Consistent economic cross-sectoral climate change impact scenario analysis: Method and application to Austria

• Published in: Climate services 2016-03, Vol.1, p.39-52
• Main Authors: Steininger, Karl W., Bednar-Friedl, Birgit, Formayer, Herbert, König, Martin
• Format: Article
• Language: English
• ISSN: 2405-8807; 2405-8807
• DOI: 10.1016/j.cliser.2016.02.003

Climate change triggers manifold impacts at the national to local level, which in turn have various economy-wide implications (e.g. on welfare, employment, or tax revenues). In its response, society needs to prioritize which of these impacts to address and what share of resources to spend on each respective adaptation. A prerequisite to achieving that end is an economic impact analysis that is consistent across sectors and acknowledges intersectoral and economy-wide feedback effects. Traditional Integrated Assessment Models (IAMs) are usually operating at a level too aggregated for this end, while bottom-up impact models most often are not fully comprehensive, focusing on only a subset of climate sensitive sectors and/or a subset of climate change impact chains. Thus, we develop here an approach which applies climate and socioeconomic scenario analysis, harmonized economic costing, and sector explicit bandwidth analysis in a coupled framework of eleven (bio)physical impact assessment models and a uniform multi-sectoral computable general equilibrium model. In applying this approach to the alpine country of Austria, we find that macroeconomic feedbacks can magnify sectoral climate damages up to fourfold, or that by mid-century costs of climate change clearly outweigh benefits, with net costs rising two- to fourfold above current damage cost levels. The resulting specific impact information – differentiated by climate and economic drivers – can support sector-specific adaptation as well as adaptive capacity building. Keywords: climate impact, local impact, economic evaluation, adaptation