke et al. (2001), Darwin and Tol (2001), Bosello et al. (2007) and Bigano et al. (2008). ...
... To simulate the Protection scenario in our CGE models, we followed Darwin and Tol (2001) and Deke et al. (2001) by reducing capital expenditures in 2009 by an amount equal to the direct cost of coastal protection. This assumes that the one-time coastal adaptation investment would protect against any current and future climate-induced SLR and storm surge impacts. ...
Global climate change will have worldwide impacts, and coastal areas in Canada are particularly susceptible. We estimated the economic costs and impacts of future sea-level rise (SLR) and storm surge due to climate change in Canada’s coastal provinces using regional, dynamic computable general equilibrium models that track provincial welfare, GDP, trade, prices and inputs over the 2009-2054 period. We also assessed the economic costs of coastal adaptation investments, to determine whether such investments can be justified on economic grounds. Results indicated that, depending on the scenario considered, climate-induced SLR and storm surge could cost Canada in the range of $4.6 to $25.5 billion in present value welfare, and between $53.7 to $108.7 billion in present value GDP. We found significant variation in costs and impacts across coastal provinces, with some provinces such as Newfoundland and Labrador experiencing only marginal costs/impacts, and others such as British Columbia experiencing costs as high as $21 billion in welfare and the Territories experiencing GDP reductions as high as 3.1% over the period. Coastal adaptation investments were estimated to substantially reduce these negative impacts, and were thus supported on economics grounds. Overall, this study provides the first (and preliminary) provincial economic impact estimates of climate-induced SLR and storm surge, as well as adaptation investments, in Canada. Additional research is needed to refine the analysis in order to produce reliable estimates that can be used to guide coastal adaptation policies in Canada.
... Partial equilibrium models alternatively are based on the analysis of part of the overall economy such as a single market (single commodity) or subsets of markets or sectors (Sadoulet and De Janvry 1995). In agriculture, partial equilibrium models mainly analyze adaptation at farm or household levels (Maddison 2006;Mendelsohn 2008a, 2008b;Hassan and Nhemachena 2008) whereas general equilibrium models are employed to analyse the impact and adaptation at national or global levels (Darwin et al. 1995;Winters et al. 1996;Yates andStrzepek 1998 Nodrhaus andYang 1996;Deke et al. 2001;Roson 2003). ...
... They indicated that the high income countries could be the major losers from cooperation. Deke et al. (2001) used the CGE approach to analyse adaptation to climate change in different regions of the world. The said study result showed that vulnerability to climate impact differs significantly across regions and that the overall adjustment of the economic system reduces the direct economic impacts. ...
... Because our economic model is for beach going to beaches in Los Angeles and Orange counties, we limited our initial investigation to this part of the coast. Like other studies that have attempted to link climate change with beach recreation, we focus specifically on the effect on day use beach visitors (see for instance Bin et al. 2007;Deke et al. 2001;Darwin and Tol 2001;Bosello, Roson, and Tol 2007;Loomis and Crespi 1999). We focus on two potential scenarios of beach change. ...
... Adaptation measures, according to previous research, are required to mitigate climate change while increasing agricultural productivity and welfare (Deke et al., 2001;Nordhaus & Yang, 1996;Schlenker & Lobell, 2010;Skoufias & Vinha, 2012;Welch et al., 2010;Winters et al., 1996;Yates & Strzepek, 1998). Dell et al. (2014) found a negative correlation between farm income and climate change in Sub-Saharan Africa, as did Miguel et al. (2004), Barrios et al. (2010) and Hsiang (2010). ...
We estimate the effect of multiple climate change adaptation strategies (CCAS) on farm household welfare using a new three- wave panel data derived from the World Bank's geo- referenced household socioeconomic survey and the National Aeronautics and Space Administration's (NASA) historical weather data. Using the multinomial panel endogenous switching regression model, we discovered that combining climate change adaptation strategies such as crop rotation and improved seed varieties is the most effective way to improve the welfare of smallholder farmers. The average treatment effect (ATT) results show that all CCAS have a positive and significant effect on the pattern of welfare improvement among smallholder farmers, but combinations of CCAS provide the highest payoffs. As a result, the combination of crop rotation and improved seed is the most appealing CCAS package that farmers could adopt as an ex- ante strategy to improve farm household welfare. We also discovered that climate change and technology adoption are the most important factors influencing the welfare of rural farm households. Furthermore, we discover that the effectiveness of climate change adaptation strategies varies by farm households. Thus, we argued that targeted extension and advisory services, as well as other policies that support the synchronization of adaptation strategies, are critical for improving the welfare of rural farm households.
... Adaptation measures, according to previous research, are required to mitigate climate change while increasing agricultural productivity and welfare (Deke et al., 2001;Nordhaus & Yang, 1996;Schlenker & Lobell, 2010;Skoufias & Vinha, 2012;Welch et al., 2010;Winters et al., 1996;Yates & Strzepek, 1998). Dell et al. (2014) found a negative correlation between farm income and climate change in Sub-Saharan Africa, as did Miguel et al. (2004), Barrios et al. (2010) and Hsiang (2010). ...
We estimate the effect of multiple climate change adaptation strategies (CCAS) on farm household welfare using a new three- wave panel data derived from the World Bank's geo- referenced household socioeconomic survey and the National Aeronautics and Space Administration's (NASA) historical weather data. Using the multinomial panel endogenous switching regression model, we discovered that combining climate change adaptation strategies such as crop rotation and improved seed varieties is the most effective way to improve the welfare of smallholder farmers. The average treatment effect (ATT) results show that all CCAS have a positive and significant effect on the pattern of welfare improvement among smallholder farmers, but combinations of CCAS provide the highest payoffs. As a result, the combination of crop rotation and improved seed is the most appealing CCAS package that farmers could adopt as an ex- ante strategy to improve farm household welfare. We also discovered that climate change and technology adoption are the most important factors influencing the welfare of rural farm households. Furthermore, we discover that the effectiveness of climate change adaptation strategies varies by farm households. Thus, we argued that targeted extension and advisory services, as well as other policies that support the synchronization of adaptation strategies, are critical for improving the welfare of rural farm households.
... • In particular, factor like economic progress and prosperity is considerably impacted by GHG emissions (Deke et al. 2001;Khan et al. 2021a;Batten 2018), health expenditure (Suhrcke et al. 2006;Oni 2014;Khan et al. 2022a;Piabuo and Tieguhong 2017;Yang 2020), and communicable diseases (like the COVID-19 pandemic) (Bagchi et al. 2020;Song and Zhou 2020;Mohsin et al. 2021;Priya et al. 2021). • Simultaneously, GHG emissions are impacted by economic progress (Girod and De 2010;Enzler and Diekmann 2019;Baležentis et al. 2020;Bjelle et al. 2021), health expenditure (Wang et al. 2019;Bilgili et al. 2021;Khan et al. 2021b;Ganda 2021;Pervaiz et al. 2021), and communicable disease spread (Liu et al. 2020b;Sajid 2020;Sajid and Gonzalez 2021;Sajid et al. 2022). ...
The spread of communicable diseases, such as COVID-19, has a detrimental effect on our socio-economic structure. In a dynamic log-run world, socio-economic and environmental factors interact to spread communicable diseases. We investigated the long-term interdependence of communicable disease spread, economic prosperity, greenhouse gas emissions, and government health expenditures in India’s densely populated economy using a variance error correction (VEC) approach. The VEC model was validated using stationarity, cointegration, autocorrelation, heteroscedasticity, and normality tests. Our impulse response and variance decomposition analyses revealed that economic prosperity (GNI) significantly impacts the spread of communicable diseases, greenhouse gas emissions, government health expenditures, and GNI. Current health expenditures can reduce the need for future increases, and the spread of communicable diseases is detrimental to economic growth. Developing economies should prioritize economic growth and health spending to combat pandemics. Simultaneously, the adverse effects of economic prosperity on environmental degradation should be mitigated through policy incentives.
... Climate change disasters are worryingly intensive in developing countries especially in Sub-Saharan Africa. Deke et al. (2001) note that adaptive capabilities within a region as well as across regions determine the extent to which human systems will suffer economically from climate change. A scrutiny of adaptive capabilities has to be adequately done as some adaptation strategies are likely to have an adverse impact on people's livelihoods and therefore unsustainable. ...
Despite the international focus on adaptation and mitigation, climate change remains one of the most pressing challenges globally. Scientists have predicted that developing countries will most be affected by climate change partly because their economies rely on the natural environment yet they have inadequate access to information on climate change and are languishing in poverty. Several strategies have been developed by scientists to enhance the adaptive capacity of the local communities and scholars have documented the various adaptation and mitigation strategies in developing countries specifically sub-Saharan Africa. However, the sustainability aspect is largely missing from the adaptation and mitigation discourse. A few studies that have attempted to examine the sustainability question are broad, generic, and lacking depth.
... Nordhaus & Yang (1996) and Nordhaus & Boyer (2000) developed the RICE, a regional version of the DICE model with different inputs endowments (in labour, capital and energy) by geographic areas. Other examples of IAMs are the models DART (Deke et al., 2001) with a general equilibrium framework and the inclusion of agricultural productivity and sea level rise, WITCH (Bosetti et al., 2006(Bosetti et al., , 2007(Bosetti et al., , 2009) that considers non-cooperative behaviour between different regions, MERGE (Manne et al., 1995), PAGE (Hope, 2006) and FUND (Tol, 2005;Waldhoff et al.,2014). ...
This paper provides a tool to build climate change scenarios to forecast Gross Domestic Product (GDP), modelling both GDP damage due to climate change and the GDP impact of mitigating measures. It adopts a supply-side, long-term view, with 2060 and 2100 horizons. It is a global projection tool (30 countries / regions), with assumptions and results both at the world and the country / regional level. Five different types of energy inputs are taken into account according to their CO2 emission factors. Full calibration is possible at each stage, with estimated or literature-based default parameters. Compared to other models, it provides a comprehensive modelisation of TFP, which is the most significant determinant of the GDP projected path. We present simulation results of different energy policy scenarios. They illustrate both the “tragedy of the horizon” and the “tragedy of the commons”, which call for a policy framework that adequately integrates a long run perspective, through a low-enough discount rate and an effective intergenerational solidarity as well as international cooperation.
... The most observable effects would be thermal expansion of sea water and melting of ice and glaciers, which leads to increase in sea level. This scenario has direct impact on water supply at coastal areas and islands (Deke et al., 2001) as follows: ...
