Climate change will likely have significant impacts on growth and wealth distribution across the world in the next decades. ICES provides a suitable framework for assessing the welfare effects of climate change impacts going beyond the common direct cost estimates and considering second and higher-order effects arising in the aftermath of shocks.
The effects of several climate change impacts have been analysed with ICES:
- Agriculture (crop production and productivity by Agro-Ecological Zone);
- Sea level rise (infrastructure and land loss in coastal areas)
- Health (cardiovascular and respiratory disorders, diarrhoea, malaria, dengue fever and schistosomiasis);
- Energy demand;
- Ecosystems (carbon sequestration services provided by forest, cropland and grassland ecosystems; or alternatively marine ecosystem)
These impacts are determined by alterations of biological, human and economic systems described by process-based models or empirical analyses. The output of these models is used as input for the impact assessment translated as sector-specific changes in productivity, resource endowments, production and consumption patterns, which are fed to ICES.
Therefore, climate change impact assessments in ICES include and summarize direct and indirect effects set in motion by specific regional and sectoral features, which are then propagated to all other interconnected sectors and regions (trade flows). This methodology is used to simulate different scenarios to account for uncertainty in climate projections and modelling assumptions.
Adaptation is a direct response to climate change impacts, and ICES is also being developed to simulate such responses according to the economic sector they are intended for. These measures could be proactive, such as the building of barriers to protect coastal zones; or reactive, such as changing irrigation demand and other soft-measures (land and water management) in the agricultural sector, following changes in productivity.
Campagnolo, Lorenza & De Cian, Enrica (2022), Distributional consequences of climate change impacts on residential energy demand across Italian households, Energy Economics, Elsevier, vol. 110, June 2022, 106020
Rizzati, M., Standardi, G., Guastella, G., Parrado, R., Bosello, F., Pareglio, S., (2022) The local costs of global climate change: spatial GDP downscaling under different climate scenarios, Spat. Econ. Anal. 1–21.
Pérez-Blanco, C.D., Parrado, R., Essenfelder, A.H., Bodoque, J., Gil-García, L., Gutiérrez-Martín, C., Ladera, J., Standardi, G., (2022) Assessing farmers’ adaptation responses to water conservation policies through modular recursive hydro-micro-macro-economic modeling, J. Clean. Prod. 360, 132208.
García-León, D., Casanueva, A., Standardi, G. et al. (2021), Current and projected regional economic impacts of heatwaves in Europe, Nat Commun 12, 5807.
García León D., Standardi G. and Staccione A. (2021), “An integrated approach for the estimation of agricultural drought costs“, Land Use Policy, vol. 100, 2021, 104923
Parrado, R., Bosello, F., Delpiazzo, E., Hinkel, J., Lincke, D., and S. Brown (2020), “Fiscal effects and the potential implications on economic growth of sea-level rise impacts and coastal zone protection”, Climatic Change, Volume 160, pp 283–302
Panagos P., Standardi G., Borrelli P., Lugato E., Montanarella L. and Bosello F. (2018), “Cost of agricultural productivity loss due to soil erosion in the European Union: from direct cost evaluation approaches to the use of macroeconomic models“, Land Degradation & Development, vol. 29(3), pp.471-484.
Ponce R., Parrado R., Stehr A., Bosello F. (2016), “Climate Change, Water Scarcity in Agriculture and the Economy-Wide Impacts in a CGE Framework“, Note di Lavoro – FEEM, 2016.079
Bosello F., Delpiazzo E., Eboli F. (2015), “Macro-economic Impact Assessment of Future Changes in European Marine Ecosystem Services“, FEEM Note di Lavoro 2015.022
Bosello F., Parrado R. (2014), “Climate Change Impacts and Market Driven Adaptation: the Costs of Inaction Including Market Rigidities“, FEEM Note di Lavoro 2014.064
Bosello F., Eboli F., Parrado R., Nunes P., Ding H., Rosa R., (2011), “The economic assessment of changes in ecosystem services: and application of the CGE methodology“, Economia Agraria y Recursos Naturales, 11(1), pp. 161-190.
Palatnik R. R., Kan I., Rapaport-Rom M., Ghermandi A., Eboli F., Shechter M., (2011), “Integration of General and Partial Equilibrium Agricultural Land-Use Transformation for the Analysis of Climate Change in the Mediterranean“, Climate Change Economics, 2(4), 275-299.
Eboli F., Parrado R., Roson R., (2010), “Climate Change Feedback on Economic Growth: Explorations with a Dynamic General Equilibrium Model“, Environment and Development Economics, Volume 15 (5), pp 515 -533. Supersedes FEEM Note di Lavoro 2009.43
Bosello F., Roson R., Tol R.S.J., (2007), “Economy-wide Estimates of the Implications of Climate Change: Sea Level Rise”, Environmental and Resource Economics, 37,549-571. Supersedes FEEM Note di Lavoro 2006.135
Impacts Quantification of global changes – Global-IQ, Vectors of Change in Oceans and Seas Marine Life, Impact on Economic Sectors – VECTORS, Prospective Analysis for the Mediterranean Region – MEDPRO, Full Costs of Climate Change – ClimateCost, Climate Change and Impact Research: the Mediterranean Environment – CIRCE, Climate change impacts in Italy and adaptation policies – APAT, Climate change predictions in Sub-Saharan Africa: impacts and adaptations – CLIMAFRICA, Climate Adaptation – Modelling water scenarios and sectoral impacts – CLIMWATADAPT, An analysis of indirect impacts of Climate Change on the Finnish society – FICC, MEDiterranean SEa Acidification in a changing climate – MEDSEA, Nigeria Climate risk assessment in agriculture and coastal development – NIGERIA, COACCH (CO-designing the Assessment of Climate CHange costs) – H2020 European project .
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