Abstract
This chapter evaluates the aggregate macroeconomic effects of the quantifiable impact chains in ten impact fields for Austria: Agriculture, Forestry, Water Supply and Sanitation, Buildings (with a focus on heating and cooling), Electricity, Transport, Manufacturing and Trade, Cities and Urban Green, Catastrophe Management, and Tourism. First, the costing methodology used for each impact chain as well as the respective interface to implement them within the macroeconomic model are reviewed and compared across impact fields. The main finding here is that gaps in costing are mostly the consequence of insufficient data and for that reason, the two important impact fields Ecosystem Services and Human Health could not be assessed in monetary terms. Second, for the subset of impact chains which could be monetised, a computable general equilibrium (CGE) model is then used to assess the macroeconomic effects caused by these. By comparing macroeconomic effects across impact fields, we find that the strongest macroeconomic impacts are triggered by climate change effects arising in Agriculture, Forestry, Tourism, Electricity, and Buildings. The total macroeconomic effect of all impact chains—which could be quantified and monetised—is modest up to the 2050s: both welfare and GDP decline slightly compared to a baseline development without climate change. This is mainly due to (a) all but two impact chains refer to trends only (just riverine flooding damage to buildings and road infrastructure damages cover extreme events), (b) impacts are mostly redistribution of demand, while stock changes occurring as a consequence of extreme events are basically not covered and (c) some of the precipitation-triggered impacts point in opposite directions across sub-national regions, leading to a comparatively small net effect on the national scale.
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Notes
- 1.
Future economic and technological development is subject to high uncertainties. Nevertheless for the construction of the baseline scenario, assumptions concerning economic growth and technological development were necessary. We therefore applied the strong but also cautious assumption of homogenous growth across all economic sectors.
- 2.
A sensitivity analysis was performed regarding the interaction of different impact fields. When running the model for each impact field separately and summing up the effects on GDP, we obtained a very similar result as in the combined model run. Therefore the decomposition by impact field can be carried out by taking the shares of the separate model runs.
- 3.
Climate impact enhancing and climate impact diminishing socioeconomic development were defined differently for each impact field and also low range and high range climatic change were used only for the key climate parameter in each impact field. As a consequence, a joint macroeconomic analysis of these various specifications across impact fields is not possible.
- 4.
In this case we use the so-called “Hicksian equivalent variation”. In this sense welfare can be interpreted as the amount of money that is needed to be added to (or subtracted from) the household’s benchmark income in order to keep its utility at the same level as in the benchmark.
- 5.
Repair of roads and required additional investment in the water sector were also implemented but contribute much less to cost increases.
- 6.
Note that the sum of all sectoral effects on value added has to be corrected by indirect taxes and subsidies to obtain the actual effect on GDP.
- 7.
All winning sectors as well as all losing sectors with losses larger than 100 million euros in 2050 are shown separately.
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Bachner, G., Bednar-Friedl, B., Nabernegg, S., Steininger, K.W. (2015). Macroeconomic Evaluation of Climate Change in Austria: A Comparison Across Impact Fields and Total Effects. In: Steininger, K., König, M., Bednar-Friedl, B., Kranzl, L., Loibl, W., Prettenthaler, F. (eds) Economic Evaluation of Climate Change Impacts. Springer Climate. Springer, Cham. https://doi.org/10.1007/978-3-319-12457-5_21
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DOI: https://doi.org/10.1007/978-3-319-12457-5_21
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