This chapter gives an overview about reverse osmosis membrane desalination technology and process. Desalination process can be considered as one of the crucial processes in obtaining fresh water to meet the increasing fresh water demand throughout the world. Desalination process begins with the intake of seawater or brackish water. The intake system usually comprises a pump and piping system. Then, the seawater goes through pre-treatment process. From there, the treated seawater will go through desalination process. The most widely used desalination is membrane desalination utilizing reverse osmosis membrane. After desalination process, the fresh water will go through more filtration and a series of post-treatment. Post-treatment consists of conditioning and stabilizing the water for distribution. This chapter concludes with a case study to illustrate the operation and sustainability of a small-scale desalination plant that utilizes brackish city polluted water as source.
... The discussion surrounding climate change is complex. Not only because the theme involves a plurality of interconnected problems that are difficult to disentangle, but above all because it has a markedly social and economic dimension (Deke et al. 2001, Sergi 2003, Adekola & Sergi 2016. Everything that revolves around the theme of climate change -and therefore the impact of man on the environment -directly involves methods of both production and consumption and people's lifestyles. ...
... Nordhaus & Yang (1996) and Nordhaus & Boyer (2000) developed the RICE, a regional version of the DICE model with different inputs endowments (in labour, capital and energy) by geographic areas. Other examples of IAMs are the models DART (Deke et al., 2001) with a general equilibrium framework and the inclusion of agricultural productivity and sea level rise, WITCH (Bosetti et al., 2006(Bosetti et al., , 2007(Bosetti et al., , 2009) that considers non-cooperative behaviour between different regions, MERGE (Manne et al., 1995), PAGE (Hope, 2006) and FUND (Tol, 2005;Waldhoff et al.,2014). ...
... A wide range of studies assess economic impacts of climate change-induced SLR using CGE models either analysing SLR as a single impact (Darwin and Tol 2001;Bosello et al. 2007;2012a;Pycroft et al. 2015;Tol et al. 2016;Joshi et al. 2016), or including SLR as part of a wider set of impacts (Deke et al. 2001;Bigano et al. 2008;Eboli et al. 2010;Ciscar et al. 2009Ciscar et al. , 2011Ciscar et al. , 2012Ciscar et al. , 2014Ciscar et al. , 2018Aaheim et al. 2012;Roson and van der Mensbrugghe 2012;Bosello et al. 2012b;Dellink et al. 2014;OECD 2015). ...
Climate change impacts on coastal zones could be significant unless adaptation is undertaken. One particular macroeconomic dimension of sea level rise (SLR) impacts that has received no attention so far is the potential stress of SLR impacts on public budgets. Adaptation will require increased public expenditure to protect assets at risk and could put additional stress on public budgets. We analyse the macroeconomic effects of SLR adaptation and impacts on public budgets. We include fiscal indicators in a climate change impact assessment focusing on SLR impacts and adaptation costs using a computable general equilibrium model extended with a detailed description of the public sector. Coastal protection expenditure is financed issuing government bonds, meaning that coastal adaptation places an additional burden on public budgets. SLR impacts are examined using several scenarios linked to three different Representative Concentration Pathways: 2.6, 4.5, and 8.5, and two Shared Socioeconomic Pathways: SSP2 and SSP5. Future projections of direct damages of mean and extreme SLR and adaptation costs are generated by the Dynamic Interactive Vulnerability Assessment framework. Without adaptation, all regions of the world will suffer a loss and public deficits increase respect to the reference scenario. Higher deficits imply higher government borrowing from household savings reducing available resources for private investments therefore decreasing capital accumulation and growth. Adaptation benefits result from two mechanisms: (i) the avoided direct impacts, and (ii) a reduced public deficit effect. This allows for an increased capital accumulation, suggesting that support to adaptation in deficit spending might trigger positive effects on public finance sustainability.
... Previous studies on agriculture related to climate change underlined roughly explain general outcomes, and some of them are: firstly agriculture is much more susceptible to climatic variation both economically and socially. Due to climate change, agricultural is softly affected in term of comparative lower prices of agricultural products and rationalization of incomes within agricultural sect, changing structures of the economies as well as pattern of international trade throughout the world (Deke et al. 2001). ...
This study estimated and forecasted the effect of temperature and precipitation on net
revenue of maize growers across Northern, Eastern, Central and Southern zones of
Khyber Pakhtunkhwa. Two hundred maize growers were randomly selected through
multistage sampling technique. Primary data on net revenue from maize crop was
collected through an interview schedule and secondary data on temperature and
precipitation was collected from Regional Metrological Department, Peshawar. Cross
sectional Ricardian Model was used to estimate the effect of temperature and
precipitation on net revenue. Results of the study revealed that temperature has
positive effect and temperature square has negative effect on net revenue at 10% and
5% level of significance, respectively. This means that initially net revenue from maize
crop increases as temperature increases, after reaching critical level further increase in
temperature decreases net revenue. Rainfall and rainfall square has insignificant effect
on net revenue of maize growers. Analysis of forecasting effects of temperature on net
revenue shows that increase in temperature. Zone wise analysis of forecasting effects
of temperature shows that increase in temperature by 1
0
C in 2040-2050 and by 2
O
C in
2060-2080 will significantly increase net revenue of maize growers in Northern and
Eastern zones, but insignificantly in Central zone. An increase in temperature by 1
0
C in
2040-2050 and by 2
O
C in 2060-2080 will decrease net revenue in Southern zone.
Reason for decrease in net revenue is that average monthly temperature in Southern
zone in maize season is approximately equal to critical temperature. Government
needs to encourage research institutes for developing temperature tolerance varieties
of maize and other crops grown in central and southern zone of the province.
Government also needs to encourage farming community of Southern zone for
afforestation which control increase in temperature.
... affected in term of comparative lower prices of agricultural products and rationalization of incomes within agricultural sector, changing structures of the economies as well as pattern of international trade throughout the world (Deke et al., 2001). ...
This study estimated and forecasted the effect of temperature and precipitation on net revenue of maize growers across Northern, Eastern, Central and Southern zones of Khyber Pakhtunkhwa, Pakistan. 200 maize growers were randomly selected through multistage sampling technique. Primary data on net revenue from maize crop was collected through an interview schedule and secondary data on temperature and precipitation was collected from Regional Metrological Department, Peshawar. Cross sectional Ricardian Model was used to estimate the effect of temperature and precipitation on net revenue. Results of the study revealed that temperature has positive effect and temperature square has negative effect on net revenue at 10% and 5% level of significance, respectively. This means that net revenue from maize crop increases initially, as temperature increases, after reaching critical level (32.14 °C) further increase in temperature decreases net revenue. Rainfall and rainfall square has insignificant effect on net revenue of maize growers. Zone wise analysis of forecasting effects of temperature shows that increase in temperature by 1 °C in 2040-2050 and by 2 °C in 2060-2080 will significantly increase net revenue of maize growers in Northern and Eastern zones, but insignificantly in Central zone. An increase in temperature by 1 °C in 2040-2050 and by 2 °C in 2060- 2080 will decrease net revenue in Southern zone. Government needs to encourage research institutes for developing temperature tolerance varieties of maize and other crops grown in Central and Southern zones of the province. Government also needs to encourage farming community of Central and Southern zones for afforestation in order to control increase in temperature.
... Sea-level rise (SLR) is one of the most studied impacts of climate change within the environmental economics literature. Researchers have used, among other methods, computable general equilibrium (CGE) models to assess the wider economic implications of SLR for a number of different climate change scenarios (Bosello et al. 2007(Bosello et al. , 2012aDarwin and Tol 2001;Deke et al. 2001). An extension to the aforementioned models includes the assessment of the broader economic impacts of SLR-induced coastal land and capital losses and their effect on sea transportation networks (Chatzivasileiadis et al. 2016). ...
The potential impacts of sea level rise (SLR) due to climate change have been widely studied in the literature. However, the uncertainty and robustness of these estimates has seldom been explored. Here we assess the model input uncertainty regarding the wide effects of SLR on marine navigation from a global economic perspective. We systematically assess the robustness of computable general equilibrium (CGE) estimates to model’s inputs uncertainty. Monte Carlo (MC) and Gaussian quadrature (GQ) methods are used for conducting a Systematic sensitivity analysis (SSA). This design allows to both explore the sensitivity of the CGE model and to compare the MC and GQ methods. Results show that, regardless whether triangular or piecewise linear Probability distributions are used, the welfare losses are higher in the MC SSA than in the original deterministic simulation. This indicates that the CGE economic literature has potentially underestimated the total economic effects of SLR, thus stressing the necessity of SSA when simulating the general equilibrium effects of SLR. The uncertainty decomposition shows that land losses have a smaller effect compared to capital and seaport productivity losses. Capital losses seem to affect the developed regions GDP more than the productivity losses do. Moreover, we show the uncertainty decomposition of the MC results and discuss the convergence of the MC results for a decomposed version of the CGE model. This paper aims to provide standardised guidelines for stochastic simulation in the context of CGE modelling that could be useful for researchers in similar settings.
... Originally developed at the end of 1960s to assess the economic consequences of international and public sector policies, CGE models have been increasingly applied since the end of the 1990s to economically assess environmental impacts, particularly those associated with climate change. CGE models have been applied to various sectors such as agriculture (Tsigas et al., 1997), tourism (Berrittella et al., 2006), and climate change effects such as sea-level rise (Deke et al., 2001;Darwin and Tol, 2001;Bosello et al., 2012). More recently, CGE studies offer an estimation of a joint set of climate change impacts on growth and GDP: Aaheim & Dokkes (2009), Eboli et al. (2010), Ciscar et al. (2011;, OECD (2015). ...
Much research has been carried out on modelling soil erosion rates under different climatic and land use conditions. While some studies have addressed the issue of reduced crop productivity due to soil erosion, few have focused on the economic loss in terms of agricultural production and Gross Domestic Product(GDP). In this study, soil erosion modellers and economists come together to carry out an economic evaluation of soil erosion in the European Union(EU). The study combines bio-physical and macroeconomic models to estimate the cost of agricultural productivity loss due to soil erosion by water in the EU. The soil erosion rates, derived from the RUSLE2015 model, are used to estimate the loss in crop productivity (physical change in the production of plants) and to model their impact on the agricultural sector per country. A Computable General Equilibrium(CGE) model is then used to estimate the impact of crop productivity change on agricultural production and GDP. The 12 million hectares of agricultural areas in the EU that suffer from severe erosion are estimated to lose around 0.43% of their crop productivity annually. The annual cost of this loss in agricultural productivity is estimated at around €1.25 billion. The CGE model estimates the cost in the agricultural sector to be close to €300 million, and the loss in GDP to be about €155 million. Italy emerges as the country that suffers the highest economic impact, while the agricultural sector in most northern and central European countries is only marginally affected by soil erosion losses.
... Sea-level rise (SLR) is one of the most studied impacts of climate change within the environmental economics literature. Researchers have used, among other methods, Computable General Equilibrium (CGE) models to assess the wider economic implications of SLR for a number of different climate change scenarios[Bosello et al. (2012a), Bosello et al. (2012b), Bosello et al. (2007, Darwin and Tol (2001),Deke et al. (2001)]. An extension to the aforementioned models includes the assessment of the broader economic impacts of SLR-induced coastal land and capital losses and their effect on sea transportation networks[Chatzivasileiadis et al. (2016)]. ...
