Climate Impacts in Europe: An Integrated Economic Assessment. Ciscar Martinez, J., Feyen, L., Soria, A., Lavalle, C., Perry, M., Raes, F., Nemry, F., Demirel, H., Rozsai, M., Dosio, A., Donatelli, M., Srivastava, A., Fumagalli, D., Zucchini, A., Shrestha, S., Ciaian, P., Himics, M., Van Doorslaer, B., Barrios, S., Ibáñez, N., Rojas, R., Bianchi, A., Dowling, P., Camia, A., Libertà, G., San-Miguel-Ayanz, J., de Rigo, D., Caudullo, G., Barredo, J. I., Paci, D., Pycroft, J., Saveyn, B., Van Regemorter, D., Revesz, T., Mubareka, S., Baranzelli, C., Rocha Gomes, C., Lung, T., & Ibarreta, D. In Impacts World 2013 - International Conference on Climate Change Effects, pages 87–96.
Climate Impacts in Europe: An Integrated Economic Assessment [link]Paper  doi  abstract   bibtex   
The JRC PESETA II study integrates the consequences of several separate climate change impacts into a macroeconomic CGE model. This enables comparison of the different impacts based on common metrics (household welfare and economic activity). The study uses a large set of climate model runs (twelve) and impact categories (agriculture, energy demand, river floods, sea-level rise, forest fires, transport infrastructure). The results show that there is a wide dispersion of impacts across EU regions, with strong geographical asymmetries, depending on the specific impact category and climate future. For instance, Northern Central Europe has negative impacts mainly related to sea level rise and river floods while Southern Europe is affected mainly by agriculture. The study also explores the significance of transboundary effects (where climate change causes economic damages outside the region directly affected). [Excerpt: Results] [...] Under the reference run, losses could reach 1\,% of EU GDP, mainly because of impacts on coastal areas and agriculture. The overall GDP loss is reduced under the 2°C scenario. Impacts of changes in energy demand (led by reduced need for heating) are positive at EU level. Regarding the regional pattern of impacts, Central Europe north is the area most affected by GDP losses (up to 1.7\,% of GDP), as a consequence mainly of sea level rise. Southern Europe GDP losses are also around 1\,% of GDP, led mainly by agriculture impacts. In all considered regions, GDP losses become smaller when one moves from the reference run to the 2°C run. [...] For the EU as a whole [...], the net welfare loss of the reference runs is estimated to be around 0.7\,% of GDP. [\n] The most significant negative impacts are linked to coastal areas, agriculture and river floods. Damage from river floods is more harmful to welfare than GDP because flood damage requires spending on repairs by households. This is compulsory consumption that brings no welfare benefit (but contributes to GDP). Moving to a 2°C scenario would reduce the impact on agriculture and river floods for the EU as a whole and would reduce coastal impacts to a lesser extent. [\n] [...] Energy impacts are positive in most climate runs in all regions, expect Southern Europe. Starting with the Northern Europe region (bars on the left-hand side), the region could have welfare gains associated with lower energy expenditure and positive agriculture yield changes. Impacts in coastal areas are the main negative climate impact, and for Variant 1 run river floods could lead to substantial losses. The negative climate impacts in UK & Ireland are due to river floods and sea level rise in coastal areas. The negative impacts in the Central Europe north area are mainly provoked by sea level rise. The Central Europe south region could register negative impacts due to sea level rise, agriculture and river floods. The Southern Europe region impacts, all negative, appear to be driven mainly by changes in energy expenditure, and also to agriculture and coastal damage. [\n] An interesting issue to analyse is to what extent climate impacts occurring in one EU region could affect the rest of the EU, via trade effects. The intuition is the following. If one region would not adapt to climate change, it would undergo welfare losses, and they would affect the rest of the EU, via trade effects, given the high degree of economic integration between the EU member states. Two preliminary simulations with the reference run setting have been made to explore these trade effects. [\n] In the first analysis [...], one can imagine a counterfactual situation where only Central Europe north is affected by sea level rise, while the rest of the EU regions do not suffer any direct impact. Under such a case, the economic modelling results suggest that Central Europe north would have a welfare loss of 20.5 billion Euros. There would be an additional 30\,% welfare loss (5.6 billion Euros) felt in the rest of the EU due to the economic linkages between EU regions. [\n] A similar simulation regarding agriculture impacts has been estimated. The hypothetical case would be that only the Southern Europe region would be affected by agriculture impacts. It is then assumed that the rest of the EU does not experience any initial yield change. In that case the impact in Southern Europe could be 10 billion Euros. There would be an additional loss of 25\,% (2.5 billion Euros) in the rest of the EU regions, leading to an overall welfare loss estimated at 13 billion Euros [...]. [Discussion] The preliminary results should be taken with care, due to the inherent uncertainties of the integrated assessment. The trajectory of GHG emissions and behaviour of the climate system are only a subset of the factors that could influence the consequences of climate change. [\n] Additional limitations of the assessment are related to the fact that several large climate impact categories have not been considered, notably the case of all the impacts affecting ecosystems, biodiversity and human life. Abrupt climate change, including climate tipping points, has also not been considered in the analysis. It is also assumed that the rest of the world remains unchanged in spite of climate change, which is not realistic.
@inproceedings{ciscarmartinezClimateImpactsEurope2013,
  title = {Climate Impacts in {{Europe}}: An Integrated Economic Assessment},
  booktitle = {Impacts {{World}} 2013 - {{International Conference}} on {{Climate Change Effects}}},
  author = {Ciscar Martinez, Juan-Carlos and Feyen, Luc and Soria, A. and Lavalle, Carlo and Perry, M. and Raes, F. and Nemry, F. and Demirel, H. and Rozsai, M. and Dosio, Alessandro and Donatelli, M. and Srivastava, A. and Fumagalli, D. and Zucchini, A. and Shrestha, S. and Ciaian, P. and Himics, M. and Van Doorslaer, B. and Barrios, S. and Ibáñez, N. and Rojas, R. and Bianchi, Alessandra and Dowling, P. and Camia, Andrea and Libertà, Giorgio and San-Miguel-Ayanz, Jesús and de Rigo, Daniele and Caudullo, Giovanni and Barredo, Jose I. and Paci, D. and Pycroft, J. and Saveyn, B. and Van Regemorter, D. and Revesz, T. and Mubareka, Sarah and Baranzelli, Claudia and Rocha Gomes, C. and Lung, T. and Ibarreta, D.},
  date = {2013-05},
  pages = {87--96},
  doi = {10.2312/pik.2013.001},
  url = {https://doi.org/10.2312/pik.2013.001},
  abstract = {The JRC PESETA II study integrates the consequences of several separate climate change impacts into a macroeconomic CGE model. This enables comparison of the different impacts based on common metrics (household welfare and economic activity). The study uses a large set of climate model runs (twelve) and impact categories (agriculture, energy demand, river floods, sea-level rise, forest fires, transport infrastructure). The results show that there is a wide dispersion of impacts across EU regions, with strong geographical asymmetries, depending on the specific impact category and climate future. For instance, Northern Central Europe has negative impacts mainly related to sea level rise and river floods while Southern Europe is affected mainly by agriculture. The study also explores the significance of transboundary effects (where climate change causes economic damages outside the region directly affected).

