Economic Evaluation of Climate Change Impacts and Adaptation in Italy

The paper deals with the social and economic dimensions of climate change impacts and adaptation in Italy. The ultimate aim of the paper is to provide policy makers and experts with a conceptual framework, as well as methodological and operational tools for dealing with climate change impacts and adaptation from an economic perspective. In order to do so, first a conceptual and theoretical framework of the economic assessment of climate change impacts is presented and the state of the art about impact assessment studies is briefly analysed. Then, the Italian case is taken into account, by underlying the main impacts and adaptation challenges that are likely to be implied by climate change in the next decades. The analysis of the Italian case is particularly addressed through the description of the methodology and results of two case studies. The first one, dealing mainly with impact assessment, is carried out at the national level and is part of a EC funded project on Weather Impacts on Natural, Social and Economic Systems (WISE). The second one is carried out at the local level and focuses on sea level rise impacts and adaptation in a plane south of Rome. The two case studies allow to propose simple and flexible methodologies for the economic impact assessment and the economic valuation of adaptation strategies.Climate change, Economic impact assessment, Adaptation, Cost benefit analysis

Economic Evaluation of Climate Change Impacts and Adaptation in Italy

The paper deals with the social and economic dimensions of climate change impacts and adaptation in Italy. The ultimate aim of the paper is to provide policy makers and experts with a conceptual framework, as well as methodological and operational tools for dealing with climate change impacts and adaptation from an economic perspective. In order to do so, first a conceptual and theoretical framework of the economic assessment of climate change impacts is presented and the state of the art about impact assessment studies is briefly analysed. Then, the Italian case is taken into account, by underlying the main impacts and adaptation challenges that are likely to be implied by climate change in the next decades. The analysis of the Italian case is particularly addressed through the description of the methodology and results of two case studies. The first one, dealing mainly with impact assessment, is carried out at the national level and is part of a EC funded project on Weather Impacts on Natural, Social and Economic Systems (WISE). The second one is carried out at the local level and focuses on sea level rise impacts and adaptation in a plane south of Rome. The two case studies allow to propose simple and flexible methodologies for the economic impact assessment and the economic valuation of adaptation strategies

Economic Valuation of On Site Material Damages of High Water on Economic Activities based in the City of Venice: Results from a Dose-Response-Expert-Based Valuation Approach

The paper focuses on the economic assessment of damages caused by high water in the city of Venice. In particular, we focus our attention on a valuation exercise that addresses the estimation of monetary, short period, on-site damages due to high water events on the different business activities located in Venice. On-site damages include both mitigation costs, which refer to all types of financial expenditure undergone to avert physical and material damages caused by flooding, and remediation costs, i.e. costs to be sustained for maintenance and substitution of affected building elements. Hence, the present study can be considered as a pioneering attempt to analytically quantify, from an economic point of view, on-site damages from high water. An integrated dose-response modelling and an expert-based valuation approach have been selected as the most suitable economic valuation methodology to shed light on the on-site damages. The main focus of the work is to assess dose-response relationships, which are able to describe the physical effects of high water on the different on-site damage categories, including inner and front doors maintenance, cleaning of pavements and maintenance of the walls. Bearing in mind such an economic valuation framework, we proceed with the estimation of on-site damages not only for the present high water situation (business as usual) but also extend the valuation exercise to three additional high water scenarios: (1) a climate change scenario; (2) a high water protection scenario; and, (3) a combined climate change and protection scenario. Estimation results show that the welfare loss due to on-site, short-term damages supported by the business activities ranges from 3.41 to 4.73 million Euro per year, respectively for the business as usual and climate change scenarios. Finally, we can conclude that the introduction of a public policy protection mechanism that defends the city of Venice from any flooding above 110 cm above the Punta della Salute Tidal Datum, such as the MOSE, will reduce the on-site damages supported by the business activities up to 2.87 million Euro per year.High water damages, Venice, Economic valuation