... The first approach is typical of earlier models like RICE (Nordhaus andYang, 1996, Nordhaus andBoyer, 1999), MERGE (Manne, Mendelsohn and Richels, 1995) and CETA (Peck and Teisberg, 1992), where a relationship is posited between loss of potential income and temperature. More recent contributions, based on multi-sectoral models like DART (Deke et al., 2001), GTEM (Pant, 2002), ICES (Eboli, Parrado and and ENVISAGE (Roson and van der Mensbrugghe, 2012) keep the sectoral detail and attribute the various impacts to different variables and parameters in a disaggregated macroeconomic model, which typically has a Computable General Equilibrium structure. The main advantage of holding distinct the different economic effects of climate change, despite the cost of higher computational complexity, is that it is possible to trace the various mechanisms through which the climate can affect the economic structure. ...
... Like Darwin and Tol (2001) and Deke et al. (2001), we find that direct costs underestimate the true welfare losses and get the regional distribution wrong at that. A detailed comparison of results is unfortunately impossible.The earlier studies report aggregate results only, in different units at different times, and for one scenario only (optimal protection / land and capital lost in the case of Darwin and Tol; full protection in the case of Deke et al.); Deke et al. also use different input data, and a recursive-dynamic rather than a static model. ...
The economy-wide implications of sea level rise in 2050 are estimated using a static computable general equilibrium model. Overall, general equilibrium effects increase the costs of sea level rise, but not necessarily in every sector or region. In the absence of coastal protection, economies that rely most on agriculture are hit hardest. Although energy is substituted for land, overall energy consumption falls with the shrinking economy, hurting energy exporters. With full coastal protection, GDP increases, particularly in regions that do a lot of dike building, but utility falls, least in regions that build a lot of dikes and export energy. Energy prices rise and energy consumption falls. The costs of full protection exceed the costs of losing land.
... 2 Only a few assessments of planned adaptation have been carried out on a macroeconomic level. There are some studies on sea level rise (Bosello et al. 2012;Darwin and Tol 2001;Deke et al. 2001); however, regarding planned adaptation for transport systems, macroeconomic studies are not available (at least to the best knowledge of the author). ...
Due to climate change, transport systems are expected to become increasingly stressed by extreme weather and gradual climatic changes, resulting in direct costs within the affected sectors as well as indirect costs from sectoral interlinkages. To reduce these costs, sector-specific climate change adaptation measures are needed, raising the question of the net benefits of adaptation at a macroeconomic level. However, despite their importance such assessments of impacts and adaptation at the macrolevel are scarce and coarse in their implementation. This paper contributes to fill this research gap by analyzing specific adaptation measures for the road and rail sectors in Austria using a computable general equilibrium model. The findings are as follows: First, direct impact costs more than double due to macroeconomic linkages. Hence, the indirect costs are found to be larger than the direct costs. Second, when analyzing adaptation measures for the road and rail sectors, without capturing any indirect effects, benefit–cost ratios imply a clear benefit only for the rail sector. However, when indirect effects via sectoral interlinkages are also captured, adaptation measures in both sectors, road and rail, clearly pay off. Climate change-induced GDP and welfare losses are reduced by 55 and 34% and lead to positive employment effects. Third, even at rather low damage reduction potentials, adaptation leads to a net benefit at the macroeconomic level.
... The first approach is typical of earlier models like RICE (Nordhaus andYang, 1996, Nordhaus andBoyer, 1999), MERGE (Manne et al., 1995) and CETA (Peck and Teisberg, 1992), where a relationship is posited between loss of potential income (GDP) and temperature. More recent contributions, based on multi-sectoral models like DART (Deke et al., 2001), GTEM (Pant, 2002), ICES (Eboli et al., 2010) and ENVISAGE (Roson and van der Mensbrugghe, 2012) keep the sectoral detail and attribute the various impacts to different variables and parameters in a disaggregated macroeconomic model, which typically has a general equilibrium structure. ...
Climate change damage (or, more correctly, impact) functions relate variations in temperature (or other climate variables) to economic impacts in various dimensions, and are at the basis of quantitative modeling exercises for the assessment of climate change policies. This document provides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific damage functions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows, and households' energy demand. All parameters of the damage functions are estimated for each of the 140 countries and regions in version 9 of the Global Trade Analysis Project (GTAP 9) Data Base. To illustrate the salient characteristics of the estimates, the change in real gross domestic product is approximated for the different effects, in all regions, corresponding to an increase in average temperature of +3°C. After considering the overall impact, the paper highlights which factor is the most significant one in each country, and elaborates on the distributional consequences of climate change.
... The first approach is typical of earlier models like RICE (Nordhaus andYang, 1996, Nordhaus andBoyer, 1999), MERGE (Manne et al., 1995) and CETA (Peck and Teisberg, 1992), where a relationship is posited between loss of potential income (GDP) and temperature. More recent contributions, based on multi-sectoral models like DART (Deke et al., 2001), GTEM (Pant, 2002), ICES (Eboli et al., 2010) and ENVISAGE (Roson and van der Mensbrugghe, 2012) keep the sectoral detail and attribute the various impacts to different variables and parameters in a disaggregated macroeconomic model, which typically has a general equilibrium structure. ...
Climate change damage (or, more correctly, impact) functions relate variations in temperature (or other climate variables) to economic impacts in various dimensions, and are at the basis of quantitative modeling exercises for the assessment of climate change policies. This document provides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific damage functions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows, and households' energy demand. All parameters of the damage functions are estimated for each of the 140 countries and regions in version 9 of the Global Trade Analysis Project (GTAP 9) Data Base. To illustrate the salient characteristics of the estimates, the change in real gross domestic product is approximated for the different effects, in all regions, corresponding to an increase in average temperature of +3°C. After considering the overall impact, the paper highlights which factor is the most significant one in each country, and elaborates on the distributional consequences of climate change.
... The first approach is typical of earlier models like RICE (Nordhaus andYang, 1996, Nordhaus andBoyer, 1999), MERGE (Manne et al., 1995) and CETA (Peck and Teisberg, 1992), where a relationship is posited between loss of potential income (GDP) and temperature. More recent contributions, based on multi-sectoral models like DART (Deke et al., 2001), GTEM (Pant, 2002), ICES (Eboli et al., 2010) and ENVISAGE (Roson and van der Mensbrugghe, 2012) keep the sectoral detail and attribute the various impacts to different variables and parameters in a disaggregated macroeconomic model, which typically has a general equilibrium structure. ...
Climate change damage (or, more correctly, impact) functions relate variations in temperature (or other climate variables) to economic impacts in various dimensions, and are at the basis of quantitative modeling exercises for the assessment of climate change policies. This document provides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific damage functions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows, and households' energy demand. All parameters of the damage functions are estimated for each of the 140 countries and regions in version 9 of the Global Trade Analysis Project (GTAP 9) Data Base. To illustrate the salient characteristics of the estimates, the change in real gross domestic product is approximated for the different effects, in all regions, corresponding to an increase in average temperature of +3°C. After considering the overall impact, the paper highlights which factor is the most significant one in each country, and elaborates on the distributional consequences of climate change.
... This feature of CGE models, coupled with their flexibility, has led recently to their increased application to the economic assessment of climate change impacts. A growing CGE literature assesses the costs of single impact categories, e.g., Deke et al. (2002), Darwin and Tol (2001), Bosello et al. (2007) on sea-level rise; Bosello et al. (2006) on health;Tzigas et al. (1997), Darwin (1999), Ronneberger et al. (2009) on agriculture; and Calzadilla et al. (2008) on water scarcity. CGE models have been also used to investigate the interactions of multiple impacts, although the techniques are still in their infancy. ...
The present study integrates Computable General Equilibrium (CGE) modelling with biodiversity services, proposing a possible methodology for assessing climate-change impacts on ecosystems. The assessment focuses on climate change impacts on carbon sequestration services provided by European forest, cropland and grassland ecosystems and on provisioning services, but provided by forest and cropland ecosystems only. To do this via a CGE model it is necessary to identify first the role that these ecosystem services play in marketable transactions; then how climate change can impact these services; and finally how the economic system reacts to those changes by adjusting demand and supply across sectors, domestically and internationally.
... The impact of climate changes in the following years refers to various issues such as (IPCC, 2007): changes in ecosystem structure, biodiversity loss projected to occur (Australia, New Zealand, Europe, Latin America), mountainous areas with glacier retreat, reduced snow cover and winter tourism (Europe); crop productivity increase/decrease, depending on latitudes, by 2020, rain-fed agriculture yields could be reduced by up to 50% (countries in Africa) and by 2030, agriculture and forestry production is projected to decline (Australia and New Zealand); coastal erosion, due to sea level rise -towards the end of 21 st century, sea level rise will affect low-lying coastal areas and the adaptation cost could amount to at least 5-10% of GDP (Africa); sea level rise is expected to exacerbate coastal hazards, threatening infrastructure, settlements, communities (Small Islands); the health status of people will be affected, this being possible through increased diseases and injury due to extreme weather events, etc., but climate change is projected to bring benefits in temperate areas, such as fewer deaths from cold exposure, etc; stresses on water resources will be exacerbated -by 2020, between 75 and 250 mil. of people will be exposed to increased water stress (Africa); by 2030, water security problems are projected to intensify (Australia, New Zealand); by 2050, freshwater availability is projected to decrease (Asia); high temperatures, drought, reduced water availability, hydropower potential, summer tourism and crop productivity (Southern Europe); changes in precipitation patterns and the glaciers disappearance will affect water availability (Latin America). Regarding the economic impact of sea-level rise, relatively poor regions have to spend a higher share of their GDP on protection than richer regions (Deke et al., 2001). ...
The globalization of the digital technology and of the Internet
is the main factors which in the last decades have created a free and commercial market economy. This market has given birth to a new type of client whose needs, desires and approaches are completely different.
These clients have become more pretentious with regard to the way in which the companies interact with them and haw they are treated. The current marketing must recognize and communicate with this new type of client in order to achieve success in this client economy dominated age. This paper will present the importance of the three factors (exploration, loyalty and regaining the client) in order to give the possibility to the organization to better react to the constant changes on the market. Based on the interaction with the client and the chosen
contact method, the perception and the reaction marketing is the only way for the company.
... The growing body of literature on climate change reports that the agricultural sector is vulnerable to both physical and economical changes (Gbetibouo & Hassan, 2005). These have a direct effect on agricultural supply and its attendant high commodity price and the re-allocation of resources within the agricultural sector (Deke et al., 2001). Many other empirical studies have projected that the effect on developing countries will be greater. ...
