The economic impact of climate driven changes in water availability in Switzerland

Anne-Kathrin Faust, Camille Gonseth and Marc Vielle

No 332185, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: The broad objective of this study is to estimate the economic impact of changes in water availability due to climate change in Switzerland with a 2050 time horizon. To do so, the sectoral structure of the computable general equilibrium model GEMINI-E3 is being extended. Raw water resources are introduced as a production factor into the model and a drinking water distribution sector is specified for Switzerland to allow for a precise analysis of the economic consequences of restricted water supply. Predictions of water availability in 2050 are taken from a hydrological model and alternative climate change scenarios are considered. Simulations show possible restrictions in water resource availability to increase raw water prices substantially compared to the baseline. Sectors most affected are the water distribution and agricultural sectors that use irrigation. However, the global economic impact for Switzerland is rather small due to the low price of raw water in Switzerland and its small value in the benchmark scenario. Finally, the simulation of scenarios featuring alternative levels of endogenous adaptive capacity of the economy reveals the possible economic impact of adaptation to climate change.

Keywords: Resource/Energy Economics and Policy; Environmental Economics and Policy (search for similar items in EconPapers)
Pages: 22
Date: 2012
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Working Paper: The economic impact of climate driven changes in water availability in Switzerland (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:332185

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