Economic and Structural Database for the MEDPRO Project. MEDPRO Report No. 5, May 2013

This report presents the economic and structural database compiled for the MEDPRO project. The database includes governance, infrastructure, finance, environment, energy, agricultural data and development indicators for the 11 southern and eastern Mediterranean countries (SEMCs) studied in the MEDPRO project. The report further details the data and the methods used for the construction of social accounting, bilateral trade, consumption and investment matrices for each of the SEMCs

A fair climate

Meeting the Paris climate goals will require a huge mitigation effort. To find out how and where it might happen, scenarios are usually designed to minimize global economic cost. This approach however assigns most of the effort to developing nations, which have the least resources to deploy carbon cuts, and the least responsibility for past emissions

Economic impacts of EU clean air policies assessed in a CGE framework

This paper assesses the macroeconomic and sectoral impacts of the “Clean Air Policy Package” proposed by the European Commission in December 2013. The analysis incorporates both the expenditures necessary to implement the policy by 2030 and the resulting positive feedback effects on human health and crop production. A decomposition analysis identifies the important drivers of the macroeconomic impacts. We show that while expenditure on pollution abatement is a cost for the abating sectors, it also generates an increased demand for the sectors that produce the goods required for pollution abatement. Moreover, we find that positive feedback effects, particularly those related to health can offset the resource costs associated to the clean air policy and result in positive macroeconomic impacts for the economy of the European Union

Economic impacts of EU clean air policies assessed in a CGE framework

This paper assesses the macroeconomic and sectoral impacts of the "Clean Air Policy Package" proposed by the European Commission in December 2013. The analysis incorporates both the expenditures necessary to implement the policy by 2030 and the resulting positive feedback effects on human health and crop production. A decomposition analysis identifies the important drivers of the macroeconomic impacts. We show that while expenditure on pollution abatement is a cost for the abating sectors, it also generates an increased demand for the sectors that produce the goods required for pollution abatement. Moreover, we find that positive feedback effects, particularly those related to health can offset the resource costs associated to the clean air policy and result in positive macroeconomic impacts for the economy of the European Union

Impact of low oil prices on the EU economy

The report describes the importance of oil for the EU economy and analyses the potential economic effects that current low oil prices since mid-2014 may have in the EU28 economy. Further it assesses how the current oil price decrease may evolve up to 2020 and the consequences for global oil consumption. The analysis shows that a decrease of the oil price from US$100 to US$50 may lead to a GDP gain of about 0.7%, both on a global level and in the EU28, driven by private consumption and investment. The global gains are not evenly distributed. Net oil importing countries gain, whereas oil exporting countries lose. The analysis mainly focuses on the EU28 and it shows that the more oil-intensive countries and sectors gain more than the rest of the economy. A 50% decrease of the oil price may generate up to 3 million additional jobs (1.3% of the total labour force). Interestingly, oil-intensive sectors do not necessarily improve their competitiveness vis-à-vis their competitors in other regions, as non-EU producers may be less energy efficient and therefore benefit more from low oil prices.JRC.J.1-Economics of Climate Change, Energy and Transpor

Economy-wide effects of coastal flooding due to sea level rise: A multi-model simultaneous treatment of mitigation, adaptation, and residual impacts

This article presents a multi-model assessment of the macroeconomic impacts of coastal flooding due to sea level rise and the respective economy-wide implications of adaptation measures for two greenhouse gas (GHG) concentration targets, namely the Representative Concentration Pathways (RCP)2.6 and RCP4.5, and subsequent temperature increases. We combine our analysis, focusing on the global level, as well as on individual G20 countries, with the corresponding stylized RCP mitigation efforts in order to understand the implications of interactions across mitigation, adaptation and sea level rise on a macroeconomic level. Our global results indicate that until the middle of this century, differences in macroeconomic impacts between the two climatic scenarios are small, but increase substantially towards the end of the century. Moreover, direct economic impacts can be partially absorbed by substitution effects in production processes and via international trade effects until 2050. By 2100 however, we find that this dynamic no longer holds and economy-wide effects become even larger than direct impacts. The disturbances of mitigation efforts to the overall economy may in some regions and for some scenarios lead to a counterintuitive result, namely to GDP losses that are higher in RCP26 than in RCP45, despite higher direct coastal damages in the latter scenario. Within the G20, our results indicate that China, India and Canada will experience the highest macroeconomic impacts, in line with the respective direct climatic impacts, with the two first large economies undertaking the highest mitigation efforts in a cost-efficient global climate action. A sensitivity analysis of varying socioeconomic assumptions highlights the role of climate-resilient development as a crucial complement to mitigation and adaptation efforts