Assessment of the level of smallholders’ vulnerability to climate variability and the adaptive capacity will provide information required for adequate policy formulation for the adaptation and improvement of food security among poor farming households. This article utilised data from a survey of 223 small farming households in the Eastern Cape province, one of the poorest agrarian provinces in South Africa, to explore the exposure of smallholder farmers to climate change, their adaptive capacity and their vulnerability to climate shock across major agro-ecological zones. Data on the production of main staple foods, household assets and access to institutional facilities were analysed by means of principal component analysis. General circulation model scenarios were used with a crop model (EPIC) to explore the impact of future plausible climate patterns on farmers’ income. Farmers in the Karoo zone are currently the most vulnerable to climate variability. A scenario analysis also showed that maize production in the Eastern Cape will be positively affected by climate change under both low-input and irrigated management systems, whereas potato yield will decrease. It is projected that smallholder farmers who significantly rely on maize can expect an increase of up to 45 per cent revenue by 2050 under the UKMO-HADGEM1 climate scenario if the average estimated future yields materialise. Both institutional and infrastructural support in the form of access to credit and irrigation facilities are recommended for adequate adaptation to future climate change impact, in particular climate volatility, which was not taken into account in our yield projections.
... In short time duration the CGE model are not able to capture the time based feedbacks of a region or over the sectors. So the CGE can give either static simulation of a current or future time period (e.g., Bosello et al. 2006;2007a,b;Roson & Van der Mensbrugghe, 2012;Ciscar et al. 2011) or dynamic simulation through time by endogenous accumulation of capital with investment determined by current economic variables (e.g., Deke, 2001;Eboli et al., 2010;Bosello et al., 2012). ...
This chapter compares two quantitative frameworks, namely, Computable General Equilibrium (CGE) and Econometric models to study the impacts of climate change on human economy. However, as is inferred from this chapter, CGE framework is fraught with unrealistic assumptions, and fails to capture impacts of climate change and extreme events on the ecosystem services. On the other hand, econometric framework can be customised and is not based on the unrealistic assumptions like CGE. The various advantages and disadvantages of the two methods have been discussed critically in the process in this chapter in light of the avowed objective of understanding sustainability science.
... The Dynamic Applied Regional Trade (DART) model (Deke, Hooss, Kasten, Klepper, & Springer, 2001) was developed at the Kiel Institute for World Economics for the purpose of assessing the impacts of climate change and climate policy. DART has been used to assess prevailing issues in the debate of the Kyoto Protocol such as different regimes for international emissions trading and to investigate the implications of different degrees of capital mobility. ...
... Likewise, a production capital destruction generated by a catastrophic event is translated into a reduction in production and, as a consequence, into a price increase. The readjustment process in terms of price, quantity and consumption generates a new equilibrium with a different value on welfare and utility (Deke et al., 2001;Darwin and Tol, 2001). Variation in energy demand, costs for investments and productivity and consumption change can also be computed in the model to estimate positive and negative economic impacts generated in specific markets or regions. ...
Purpose
– The increasing complexity of the present economic system and the strong interdependencies existing between production activities taking place in different world areas make modern societies vulnerable to crisis. The global supply chain is a paradigmatic example of economic structures on which the impacts of unexpected events propagate rapidly through the system. Climate change, which affects societies all over the world, is one of the most important factors influencing the efficiency of the present economic networks. During the last decades a large set of studies have been oriented to investigate the direct impacts generated on specific geographical areas or productions. However, a smaller number of analyses have been oriented to quantify the cascading and indirect economic effects generated all over the world. The paper aims to discuss these issues.
Design/methodology/approach
– The main objective of this paper is to provide an overview of the main studies, methodologies and databases used to investigate the climate vulnerability of the global supply chain.
Findings
– The great complexity of the global economic system, coupled with methodological and data gaps, makes it difficult to estimate the domino effects of unexpected events. A clear understanding of the possible consequences generated all over the world is, however, a fundamental step to build socio-economic resilience and to plan effective adaptation strategies.
Originality/value
– The information provided in this paper can be useful to support further studies, to build consistent quantification methodologies and to fill the possible data gap.
... It is evidently not feasible to study all vulnerable coastlines in the required detail, and a global assessment of SLR damage will therefore necessarily have to be based on a top-down approximation (Fankhauser, 1995). There are only a few studies that look at the general equilibrium effects of SLR (Darwin and Tol, 2001;Deke et al., 2001;Bosello et al., 2007Bosello et al., , 2012. Darwin and Tol (2001) have suggested that the results from such models could be significantly more realistic than simpler approaches considering only direct economic impacts and ignoring the effects of variations in prices and international trade. ...
This paper develops a modelling framework that links GEMINI-E3, a multi-regional, multi-sectoral computable general equilibrium model with a cost-benefit analysis approach at local level using geographical information system tools to assess the physical and economic consequences of sea-level rise (SLR) in the twenty first century. A set of future scenarios is developed spanning the uncertainties related to global warming, the parameters of semi-empirical SLR estimates, and coastal developments (cropland, urban areas and population). The importance of incorporating uncertainties regarding coastal development is highlighted. The simulation results suggest that the potential development of future coastal areas is a greater source of uncertainty than the parameters of SLR itself in terms of the economic consequences of SLR. At global level, the economic impact of SLR could be significant when loss of productive land along with loss of capital and forced displacement of populations are considered. Furthermore, highly urbanised and densely populated coastal areas of South East Asia, Australia and New Zealand are likely to suffer significantly if no protective measures are taken. Hence, it is suggested that coastal areas needs to be protected to ameliorate the overall welfare cost across various regions.
... There are some estimates for low-and middle-income nations -for instance one study suggested that the cost of coastal protection for a 1m sea-level rise would range from a minimum of 0.01 per cent of GDP per year in Latin America to a maximum of 0.2 per cent of GDP per year for China. 281 Direct protection costs against 0.13m sea-level rise in 2030 is much smaller -from 0.001 per cent of GDP in Latin America to 0.035 per cent of GDP in India. 282 Other studies suggest that "high levels of coastal protection" are possible (for instance more than 70 per cent of the threatened coast) but the usefulness of such calculations might be in doubt if the 20-30 per cent of the coast that is not easily protected included most of the major cities. ...
This paper derives the seasonal factors from the US temperature, gasoline price, and fresh food price data sets using the Kalman state smoother and the principal component analysis. Seasonality in this paper is modeled by the autoregressive process and added to the random component of the time series. The derived seasonal factors show a common feature: their volatilities have increased over the last four decades. Climate change is undoubtedly reflected in the temperature data. The three data sets’ similar patterns from the 1990s suggest that climate change may have affected the prices’ volatility behavior.
La thèse modélise différents canaux macroéconomiques de transmission de la transition énergétique dans deux scénarios officiels sur le système énergétique français, selon différentes évolutions du prix des énergies et structures d’information des agents privés. Un modèle hybride associe un modèle en équilibre général dynamique et un modèle d’optimisation du système de production d’électricité. Il modélise notamment des ménages sous contraintes de liquidité, les services énergétiques produits par les biens durables des ménages, différents scénarios du prix des énergies, les effets d’une taxe carbone, et deux structures d’information selon que les agents anticipent ou non parfaitement le futur. Les résultats suggèrent l’importance de l’effet prix sur la consommation d’énergie par les agents (plutôt que l’augmentation des investissements de décarbonation du mix électrique), le rôle joué par les investissements dans les biens durables et en capital, les différences de comportement entre ménages ricardiens et non ricardiens. Les effets de la fiscalité carbone varient selon l’évolution du prix de l’énergie non-électrique ; si ses recettes sont redistribuées, elle ne lèse par forcément le bien-être des ménages dans le modèle. Si les agents anticipent le futur, la décarbonation est favorisée sans peser significativement sur la croissance. Pour atteindre la neutralité carbone, davantage d’efforts d’efficacité énergétique et en matière de transferts d’usage semblent nécessaires.
The ability of food systems to respond to climate change is both exciting and underappreciated. This chapter examines potential producer and consumer responses to climate change, their ability to mitigate otherwise negative effects on food security, and the role of public and private organizations in investing in adaptation when individual responses are inadequate. This research, on the other hand, attempted to delve into the literature on climate change and adaptation policies by looking into the relationship between climate change and food security, adaptation, and agriculture in developing countries, specifically Malaysia. It is necessary to address some important issues concerning climate change and food security in this chapter in order to gain a better understanding of adaptation concepts and climate change as they relate to food security. Many studies have highlighted the negative net impact of climate change on agriculture. Most studies have shown that Sub-Saharan Africa is one of the most vulnerable regions to climate change, with the majority of people reliant on climate-sensitive agricultural systems. According to a review of the literature on food security issues, food production alone would not be able to contribute to overall food security because food production is dependent on a variety of climatic conditions and factors. Many reports in particular define the negative effects based on forecasts for various time segments and suggest that the amount of rainfall is decreasing in trend and will continue to decrease in the future with some uncertainty regarding its amount. Although a mild rise in temperature (between 1 and 3 °C) may support food production in temperate regions, it may have a negative effect in tropical and seasonally dry areas. Furthermore, this study discovered a scarcity of studies on adaptive capacities in developing countries that represent the introduction of a certain level of adaptation alternative that can be used as a benchmark for measuring food security or food sustainability. Therefore, the aim of this chapter is to discuss the different climate change adaptive capacities and concerns for food sustainability particularly in Malaysian context.
A recent review of common modelling practices conducted during the Workshop “Shaping long-term baselines with Computable General Equilibrium (CGE) models” held at OECD in January 2018 showed that models include different assumptions on changes to the production function along their dynamic baselines. These changes imply shifts in sectoral compositions for the projected economies (i.e. structural change). This paper reviews the assumptions made by 24 modeling teams about supply-side drivers of structural change: primary factor efficiency and changes in input-output structures of the production function over time. We critically review various methodologies, identifying state-of-the-art practices, and we propose simple guidelines, particularly focusing on consistency between data sources and models. The review highlights that most models take into account structural change to some extent. However, more effort is needed in modelling projected changes in input-output structures. Furthermore, this review is helpful for understanding the functioning of dynamic CGE models and in assisting dynamic CGE modelers in building their own baselines.
İklim değişikliği, inşaat alanında olumsuz etkiler yaratmaktadır. İklimsel koşullar, iş yönetimini zorlaştırmakta, işin öngörülen zaman ve maliyetle bitirilmesinde sorunlara yol açmaktadır. Özellikle kar, yağmur gibi yağışlarda görülen değişikliklerin inşaat sektöründe olumsuz etkileri bulunmaktadır. Bu bağlamda, çalışmada, İstanbul ilinde yapılmış olan bir inşaatta yapım öncesi planlanan zaman ve maliyet ile uygulama sonrası gerçekleşen süre ve maliyet kıyaslanmaktadır. Bu çalışma, iklim değişikliğinin inşaat maliyetine etkisini gösteren bir formül ortaya koymuştur. Bu formül sayesinde; iklim değişikliği maliyet hesaplarına bir katsayı olarak eklenebilecek, iklim değişikliğinin projeye hangi oranda zarar vereceği hesaplanabilecektir. Formül sadece Türkiye’de değil, uluslararası kullanılabilir niteliktedir.
