ClimateCost (the Full Costs of Climate Change) is a major research project on the economics of climate change, funded from the European Community's Seventh Framework Programme. The three primary objectives of the project are to advance knowledge in the following areas: 1. Long-term targets and mitigation policies. 2. Costs of inaction (the economic effects of climate change). 3. Costs and benefits of adaptation. To achieve these objectives, seven research tasks were agreed upon: 1. Identify and develop consistent scenarios for climate change and socio-economic development, including mitigation scenarios. 2. Quantify in physical terms, and value as economiac costs, the effects of future climate change (the ‘costs of inaction’) under different scenarios for the EU and other major negotiator countries (China, India). This analysis will be at a disaggregated level, undertaken, where possible using spatial analysis (Geographic Information Systems, GIS). The analysis will include market and non-market sectors (coasts, health, ecosystems, energy, water and infrastructure). The analysis will also quantify and value the costs and ‘benefits’ of adaptation. 3. Assess the potential physical effects and economic costs of major catastrophic events and major socially contingent effects. 4. Update the mitigation costs of greenhouse gas (GHG) emissions reductions, consistent with medium- and long-term reduction targets/stabilisation goals for the mitigation scenarios, including (induced) technological change, non-CO2 GHG and sinks, and recent abatement technologies. 5. Quantify the ancillary air-quality co-bene!ts (in physical and economic terms) of mitigation, using a spatially detailed disaggregated approach to quantify bene!ts in Europe, China and India. 6. Develop and apply a number of General Circulation Models (GCMs) and Integrated Assessment Models (IAM) to integrate the analyses. 7. Bring the information together to provide policy relevant output, including undertaking analysis of policy scenarios. For more about this information about this project, please follow this link to the project page on weADAPT: http://weadapt.org/knowledge-base/economics-of-adaptation/climatecost

2. ClimateCost
 EU Funded Research project – 7th Framework Programme on:
 Economic costs of climate change
 Costs and benefits of mitigation (including co-benefits)
 Costs and benefits of adaptation
 Completed End of 2011
 Multi-disciplinary study, involving top-down and bottom up modelling, with teams
from across Europe
 European detailed analysis, within Global assessment

3. Methods and Innovation
Climate Cost used Classical Impact Assessment Method - series of steps
• Climate model output (future climate change signal)
 Combine with stock at risk (e.g. population)
 Use response functions that link climate parameters to assess physical impacts
 Value physical impacts in economic terms, for both market and non-market sectors
 Assess costs and benefits of adaptation
Innovation
 1) Explicitly consider climate uncertainty- rather than central projections only
 2) Separate out socio-economic and climate change
 3) Feed analysis into macro-economic assessment with CGE and IA models

4. Climate model analysis and data
 30 yr time slices ENSEMBLES data
 (2010-2040; 2040-2070; 270-2100) for 2 scenarios
 A1B (medium-high)
 E1 Mitigation (equivalent to 2 degrees)
 So can consider benefits of mitigation action
 BUT looking at uncertainty
 Very large differences across the models - even in the sign (+/-) of change
 Climate model information written up in short policy summary

5. Medium high
baseline (A1B)
mitigation
Benefit of
Mitigation = 2
degrees (E1)
Projected change in global mean temperature (°C) with respect
to 1961-1990 for the A1B (red) and E1 (green) emissions
Source Christensen, Goodess, Harris, Climatic and Watkiss, 2011 scenarios. Results from ENSEMBLES GCMs. Thin lines:
individual models. Thick lines: ensemble mean.

