Full Costs of Climate Change – ClimateCost
ClimateCost aims to inform policy on a) long-term climate change policy targets, b) the costs of inaction (the economic effects of climate change), and c) the costs and benefits of adaptation.
ClimateCost aims to inform policy on a) long-term climate change policy targets, b) the costs of inaction (the economic effects of climate change), and c) the costs and benefits of adaptation.
To advance knowledge on the full economic costs of climate change, the project will:
- Identify and develop consistent climate change and socio-economic scenarios;
- Quantify in physical terms, and economic costs, the ‘costs of inaction’ for these scenarios, including also costs and benefits of adaptation.
- Update the mitigation costs of GHG emission reductions for medium and long-term reduction targets/ stabilisation goals.
- Quantify the ancillary air quality benefits of mitigation.
- Apply a number of complementary CGM and IAM models to incorporate the information from the tasks above.
- Bring all the information above together to provide policy relevant output, including information on physical effects and economic values, and undertake analysis of policy scenarios.
There is recognition that the economic costs of climate change as assessed in sectoral studies do not fully capture the economy wide effects. While the valuation of effects above is generally done from the perspective of ‘willingness to pay’ (WTP), there is a need to supplement this analysis with general equilibrium analysis of the impacts considered. This proposal includes such an analysis and FEEM will develop and use its CGE tool, ICES, to this aim.
Combined information from the detailed analysis and the wider economy analysis performed in the project will be used to update and enhance a number of existing leading Integrated Assessment Models (IAMs), among others the FEEM WITCH model, in order to combine the scientific and economic aspects of climate change within a single, iterative analytical framework.