[Excerpt: Results] [...] Under the reference run, losses could reach 1\,\% of EU GDP, mainly because of impacts on coastal areas and agriculture. The overall GDP loss is reduced under the 2°C scenario. Impacts of changes in energy demand (led by reduced need for heating) are positive at EU level. Regarding the regional pattern of impacts, Central Europe north is the area most affected by GDP losses (up to 1.7\,\% of GDP), as a consequence mainly of sea level rise. Southern Europe GDP losses are also around 1\,\% of GDP, led mainly by agriculture impacts. In all considered regions, GDP losses become smaller when one moves from the reference run to the 2°C run. [...] For the EU as a whole [...], the net welfare loss of the reference runs is estimated to be around 0.7\,\% of GDP. 

[\textbackslash n] The most significant negative impacts are linked to coastal areas, agriculture and river floods. Damage from river floods is more harmful to welfare than GDP because flood damage requires spending on repairs by households. This is compulsory consumption that brings no welfare benefit (but contributes to GDP). Moving to a 2°C scenario would reduce the impact on agriculture and river floods for the EU as a whole and would reduce coastal impacts to a lesser extent. 

[\textbackslash n] [...] Energy impacts are positive in most climate runs in all regions, expect Southern Europe. Starting with the Northern Europe region (bars on the left-hand side), the region could have welfare gains associated with lower energy expenditure and positive agriculture yield changes. Impacts in coastal areas are the main negative climate impact, and for Variant 1 run river floods could lead to substantial losses. The negative climate impacts in UK \& Ireland are due to river floods and sea level rise in coastal areas. The negative impacts in the Central Europe north area are mainly provoked by sea level rise. The Central Europe south region could register negative impacts due to sea level rise, agriculture and river floods. The Southern Europe region impacts, all negative, appear to be driven mainly by changes in energy expenditure, and also to agriculture and coastal damage. 

[\textbackslash n] An interesting issue to analyse is to what extent climate impacts occurring in one EU region could affect the rest of the EU, via trade effects. The intuition is the following. If one region would not adapt to climate change, it would undergo welfare losses, and they would affect the rest of the EU, via trade effects, given the high degree of economic integration between the EU member states. Two preliminary simulations with the reference run setting have been made to explore these trade effects. 

[\textbackslash n] In the first analysis [...], one can imagine a counterfactual situation where only Central Europe north is affected by sea level rise, while the rest of the EU regions do not suffer any direct impact. Under such a case, the economic modelling results suggest that Central Europe north would have a welfare loss of 20.5 billion Euros. There would be an additional 30\,\% welfare loss (5.6 billion Euros) felt in the rest of the EU due to the economic linkages between EU regions. 

[\textbackslash n] A similar simulation regarding agriculture impacts has been estimated. The hypothetical case would be that only the Southern Europe region would be affected by agriculture impacts. It is then assumed that the rest of the EU does not experience any initial yield change. In that case the impact in Southern Europe could be 10 billion Euros. There would be an additional loss of 25\,\% (2.5 billion Euros) in the rest of the EU regions, leading to an overall welfare loss estimated at 13 billion Euros [...]. 

[Discussion] The preliminary results should be taken with care, due to the inherent uncertainties of the integrated assessment. The trajectory of GHG emissions and behaviour of the climate system are only a subset of the factors that could influence the consequences of climate change.

[\textbackslash n] Additional limitations of the assessment are related to the fact that several large climate impact categories have not been considered, notably the case of all the impacts affecting ecosystems, biodiversity and human life. Abrupt climate change, including climate tipping points, has also not been considered in the analysis. It is also assumed that the rest of the world remains unchanged in spite of climate change, which is not realistic.},
  keywords = {*imported-from-citeulike-INRMM,~INRMM-MiD:c-12378515,~to-add-doi-URL,anthropogenic-impacts,assessment,climate,climate-change,economic-impacts,economics,europe,european-union,featured-publication,integrated-natural-resources-modelling-and-management,integration-techniques,multiauthor,peseta-series},
  options = {useprefix=true},
  venue = {Postdam, Germany}
}
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