6. Models and Sector Analysis
ClimateCost uses a ‘impact assessment’ approach using sector models
 coastal zones (DIVA). Population affected, flood damage, beach erosion, loss wetlands, etc
 floods (LISFLOOD) – flood damage for 5 sectors.
 energy (POLES). Heating and cooling, hydro potential, thermal cooling, water abstraction
 health (LSHTM). Heat and cold related mortality, food borne disease, labour productivity, floods
 agriculture (UPM - PESETA). Crop based models and land productivity - linked to economic
 ecosystems (LPJ) – terrestrial carbon and biomes
 While comprehensive – still only a subset of impacts – and subset of sectors

7. Damage Costs are High – e.g. River Floods
River Damage Costs from Climate Change (EU27)
River flood damage costs A1B, Feyen et al, 2011

8. But fall significantly with mitigation – e.g. Cooling
Changes in EU27 energy costs due to climate change for Source Mima et al
cooling energy demand - A1B
220 BCM2
200
180 EGMAM1 E1 (mitigation)
160
EGMAM2
140 Changes in EU27 energy costs due to climate change for
120 EGMAM3 cooling energy demand - E1
B$
100 220 CNCM33
80 IPCM4
200 EGMAM2_2
60 MPEH5_1 180
40 EGMAM2_3
160
20 MPEH5_3 IPCM4v2_1
140
0
B$
DMIEH5 120 IPCM4v2_2
-20
100 IPCM4v2_3
2020 2030 2040 2050 2060 2070 2080 2090 2100 HADGEM
80
60 MPEH5C_1
40 MPEH5C_2
A1B 20 MPEH5C_3
0
HADCM3C
-20
HADGEM2
2020 2030 2040 2050 2060 2070 2080 2090 2100
Cooling Energy Costs from Climate Change (EU27)

9. But with strong distributional patterns across Europe
Annual damage costs (billions euros / year (2005 value))
Coastal Damage Costs by Country
A1B, combination of SES and CC
Source Nicholls et al

10. Mitigation has important co-benefits
 Mitigation will improve air quality in Europe – locally and in the short-term
 Benefits (health, ecosystems) valued at €70 million/year by 2050
Source Rafaj et al, 2011, Holland et al, 2011 Statistical loss of life expectancy due to anthropogenic PM2.5, months

11. Adaptation appears potentially very cost-effective (cost-
beneficial) in reducing costs of CC
Benefits of Coastal adaptation (EU) Benefits of adaptation
30
No upgrade A1B(I) Mid
With upgrade
Annual total damage cost (billions euros / year (2005 value))
25 No upgrade
E1 Mid
With upgrade
No upgrade
No SLR
With upgrade
20
15
10
5
0
Present 2020s 2050s 2080s
Year
Coastal damage costs with and without adaptation
A1B, Brown et al, 2011

12. But Considering
Uncertainty is key for
Adaptation
Change in flood damage for the 12
individual climate model A1B RCM
runs
Highlights the need for
robust adaptation
decision making
A1B, combination of SES and CC
Source Feyen et al JRC ISPRA

13. Mitigation and Climate Policy
 Project assessed some of the impacts of major catastrophic events
 Extreme SLR could lead to global damage costs of ~ $1 trillion/year by 2100,
as well as flooding tens of millions of people (supports 2 degrees)
 Project has funded suite of mitigation model updates (POLES, GEM-E3) that
were used in the 2050 Roadmap analysis
 Study developed new integrated assessment model (PAGE09), as well as FUND
and WITCH models and run analysis of the costs and benefits of mitigation policy
and social costs of carbon

14. What emerges from the study
 There are large economic costs from climate change in Europe
 Also strong distributional patterns across Europe – economic impacts are not equal
across Member States
 Economic costs significantly lower under mitigation scenarios, but only post 2040,
thus need for adaptation and mitigation
 Mitigation also avoids major tipping elements
 Mitigation leads to high co-benefits, health benefits and large economic benefits
from improving air quality
 Adaptation effective in reducing impacts at low cost (high benefit to cost ratios)
 However, uncertainty requires decision making under uncertainty – and a move to
robustness and resilience

15. Key success elements
 Large multi-disciplinary consortium, with wide geographical coverage, successfully
completed project
 Key research developments
 New PAGE integrated assessment model
 Improvement of suite of EC mitigation policy tools
 European wide impact models
 Academic outputs (14 published papers to date, and rising)
 High degree of policy interaction – meetings, briefing notes – and use of the results
in EC policy analysis (e.g. 2050 road map)

16. Dissemination
Series of Technical briefing notes
Available at:
www.climatecost.cc