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CIRCLE: PROJECTING
ENVIRONMENTAL FEEDBACKS
ON ECONOMIC GROWTH
Rob Dellink
Environment Directorate, OECD
CCXG Global Forum
18 March 2014
• Two key objectives:
– Quantify how changes in environmental quality, climate
change, degradation and scarcity of natural resources
affect the economy, and ultimately prospects for long-
term growth (costs of inaction)
– Assess the benefits, as well as trade-offs, associated with
policy responses to these environmental challenges
(benefits of policy action)
• Regional and sectoral quantitative approach where possible,
coupled with more general insights where needed
2
CIRCLE Objectives
3
Modelling track
Climate change
Air pollution
Land-water-energy nexus
Water
Biodiversity and ecosystems
Resource scarcity
Scoping track
Project themes and tracks
Climate change impacts and damages
• Coastal land losses and damages to capital
Sea level rise
• Changes in morbidity and demand for healthcare
Health
• Changes in productivity of production sectors
Ecosystems
• Changes in agricultural productivity
Crop yields
• Changes in productivity of tourism services
Tourism flows
• Changes in the demand for energy from cooling and heating
Energy demand
• Changes in catchment
Fisheries
• Extreme weather events, water stress, catastrophic risks, …
Not included
4
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
2010 2020 2030 2040 2050 2060
Global GDP impacts (% change wrt no-damages baseline)
Likely uncertainty range
equilibrium climate sensitivity (1.5°C - 4.5°C)
5
Global assessment
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
2010 2020 2030 2040 2050 2060
Global GDP impacts (% change wrt no-damages baseline)
Likely uncertainty range
equilibrium climate sensitivity (1.5°C - 4.5°C)
Wider uncertainty range
equilibrium climate sensitivity (1°C - 6°C)
Central projection
-4.0%
-3.5%
-3.0%
-2.5%
-2.0%
-1.5%
-1.0%
-0.5%
0.0%
2010 2020 2030 2040 2050 2060
Global GDP impacts (% change wrt no-damages baseline)
Likely uncertainty range
equilibrium climate sensitivity (1.5°C - 4.5°C)
Wider uncertainty range
equilibrium climate sensitivity (1°C - 6°C)
Central projection
Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
6
Sectoral results (central projection)
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
OECD America OECD Europe OECD Pacific Rest of Europe
and Asia
Latin America Middle East &
North Africa
South & South-
East Asia
Sub-Saharan
Africa
World
Global GDP impact (% change wrt no-damages baseline, 2060)
Agriculture
Energy intensive industries
Other industries
Services
GDP
Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
• Post-2060 stylised assessment reveals:
– GDP losses remain for at least a century
– Substantial increase in risk of much larger damages
• Further work needed to …
– … expand the quality of the calibration, esp. agriculture
– … expand the range of impacts (water, extreme weather, …)
– … look at large-scale disruptions / catastrophic risks:
unable to quantify but may potentially be larger than
incremental damages
– … do more thorough uncertainty analysis
– … integrate with other CIRCLE themes
– … assess benefits of policy action (adaptation & mitigation)
Placing results into context
7
THANK YOU!
For more information:
www.oecd.org/environment/indicators-modelling-outlooks/CIRCLE.htm
www.oecd.org/environment/modelling
• Baseline
– OECD@100 baseline available
• Climate change
– Background report (Prof. Sue Wing) completed
– Collaboration with FEEM to model climate damages
– Contribution to OECD@100, NAEC
• Air pollution
– Collaboration with IIASA and PBL
– Work on emissions in ENV-Linkages, planning scoping
work on health impacts and feedbacks to economy
• Land-water-energy nexus
– Collaboration with PBL
9
Current status: modelling track
• Biodiversity and ecosystems
– Scoping work started with consultant Anil Markandya
• Water
– Scoping work started on water stress with consultant
Thomas Hertel
– Still need to scope water pollution and to identify
delineation with nexus analysis
• Natural resources
– Collaboration with LSE established for work on specific
case studies
10
Current status: scoping track
11
Shares of selected impacts
Agriculture
Ecosystems
Energy
Fisheries
Health
Sea level
rise
Tourism
World damages 2035
Agriculture
Ecosystems
Energy
Fisheries
Health
Sea level
rise
Tourism
World damages 2060
Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
12
Regional results (central projection)
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2010 2020 2030 2040 2050 2060
Regional GDP impacts (% change wrt no-damages baseline)
OECD Pacific
Rest of Europe & Asia
OECD Europe
Latin America
OECD America
World
Sub-Saharan Africa
Middle East &
North Africa
South & South -
East Asia
13
Unilateral regional effects (central proj.)