Coastal ecosystems are linked to socio-economic development, but simultaneously, are particularly vulnerable to anthropogenic climate change and sea level rise (SLR). Within this scope, detailed topographic data resources of Spercheios River and Maliakos Gulf coastal area in Greece, combined with information concerning the economic value of the most important sectors of the area (wetland services, land property, infrastructure, income) were employed, so as to examine the impacts of three SLR scenarios, compiled based on the most recent regional projections reviewed. Based on the results, in the case of 0.3 m, 0.6 m and 1.0 m SLR the terrestrial zone to be lost was estimated to be 6.2 km2, 18.9 km2 and 31.1 km2, respectively. For each scenario examined, wetlands comprise 68%, 41% and 39% of the total area lost, respectively, reflecting their sensitivity to even small SLR. The total economic impact of SLR was estimated to be 75.4 × 106 €, 161.7 × 106 € and 510.7 × 106 € for each scenario, respectively (3.5%, 7.5% and 23.7% of the gross domestic product of the area), 19%, 17% and 8% of which can be attributed to wetland loss. The consequences of SLR to the ecosystem services provided are indisputable, while adaptation and mitigation planning is required.
This chapter compares two quantitative frameworks, namely, Computable General Equilibrium (CGE) and Econometric models to study the impacts of climate change on human economy. However, as is inferred from this chapter, CGE framework is fraught with unrealistic assumptions, and fails to capture impacts of climate change and extreme events on the ecosystem services. On the other hand, econometric framework can be customised and is not based on the unrealistic assumptions like CGE. The various advantages and disadvantages of the two methods have been discussed critically in the process in this chapter in light of the avowed objective of understanding sustainability science.
The present research offers an economic assessment of climate change impacts on the four major crop families characterizing Nigerian agriculture. The evaluation is performed by shocking land productivity in a computable general equilibrium model tailored to replicate Nigerian economic development up to 2050. The detail of land uses in the model has been increased by differentiating land types per agro-ecological zones. Uncertainty about future climate is captured, using, as inputs, yield changes computed by a crop model under ten general circulation models runs. Climate change turns out to be negative for Nigeria in the medium term, with production losses and increase in crop prices, higher food dependency on foreign imports, and GDP losses in all the simulations after 2025. In a second part of the paper, a cost effectiveness analysis of adaptation in Nigerian agriculture is conducted. The adaptation practices considered are a mix of cheaper “soft measures” and more costly “hard” irrigation expansion. The main result is that the cost effectiveness of the whole package depends crucially on the possibility of implementing adaptation by exploiting low-cost opportunities which show a benefit-cost ratio larger than one in all the climate regimes.
Climate change damage (or, more correctly, impact) func- tions relate variations in temperature (or other climate variables) to economic impacts in various dimensions, and are at the basis of quantitative modeling exercises for the assessment of climate change policies. This document pro- vides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific damage func- tions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows, and households’ energy demand. All parameters of the damage functions are estimated for each of the 140 countries and regions in the Global Trade Analysis Project 9 data set. To illustrate the salient characteristics of the estimates, the change in real gross domestic product is approximated for the different effects, in all regions, corresponding to an increase in average temperature of +3°C. After consider- ing the overall impact, the paper highlights which factor is the most significant one in each country, and elaborates on the distributional consequences of climate change.
Coastal sector impacts from sea level rise (SLR) are a key component of the projected economic damages of climate change, a major input to decision-making and design of climate policy. Moreover, the ultimate global costs to coastal resources will depend strongly on adaptation, society’s response to cope with the local impacts. This paper presents a new open-source optimization model to assess global coastal impacts from SLR from the perspective of economic efficiency. The Coastal Impact and Adaptation Model (CIAM) determines the optimal strategy for adaptation at the local level, evaluating over 12,000 coastal segments, as described in the DIVA database (Vafeidis et al. 2006), based on their socioeconomic characteristics and the potential impacts of relative sea level rise and uncertain sea level extremes. A deterministic application of CIAM demonstrates the model’s ability to assess local impacts and direct costs, choose the least-cost adaptation, and estimate global net damages for several climate scenarios that account for both global and local components of SLR (Kopp et al. 2014). CIAM finds that there is large potential for coastal adaptation to reduce the expected impacts of SLR compared to the alternative of no adaptation, lowering global net present costs through 2100 by a factor of seven to less than $1.7 trillion, although this does not include initial transition costs to overcome an under-adapted current state. In addition to producing aggregate estimates, CIAM results can also be interpreted at the local level, where retreat (e.g., relocate inland) is often a more cost-effective adaptation strategy than protect (e.g., construct physical defenses).
Es sei dahingestellt, ob die Welt komplexer geworden ist oder ob wir ihre Komplexität zunehmend besser erkennen. In jedem Fall besteht inzwischen Konsens darüber, dass viele Probleme nur noch mit den einzelnen Disziplinen übergreifenden Ansätzen adäquat analysiert werden können. Bis in die Forschungsforderung hinein wird heute erwartet, dass die Forschung handlungsorientiert die komplexen Zusammenhänge des Globalen Wandels untersucht und dabei interdisziplinäre und integrative Ansätze wählt (BMBF 2001).
Impacts of climate change in developing countries remain poorly understood because few studies have successfully analyses the overall impact of climate on developing country economies. Agricultural growth is widely viewed as an effective and most important way to reduce poverty in developing countries which are hardly hit by the adverse effects of climate change (Datt and Ravallion, 1996). Despite this knowledge the main challenge is how to increase agricultural productivity to improve household welfare and increase food security in these changing and challenging climatic conditions. This study used the multinomial logit model to analyse the determinants of farmers' choice of crop variety in the face of climate change. The estimation of the multinomial logit was done by using the sorghum variety options as dependent variable and where farmers grow other crop different from sorghum as the reference state. Results show that the key determinants of choosing crop variety are; the price of existing crop variety, level of education of farmers, the size of the farms, government policies and incentives and credit availability.
Introduction. Adaptation to climate change has become a strategic negotiation issue only recently, although the UNFCCC has referred to it in Article 2 and Article 4. The difficulty of implementing national and international mitigation policies and the increasing awareness of climate inertia eventually put adaptation under the spotlight of science and policy. The EU released a Green Paper on Adaptation (European Commission 2007b) and many EU countries have prepared and started to implement national adaptation plans. The Bali action plan adopted at the December 2007 conference has identified the need for enhanced adaptation action by the Parties of the Convention, and adaptation is among the five key building blocks for a strengthened response to climate change. COP 13 has established the Adaptation Fund Board with the role of managing the Adaptation Fund, established at COP 7. COP 14, held in Poznán in 2008, also made some progress on a number of important issues concerning adaptation. The ultimate question that interests policy makers is how to reduce the climate change vulnerability of socioeconomic systems in the most cost-effective way. This objective can be achieved with both mitigation and adaptation. It also requires, on the one hand, a thorough knowledge of the size and the regional distribution of damages and, on the other hand a precise assessment of the cost-effectiveness of alternative policies. Given its local- and project-specific nature, a cost-benefit analysis (CBA) of adaptation strategies has been treated from a micro-perspective.
This section introduces the main methodologies used by the climate change impact science to assess economically the consequences of climate change. Furthermore it presents the main findings of this literature focusing specifically on possible future economic consequences of climate change in the Mediterranean area emphasizing the new knowledge in this field brought by the CIRCE project. The robust finding of the literature points out a low economic vulnerability of Euro-Mediterranean countries (with losses ranging from −0.25 to −1.4% of GDP for extreme temperature scenarios or even slight gains), and a higher vulnerability of North African and Eastern-Mediterranean countries (of roughly 2% of GDP by the mid of the century). Against this background the CIRCE project proposes one of the first attempts to perform a detailed integrated impact assessment exercise focusing on the Mediterranean area. With the IPCC A1B SRES scenario as reference, impacts related to energy demand, sea-level rise and tourism, have been economically assessed by a general equilibrium model. The Mediterranean as a whole loses 1.2% of GDP with the Northern-Mediterranean countries clearly less vulnerable than the Southern-Mediterranean ones. Among the former the average loss in 2050 is 0.5% of GDP, while among the latter this more than doubles. Particularly adversely affected are Cyprus, Albania and the Eastern Mediterranean region (−1.6, −2.4, −1.5% of GDP respectively in 2050). In terms of impact types, tourism and sea-level rise are clearly the most threatening, while GDP impacts induced by demand re-composition of energy use is less of an issue and often positive.
This study used a quadratic programming sector model to assess the integrated impacts of climate change on the agricultural economy of Egypt. Results from a dynamic global food trade model were used to update the Egyptian sector model and included socio-economic trends and world market prices of agricultural goods. In addition, the impacts of climate change from three bio-physical sectors – water resources, crop yields, and land resources – were used as inputs to the economic model. The climate change scenarios generally had minor impacts on aggregated economic welfare (sum of Consumer and Producer Surplus or CPS), with the largest reduction of approximately 6 percent. In some climate change scenarios, CPS slightly improved or remained unchanged. These scenarios generally benefited consumers more than producers, as world market conditions reduced the revenue generating capacity of Egyptian agricultural exporters but decreased the costs of imports. Despite increased water availability and only moderate yield declines, several climate change scenarios showed producers being negatively affected by climate change. The analysis supported the hypothesis that smaller food importing countries are at a greater risk to climate change, and impacts could have as much to do with changes in world markets as with changes in local and regional biophysical systems and shifts in the national agricultural economy.
Previous studies suggest that the expected global warming from the greenhouse effect could raise sea level 50 to 200 cm (2 to 7 ft) in the next century. This article presents the first nationwide assessment of the primary impacts of such a rise on the United States: (1) the cost of protecting ocean resort communities by pumping sand onto beaches and gradually raising barrier islands in place; (2) the cost of protecting developed areas along sheltered waters through the use of levees (dikes) and bulkheads; and (3) the loss of coastal wetlands and undeveloped lowlands. The total cost for a 1‐m rise would be between $270 and $475 billion, ignoring future development.We estimate that if no measures are taken to hold back the sea, a 1‐m rise in sea level would inundate 30,000 sq km (14,000 sq mi), with wet and dry land each accounting for about half the loss. The 1500 sq km (600–700 sq mi) of densely developed coastal lowlands could be protected for approximately $1000 to $2000 per year for a typical coastal lot. Given high coastal property values, holding back the sea would probably be cost‐effective.The environmental consequences of doing so, however, may not be acceptable. Although the most common engineering solution for protecting the ocean coast, pumping sand, would allow us to keep our beaches, levees and bulkheads along sheltered waters would gradually eliminate most of the nation's wetland shorelines. To ensure the long‐term survival of coastal wetlands, federal and state environmental agencies should begin to lay the groundwork for a gradual abandonment of coastal lowlands as sea level rises.
