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I review the literature on the economic impacts of climate change, an externality that is unprecedentedly large, complex, and uncertain. Only 14 estimates of the total damage cost of climate change have been published, a research effort that is in sharp contrast to the urgency of the public debate and the proposed expenditure on greenhouse gas emission reduction. These estimates show that climate change initially improves economic welfare. However, these benefits are sunk. Impacts would be predominantly negative later in the century. Global average impacts would be comparable to the welfare loss of a few percent of income, but substantially higher in poor countries. Still, the impact of climate change over a century is comparable to economic growth over a few years. There are over 200 estimates of the marginal damage cost of carbon dioxide emissions. The uncertainty about the social cost of carbon is large and right-skewed. For a standard discount rate, the expected value is $50/tC, which is much lower than the price of carbon in the European Union but much higher than the price of carbon elsewhere. Current estimates of the damage costs of climate change are incomplete, with positive and negative biases. Most important among the missing impacts are the indirect effects of climate change on economic development; large-scale biodiversity loss; low-probability, high-impact scenarios; the impact of climate change on violent conflict; and the impacts of climate change beyond 2100. From a welfare perspective, the impact of climate change is problematic because population is endogenous, and because policy analyses should separate impatience, risk aversion, and inequity aversion between and within countries.

Based on predicted changes in the magnitude and distribution of global precipitation, temperature and river flow under the IPCC SRES A1B and A2 scenarios, this study assesses the potential impacts of climate change and CO 2 fertilization on global agriculture. The analysis uses the new version of the GTAP-W model, which distinguishes between rainfed and irrigated agriculture and implements water as an explicit factor of production for irrigated agriculture. Future climate change is likely to modify regional water endowments and soil moisture. As a consequence, the distribution of harvested land will change, modifying production and international trade patterns. The results suggest that a partial analysis of the main factors through which climate change will affect agricultural productivity provide a false appreciation of the nature of changes likely to occur. Our results show that global food production, welfare and GDP fall in the two time periods and SRES scenarios. Higher food prices are expected. No matter which SRES scenario is preferred, we find that the expected losses in welfare are significant. These losses are slightly larger under the SRES A2 scenario for the 2020s and under the SRES A1B scenario for the 2050s. The results show that national welfare is influenced both by regional climate change and climate-induced changes in competitiveness.

UNESCO World Heritage sites (WHS) located in coastal areas are increasingly at risk from coastal hazards due to sea-level rise. In this study, we assess Mediterranean cultural WHS at risk from coastal flooding and erosion under four sea-level rise scenarios until 2100. Based on the analysis of spatially explicit WHS data, we develop an index-based approach that allows for ranking WHS at risk from both coastal hazards. Here we show that of 49 cultural WHS located in low-lying coastal areas of the Mediterranean, 37 are at risk from a 100-year flood and 42 from coastal erosion, already today. Until 2100, flood risk may increase by 50% and erosion risk by 13% across the region, with considerably higher increases at individual WHS. Our results provide a first-order assessment of where adaptation is most urgently needed and can support policymakers in steering local-scale research to devise suitable adaptation strategies for each WHS. UNESCO World Heritage located in low-lying coastal areas is increasingly at risk from flooding and erosion due to sea-level rise. This study shows that up to 82% of cultural World Heritage sites located in the Mediterranean will be at risk from coastal flooding and over 93% from coastal erosion by 2100 under high-end sea-level rise.

Coastal flood damage and adaptation costs under 21st century sea-level rise are assessed on a global scale taking into account a wide range of uncertainties in continental topography data, population data, protection strategies, socioeconomic development and sea-level rise. Uncertainty in global mean and regional sea level was derived from four different climate models from the Coupled Model Intercomparison Project Phase 5, each combined with three land-ice scenarios based on the published range of contributions from ice sheets and glaciers. Without adaptation, 0.2—4.6% of global population is expected to be flooded annually in 2100 under 25—123 cm of global mean sea-level rise, with expected annual losses of 0.3—9.3% of global gross domestic product. Damages of this magnitude are very unlikely to be tolerated by society and adaptation will be widespread. The global costs of protecting the coast with dikes are significant with annual investment and maintenance costs of US$ 12—71 billion in 2100, but much smaller than the global cost of avoided damages even without accounting for indirect costs of damage to regional production supply. Flood damages by the end of this century are much more sensitive to the applied protection strategy than to variations in climate and socioeconomic scenarios as well as in physical data sources (topography and climate model). Our results emphasize the central role of long-term coastal adaptation strategies. These should also take into account that protecting large parts of the developed coast increases the risk of catastrophic consequences in the case of defense failure.