-6%
-5%
-4%
-3%
-2%
-1%
0%
1%
2%
OECD America OECD Europe OECD Pacific Rest of Europe
and Asia
Latin America Middle East &
North Africa
South & South-
East Asia
Sub-Saharan
Africa
Regional GDP impacts (% change wrt no-damages baseline)
'Unilateral' impact
Total impact
Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
14
Stylised analysis post-2060 (AD-RICE)
-6%
-5%
-4%
-3%
-2%
-1%
0%
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Global GDP impacts (% change wrt no-damage baseline)
Likely uncertainty range (Business as Usual)
Likely uncertainty range (Committed by 2060)
Central projection (Business as Usual)
Central projection (Committed by 2060)
-6%
-5%
-4%
-3%
-2%
-1%
0%
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Global GDP impacts (% change wrt no-damage baseline)
Likely uncertainty range (Business as Usual)
Likely uncertainty range (Committed by 2060)
Central projection (Business as Usual)
Central projection (Committed by 2060)
15
Stylised analysis post-2060 (AD-RICE)
-10%
-9%
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Global GDP impacts (% change wrt no-damage baseline)
Likely uncertainty range (Business as Usual)
Wider uncertainty range (Business as Usual)
Central projection (Business as Usual)
Central projection (no adaptation)
Central projection (Weitzman damages)
-10%
-9%
-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Global GDP impacts (% change wrt no-damage baseline)
Likely uncertainty range (Business as Usual)
Wider uncertainty range (Business as Usual)
Central projection (Business as Usual)
Central projection (no adaptation)
Central projection (Weitzman damages)

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Dellink (oecd) circle ccxg global forum march2014

  • 1. CIRCLE: PROJECTING ENVIRONMENTAL FEEDBACKS ON ECONOMIC GROWTH Rob Dellink Environment Directorate, OECD CCXG Global Forum 18 March 2014
  • 2. • Two key objectives: – Quantify how changes in environmental quality, climate change, degradation and scarcity of natural resources affect the economy, and ultimately prospects for long- term growth (costs of inaction) – Assess the benefits, as well as trade-offs, associated with policy responses to these environmental challenges (benefits of policy action) • Regional and sectoral quantitative approach where possible, coupled with more general insights where needed 2 CIRCLE Objectives
  • 3. 3 Modelling track Climate change Air pollution Land-water-energy nexus Water Biodiversity and ecosystems Resource scarcity Scoping track Project themes and tracks
  • 4. Climate change impacts and damages • Coastal land losses and damages to capital Sea level rise • Changes in morbidity and demand for healthcare Health • Changes in productivity of production sectors Ecosystems • Changes in agricultural productivity Crop yields • Changes in productivity of tourism services Tourism flows • Changes in the demand for energy from cooling and heating Energy demand • Changes in catchment Fisheries • Extreme weather events, water stress, catastrophic risks, … Not included 4
  • 5. -4.0% -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 2010 2020 2030 2040 2050 2060 Global GDP impacts (% change wrt no-damages baseline) Likely uncertainty range equilibrium climate sensitivity (1.5°C - 4.5°C) 5 Global assessment -4.0% -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 2010 2020 2030 2040 2050 2060 Global GDP impacts (% change wrt no-damages baseline) Likely uncertainty range equilibrium climate sensitivity (1.5°C - 4.5°C) Wider uncertainty range equilibrium climate sensitivity (1°C - 6°C) Central projection -4.0% -3.5% -3.0% -2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 2010 2020 2030 2040 2050 2060 Global GDP impacts (% change wrt no-damages baseline) Likely uncertainty range equilibrium climate sensitivity (1.5°C - 4.5°C) Wider uncertainty range equilibrium climate sensitivity (1°C - 6°C) Central projection Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
