economic impacts of climate change for south …...climate change impact channels • world...
TRANSCRIPT
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Economic Impacts of Climate Change for South Africa:
An Economywide Perspective to 2050
Channing Arndt (UNU-WIDER)
with many others
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UNU-WIDER Development Under Climate Change
• Analytical work completed for: – Zambeze River Valley
– Vietnam
– Carbon tax in collaboration with NT
• Current collaborative process in South Africa to consider climate change impacts and potential adaptation strategies.
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Integrated
Modeling Framework
CLIRRUN/PITMAN
WRYM
IRRDEM/Smith IPSS
ADJUSTED FOR
RSA MODELS
GCM HFDs
LTAS Scenarios
Water supply to
urban and industry
Development/
Demand
Scenario(s)
Water supply (Local
hydropower)
Baseline
Climate
Scenario(s)
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Perspective on Work
• Questions: – What are the implications of climate change for growth and development
prospects?
– What are the potentially large impact channels?
– How much should the National Treasury allocate to climate change adaptation over the next two decades in order to offset negative economic impacts?
– How do we meet development goals in the context of climate change?
• State of progress in modeling : – System is functioning (mechanically)
– Needs refinement, QC & QA
– A series of illustrative results are available
– On a good timeline for report completion by end March
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Trade Remittances
Foreign markets
Government
Loans
Taxes
Consumption
spending Taxes &
social grants
Taxes
Economic growth Household welfare
Incomes
Consumption Production Product markets
Payments Agriculture
Services
Rural
Urban
Factor markets
Industry
Productivity
Human/physical capital
Public
investment Foreign
investment
Private
investment
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Benchmark Data
• 2002 Social Accounting Matrix – 2002 Supply-Use Table
– 2002 Census of Commercial Agriculture (large-scale farms)
– 2000 Population Census
– 2000 Income and Expenditure Survey
– 2002 Standard Industrial Database (SASID)
• 2000/2005 Water Accounts
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Sectors
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Economic Structure
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Crops and Water Use
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Water Management Areas
Cape Town
Durban
Johannesburg
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Matching Water and Economic Data
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CPT
DBN
JHB
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CPT
DBN
JHB
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Integrated
Modeling Framework
CLIRRUN/PITMAN
WRYM
IRRDEM/Smith IPSS
ADJUSTED FOR
RSA MODELS
GCM HFDs
LTAS Scenarios
Water supply to
urban and industry
Development/
Demand
Scenario(s)
Water supply (Local
hydropower)
Baseline
Climate
Scenario(s)
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Climate Change Impact Channels
• World commodity prices
• Agriculture – Crop yield deviations; and irrigation water supply
• Non-irrigation water supplies – Affect non-agriculture production and households
• Road infrastructure – Costs to maintain the same road network
• Sea level rise – SLR reduces crop land and damages coastal infrastructure
• Energy – Domestic and regional hydropower supply?
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Agriculture and Irrigation
• CGE measures direct and indirect impacts – Reallocation of crop land in response to changing crop productivity and
water resource constraints
– Change in food imports in response to changing domestic production and world food prices
– Effects on downstream processing
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Baseline “No Climate Change” Scenario
• Define a baseline growth scenarios (or a set of scenarios) – Population and labor supply growth (by skill groups)
– Urbanization rates
– Sector and WMA-level productivity growth
• Water demand projections – Fix industrial, commercial and residential water demand
– Residual allocated to irrigated agriculture
• Historical weather repeats itself (50 years)
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PRELIMINARY RESULTS
FOCUS ON AGRICULTURE/WATER IMPACT CHANNEL UNDER UNCONSTRAINED
EMISSIONS
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Agricultural Share of GDP
05
10
15
Den
sity
.94 .96 .98 1 1.02 1.04Ratio
Relative to xw
Var= AgshrX Scenario=xa
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Agricultural GDP
24
68
10
12
Den
sity
.95 1 1.05Ratio
Relative to xw
Var= AgGDPX Scenario=xa
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Non-Agricultural GDP 1
00
150
200
250
Den
sity
1.004 1.006 1.008 1.01 1.012Ratio
Relative to xw
Var= QVAXNonAg Scenario=xa
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Both Industry and Services Expand Slightly as Agriculture Releases Resources
Industry Services
50
100
150
200
250
Den
sity
1.004 1.006 1.008 1.01 1.012Ratio
Relative to xw
Var= QVAXManu Scenario=xa
100
150
200
250
300
Den
sity
1.004 1.006 1.008 1.01 1.012Ratio
Relative to xw
Var= QVAXServ Scenario=xa
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Real Value Added in Agriculture (Dry Land)
11
.52
2.5
Den
sity
.7 .8 .9 1 1.1 1.2Ratio
Relative to xw
Var= QVAXDry Scenario=xa
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Real Value Added in Agriculture (Irrigated Land)
46
81
01
2
Den
sity
.95 1 1.05 1.1Ratio
Relative to xw
Var= QVAXIrr Scenario=xa
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Diversity of Impacts on Agriculture Across WMAs
WMA 17 – Consistent Losses WMA 5 – Mostly Gains
05
10
15
20
Den
sity
.92 .94 .96 .98 1Ratio
Relative to xw
Var= QVAXAgw17 Scenario=xa
12
34
5
Den
sity
.9 1 1.1 1.2 1.3Ratio
Relative to xw
Var= QVAXAgw5 Scenario=xa
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GDP Impact
50
100
150
200
Den
sity
1.002 1.004 1.006 1.008 1.01 1.012Ratio
Relative to xw
Var= GDPfcX Scenario=xa
This distribution will likely shift to the left when other channels, such as roads and SLR are incorporated.
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Expectations at this Point
• Based on the impact channels considered, we expect: – Mild negative implications for overall GDP growth
– Increased costs to maintain the same transport infrastructure
– Potentially strong economic impacts for
• Dry land agriculture (broad confidence intervals)
• Water availability in certain WMAs
• Infrastructure on a localized basis
• Particular zones vulnerable to sea level rise
• The cumulative economic impact of excluded impact channels is likely negative but not very large in a macroeconomic sense