Quantification of the economic costs of the urban heat island effect for the main cities around the world. The cost–benefit analyses for some mitigation options are presented and their contribution to the global mitigation efforts is discussed. Climate change impacts can be especially large in cities 1 , 2 . Several large cities are taking climate change into account in long-term strategies 3 , 4 , for which it is important to have information on the costs and benefits of adaptation 5 . Studies on climate change impacts in cities mostly focus on a limited set of countries and risks, for example sea-level rise, health and water resources 6 . Most of these studies are qualitative, except for the costs of sea-level rise in cities 7 , 8 . These impact estimates do not take into account that large cities will experience additional warming due to the urban heat island effect 9 , 10 , that is, the change of local climate patterns caused by urbanization. Here we provide a quantitative assessment of the economic costs of the joint impacts of local and global climate change for all main cities around the world. Cost–benefit analyses are presented of urban heat island mitigation options, including green and cool roofs and cool pavements. It is shown that local actions can be a climate risk-reduction instrument. Furthermore, limiting the urban heat island through city adaptation plans can significantly amplify the benefits of international mitigation efforts.

Ocean acidification is increasingly recognized as a major global problem. Yet economic assessments of its effects are currently almost absent. Unlike most other marine organisms, mollusks, which have significant commercial value worldwide, have relatively solid scientific evidence of biological impact of acidification and allow us to make such an economic evaluation. By performing a partial-equilibrium analysis, we estimate global and regional economic costs of production loss of mollusks due to ocean acidification. Our results show that the costs for the world as a whole could be over 100 billion USD with an assumption of increasing demand of mollusks with expected income growths combined with a business-as-usual emission trend towards the year 2100. The major determinants of cost levels are the impacts on the Chinese production, which is dominant in the world, and the expected demand increase of mollusks in today’s developing countries, which include China, in accordance with their future income rise. Our results have direct implications for climate policy. Because the ocean acidifies faster than the atmosphere warms, the acidification effects on mollusks would raise the social cost of carbon more strongly than the estimated damage adds to the damage costs of climate change.

We report the results of an uncertainty decomposition analysis of the social cost of carbon as estimated by FUND, a model that has a more detailed representation of the economic impact of climate change than any other model. Some of the parameters particularly influence impacts in the short run whereas other parameters are important in the long run. Some parameters are influential in some regions only. Some parameters are known reasonably well, but others are not. Ethical values, such as the pure rate of time preference and the rate of risk aversion, therefore affect not only the social cost of carbon, but also the importance of the parameters that determine its value. Some parameters, however, are consistently important: cooling energy demand, migration, climate sensitivity, and agriculture. The last two are subject to a large research effort, but the first two are not.

The increasing atmospheric concentrations of greenhouse gases will place humans in climates that are unprecedented in the evolution of the species. I use the ecological definition of the human niche in climate space, and combine this with a new constellation of methods from extreme value statistics to study human occupation near the boundaries of that niche. I find that the temperature distribution has a thin tail whereas the tail of precipitation is thick. This thick tail reflects that humans are used to a wide range of rainfall regimes, so future precipitation changes, although leading to unprecedented rainfall, are less likely to pose a major challenge. An increase in temperature, on the other hand, will put hundreds of millions of people in heat that is not just unprecedented and but also hard to imagine from extrapolating current temperatures. These findings are qualitatively similar but an order of magnitude smaller than previous studies.

The national version of FUND3.6 is used to backcast the impacts of climate change to the 20th century and extrapolate to the 21st century. Carbon dioxide fertilization of crops and reduced energy demand for heating are the main positive impacts. Climate change had a negative effect on water resources and, in most years, human health. Most countries benefitted from climate change until 1980, but after that the trend is negative for poor countries and positive for rich countries. The global average impact was positive in the 20th century. In the 21st century, impacts turn negative in most countries, rich and poor. Energy demand, water resources, biodiversity and sea level rise are the main negative impacts; the impacts of climate change on human health and agriculture remain positive until 2100.

Probabilistic projections of baseline (with no additional mitigation policies) future carbon emissions are important for sound climate risk assessments. Deep uncertainty surrounds many drivers of projected emissions. Here, we use a simple integrated assessment model, calibrated to century-scale data and expert assessments of baseline emissions, global economic growth, and population growth, to make probabilistic projections of carbon emissions through 2100. Under a variety of assumptions about fossil fuel resource levels and decarbonization rates, our projections largely agree with several emissions projections under current policy conditions. Our global sensitivity analysis identifies several key economic drivers of uncertainty in future emissions and shows important higher-level interactions between economic and technological parameters, while population uncertainties are less important. Our analysis also projects relatively low global economic growth rates over the remainder of the century. This illustrates the importance of additional research into economic growth dynamics for climate risk assessment, especially if pledged and future climate mitigation policies are weakened or have delayed implementations. These results showcase the power of using a simple, transparent, and calibrated model. While the simple model structure has several advantages, it also creates caveats for our results which are related to important areas for further research.