Transcript The Economics of Climate Change and Adaptation

The Economics of Climate
Change and Adaptation
Speaker:
Jean-Marc Mayotte
MA Water Resources Engineering
University of Colorado and University of Copenhagen
CIEM DANIDA Project
Talking Points
•
•
•
•
•
•
What is a GCM?
Accounting for future climate uncertainty
Linking climate to the economy
Data needs
Example: Mozambique
Concluding remarks
NOTE: This presentation will concentrate on the framework and
methodology within which the study is conducted. It will also only address
the climate analysis and the climate’s interaction with the models within the
framework leading up to the economic analysis. The CGE will not be
discussed in detail.
General Circulation Model
• A mathematical representation of the general
circulation of the planetary atmosphere based
on the Navier-Stokes equations
– There are 22 GCMs officially recognized by the
International Panel on Climate Change
• Predictions of future climate are based on CO2
emission scenarios used to estimate the
concentration of CO2 in the Earth’s atmosphere
Future Climate is Uncertain
Economic and Model Uncertainty
Wide Variation at Local Scale between
Models
Precipitation
2100
NCAR
Precipitation
2100
MIROC
Observed & Predicated Trends
Consistent Message from GCMs
• Change in Daily
Precipitation Intensity
• Change in inter-storm
arrival
• Seasonal & Spatial
Variation
Selecting the Climate Change Scenarios
• Not all GCMs are used in the analysis
• Models are picked based on their predicted Climate
Moisture Index (CMI)
– Simple water balance that accounts for both
precipitation and evaporation
• The average CMI for the time-horizon (2000 – 2100) is
predicted using each GCM. The models that predict the
“wettest” and the “driest” CMI in the region considered
are used in an effort to capture the “wettest” (+1) and
“driest” (-1) possible futures
Climate Moisture Index (CMI)
Adapt to what? – Global Wet and Dry
Change in average annual precipitation, 2000 – 2050
CSIRO (DRY)
NCAR (WET)
A2 SCENARIO
Two extreme GCMs used to estimate range of costs
Modeling Concept
CLIMATE CHANGE
HUMAN ENVIRONMENT
COST OF CLIMATE
CHANGE
ECONOMY
Uses of History
• Simulations are based on historical experience
– The impacts from future CC will likely resemble those from
the current climate but with some modifications to their
frequency, timing, and magnitude
– These changes in the distribution require a new approach
to “risk based” design (i.e. what used to be a 1/50 year
storm may become a 1/25 year storm)
• Models
– The models used to relate CC to the economy are
constructed based on underlying science and knowledge
of technology/biology and tested, calibrated, and
legitimized using historic climate data
Extensive Data Needs
• The analysis is spatially and temporally
dependant and the quality of its outputs
are entirely reliant on the quality of its
input data
• Many global databases are available but
locally collected and quality assured data
increases the applicability and reliability of
model outputs
Data Needs
•
•
•
•
•
Climatologic data
– Precipitation, min/max temperature, pressure,
humidity
Land cover and vegetation data
– Wetlands
– Agricultural land
– Commercial
– Residential
– Industrial
– Institutional
DEM (Digital Elevation Map) data
– 10-30 m preferred
Soil
– Slope
– Hydraulic conductivity
Population
– Density maps
– Poverty maps
– Housing type
•
•
•
•
Infrastructure
– Road inventory maps
– Bridge inventory
– Rail inventory
– Urban drainage
– Property value
Hydropower production
– By province
Tropical Storms/Cyclones
– Storm track
– Magnitude
– Rainfall
– Wind speed
– Storm surge
Economic Data
– Manufacturing production values
– Crop production
NOTE: The project has already received significant support from the
Institute of Mechanics, Remote Sensing and GIS, MONRE, and CIEM
Model Framework
Climate Shocks
General Circulation
Models (GCM)
Flood, Drought,
Cyclone
Temperature, Precipitation
Rainfall Runoff
Model
Hydrologic
Model
Surface Water
Surface Water
Availability
Transportation
Model
Functionality
Coastal
Infrastructure
Damage
Agriculture
Model
Production
Energy Production
Model
Production
Comuputable General
Equilibrium (CGE)
COST OF CLIMATE
CHANGE
The Economics of the Adaptation
to Climate Change (EACC)
Mozambique
Massachusetts Institute of
Technology (MIT), University of
Colorado, and University of
Copenhagen
Funded by the World Bank
How are Mozambique and Vietnam
Similar?
• Both are estuary countries and are strongly
reliant on coastal infrastructure making them
very vulnerable to sea level rise
• Both have a large discrepancy between the rich
and poor
• Both exhibit rather significant economic growth
and development but have done little to adapt to
potential changes in climate
• Agriculture is a very significant part of both
economies and are very reliant on available
surface water
Adapt to what?