This paper analyses the relative role of protection and mitigation expenditures within the total costs of climate change induced sea level rise. It derives a rule of thumb to approximate the optimal level of protection. Economic efficiency requires that protection expenditures are designed such that the sum of protection costs plus remaining land loss damage is minimised. A formula is derived according to which the optimal protection level depends on the relative importance of dryland loss compared to the costs of accelerated wetland loss plus protection expenditures. This framework is then used to estimate sea level rise damage cost functions for the countries of the OECD. -Author
A low-order physical-biogeochemical climate model was used to project atmospheric carbon dioxide and global warming for scenarios
developed by the Intergovernmental Panel on Climate Change. The North Atlantic thermohaline circulation weakens in all global
warming simulations and collapses at high levels of carbon dioxide. Projected changes in the marine carbon cycle have a modest
impact on atmospheric carbon dioxide. Compared with the control, atmospheric carbon dioxide increased by 4 percent at year
2100 and 20 percent at year 2500. The reduction in ocean carbon uptake can be mainly explained by sea surface warming. The
projected changes of the marine biological cycle compensate the reduction in downward mixing of anthropogenic carbon, except
when the North Atlantic thermohaline circulation collapses.
A coupled physical-biogeochemical climate model that includes a dynamic global vegetation model and a representation of a coupled atmosphere-ocean general circulation model is driven by the nonintervention emission scenarios recently developed by the Intergovernmental Panel on Climate Change (IPCC). Atmospheric CO 2 , carbon sinks, radiative forcing by greenhouse gases (GHGs) and aerosols, changes in the fields of surface-air temperature, precipitation, cloud cover, ocean thermal expansion, and vegetation structure are projected. Up to 2100, atmospheric CO 2 increases to 540 ppm for the lowest and to 960 ppm for the highest emission scenario analyzed. Sensitivity analyses suggest an uncertainty in these projections of À10 to +30% for a given emission scenario. Radiative forcing is estimated to increase between 3 and 8 W m -2 between now and 2100. Simulated warmer conditions in North America and Eurasia affect ecosystem structure: boreal trees expand poleward in high latitudes and are partly replaced by temperate trees and grasses at lower latitudes. The consequences for terrestrial carbon storage depend on the assumed sensitivity of climate to radiative forcing, the sensitivity of soil respiration to temperature, and the rate of increase in radiative forcing by both CO 2 and other GHGs. In the most extreme cases, the terrestrial biosphere becomes a source of carbon during the second half of the century. High GHG emissions and high contributions of non-CO 2 agents to radiative forcing favor a transient terrestrial carbon source by enhancing warming and the associated release of soil carbon.
A structurally highly simplified, globally integrated coupled climate-economic costs model SIAM (Structural Integrated Assessment Model) is used to compute optimal paths of global CO2 emissions that minimize the net sum of climate damage and mitigation costs. The model is used to study the sensitivity of the computed optimal emission paths with respect to various critical input assumptions. The climate module is represented by a linearized impulse-response model calibrated against a coupled ocean-atmosphere general circulation climate model and a three-dimensional global carbon-cycle model. The cost terms are represented by strongly simplified expressions designed for maximal transparency with respect to sensitive input assumptions. These include the discount rates for mitigation and damage costs, the inertia of the socio-economic system, and the dependence of climate damages on the change in temperature and the rate of change of temperature. Different assumptions regarding these parameters are believed to be the cause of the marked divergences of existing cost-benefit analyses based on more sophisticated economic models. The long memory of the climate system implies that very long time horizons of several hundred years need to be considered to optimize CO2 emissions on time scales relevant for a policy of sustainable development. Cost-benefit analyses over shorter time scales of a century or two can
Estimates of the true economic cost that might be attributed to greenhouse-induced sea-level rise on the developed coastline of the United States are offered for the range of trajectories that is now thought to be most likely. Along a 50-cm sea level rise trajectory (through 2100), for example, transient costs in 2065 (a year frequently anticipated for doubling of greenhouse-gas concentrations) are estimated to be roughly 70 million (undiscounted, but measured in constant 199070 million (undiscounted, but measured in constant 1990). More generally and carefully cast in the appropriate context of protection decisions for developed property, the results reported here are nearly an order of magnitude lower than estimates published prior to 1994. They are based upon a calculus that reflects rising values for coastal property as the future unfolds, but also includes the cost-reducing potential of natural, market-based adaptation in anticipation of the threat of rising seas and/or the efficiency of discrete decisions to protect or not to protect small tracts of property that will be made when necessary and on the (then current) basis of their individual economic merit.
A new periodically synchronous coupling scheme has been applied to an atmosphere-ocean general circulation model. Due to
a temporary switching off of the atmospheric model this scheme can considerably reduce computer requirements of coupled model
experiments. In order to evaluate the new coupling scheme the model results are compared to corresponding synchronously coupled
integrations. Experiments with fixed present-day CO2 concentration and a gradual increase of CO2 show a good reproduction of the mean state and the climate-change pattern, respectively. The deviations from the synchronously
coupled experiments are in the range of the variability of the corresponding synchronously coupled runs. Due to the forcing
during the ocean-only periods the short-term fluctuations are underestimated and the long-term variability is overestimated.
Impulse-response-function (IRF) models are designed for applications requiring a large number of climate change simulations, such as multi-scenario climate impact studies or cost-benefit integrated-assessment studies. The models apply linear response theory to reproduce the characteristics of the climate response to external forcing computed with sophisticated state-of-the-art climate models like general circulation models of the physical ocean-atmosphere system and three-dimensional oceanic-plus-terrestrial carbon cycle models. Although highly computer efficient, IRF models are nonetheless capable of reproducing the full set of climate-change information generated by the complex models against which they are calibrated. While limited in principle to the linear response regime (less than about 3 degreesC global-mean temperature change), the applicability of the IRF model presented has been extended into the nonlinear domain through explicit treatment of the climate system's dominant nonlinearities: CO2 chemistry in ocean water, CO2 fertilization of land biota, and sublinear radiative forcing. The resultant nonlinear impulse-response model of the coupled carbon cycle- climate system (NICCS) computes the temporal evolution of spatial patterns of climate change for four climate variables of particular relevance for climate impact studies: near- surface temperature, cloud cover, precipitation, and sea level. The space-time response characteristics of the model are derived from an EOF analysis of a transient 850-year greenhouse warming simulation with the Hamburg atmosphere-ocean general circulation model ECHAM3-LSG and a similar response experiment with the Hamburg carbon cycle model HAMOCC. The model is applied to two long-term CO2 emission scenarios, demonstrating that the use of all currently estimated fossil fuel resources would carry the Earth's climate far beyond the range of climate change for which reliable quantitative predictions are possible today, and that even a freezing of emissions to present-day levels would cause a major global warming in the long term.
En la UE se ha estimado que los costes de la congesti�n representan el 2% de su PIB y que el coste de la poluci�n del aire y ruido supera el 0,6% del PIB, siendo alrededor del 90% de los mismos ocasionados por el transporte terrestre. Ante este hecho y el continuo aumento de la demanda del transporte privado frente al p�blico para los desplazamientos, muchos abogan por una conjunci�n de medidas tanto restrictivas como alternativas al uso del coche. Dentro de las primeras se encuentra el establecimiento de un peaje o una tarifa por el uso de las carreteras, medida que aunque desde el punto de vista de la Teor�a Econ�mica es la manera m�s eficiente para corregir el fallo de mercado que supone la congesti�n, desde la visi�n de pol�ticos y del p�blico no goza de gran aceptaci�n. En este trabajo se pretende hacer una simulaci�n de los efectos que tendr�a sobre el bienestar social de la implantaci�n de una medida de este tipo en la Bah�a de C�diz. In the European Union it has been estimated that the congestion cost are the 2% of the gross domestic product and the cost of pollution and noise is over 0,6%, olso it is known that the 90% of this cost are caused by overland transport. For this reason and for the always increasing demand of private transport, there are professionals who thinks that the solution have to be restrictive measures added to alternatives to the car. road pricing is a restrictive measures that for the economic theory is the most efficient way to solve congestion cost but for politicians and user of transport is not always accepted. In this study we are going to simulate road pricing for commuters in the Bah�a of C�diz and then it will be estimated welfare effects.
Without a doubt, climate change will be one of the most important environmental topics of the 1990s and will be high on the research agendas of many scientific disciplines in years ahead. While not yet universally accepted, it is now widely believed that anthropogenic emissions of carbon dioxide and other “greenhouse” gases have the potential to substantially warm climates worldwide. Although there is no consensus on the timing and magnitude of global warming, current climate models predict an average increase of 2.8°C to 5.2°C in the earth's temperature over the next century (Karl, Diaz, and Barnett). Changes in regional temperature and precipitation will likely accompany the global warming, but there is even less scientific agreement on the magnitude of these changes.
For analyzing the impact of climate change and of international climate policies on the international division of labor and on regional welfare the use of a disaggregated multi–sectoral, multi–regional dynamic computable general equilibrium model is appropriate. This paper discusses the problems of defining an appropriate benchmark against which policy simulations and climate change impacts can be assessed. It explicitly considers regionally differentiated growth rates by basing the development of the parameters which determine human and physical capital growth, technical progress and technology diffusion as well as savings decisions on historical developments and estimates in the literature. A sensitivity analysis of important parameters is performed.
Over the last three decades the developing world has witnessed a large and increasing divergence in saving rates: they have doubled in East Asia, stagnated in Latin America, and collapsed in Sub-Saharan Africa. These regional saving disparities have been closely reflected in the respective growth performances: across world regions, higher saving rates have come with higher income growth. Against such background, this paper lays out a research agenda to address three broad questions of direct policy relevance. First, who do saving rates differ so much across countries and time periods? Second, how much do higher saving rates contribute to raising growth? And third, what policy measures are the most effective to raise national saving? The paper surveys broad saving trends across the world, reviews the current knopwledge about consumption and saving, and identifies the main unresolved questions to be addressed by the research. The proposed agenda starts from the construction of an international database on saving and related macroeconomic variables, and includes work focused on specific policy issues that cut across a broad range of countries as well as research focused on regional and country experiences. The paper spells out in detail the analytical and methodological framework to be used by the different research components.
