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CO-designing the Assessment of Climate CHange costs

Periodic Reporting for period 2 - COACCH (CO-designing the Assessment of Climate CHange costs)

Periodo di rendicontazione: 2019-12-01 al 2021-11-30

The objective of the COACCH project is to produce an improved assessment of the risks and costs of climate change in Europe of direct usability and responding to the different needs of the research, the business, and the policy-making communities. Specific goals are to enlighten relations across complex climate impact chains and improve the spatial resolution of physical and economic impact assessments; advance the evidence base on climatic and social-economic tipping points; advance the economic valuation of climate mitigation and adaptation action in the EU at various scales over the short to the longer term; develop a solution/user orientated research involving stakeholders in a truly co-designed, co-produced and co-disseminated effort.
COACCH produced a “more accurate and downscaled economic valuation of climate-induced impacts and risks in Europe” (Call impact 1) assessing with high spatial resolution consequences for/from agriculture, forestry, fishery, sea-level rise, river flooding, transportation, energy demand, energy supply, labour productivity, ecosystems, health. Impacts were also compounded into unifying macro-economic assessments.
COACCH indicated that climate change impacts may entail for the EU a median GDP loss of 2.2% by 2070 (Fig.1). These results are higher compared to previous estimates. COACCH results also highlighted important regional differences, with one quarter of EU regions estimated to experience a loss that is larger than 5% of gross regional product. The main drivers of GDP losses were from sea-level rise (although they drop dramatically under the adaptation scenario), river floods and crop yield changes (Fig.2). There were also important impacts from labour productivity, energy supply and energy demand, more pronounced in southern Europe (Fig.2). While ambitious mitigation policy had major benefits, these arise mostly after mid-century. This also means that the impacts in the next two decades can only be reduced with adaptation.
COACCH developed a throughout analysis on climate and social economic tipping points. It examined 3 of the former and 9 of the latter, co-selected with stakeholders for their relevance for the EU economic system. The major conclusion is that local, but highly socially and economically damaging “tipping points” can emerge in many EU areas by mid-century. An example is the case of potential collapses in flood insurance markets because of rising premiums due to climate change. High increases in unaffordability were projected in Eastern European countries, as well as regions in Sweden, Portugal and Italy (Fig.3).
The COACCH project devoted a particular attention to “Decrease uncertainties on the economic value of climate action in the EU, over the longer term (2050 and beyond) call impact 2). This has been done a) defining, with stakeholders a multi climate change and social economic scenario space to capture scenario uncertainty, b) specifying for each impact type ranges capturing climate and impact model uncertainty and finally c) specifying different assumptions on economic adjustments.
Uncertainty analysis showed a clear dominance of model uncertainty (related to the choice of climate models, or to the assumptions on the functioning of the economic systems) over scenario uncertainty. Within scenario uncertainty, that stemming from the climate futures dominates that from the economic futures (Fig.4).
New damage functions (Fig.5) for major geo-political macro regions (also available at the NUTS2 resolution for the EU) were then estimated and implemented in three Integrated Assessment Models. A full cost-benefit policy analysis showed that with medium damages, the optimal temperature is in line with the 2°C target from the Paris Agreement. When assuming the high end of the damage function, optimal temperatures were in line with a 1.5°C goal. These outcomes are obtained without including catastrophic events.
COACCH also fostered greater transparency of models, methods and tools (Call impact 3) by co-designing research and co-delivering its outcomes with the reference stakeholders guaranteeing easier interpretation and use of recommendations. It also developed an open-access interactive web tool (www.scenarioxplorer.coacch.eu/) enabling easy and intuitive exploration of COACCH results and methods, granted on-line open access to all data produced by the project (https://iiasa.github.io/COACCH/en/master/index.html#coacch-data-repository) so that information can be evaluated, reused and progressed by other research groups, produced easy reading syntheses specifically tailored to non-academic users.
COACCH supported EU policy action and international scientific assessments (Call Impact 4). The COACCH outcomes were used to support the background papers for the new RTD Mission area on Adaptation, the Glasgow City Region Adaptation Strategy, the UK Climate Change Risk Assessment, the Catalonia Climate Change Office, the macroeconomic assessment of climate change impacts of the Italian Ministry of Infrastructures and Sustainable Mobility. On the more scientific ground, COACCH promoted: direct data and information exchange with the SOCLIMPACT and the CASCADES H2020 research projects, supported the DG CLIMA funded SAM-PS study on adaptation modelling. Its findings were included in the UNEP Adaptation Gap Report and the Global Centre on Adaptation Report on the State of Adaptation in Africa. COACCH project is acknowledged in the CLIMATEADAPT portal.
COACCH produced a whole new set of climate change damage estimates for the world, highlighting, for the EU, the possibility of macro-economic losses much larger than previously estimated. It also characterised these losses per region, sector and impact type highlighting where, when and related to what, major vulnerabilities are to be expected.
COACCH advanced, for the EU, the analysis of (3) climatic and (9) social economic tipping points showing that, many EU regions could meet these local, but highly damaging events, already by mid-century. It demonstrated how impact can differ across alternative climate and socio-economic scenarios while discussing mitigation and adaptation policy effectiveness. This provides support to EU businesses, national and local policy decision makers to better understanding climate change risk, prioritizing, and better designing mitigation and adaptation actions.
COACCH estimated a new generation of empirically funded (model validated) reduced-form climate change damage functions. This overcomes one of the major criticisms against these instruments: the weak empirical basis. These functions are freely available to the scientific community to enable validation, use and further advancements of cost benefit and cost effectiveness policy assessments.
COACCH revised and updated estimates of attitudes toward climate risk by EU citizens and developed its own cost benefit/effectiveness policy assessment confirming the robustness of the 2°C stabilization target without the need to “invoke” catastrophic events and irreversibility.
COACCH developed a comprehensive and transparent description and quantification of epistemic (scenario) and aleatory (model) uncertainty.
COACCH developed and applied best practices for co-design and co-production of research that can guide similar exercises in the future. This contributes to bridging the gap between research and end-users and maximise result uptake in users’ decision process.
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Figure 3. Percentage change in insurance unaffordability
Figure 4. Decomposition of uncertainty sources
Figure 5. COACCH climate change damage function for the world
Figure 1. Climate change impacts on EU Gross Regional Product
Figure 2. Climate change impacts on EU GDP