Toon Vandyck

Climate Impacts in Europe. The JRC PESETA II Project

The objective of the JRC PESETA II project is to gain insights into the sectoral and regional patterns of climate change impacts in Europe by the end of this century. The study uses a large set of climate model runs and impact categories (ten impacts: agriculture, energy, river floods, droughts, forest fires, transport infrastructure, coasts, tourism, habitat suitability of forest tree species and human health). The project integrates biophysical direct climate impacts into a macroeconomic economic model, which enables the comparison of the different impacts based on common metrics (household welfare and economic activity). Under the reference simulation the annual total damages would be around €190 billion/year, almost 2% of EU GDP. The geographical distribution of the climate damages is very asymmetric with a clear bias towards the southern European regions. More than half of the overall annual EU damages are estimated to be due to the additional premature mortality (€120 billion). Moving to a 2°C world would reduce annual climate damages by €60 billion, to €120 billion (1.2% of GDP).

Inefficiencies in regional commuting policy

This paper discusses investments in transport infrastructure and incentives for commuting taxes in a multiregional setting. We study the horizontal and vertical interactions between governments. We identify incentives for strategic and tax exporting behavior that might lead to underinvestment in transport infrastructure. Furthermore, we show that the intensity of the strategic behavior is affected by geographic firm ownership structure, the number of labor-supplying regions and the revenue-sharing mechanism in the federation. A numerical example applies the insights on commuting in Belgium.

Global Energy and Climate Outlook 2017: How climate policies improve air quality

This study shows that achieving the climate change mitigation target of staying below 2°C temperature rise is possible technically – thanks to an acceleration of decarbonisation trends, an increased electrification of final demand and large changes in the primary energy mix that include a phase out of coal and a reduction of oil and gas – and is consistent with economic growth. It yields co-benefits via improved air quality – including avoided deaths, reduction of respiratory diseases and agricultural productivity improvement – that largely offset the cost of climate change mitigation. These co-benefits arise without extra investment costs and are additional to the benefits of avoiding global warming and its impact on the economy.

Impact of low oil prices on oil exporting countries

The report describes the importance of oil for oil exporting countries and analyses the potential economic effects that current low oil prices may have in their economy and political stability. Firstly, the report describes the main drivers that have led to the present low oil prices. Secondly, descriptive statistics are employed to show the exposure of the main oil exporting countries to the oil price, where GDP and government revenue is found to be closely correlated to the oil price. In general, several Sub-Saharan African and North African countries show high risk due to the high exposure of their economy and of their government revenue combined with limited reserves per capita. Secondly, the macro-economic effects of a 60% fall in the price of oil is analysed with the GEM-E3 model, which is an stylized representation of the oil market change over the last two years. The results show that such an oil price drop has different effects across oil exporting countries, unsurprisingly strongly correlated with export dependence to oil. For instance, a 60% fall in the price of oil could lead to a reduction of the GDP of Sub-Saharan Africa by around 8.5%. The final section discusses the migration patterns from the studied countries, as a proxy of what might happen be they destabilised because of a lasting low oil price.

Impact of low oil prices on the EU economy

The report describes the importance of oil for the EU economy and analyses the potential economic effects that current low oil prices since mid-2014 may have in the EU28 economy. Further it assesses how the current oil price decrease may evolve up to 2020 and the consequences for global oil consumption. The analysis shows that a decrease of the oil price from US

Distributional and regional economic impact of energy taxes in Belgium

100 to US

GECO2015 Global Energy and Climate Outlook: Road to Paris. Assessment of Low Emission Levels under World Action Integrating National Contributions

50 may lead to a GDP gain of about 0.7%, both on a global level and in the EU28, driven by private consumption and investment. The global gains are not evenly distributed. Net oil importing countries gain, whereas oil exporting countries lose. The analysis mainly focuses on the EU28 and it shows that the more oil-intensive countries and sectors gain more than the rest of the economy. A 50% decrease of the oil price may generate up to 3 million additional jobs (1.3% of the total labour force). Interestingly, oil-intensive sectors do not necessarily improve their competitiveness vis-A -vis their competitors in other regions, as non-EU producers may be less energy efficient and therefore benefit more from low oil prices.