The integration of PESETA sectoral economic impacts into the GEM-E3 Europe model: methodology and results
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The PESETA project has estimated the physical effects of climate change in Europe for the following impact categories with a market valuation: agriculture, river floods, coastal systems and tourism. Four alternative scenarios of future climate change have been considered. The computable general equilibrium (CGE) GEM-E3 model for Europe has been used to integrate the PESETA damages under a consistent economic framework. The approach followed has been to assess the effects of future climate (as of 2080s) on today’s economy. This article details the way each sectoral impact has been integrated into the CGE model. The EU welfare loss is estimated to be in a range of 0.2% to 1%, depending on the climate future and the projected sea level rise. Results show that the Southern Europe region appears as the most vulnerable area to climate change. Impacts in coastal systems, agriculture and river floods determine the overall and regional pattern of impacts within Europe.
KeywordsTotal Factor Productivity Impact Category Welfare Loss Coastal System Computable General Equilibrium
We thank Ana Iglesias and Sonia Quiroga for discussions on the agriculture application. We also thank Marc Mueller (IPTS) for providing us with the EEA data, and Bert Saveyn and Ignacio Pérez (both at IPTS) for reviewing the document.
We would like to thank Samuel Fankhauser, Hans-Martin Füssel, Ger Klaassen, and Leonidas Paroussos, and two anonymous referees for their comments.
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