Learning by Doing vs Learning by Researching in a Model of Climate Change Policy Analysis

Many predictions and conclusions in climate change literature have been made on the basis of theoretical analyses and quantitative models that assume exogenous technological change. One may wonder if those policy prescriptions hold in the more realistic case of endogenously evolving technologies. In previous work we modified a popular integrated assessment model to allow for an explicit role of the stock of knowledge which accumulates through R&D investment. In our formulation knowledge affects the output production technology and the emission-output ratio. In this paper we make progress in our efforts aimed to model the process of technological change. In keeping with recent theories of endogenous growth, we specify two ways in which knowledge accumulates: via a deliberate, optimally selected R&D decision or via experience, giving rise to Learning by Doing. We simulate the model under the two versions of endogenous technical change and look at the dynamics of a number of relevant variables.Climate Policy, Environmental Modeling, Integrated Assessment, Technical Change

Learning by Doing vs Learning by Researching in a Model of Climate Change Policy Analysis

Many predictions and conclusions in climate change literature have been made on the basis of theoretical analyses and quantitative models that assume exogenous technological change. One may wonder if those policy prescriptions hold in the more realistic case of endogenously evolving technologies. In previous work we modified a popular integrated assessment model to allow for an explicit role of the stock of knowledge which accumulates through R&D investment. In our formulation knowledge affects the output production technology and the emission-output ratio. In this paper we make progress in our efforts aimed to model the process of technological change. In keeping with recent theories of endogenous growth, we specify two ways in which knowledge accumulates: via a deliberate, optimally selected R&D decision or via experience, giving rise to Learning by Doing. We simulate the model under the two versions of endogenous technical change and look at the dynamics of a number of relevant variables

Scaling up critical finance for sustainable food systems through blended finance

Sustainable agriculture is systemically underfinanced in developing countries – disproportionately, relative to other sectors – despite its critical contribution to many SDGs. This paper provides a pathway for scaling investment for food system transformation through blended finance by mobilizing commercial banks, non-bank financial institutions and their clients. The development finance community needs to collaborate with private financial institutions and investors to leverage limited public funding and increase investment. Investment in sustainable agriculture in developing countries is risky and therefore beyond the investmen

Economic Valuation of on Site Material Damages of High Water on Economic Activities based in the City of Venice: Results from a Dose-Response-Expert-Based Valuation Approach

The paper focuses on the economic assessment of damages caused by high water in the city of Venice. In particular, we focus our attention on a valuation exercise that addresses the estimation of monetary, short period, on-site damages due to high water events on the different business activities located in Venice. On-site damages include both mitigation costs, which refer to all types of financial expenditure undergone to avert physical and material damages caused by flooding, and remediation costs, i.e. costs to be sustained for maintenance and substitution of affected building elements. Hence, the present study can be considered as a pioneering attempt to analytically quantify, from an economic point of view, on-site damages from high water. An integrated dose-response modelling and an expert-based valuation approach have been selected as the most suitable economic valuation methodology to shed light on the on-site damages. The main focus of the work is to assess dose-response relationships, which are able to describe the physical effects of high water on the different on-site damage categories, including inner and front doors maintenance, cleaning of pavements and maintenance of the walls. Bearing in mind such an economic valuation framework, we proceed with the estimation of on-site damages not only for the present high water situation (business as usual) but also extend the valuation exercise to three additional high water scenarios: (1) a climate change scenario; (2) a high water protection scenario; and, (3) a combined climate change and protection scenario. Estimation results show that the welfare loss due to on-site, short-term damages supported by the business activities ranges from 3.41 to 4.73 million Euro per year, respectively for the business as usual and climate change scenarios. Finally, we can conclude that the introduction of a public policy protection mechanism that defends the city of Venice from any flooding above 110 cm above the Punta della Salute Tidal Datum, such as the MOSE, will reduce the on-site damages supported by the business activities up to 2.87 million Euro per year