Full Costs of Climate ChangeInnovative analyses of economic costs of climate policy in an integrated, disaggregated framework

EC PROJECT ENV.2007.1.1.6.1 GRANT AGREEMENT 212774

Background

ClimateCost is a DG RTD funded project under the 7th Framework Programme

3.5 million Euro research project, but with strong policy orientation

Multi-disciplinary research, linking climate scientists, impact experts and economists

Linking the mitigation, climate impact assessment, and adaptation domains

Runs for 32 months, commenced in December 2009

Aims – full costs of climate change

Costs of inaction (the economic effects of climate change)

Adaptation

Major events

Targets and mitigation policies and costs

combining bottom up sectoral based analysis with global IAMs

Project teamPaul Watkiss, PWA, Research CoordinatorTom Downing, SEI, Project CoordinatorJoint Research Centre, ECDanish Meteorological Institute (DMI), DenmarkPotsdam Institute for Climate Impact Research (PIK), Potsdam, GermanyUniversity of Southampton (Soton), Southampton, UKFondazione Eni Enrico Mattei (FEEM), Milan, ItalyInternational Institute for Applied Systems Analysis (IIASA), Laxenburg, AustriaMetroeconomica (Metro), Bath, UKInstitute of Communication and Computer Systems (ICCS), Athens, GreeceKatholieke Universiteit Leuven-Center of Economic Studies (KUL), Leuven, BelgiumAEA Technology plc (AEA), Harwell, UKUniversidad Politecnica de Madrid (UPM), Madrid, SpainEconomic and Social Research Institute (ESRI), Dublin, IrelandLondon School of Hygiene & Tropical Medicine (LSHTM), London, UKZentrum für Europäische Wirtschaftsforschung (ZEW), Bonn, GermanyUniversity of the Aegean (UoA), Athens, GreeceUniversity of East Anglia (UEA), Norwich, UKCharles University Environment Center (CUEC), Prague, Czech R.The Energy and Resources Institute (TERI), Delhi, IndiaEnergy Research Institute (ERI), Beijing, ChinaUniversité de Grenoble-2 (UG-2), Grenoble, France

Theme a). Impacts and Costs of Climate change and analysis of adaptation

• Assess physical impacts and economic costs of climate change at a sectoral level for Europe, China, India, US

• Use of traditional bottom-up impact assessment techniques and sector models, linked to economic valuation

• Progress to analysis of adaptation, looking at costs and benefits within a framework of uncertainty

• Look at real policy aspects for Europe – linking to the forthcoming EC adaptation policy (2013)

• Use the outputs to link into CGEM assessments and the global economic IAMs

TasksWP1. Scenarios: to select, develop and provide consistent climate and socio-economic scenarios and adopt common harmonized data sets. Climate mitigation scenarios will also be specified and used.

WP2. Quantify in physical terms, and value as economic costs, the effects of future climate change (the ‘costs of inaction’) under different future scenarios for the EU and other major negotiator countries.

Undertaken using spatial analysis platfrms (GIS), and will be based on a multi-disciplinary approach combining detailed sectoral expertise with economics.

The effects covered will include both market and non-market, with sector focus of coastal zones, health, energy, infrastructure, water resources, agriculture, tourism, ecosystem services, including extremes

Analysis will also extend to the ‘costs of adaptation’ again using the dis-aggregated sectoral analysis. It will also quantify and value the ‘benefits’ that adaptation can achieve in reducing the ‘costs of inaction’and the ‘residual costs of climate change’ after adaptation.

Theme b): Large-scale events

Concern that current economic assessment miss the major tipping points (e.g. Lenton et al) and also large-scale socially contingent effects

Source: Watkiss et al, 2006

Lenton et al, 2008

Tipping points

Socially contingent

• Cumulative effects of multiple factors

• Links to migration, conflict, etc.

Work PackageWork Package 3. Catastrophic (Major) events: The impacts of climate change for catastrophic events from climate change will cover the major climate ‘tipping points’ such as collapse of the West Antarctic or Greenland ice sheets, changes in the thermo-haline circulation and large scale regional changes.

Includes socially contingent effects, where multiple stresses come together to lead to large-scale human societal changes.

Theme c) Mitigation and ancillary effects

• Work to look at range of modelling approaches for mitigation in each region, Europe, China, India, using a range of models

• Also look at major co-benefit of air quality – because benefits happen immediately and locally

• Assess with detailed air quality models to capture change in impacts and economic costs in detail

Work Packages

Work Package 4. Mitigation: Modelling platforms to estimate the mitigation costs of stabilisation scenarios include POLES (bottom-up global energy system), PACE (multi-sector, multi-region computable general equilibrium framework) and GEM-E3 (Europe and World CGE). Using several models explores the robustness of mitigation estimates to theoretical specifications. ClimateCost uses the suite of models currently used by DG Environment for mitigation policy.

Work Package 5. Ancillary Benefits: Mitigation policies or scenarios aimed at reducing greenhouse gas emissions may have ancillary benefits including reductions in air pollution. Detailed air quality modelling of the ancillary benefits of mitigation will adopt a bottom-up assessment quantifying benefits in physical terms and monetary values.

Theme d) Policy and integration

• Aims to bring the work together, link bottom-up sectoral analysis into wider economic models (Computerised General Equilibirum Models)

• Integrate into global integrated assessment models – PAGE, FUND, WITCH and run policy scenarios

Work Package 6. Model Development: Update number of general equilibrium models with sectoral information from previous tasks. Similarly update IAM models

Work Package 7. Policy, Integration, Synthesis: Focus on policy engagement, and consideration of policy frameworks for using the results.

Work Package 8. Dissemination: through the website and project synthesis, electronic distribution lists, symposium workshops, briefing material.

Tasks

Key Deliverables• Copenhagen 2009: Synthesis material by sector and updates

of a number of key IAM and early results (PAGE09)

• Summer 2010. Detailed impacts and economic costs of climate change for Europe

• December 2010. Detailed costs for China and India

• Summer 2011. Integration and policy runs

ClimateCost.eu

Tom.Downing@SEI.SE