Economic Impacts of Climate Change

This paper deals with the often ignored issue of adaptation to human-induced climate change. Adaptation is not only inevitable but essential to fashioning the least-social-cost strategy to addressing climate change. The urgency for limiting climate change is inversely proportional to society's adaptability. Some mitigation strategies are incompatible with adaptation goals (e.g., reducing CO 2 rather than equivalent amounts of other greenhouse gases may compromise several adaptation goals) and climate change impacts --and, therefore, benefits --analysis must necessarily incorporate adaptation.

Adaptation to a Changing Climate in the Arab Countries, 2012

Climate Change and Agricultural Production: Projections suggest that the rate of increase in agricultural production will slow over the next few decades, and it may start to decline after about 2050.

Environmental Management, 2009

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2009

COPENHAGEN CONSENSUS ON CLIMATE copenhAgen consensus on climAte The Copenhagen Consensus Center has commissioned 21 papers to examine the costs and benefits of different solutions to global warming. The project's goal is to answer the question: "If the global community wants to spend up to, say $250 billion per year over the next 10 years to diminish the adverse effects of climate changes, and to do most good for the world, which solutions would yield the greatest net benefits?" The series of papers is divided into Assessment Papers and Perspective Papers. Each Assessment Paper outlines the costs and benefits of one way to respond to global warming. Each Perspective Paper reviews the assumptions and analyses made within an Assessment Paper. It is hoped that, as a body of work, this research will provide a foundation for an informed debate about the best way to respond to this threat. Adaptation to climate change impacts will be necessary, and may require substantial economic resources. Economic analysis of adaptation, including costs and benefits, is subject to similar complications and limitations that beset quantitative economic analysis of climate change mitigation. To make such analysis relevant for policy decisions, the analysis must incorporate three factors that define the economics of climate change. The first is uncertainty, in particular the risk of abrupt climate change, which is a major reason for urgency in addressing climate change. The second is improved calibration of economic climate change impacts, and the inclusion of non-market impacts. The third is equity and differential climate impacts at the fine scale, which will define adaptation actions in practice. Hence, there is a long road ahead in improving the tools for economic modelling of adaptation, and the mitigation-adaptation nexus. Meanwhile, the crucial question for policymakers is not the benefit-cost ratio for adaptation in aggregate, but whether and where specific adaptation actions are beneficial, what new policies are needed to support adaptive action, and what existing policies need to be changed or scrapped.

2011

Adaptation to human-induced climate change is currently receiving a lot of attention in international development circles. But throughout human existence, natural resource-dependent people have exploited and coped with the effects of climate variability on the ecosystems from which they derive a living. Learning from this experience can help inform the design of appropriate policies for responding to human-induced climate change. This paper presents the results of a World Bank study which sought to better understand the role of local institutions in supporting adaptation to climate variability and change in Ethiopia, Mali and Yemen. The study raised three questions. First, what strategies have been adopted by rural households in the past to adapt to climate variability? Second, to what extent do institutions of various sorts assist households in adopting adaptation strategies? And third, what are the factors that prevent households from adopting appropriate adaptation strategies? For the purposes of this paper, institutions are defined as structured, formal or informal organizations. The study followed a three-step approach. First, drawing on original data from field surveys, focus group discussions and institutional stakeholder interviews, household vulnerability to climate variability was characterized in terms of its three constituent elements: exposure to climate-related shocks and stresses, and sensitivity and adaptive capacity in the face of such stressors. Sensitivity refers to the degree to which people are affected by climate variability and change. High levels of exposure and sensitivity and low levels of adaptive capacity generally result in high levels of vulnerability. But a high level of exposure need not necessarily result in a high level of vulnerability if the household's adaptive capacity is also high. Using data gathered on each of the constituent elements of vulnerability, cluster analysis was conducted to identify types of rural households sharing similar vulnerability profiles. Second, the reasons for differences in households' choice of adaptation strategies were analysed. And third, the role of institutional assistance in adaptation was investigated.

2000

Climate change is now very much with us, and for the poorest of the poor the implications are particularly daunting. These often remote or marginalised communities are so burdened they will struggle to meet the coming challenges. Adaptation - learning to cope with rising temperature and other effects of climate change - is a difficult but essential task for these

2009

Climate change is likely to have relevant effects on our future socio-economic systems. It is therefore important to identify how markets and policy jointly react to expected climate change to protect our societies and well-being. This study addresses this issue by carrying out an integrated analysis of both optimal mitigation and adaptation at the global and regional level. Adaptation responses are disentangled into three different modes: reactive adaptation, proactive (or anticipatory) adaptation, and investments in innovation for adaptation purposes. The size, the timing, the relative contribution to total climate-related damage reduction, and the benefit-cost ratios of each of these strategies are assessed for the world as a whole, and for developed and developing countries in both a cooperative and a non-cooperative setting. The study also takes into account the role of price signals and markets in inducing and diffusing adaptation. This leads to two scenarios: A pessimistic one, in which policy-driven adaptation bears the burden, together with mitigation, of reducing climate damage; and an optimistic one, in which markets also autonomously contribute to reducing some damages by modifying sectoral structure, international trade flows, capital distribution and land allocation. For all scenarios, the costs and benefits of adaptation are assessed using WITCH, an integrated assessment, intertemporal optimization, forward-looking model. Extensive sensitivity analysis with respect to the size of climate damages and of the discount rate has also been carried out.