Mozambique Wet and Dry Precipitation in 2050
Moz. Dry (ukmo)
-3.6% : 30.6%
Moz. Wet (ipsl)
-6.3% :
16.3%
• Regional variation in precipitation continues to be significant between northern
and southern Mozambique
• The southern portion of the country is projected to either remain relatively
similar or increase dramatically
Adapt to what?
Mozambique Wet and Dry Temperature in 2050
Moz. Dry (ukmo)
Moz. Wet (ipsl)
1.24o :
2.09o
1.15o :
1.75o
• Regional variation in temperature is not as significant as precipitation variation
• Both scenarios display a 1o – 2o increase in for Mozambique
EACC Mozambique Modeling Framework
•Infrastructure
•Roads
•M&I Water
•Floods
Agriculture
Effects on yield in 2050 compared to historic averages
Cassava
Sorghum
Moz. Wet
Soybeans
Yams
Wheat
Moz. Dry
Global Wet
South
Groundnuts
Central
Maize
North
Millet
Potato
Global Dry
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
Bars represent the average change in overall crop productivity. Regional averages
are weighted by historic crop yield rates per crop in the region.
NOTE: Further
collaboration with INGC
will provide more detailed
geared at determining the
vulnerability of individual
crops to climate change
Changes in crop productivity over all of Mozambique are net negative in all scenarios with
central Mozambique being hit hardest suggesting that this region may be most vulnerable
Roads
Cost of Maintaining Existing Road Inventory 2010 - 2050
HIGH
LOW
million
Cumulative cost increase for
paved road construction
$77
$37
Cumulative cost increase for
maintaining paved roads
$66
$8
Cumulative cost increase for
maintaining gravel and earth
roads
SUM
$180
$50
$323
$97
Construction of new
gravel and earth roads
is not modeled. Only
maintenance of existing
gravel and earth roads.
Costs however DO take
into account making
improvements to the
existing roadstock that
anticipate the climate
change effect on paved
roads.
These numbers DO
NOT include the
modeling of flood
shocks
The initial investment in paved roads is high but maintenance costs are dramatically
reduced as roads are built more climate resilient
Hydropower
Annual Generation 2005 - 2050
Energy GWh / year
This scenario assumes hydropower
development continues as planned by the
Government of Mozambique according to the
Energy Master Plan.
Cahora Bassa
Chicamba
Corumana
Mavuzi
Massingir
Muenezi
Tsate
Pavua
Cahora Bassa N.
7:11
7:6
Nphanda Nkuwa
Boroma
5:8+9
Lupata
Mugeba
Alto Malema
Lurio 2
Investment Cost:
$5.412 Billion US
(between 2010 and 2040
according to Energy Master
Plan)
•
Potential energy deficit due to climate change relative to BASE
generation potential (2005 – 2050):
-109716 GWh
Impact on Coastal Zones, 2010 – 2050
Extracted from Global Study Specific to Mozambique
Cost to Protect All Vulnerable Coastal and
Floodplain Areas
Sea Level
Rise
Impacts
million US$
Adaptation
million US$
NONE 0 cm
23
2000
LOW 4-15 cm
27
1400
MEDIUM 6-30
cm
110
3700
HIGH 7-38 cm
100
•
Adaptation Options
Sea and River Dikes
4500
NOTE: Adaptation costs include construction and maintenance
•
Global study
considered all
land that would
be affected by the
2100 highest
potential sea level
of ~1m and all
flood-prone areas
Further studies on specific areas (i.e. Beira and Maputo) are needed for
a more relevant cost estimates
Initial study does, however, highlight the potentially huge cost of
“hard” adaptation at a large scale thus further emphasizing that large
scale, hard costal adaptations are unrealistic
Only constructed where population
density is >1person/km2
Port Upgrade
Beach Nourishment
Where tourist revenue is high
Summary of CGE Modeling Results
• Without public policy changes, the worst scenario results
in a net present value of damages of nearly US$7 billion.
– equivalent to an annual payment of US$390 million
(5% discount rate).
• Hardening rural roads reduces worst case impacts
substantially, restoring approximately 1/3 of lost
absorption.
• Remaining welfare losses could be regained with
improved agricultural productivity or human capital
accumulation.
Conclusion
• It is our hope that we will be able to produce
similar results for Vietnam as has been done for
Mozambique
• The ultimate goal is to find adaptation options
that are of “no regret”, or infrastructure and
investment that would benefit the people and
economy regardless of potential climate
changes
• It is our thought that developing whilst adapting
to climate change is essential to insuring
continued economic growth