Monetizing the impacts of climate change on the Greek mining sector

Abstract

Nowadays, it is widely acknowledged that climate change will affect mining industry and may pose significant risks to the economic viability of mining enterprises. So far, the vast majority of recent research efforts on this subject have focused, not surprisingly, on mining activities operating in northern areas. Nevertheless, climate change is an issue that should be of concern for all mining industry, worldwide. For this reason, this paper addresses the impacts of climate change on mining industry in the Mediterranean Region, and specifically Greece, and attempts, for the first time, to estimate the cost of climate change-related risks to the sector by means of a “top-down” approach. Towards this direction, climate projections based on the United Nations International Panel on Climate Change (IPCC) A1B emission scenario (which refers to a fast global economic growth, global population that peaks mid-century and then decreases, and a rapid introduction of new and more efficient technologies and a balanced energy source mix) for the time period 2021–2050 are compared to climate data for the time period 1991–2000, in order to quantify the impacts in physical terms. Then, both secondary and primary data sources are used to monetize the cost of climate change impacts to mining enterprises. Although there exist certain limitations in the research due to data unavailability, the study reveals the importance of the problem and provides useful findings. More specifically, the estimates indicate that Greece’s mining industry could face economic losses from climate change as high as US$0.8 billion. The cost of adaptation measures is about US$312 million, while that of mitigation measures that will burden the sector through the increased electricity prices is about US$478 million.