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Global Warming Induced Water-Cycle Changes and Industrial Production – A Scenario Analysis for the Upper Danube River Basin

Christoph Jeßberger (), Maximilian Sindram () and Markus Zimmer ()

No 94, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: Using the environmental decision support system DANUBIA, we analyze the effects of climate change on industry and compare the effectiveness of different adaptation strategies. The observed area covers Germany and Austria up to 2025. Since the main effects of climate change in this region are expected to be caused through changes in the watercycle, we place a special focus on the exemplary region of the upper Danube catchment area. Industry is the main regional user of water resources. Water is an essential production factor and is used in almost every production process of a manufactured good. We apply estimates of regional production functions, based on AFiD-panel micro-data for Germany, to calibrate regional industrial production and water usage within DANUBIA. Thus, we are able to simulate region-specific effects of climate change and the impact of social scenarios using an unprecedented model of reciprocal influences of a huge network of interdisciplinary research areas. Simulation results show wide regional differences in production site reactions as well as between differing scenarios. Comparing scenarios of moderate and serious climate change, we are able to illustrate the severe environmental effects in some regions and to determine considerable economic effects on regional economic growth.

Keywords: Environmental decision support system; climate change; water-cycle; river basin management (search for similar items in EconPapers)
JEL-codes: D24 Q01 Q25 Q52 Q53 (search for similar items in EconPapers)
Date: 2010
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Journal Article: Global Warming Induced Water-Cycle Changes and Industrial Production – A Scenario Analysis for the Upper Danube River Basin (2011) Downloads
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