Climatic variability contributes to severe problems for the people of the semi-arid parts of Africa through drought-related food shortages. The 1984 drought that afflicted the Sahelian region and eastern and southern Africa focused attention on this, and in Kenya the National Environment Secretariat initiated a project to study this problem in an area of central and eastern Kenya. This case study presents a detailed climate impact assessment for three districts - Kirinyaga, Embu and Machakos - which include a range of conditions from a humid tea-growing agroclimate to semi-arid grazing lands. The study area's climate is described and the nature of drought discussed. Kenya's past and present policies toward development of the semi-arid (traditionally drought-prone) areas and drought preparedness are reviewed. Various agroclimatic and socioeconomic aspects and some linkages among them are explored, utilizing several models. The policy implications of the results are then discussed. -from Editors
The IPCC Report on potential effects of climate change on agriculture concluded that it is not yet clear whether climate change will increase or decrease the potential for global food production. However, recent work suggests that the net effect on potential production, globally averaged, will tend to be adverse. Projected changes in temperature and precipitation imply increases in potential production in mid latitude regions and, in general, decreases in low latitude areas. Climate change is thus likely to accentuate current inequalities in the world geography of agricultural potential.
The study combines the CERES-wheat (Triticum aestivum L.) crop growth model and climate change scenarios to estimate the possible impacts of climate change on wheat production (the main food crop of the country) in 19 sites of Russia and the former Soviet Republics. The sensitivity of the crop model to arbitrary incremental temperature and precipitation changes was estimated in two regions. A 2 C increase in temperature decreased yields by an average of {approx} 20% and a temperature increase of 4 C resulted in yield decreases of > 30%. These yield decreases probably result from a shortening of the wheat season length under a higher temperature. Changes by {+-} 20% in the precipitation had a smaller impact in simulated wheat yields than the changes in temperature. The GCM climate change alone resulted in considerable regional differences in simulated changes in wheat yields compared with baseline yields. In general, the climate change scenarios used were more favorable for winter than for spring wheat yields. The simulation study considered the beneficial physiological effects of CO{sub 2} on wheat yields. 38 refs., 4 figs., 5 tabs.
Climate change and related global concerns dominate the current environmental agenda, while most atmospheric scientists agree that a climate change "signal' has yet to be detected, concern over potential climate change arising from "greenhouse' gases is motivating substantial funding increases for such research. Several questions seem relevant in current discussions, among the problems faced by mankind, does climate change warrant this current attention? Are the costs of slowing a CO2 buildup justified by the benefits? Is there even a role for economic analysis in view of the long time horizons and the associated uncertainties in critical natural and physical science data? The objective of this paper is to provide an economic perspective on these questions, including an overview of contemporary economic thinking on some central research issues surrounding climate change; and an assessment of whether economic adjustments are likely to soften or offset the negative effects suggested by current research. The discussion draws heavily upon a sizable and growing economic literature on global climate change. The empirical focus is on agriculture and related resource use. Climate change effects are given numerical weight with updated evidence from a recent economic analysis of US agriculture. Such quantitative information can suggest the degree of urgency associated with implementing CO2 control policies. -from Author
Climate change could have far‐reaching effects on agriculture, trade patterns, development and food security. This article examines quantitatively the impact of climate change on food production and numbers at risk of hunger, allowing for factors such as latitude and farming practice. Globally, a doubling of atmospheric carbon dioxide (CO2) level may lead to a small to moderate decrease in food production, but developing countries would bear the brunt of the consequences. To prevent widespread hunger, the agricultural industry should develop management programmes for hot and dry conditions, in conjunction with measures to slow the growth of the human population and reduce emissions of greenhouse gases.
The author is solely responsible for the contents and distribution of each Kiel Working Paper. Since the series involves manuscripts in a preliminary form, interested readers are requested to direct criticism and suggestions directly to the author and to clear any quotations with her.
Establishing the link between atmospheric CO2 concentration and anthropogenic carbon emissions requires the development of complex carbon cycle models of the primary sinks, the ocean and terrestrial biosphere. Once such models have been developed, the potential exists to use pulse response functions to characterize their behaviour. However, the application of response functions based on a pulse increase in atmospheric CO2 to characterize oceanic uptake, the conventional technique, does not yield a very accurate result due to nonlinearities in the aquatic carbon chemistry. Here, we propose the use of an ocean mixed-layer pulse response function that characterizes the surface to deep ocean mixing in combination with a separate equation describing air-sea exchange. The use of a mixed-layer pulse response function avoids the problem arising from the nonlinearities of the carbon chemistry and gives therefore more accurate results. The response function is also valid for tracers other than carbon. We found that tracer uptake of the HILDA and Box-Diffusion model can be represented exactly by the new method. For the Princeton 3-D model, we find that the agreement between the complete model and its pulse substitute is better than 4% for the cumulative uptake of anthropogenic carbon for the period 1765–2300 applying the IPCC stabilization scenarios S450 and S750 and better than 2% for the simulated inventory and surface concentration of bomb-produced radiocarbon. By contrast, the use of atmospheric response functions gives deviations up to 73% for the cumulative CO2 uptake as calculated with the Princeton 3-D model. We introduce the use of a decay response function for calculating the potential carbon storage on land as a substitute for terrestrial biosphere models that describe the overturning of assimilated carbon. This, in combination with an equation describing the net primary productivity permits us to exactly characterize simple biosphere models. As the time scales of biospheric overturning are one key aspect to determine the amount of anthropogenic carbon which might be sequestered by the biosphere, we suggest that decay response functions should be used as a simple and standardized measure to compare different models and to improve understanding of their behaviour. We provide analytical formulations for mixed-layer and terrestrial biosphere decay pulse response functions which permit us to easily build a substitute for the ‘Bern’ carbon cycle model (HILDA). Furthermore, mixed-layer response functions for the Box-Diffusion, a 2-D model, and the Princeton 3-D model are given.
In recent years a growing concern that the increasing accumulation of greenhouse gases will lead to undesirable changes in global climate has resulted in a number of proposals, both in the United States and internationally, to set physical targets for reducing greenhouse gas emissions. But what will these proposals cost? Based on the authors' earlier ground-breaking work, Buying Greenhouse Insurance outlines a way to think about greenhouse-effect decisions under uncertainty. It describes an insightful model for determining the economic costs of limiting carbon dioxide emissions produced by burning fossil fuels and provides a solid analytical base for rethinking public policy on the farreaching issue of global warming. Manne and Richels present region-by-region estimates of the costs that would underlie an international agreement. Using a computer model known as Global 2100, they analyze the economic impacts of limiting C02 emissions under alternative supply and conservation scenarios. The results clearly indicate that a reduction in emissions is not the sole policy response to potential climate change. Following a summary of the greenhouse effect, its likely causes, and possible consequences, Manne and Richels take up issues that concern the public at large. They provide an overview of Global 2100, look at how the U.S. energy sector is likely to evolve under business-as-usual conditions and under carbon constraints, and describe the concept of "greenhouse insurance." They consider possible global agreements, including an estimate of benefits that might result from trading in an international market in emission rights. They conclude with a technical description directed toward modeling specialists.
Estimates of the marginal costs of greenhouse gas emissions are an important input to the decision how much society would want to spend on greenhouse gas emission reduction. Marginal cost estimates in the literature range between $5 and $25 per tonne of carbon. Using similar assumptions, the FUND model finds marginal costs of $9 23/tC, depending on the discount rate. If the aggregation of impacts over countries accounts for inequalities in income of 3. Marginal costs per region are an order of magnitude smaller than global marginal costs. The ratios between the marginal costs of CO2 and those of CH4 and N2O are roughly equal to the global warming potentials of these gases. The uncertainty about the marginal costs is large and right-skewed. The expected value of the marginal costs lies about 35% above the best guess, the 95-percentile about 250%.
Although the range of cultivated species is relatively restricted, domestic plants and animals exhibit considerable resilience to stochastic shocks, and the study of their ecological adaptability and critical physiological and phenological requirements is a valuable first step in determining their possible response to climatic change. Methods of assessing agroclimatic suitability and their limitations are discussed, and suggestions are made for simulating the probable impact of shifts in the main climatic parameters on the productivity and spatial distribution of key crops and livestock. Some regions and crops are climatically more vulnerable than others: some regions (in particular North America) are strategically more critical to the stability of world food supplies, while in others resources for agricultural production are under more severe pressure.As well as attempts to forecast long-term climatic trends and their effects on agriculture, combating climatic variability merits high priority. This is an ever-present source of instability in production and could be enhanced in association with changing climate. Its magnitude differs widely among crops and geographical regions, but its impact from year to year is often greater than that predicted from climatic change even in extreme scenarios. The paper indicates a number of potentially desirable areas for action and suggests that several of these would be beneficial both as a buffer against short-term effects of variability and as a means of combating climatic change.
The tolerable windows (TW) approach is presented as a novel scheme for integrated assessment of climate change. The TW approach is based on the specification of a set of guardrails for climate evolution which refer to various climate-related attributes. These constraints, which define what we call tolerable windows, can be purely systemic in nature – like critical thresholds for the North Atlantic Deep Water formation – or of a normative type – like minimum standards for per-capita food production worldwide. Starting from this catalogue of knock-out criteria and using appropriate modeling techniques, those policy strategies which are compatible with all the constraints specified are sought to be identified. In addition to the discussion of the basic elements and the general theory of the TW approach, a modeling exercise is carried out, based on simple models and assumptions adopted from the German Advisory Council on Global Change (WBGU). The analysis shows that if the global mean temperature is restricted to 2C beyond the preindustrial level, the cumulative emissions of CO2 are asymptotically limited to about 1550 Gt C. Yet the temporal distribution of these emissions is also determined by the climate and socio-economic constraints: using, for example, a maximal tolerable rate of temperature change of 0.2C/dec and a smoothly varying emissions profile, we obtain the maximal cumulative emissions, amounting to 370 Gt C in 2050 and 585 Gt C in 2100.
The Tolerable Windows Approach (TWA) to Integrated Assessments (IA) of global warming is based on external normative specifications of tolerable sets of climate impacts as well as proposed emission quotas and policy instruments for implementation. In a subsequent step, the complete set of admissible climate protection strategies which are compatible with these normative inputs is determined by scientific analysis. In doing so, minimum requirements concerning global and national greenhouse gas emission paths can be determined. In this paper we present the basic methodological elements of TWA, discuss its relation to more conventional approaches to IA like cost–benefit analyses, and present some preliminary results obtained by a reduced-form climate model.
Increasing concentrations of atmospheric CO2 and other greenhouse gases are expected to contribute to a global warming. This paper examines the potential implications of a climatic change corresponding to a doubling of atmospheric concentrations of CO2 on crop production opportunities throughout Ontario, a major food producing region in Canada. The climate is projected to become warmer and drier, but the extent of these shifts are expected to vary from region to region within Ontario. The effect of this altered climate on crop yields and the area of land capable of supporting specific crops varies according to region, soil quality and crop type. Most notable are the enhanced opportunities for grains and oilseeds in the northern regions, and the diminished production prospects for most crops in the most southerly parts of Ontario.