  • 6. 6 Sectoral results (central projection) -6% -5% -4% -3% -2% -1% 0% 1% 2% OECD America OECD Europe OECD Pacific Rest of Europe and Asia Latin America Middle East & North Africa South & South- East Asia Sub-Saharan Africa World Global GDP impact (% change wrt no-damages baseline, 2060) Agriculture Energy intensive industries Other industries Services GDP Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
  • 7. • Post-2060 stylised assessment reveals: – GDP losses remain for at least a century – Substantial increase in risk of much larger damages • Further work needed to … – … expand the quality of the calibration, esp. agriculture – … expand the range of impacts (water, extreme weather, …) – … look at large-scale disruptions / catastrophic risks: unable to quantify but may potentially be larger than incremental damages – … do more thorough uncertainty analysis – … integrate with other CIRCLE themes – … assess benefits of policy action (adaptation & mitigation) Placing results into context 7
  • 8. THANK YOU! For more information: www.oecd.org/environment/indicators-modelling-outlooks/CIRCLE.htm www.oecd.org/environment/modelling
  • 9. • Baseline – OECD@100 baseline available • Climate change – Background report (Prof. Sue Wing) completed – Collaboration with FEEM to model climate damages – Contribution to OECD@100, NAEC • Air pollution – Collaboration with IIASA and PBL – Work on emissions in ENV-Linkages, planning scoping work on health impacts and feedbacks to economy • Land-water-energy nexus – Collaboration with PBL 9 Current status: modelling track
  • 10. • Biodiversity and ecosystems – Scoping work started with consultant Anil Markandya • Water – Scoping work started on water stress with consultant Thomas Hertel – Still need to scope water pollution and to identify delineation with nexus analysis • Natural resources – Collaboration with LSE established for work on specific case studies 10 Current status: scoping track
  • 11. 11 Shares of selected impacts Agriculture Ecosystems Energy Fisheries Health Sea level rise Tourism World damages 2035 Agriculture Ecosystems Energy Fisheries Health Sea level rise Tourism World damages 2060 Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
  • 12. 12 Regional results (central projection) -6% -5% -4% -3% -2% -1% 0% 1% 2010 2020 2030 2040 2050 2060 Regional GDP impacts (% change wrt no-damages baseline) OECD Pacific Rest of Europe & Asia OECD Europe Latin America OECD America World Sub-Saharan Africa Middle East & North Africa South & South - East Asia
  • 13. 13 Unilateral regional effects (central proj.) -6% -5% -4% -3% -2% -1% 0% 1% 2% OECD America OECD Europe OECD Pacific Rest of Europe and Asia Latin America Middle East & North Africa South & South- East Asia Sub-Saharan Africa Regional GDP impacts (% change wrt no-damages baseline) 'Unilateral' impact Total impact Note: Preliminary results using ENV-Linkages model; not to be cited or quoted
  • 14. 14 Stylised analysis post-2060 (AD-RICE) -6% -5% -4% -3% -2% -1% 0% 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Global GDP impacts (% change wrt no-damage baseline) Likely uncertainty range (Business as Usual) Likely uncertainty range (Committed by 2060) Central projection (Business as Usual) Central projection (Committed by 2060) -6% -5% -4% -3% -2% -1% 0% 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Global GDP impacts (% change wrt no-damage baseline) Likely uncertainty range (Business as Usual) Likely uncertainty range (Committed by 2060) Central projection (Business as Usual) Central projection (Committed by 2060)
  • 15. 15 Stylised analysis post-2060 (AD-RICE) -10% -9% -8% -7% -6% -5% -4% -3% -2% -1% 0% 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Global GDP impacts (% change wrt no-damage baseline) Likely uncertainty range (Business as Usual) Wider uncertainty range (Business as Usual) Central projection (Business as Usual) Central projection (no adaptation) Central projection (Weitzman damages) -10% -9% -8% -7% -6% -5% -4% -3% -2% -1% 0% 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 Global GDP impacts (% change wrt no-damage baseline) Likely uncertainty range (Business as Usual) Wider uncertainty range (Business as Usual) Central projection (Business as Usual) Central projection (no adaptation) Central projection (Weitzman damages)