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GTAP Resource #3624

"Climate change impacts in the Mediterranean: a CGE analysis"
by Eboli, Fabio, Francesco Bosello and Ramiro Parrado

This report presents an analysis developed by ICES, a recursive-dynamic Computable General Equilibrium (CGE) model, applied to assess economically a set of climate change impacts, considering three climatic impacts estimated for the IPCC A1b SRES scenario: land and capital losses due to the increase in sea level, changes in households’ energy demand (both for heating and cooling purposes) and changes in tourism services demand.
In 2050, jointly considered, these impacts can induce a loss of the 1% of GDP in the Mediterranean area as a whole. Particularly adversely affected are Cyprus and Albania (-1.6% and -2.4% of GDP respectively). Northern-Mediterranean are clearly less vulnerable than the Southern-Mediterranean countries. Among the former the average loss in 2050 is the 0.5% of GDP, while among the latter this more than doubles.
In terms of impact types, tourism and sea-level rise are the most threatening, while GDP impacts induced by demand re-composition of energy use is often positive.
Climate change impacts trigger many indirect effects. Energy prices decline compared to the baseline (-7% oil, -4% gas in 2050), as the net effect of the GDP decrease worldwide compresses particularly energy demand. Industry and services’ prices remain roughly constant at the baseline levels. Agricultural prices, affected by the decrease in available productive land, increase especially after 2025 (the maximum increase shown by rice with a +1.5% in 2050) when sea-level rise becomes stronger.
Consistently with the GDP contraction worldwide, at the industry level negative signs prevail. Within the Mediterranean countries, sectoral production is adversely affected mainly in the market services and in the energy sectors. However electricity production tends often to increase, fostered by the increased space cooling demand from households that counterbalances the decrease in aggregated demand. Food production fostered by higher prices tend to increase in the Mediterranean area.

Resource Details (Export Citation) GTAP Keywords
Category: 2011 Conference Paper
Status: Published
By/In: Presented at the 14th Annual Conference on Global Economic Analysis, Venice, Italy
Date: 2011
Created: Eboli, F. (4/15/2011)
Updated: Eboli, F. (4/15/2011)
Visits: 2,529
- Dynamic modeling
- Middle East
- Africa (North)
- Europe (Southern)

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