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The economic impact of climate driven changes in water availability in Switzerland

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  • Faust, Anne-Kathrin
  • Gonseth, Camille
  • Vielle, Marc

Abstract

The broad objective of this study is to estimate the economic impact of changes in water availability due to climate change in Switzerland with a 2050 time horizon. To do so, the sectoral structure of the computable general equilibrium model GEMINI-E3 is being extended. Raw water resources are introduced as a production factor into the model and a drinking water distribution sector is specified for Switzerland to allow for a precise analysis of the economic consequences of restricted water supply. Predictions of water availability in 2050 are taken from a hydrological model and alternative climate change scenarios are considered. Simulations show possible restrictions in water resource availability to increase raw water prices substantially compared to the baseline. Sectors most affected are the water distribution and agricultural sectors that use irrigation. However, the global economic impact for Switzerland is rather small due to the low price of raw water in Switzerland and its small value in the benchmark scenario. Finally, the simulation of scenarios featuring alternative levels of endogenous adaptive capacity of the economy reveals the possible economic impact of adaptation to climate change.

Suggested Citation

  • Faust, Anne-Kathrin & Gonseth, Camille & Vielle, Marc, 2012. "The economic impact of climate driven changes in water availability in Switzerland," Conference papers 332185, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:332185
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    12. van Heerden, Jan H. & Blignaut, James & Horridge, Mark, 2008. "Integrated water and economic modelling of the impacts of water market instruments on the South African economy," Ecological Economics, Elsevier, vol. 66(1), pages 105-116, May.
    13. Philip Watson & Stephen Davies, 2011. "Modeling the effects of population growth on water resources: a CGE analysis of the South Platte River Basin in Colorado," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(2), pages 331-348, April.
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    Cited by:

    1. Luckmann, Jonas & Grethe, Harald & McDonald, Scott, 2015. "When Water Saving Limits Recycling: Modeling Economy-wide Linkages of Wastewater Use," 2015 Conference, August 9-14, 2015, Milan, Italy 212161, International Association of Agricultural Economists.
    2. Camille Gonseth & Philippe Thalmann & Marc Vielle, 2017. "Impacts of Global Warming on Energy Use for Heating and Cooling with Full Rebound Effects in Switzerland," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 153(4), pages 341-369, October.
    3. Luckmann, Jonas & Grethe, Harald & McDonald, Scott & Orlov, Anton & Siddig, Khalid, 2013. "A general equilibrium approach to modelling multiple types and uses of water," Conference papers 332401, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Luckmann, Jonas & Grethe, Harald & McDonald, Scott, 2015. "When Water Saving Limits Recycling: Modeling Cascading Water Use in a Computable General Equilibrium Framework," Conference papers 332622, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    5. Jaume Freire-González & Christopher A. Decker & Jim W. Hall, 2017. "A Scenario-Based Framework for Assessing the Economic Impacts of Potential Droughts," Water Economics and Policy (WEP), World Scientific Publishing Co. Pte. Ltd., vol. 3(04), pages 1-27, October.
    6. Luckmann, Jonas & Ihle, Rico & Kleinwechter, Ulrich & Grethe, Harald, 2015. "The Effects of Vietnamese Export Policies on the World Market Integration of Domestic Rice Markets," 2015 Conference, August 9-14, 2015, Milan, Italy 212159, International Association of Agricultural Economists.
    7. Nicholas Kilimani, 2014. "Water Taxation and the Double Dividend Hypothesis," Working Papers 201451, University of Pretoria, Department of Economics.
    8. Luckmann, Jonas & McDonald, Scott, 2014. "STAGE_W: An Applied General Equilibrium Model With Multiple Types of Water - Technical Documentation," Working Papers 234473, Universitaet Hohenheim, Institute of Agricultural Policy and Agricultural Markets.

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