Julie Richards

Physical and economic consequences of climate change in Europe

Quantitative estimates of the economic damages of climate change usually are based on aggregate relationships linking average temperature change to loss in gross domestic product (GDP). However, there is a clear need for further detail in the regional and sectoral dimensions of impact assessments to design and prioritize adaptation strategies. New developments in regional climate modeling and physical-impact modeling in Europe allow a better exploration of those dimensions. This article quantifies the potential consequences of climate change in Europe in four market impact categories (agriculture, river floods, coastal areas, and tourism) and one nonmarket impact (human health). The methodology integrates a set of coherent, high-resolution climate change projections and physical models into an economic modeling framework. We find that if the climate of the 2080s were to occur today, the annual loss in household welfare in the European Union (EU) resulting from the four market impacts would range between 0.2–1%. If the welfare loss is assumed to be constant over time, climate change may halve the EUs annual welfare growth. Scenarios with warmer temperatures and a higher rise in sea level result in more severe economic damage. However, the results show that there are large variations across European regions. Southern Europe, the British Isles, and Central Europe North appear most sensitive to climate change. Northern Europe, on the other hand, is the only region with net economic benefits, driven mainly by the positive effects on agriculture. Coastal systems, agriculture, and river flooding are the most important of the four market impacts assessed.

Economic impacts of climate change in Europe: sea-level rise

This paper uses two models to examine the direct and indirect costs of sea-level rise for Europe for a range of sea-level rise scenarios for the 2020s and 2080s: (1) the DIVA model to estimate the physical impacts of sea-level rise and the direct economic cost, including adaptation, and (2) the GTAP-EF model to assess the indirect economic implications. Without adaptation, impacts are quite significant with a large land loss and increase in the incidence of coastal flooding. By the end of the century Malta has the largest relative land loss at 12% of its total surface area, followed by Greece at 3.5% land loss. Economic losses are however larger in Poland and Germany (

Climate change impacts in Europe. Final report of the PESETA research project

483 and

Impacts of climate change in coastal systems in Europe. PESETA-Coastal Systems study

391 million, respectively). Coastal protection is very effective in reducing these impacts and optimally undertaken leads to protection levels that are higher than 85% in the majority of European states. While the direct economic impact of sea-level rise is always negative, the final impact on countries’ economic performances estimated with the GTAP-EF model may be positive or negative. This is because factor substitution, international trade, and changes in investment patterns interact with possible positive implications. The policy insights are (1) while sea-level rise has negative and huge direct economic effects, overall effects on GDP are quite small (max −0.046% in Poland); (2) the impact of sea-level rise is not confined to the coastal zone and sea-level rise indirectly affects landlocked countries as well (Austria for instance loses −0.003% of its GDP); and (3) adaptation is crucial to keep the negative impacts of sea-level rise at an acceptable level.

Integrated analysis of risks of coastal flooding and cliff erosion under scenarios of long term change

The PESETA research project integrates a set of high-resolution climate change projections and physical models into an economic modelling framework to quantify the impacts of climate change on vulnerable aspects of Europe. Four market impact categories are considered (agriculture, river floods, coastal systems, and tourism) and one non-market category (human health). Considering the market impacts, without public adaptation and if the climate of the 2080s occurred today, the EU annual welfare loss would be in the range of 0.2% to 1%, depending on the climate scenario. However, there is large variation across different climate futures, EU regions and impact categories. Scenarios with warmer temperatures and higher sea level rise result in more severe economic damage for the EU. Southern Europe, the British Isles and Central Europe North appear to be the most sensitive regions to climate change. Northern Europe is the only region with net economic benefits, mainly driven by the positive effects in agriculture. Concerning the contribution to the overall effects, coastal systems, agriculture and river flooding are the most important ones.

The concepts and development of a participatory regional integrated assessment tool

Results of the physical impacts and adaptation cost assessment of sea-level rise for the European Union are presented for the A2 and B2 SRES socio-economic storylines and for a range of plausible sea-level rise scenarios, using data from the ECHAM4 and HADCM3 Global Climate Models (GCMs) models. In addition, to better understand the sensitivity of the results to the magnitude of sea-level rise, the full IPCC (2001) range of sea level rise predictions and scenarios of no climate change have also been modelled. These results are all derived using the global Dynamic Interactive Vulnerability Assessment (DIVA) tool for assessing regional to global coastal impacts and adaptation. Both the physical and economic impacts of sea-level rise increase with time for both the A2 and B2 storylines, especially under scenarios of high sea-level rise. Without adaptation, significant impacts and therefore damages are apparent. Significant populations are threatened with displacement by flooding and coastal erosion. An exploratory adaptation analysis using standard protection measures of dike construction and beach nourishment, where benefit-cost analysis suggests this is the optimum response, reduces these impacts significantly. While adaptation in Europe is likely to be much more diverse than these two simple options, these results demonstrate the significant benefits of protection, and more generally suggest that widespread adaptation to sustain human coastal activities would be prudent. Moreover, under these protection assumptions, coastal ecosystems are significantly reduced in area, especially under the high sea-level rise scenario and climate change raises significant challenges for wider coastal management in Europe, even if human uses in the coastal zone are protected.