Reducing stranded assets through early action in the Indian power sector

Cost-effective achievement of the Paris Agreement's long-term goals requires the unanimous phase-out of coal power generation by mid-century. However, continued investments in coal power plants will make this transition difficult. India is one of the major countries with significant under construction and planned increase in coal power capacity. To ascertain the likelihood and consequences of the continued expansion of coal power for India's future mitigation options, we use harmonised scenario results from national and global models along with projections from various government reports. Both these approaches estimate that coal capacity is expected to increase until 2030, along with rapid developments in wind and solar power. However, coal capacity stranding of the order of 133–237 GW needs to occur after 2030 if India were to pursue an ambitious climate policy in line with a well-below 2 °C target. Earlier policy strengthening starting after 2020 can reduce stranded assets (14–159 GW) but brings with it political economy and renewable expansion challenges. We conclude that a policy limiting coal plants to those under construction combined with higher solar targets could be politically feasible, prevent significant stranded capacity, and allow higher mitigation ambition in the future

Enhancing global climate policy ambition towards a 1.5 °C stabilization: a short-term multi-model assessment

The Paris Agreement is a milestone in international climate policy as it establishes a global mitigation framework towards 2030 and sets the ground for a potential 1.5 °C climate stabilization. To provide useful insights for the 2018 UNFCCC Talanoa facilitative dialogue, we use eight state-of-the-art climate-energy-economy models to assess the effectiveness of the Intended Nationally Determined Contributions (INDCs) in meeting high probability 1.5 and 2 °C stabilization goals. We estimate that the implementation of conditional INDCs in 2030 leaves an emissions gap from least cost 2 °C and 1.5 °C pathways for year 2030 equal to 15.6 (9.0–20.3) and 24.6 (18.5–29.0) GtCO2eq respectively. The immediate transition to a more efficient and low-carbon energy system is key to achieving the Paris goals. The decarbonization of the power supply sector delivers half of total CO2 emission reductions in all scenarios, primarily through high penetration of renewables and energy efficiency improvements. In combination with an increased electrification of final energy demand, low-carbon power supply is the main short-term abatement option. We find that the global macroeconomic cost of mitigation efforts does not reduce the 2020–2030 annual GDP growth rates in any model more than 0.1 percentage points in the INDC or 0.3 and 0.5 in the 2 °C and 1.5 °C scenarios respectively even without accounting for potential co-benefits and avoided climate damages. Accordingly, the median GDP reductions across all models in 2030 are 0.4%, 1.2% and 3.3% of reference GDP for each respective scenario. Costs go up with increasing mitigation efforts but a fragmented action, as implied by the INDCs, results in higher costs per unit of abated emissions. On a regional level, the cost distribution is different across scenarios while fossil fuel exporters see the highest GDP reductions in all INDC, 2 °C and 1.5 °C scenarios

Mid-century emission pathways in Japan associated with the global 2 °C goal: national and global models’ assessments based on carbon budgets

This study assesses Japan’s mid-century low-emission pathways using both national and global integrated assessment models in the common mitigation scenario framework, based on the carbon budgets corresponding to the global 2 °C goal. We examine high and low budgets, equal to global cumulative 1600 and 1000 Gt-CO2 (2011–2100) for global models, and 36 and 31 Gt-CO2 (2011–2050) in Japan for national models, based on the cost-effectiveness allocation performed by the global models. The impacts of near-term policy assumption, including the implementation and enhancement of the 2030 target of the nationally determined contribution (NDC), are also considered. Our estimates show that the low budget scenarios require a 75% reduction of CO2 emissions by 2050 below the 2010 level, which is nearly the same as Japan’s governmental 2050 goal of reducing greenhouse gas emissions by 80%. With regard to near-term actions, Japan’s 2030 target included in the NDC is on track to meet the high budget scenario, whereas it is falling short for the low budget scenario, which would require emission reductions immediately after 2020. Whereas models differ in the type of energy source on which they foresee Japan basing its decarbonization process (e.g., nuclear- or variable renewable energy-dependent), the large-scale deployment of low-carbon energy (nuclear, renewable, and carbon capture and storage) is shared across most models in both the high and low budget scenarios. By 2050, low-carbon energy represents 44–54% of primary energy and 86–97% of electricity supply in the high and low budget scenarios, respectively