Macroeconomic Evaluation of Climate Change in Austria: A Comparison Across Impact Fields and Total Effects

Abstract

This chapter evaluates the aggregate macroeconomic effects of the quantifiable impact chains in ten impact fields for Austria: Agriculture, Forestry, Water Supply and Sanitation, Buildings (with a focus on heating and cooling), Electricity, Transport, Manufacturing and Trade, Cities and Urban Green, Catastrophe Management, and Tourism. First, the costing methodology used for each impact chain as well as the respective interface to implement them within the macroeconomic model are reviewed and compared across impact fields. The main finding here is that gaps in costing are mostly the consequence of insufficient data and for that reason, the two important impact fields Ecosystem Services and Human Health could not be assessed in monetary terms. Second, for the subset of impact chains which could be monetised, a computable general equilibrium (CGE) model is then used to assess the macroeconomic effects caused by these. By comparing macroeconomic effects across impact fields, we find that the strongest macroeconomic impacts are triggered by climate change effects arising in Agriculture, Forestry, Tourism, Electricity, and Buildings. The total macroeconomic effect of all impact chains—which could be quantified and monetised—is modest up to the 2050s: both welfare and GDP decline slightly compared to a baseline development without climate change. This is mainly due to (a) all but two impact chains refer to trends only (just riverine flooding damage to buildings and road infrastructure damages cover extreme events), (b) impacts are mostly redistribution of demand, while stock changes occurring as a consequence of extreme events are basically not covered and (c) some of the precipitation-triggered impacts point in opposite directions across sub-national regions, leading to a comparatively small net effect on the national scale.