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The economic impact of a shutdown of the Thermohaline Circulation: an application of FUND

Peter Link () and Richard Tol ()

No FNU-103, Working Papers from Research unit Sustainability and Global Change, Hamburg University

Abstract: The integrated assessment model FUND 2.8n is applied in an analysis of the overall economic consequences in a scenario of a shutdown of the thermohaline circulation (THC). Monetized market and non-market impacts of changes in environmental conditions following a THC collapse are determined for 207 individual countries. Eight different response patterns can be identified. The dominant pattern is that a THC shutdown has an offsetting effect on the underlying warming trend. Depending on whether the impacts of warming are initially beneficial or detrimental, the economic effects of a THC collapse show distinct regional variability. Key economic sectors affected in a THC shutdown scenario are water resources and energy consumption, as well as cardiovascular and respiratory diseases among health impacts. The maximum, national impact of a collapse of the THC turns out to be of the magnitude of a few per cent of GDP, but the global impact is much smaller. Considering the low probability of occurrence, a THC shutdown does not call for drastic action at present.

Keywords: Fisheries; climate change (search for similar items in EconPapers)
JEL-codes: Q54 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2006-05, Revised 2006-05
New Economics Papers: this item is included in nep-ene and nep-env
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