This paper describes a simulation study of some of the socio-economic consequences of a rise in sea level on Dutch society. A computer simulation model for the greenhouse problem has been developed, which tries to capture the climate change cause-effect relationship for a combination of greenhouse-gas emissions. The impact of emissions of greenhouse gases on global temperature and sea-level rise can be calculated using the model. Additionally, separate, independent modules have been implemented in order to quantify the socio-economic consequences for the Netherlands. Four consistent sets of scenarios have been developed, based on differences in economic growth, energy use, international environmental measures, etc. On the basis of these scenarios estimates are made of the costs of coastal defence and water management in the Netherlands as a result of adaptation to the impacts of sea-level rise.
An investigation is made of the possible impacts of a climatic change (induced by a doubling of atmospheric carbon dioxide concentration) on the European agricultural sector. Two general circulation models have been used to develop climatic change scenarios for the European study area. From the scenarios, information was obtained concerning the possible behavior of temperature, precipitation, solar radiation, and relative humidity in the altered climatic state. This meteorological information was then employed in two separate crop-weather models - an empirical/statistical model (for winter wheat) and a simple simulation model (for biomass potential). This type of approach represents a considerable departure from that employed by previous large-scale climate impact studies. Both the seasonal and regional components of a possible climatic change are incorporated directly in the two crop-weather models. The results of this investigation demonstrate that a simple crop-weather simulation model may be more suitable for the purposes of agricultural impact analysis than the linear regression models frequently used in such studies. In order for such an impact analysis to be accepted as a valid scientific experiment, a full presentation of the underlying assumptions and uncertainties is essential.
Inorganic carbon in the ocean is modelled as a passive tracer advected by a three-dimensional current field computed from a dynamical global ocean circulation model. The carbon exchange between the ocean and atmosphere is determined directly from the (temperature-dependent) chemical interaction rates in the mixed layer, using a standard CO2 flux relation at the air-sea interface. The carbon cycle is closed by coupling the ocean to a one-layer, horizontally diffusive atmosphere. Biological sources and sinks are not included. In this form the ocean carbon model contains essentially no free tuning parameters. The model may be regarded as a reference for interpreting numerical experiments with extended versions of the model including biological processes in the ocean (Bacastow R and Maier-Reimer E in prep.) and on land (Esser G et al in prep.). Qualitatively, the model reproduces the principal features of the observed CO2 distribution bution in the surface ocean. However, the amplitudes of surface pCO2 are underestimated in upwelling regions by a factor of the order of 1.5 due to the missing biological pump. The model without biota may, nevertheless, be applied to compute the storage capacity of the ocean to first order for anthropogenic CO2 emissions. In the linear regime, the response of the model may be represented by an impulse response function which can be approximated by a superposition of exponentials with different amplitudes and time constants. This provides a simple reference for comparison with box models. The largest-amplitude (0.35) exponential has a time constant of 300 years. The effective storage capacity of the oceans is strongly dependent on the time history of the anthropogenic input, as found also in earlier box model studies.
The long-term adjustment processes of atmosphere and ocean in response to gradually increased atmospheric CO2 concentration have been analysed in two 850-year integrations with a coupled atmosphere-ocean general circulation model (AOGCM).
In these experiments the CO2 concentration has been increased to double and four times the initial concentration, respectively, and is kept fixed thereafter.
Three characteristic time scales have been identified: a very fast response associated with processes dominated by the atmospheric
adjustment, an intermediate time scale of a few decades connected with processes in the upper ocean, and adjustment processes
with time scales of centuries and longer due to the inertia of the deep ocean. The latter in particular is responsible for
a still ongoing adjustment of the atmosphere-ocean system at the end of the integrations after 850 years. After 60 years,
at the time of CO2 doubling, the global mean near-surface air temperature rises by 1.4 K. In spite of the constant CO2 concentration during the following centuries the warming continues to 2.6 K after 850 years. The behaviour of the quadrupling
run is similar: global mean near-surface air temperature increases by 3.8 K at the time of CO2 quadrupling and by 4.8 K at the end of the simulation. The thermohaline circulation undergoes remarkable changes. Temporarily,
the North Atlantic overturning circulation weakens by up to 30% in the CO2 doubling experiment and up to 50% in the CO2 quadrupling experiment. After reaching the minimum the North Atlantic overturning slowly recovers in both experiments.
Projections of climate impacts on crop yields simulated for different General Circulation Model (GCM) scenarios are used, in a recursively dynamic general equilibrium framework, to account for potential economy-wide impacts of climate change in Egypt. Comparing these impact projections to those obtained under a reference, business-as-usual, scenario assuming some moderate changes in the political, economic or technological spheres, indicates that global warming has potentially negative effects. The analysis is based on a global assessment of potential climate change-induced variations in world commodity production and trade. The Egyptian agricultural sector, and the non-agricultural sector to a lesser extent, are projected to be increasingly less self-sufficient. Specific potential adverse impacts are identified. The simulation results show that high-cost adaptation measures involving major changes in the agricultural system and practices may mitigate these adverse impacts. Stimulating economic development of the rural areas and creating appropriate conditions for effective diffusion and development of technologies — particularly for the agricultural sector — would seem a desirable strategy. Perhaps, more importantly, the simulation results show that the assumption of exogenously determined technological progress may be inappropriate, in which case the potential adverse impacts of a future warming of the global climate are likely to be fewer than is indicated in this study — if prevailing constraints on productivity growth in the major food and feed grains are ‘released’ by endogenous advances in technology.
Output per worker varies enormously across countries. Why? On an accounting basis our analysis shows that differences in physical capital and educational attainment can only partially explain the variation in output per worker-we find a large amount of variation in the level of the Solow residual across countries. At a deeper level, we document that the differences in capital accumulation, productivity, and therefore output per worker are driven by differences in institutions and government policies, which we call social infrastructure. We treat social infrastructure as endogenous, determined historically by location and other factors captured in part by language. © 2000 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
This paper conveniently skips any controversy associated with the science of climate change. On the assumption that greenhouse gas emissions are causing climate change that is detrimental to humanity, the paper focuses on some economic dimensions of the issue which seem to be poorly understood by Australian media commentators, policy analysts, interest groups and the political parties. Using a neoclassical welfare economics framework the paper explores the costs and benefits of greenhouse gas abatement with reference to the findings of the Stern Report, the setting of greenhouse gas targets by Australian political parties, the danger of the government “picking winners” and the emerging carbon theory of value. The paper concludes with a brief review of the relative merits of a carbon tax and a cap and trade approach. Key Words: This paper conveniently skips any controversy associated with the science of climate change. On the assumption that greenhouse gas emissions are causing climate change that is detrimental to humanity, the paper focuses on some economic dimensions of the issue which seem to be poorly understood by Australian media commentators, policy analysts, interest groups and the political parties. Using a neoclassical welfare economics framework the paper explores the costs and benefits of greenhouse gas abatement with reference to the findings of the Stern Report, the setting of greenhouse gas targets by Australian political parties, the danger of the government “picking winners” and the emerging carbon theory of value. The paper concludes with a brief review of the relative merits of a carbon tax and a cap and trade approach.
The issue of global warming has become a major topic in the international environmental debate. Alternative climate policy measures can be evaluated with the help of a simulation model that integrates economic and natural science considerations. A fully integrated assessment of the two-way relationship between the world economy and the climate system requires the incorporation of the repercussions of climate change on economic processes into the analysis. This paper seeks to review the contributions of the economic literature dealing with the modelling of climate change impacts. We look at the structure, assumptions, and results of impact studies to illustrate how climate change impacts can be incorporated into Computable General Equilibrium Models (CGEs). As a point of reference a generic general equilibrium model is established and extended to incorporate climate change impacts on the economy.
Deriving Climate Protection Targets From Guard-rails for the Preservation of Terrestrial Ecosystems
- H Füssel
- J G Minnen
Füssel, H.-M., and J. G. van Minnen(2000): Deriving Climate Protection Targets From Guard-rails for the Preservation of Terrestrial Ecosystems. Integrated Assessment, accepted
Agricultural Adaption to Climate Change: Issues of Longrun Sustainability Vortrag gehalten auf der Konferenz Agricultural Economic Report
- D Schimmelpfennig
- J Lewandrowski
- J Reilly
- M Tsigas
- I Parry
Schimmelpfennig, D., J. Lewandrowski, J. Reilly, M. Tsigas, and I. Parry (1996): Agricultural Adaption to Climate Change: Issues of Longrun Sustainability. Vortrag gehalten auf der Konferenz Agricultural Economic Report, No. 740, Natural Resources and Environment Division, Economic Research Service, U.S. Department of Agriculture
An Assessment of Integrated Climate Change Impacts on Egypt Working Paper 94-48 International Institute for Applied Systems Analysis Greenhouse Effect and Sea-level Rise. The Cost of Holding Back the Sea The Marginal Costs of Greenhouse Gas Emissions
- K M Strzepek
- S C Onyeji
- M Saleh
- D N Titus
- J G Park
- R A Leatherman
- S P Weggel
- J R Greene
- M S Mausel
- P W Brown
- S Gaunt
- G Trehan
- G Yohe
Strzepek, K.M., S.C. Onyeji, M. Saleh, and D.N. Yates (1994): An Assessment of Integrated Climate Change Impacts on Egypt. Working Paper 94-48. International Institute for Applied Systems Analysis, Titus, J.G., Park, R.A., Leatherman, S.P., Weggel, J.R., Greene, M.S., Mausel, P.W., Brown, S., Gaunt, G., Trehan, M., and G. Yohe (1991): Greenhouse Effect and Sea-level Rise. The Cost of Holding Back the Sea. Coastal Management 19:171-204. r102 Tol, R.S.J. (1999): The Marginal Costs of Greenhouse Gas Emissions. The Energy Journal, 20(1):61-81
The Socio-Economic Impact of Sea-level Rise on The Netherlands: A Study of Possible Scenarios Potential Effects of Global Climate Change for Brazilian Agriculture: Applied Simulation Studies for Wheat, Maize, and Soybeans
- Denz Elzen
- J Rotmans
- O J F Siqueria
- J R Farias
- L M Aguiar
Denz Elzen, M.G.J., and J. Rotmans (1992): The Socio-Economic Impact of Sea-level Rise on The Netherlands: A Study of Possible Scenarios. Climatic Change 20: 169-195 De Siqueria, O.J.F., J.R. Boucas Farias, and L.M. Aguiar Sans (1994) : Potential Effects of Global Climate Change for Brazilian Agriculture: Applied Simulation Studies for Wheat, Maize, and Soybeans. In: C. Rosenzweig, and A. Iglesias (Eds.): Implications of Climate Change for International Agriculture: Crop Modeling Study