ACCREU partners presented several papers at the EAERE Annual Conference held in Bergen last 16-19 June. Here below you can find the full list of presentations:
Attributing historical climate change to in labour force impacts
by Shouro Dasgupta
The extent to which changes in labour force outcomes can be attributed to historic climate change is currently unknown. Here, robust estimates of the impact of climatic stressors on labour supply, labour productivity, and a metric of the two – effective labour, are combined with novel historic climate forcing data to quantify the effect of historic climate change on labour. We do this at the global and regional level, taking explicit account of heterogeneity of working conditions. Globally, effective labour in outdoor working conditions was 1.8 percentage points lower in 1901-2019 than it would have been without climate change. The attributable declines have increased over time, rising to 3.6 percentage points between 2001 and 2019. The highest declines have been in the relatively lower-income regions of Western Africa, South-Eastern Asia, and Middle Africa, where climate change has increased workforce inequalities. Economic effects through impacts on GDP are estimated, up to a 12% GDP loss for some regions are found. These findings can help improve the design of better labour protections, improve worker health, enhance productivity and economic growth, and inform better climate adaptation and resilience.
Assessing climate change costs for EU households
by Lorenza Campagnolo, Enrica De Cian, Filippo Pavanello, Giacomo Falchetta, Francesco Pietro Colelli, Gabriele Mansi, Andrea Bigano, Ramiro Parrado, Erica Frassetto
The paper investigates the major climate-related risks for households in the EU by quantifying the relationship between a set of selected climate-hazards metrics, households’ income by source, and sector-specific expenditures, capturing both the climate induced cost of impacts and adaptation measures. The paper analyses the distribution of climate change costs by type (income source- and good/service expenditure-related) across regions (NUTS1 level) and socioeconomic characteristics of households (poor, medium income and rich households). In addition, the implications of climate change costs on income distribution and risk of poverty are investigated. Strong vulnerability of EU households emerges especially in the Southern EU.
Can home solar PV users better adapt to price and temperature shocks? Evidence from Italy between 2021-2022
by Enrica De Cian, Francesco Pietro Colelli, Lucia Piazza, Wilmer Pasut
The use of renewable energy sources, the energy crisis and the increased frequency and intensity of high heat events are changing the conditions under which European households consume energy services for their thermal comfort. Leveraging high-frequency residential electricity consumption data of over 10,000 households of one municipality in Northern Italy, between 2021 and 2022, we show that Photovoltaic (PV) adoption reduces electricity extraction from the grid, during high price and temperature events, enhancing energy security and affordability. Based on our estimated demand functions, we measure significant differences in the price-induced consumer surplus loss for households with and without PV, which amount to 133 and 300 euros, respectively, highlighting substantial private benefits from PV adoption during price fluctuations. Also, we evaluate the social benefits of PV adoption by using the global estimates of the Social Cost of Carbon (SCC) to monetize the value of avoided negative externalities due to GHGs emissions. The adoption of PV by an average household in Brescia spares up to 544 Kg of CO2 in a year, leading to a reduction of environmental damages for a value of 166 – 266 €/year.
The Impact of Temperature Extremes on Local Power Distribution
by Francesco Pietro Colelli, Filippo Pavanello, Luis Sarmiento
As global temperatures rise and extreme weather events intensify, local power distribution systems face significant reliability challenges. Using a novel dataset of daily municipal-level unplanned outages, we show that temperature extremes substantially increase outage incidence, beyond the known effects of hurricanes and storms. This vulnerability primarily arises from technical failures, such as equipment faults and overloads, rather than environmental factors like high winds or lightning. Large deviations from moderate temperatures sharply elevate the risk of technical outages, with overload-related outages increasing from below 2% at mild temperatures to nearly 35% at temperatures exceeding 39 °C. Moreover, heat-induced outages increase with greater air conditioning adoption, exacerbating grid stress precisely when cooling is most needed. These findings reveal an overlooked climate risk for developing regions, where rising temperatures and growing reliance on air conditioning may strain distribution networks. Our results underscore the urgency of targeted policy interventions and infrastructure investments to enhance grid resilience amid intensifying heatwaves.
Inequality in Flood Insurance Arrangements to Finance Flood Recovery under Climate Change
by Max Tesselaar, Wouter Botzen
Austria faces a substantial flood insurance and adaptation protection gap. As a result, after a damaging flood, households and governments need to redirect funding to cover uninsured damages. Households may not be able to afford expensive recovery costs, and governments may need to redirect funds and reduce spending on planned objectives, or increase debt. The resulting indirect impacts caused by slow recovery, increased debt, or redirected government spending, may be prevented by reducing flood risk and/or increasing coverage by insurance. Reducing the flood insurance protection gap in Austria, as in many other countries, can be done by various means, which differ in how flood risk is born and spread amongst the population. This study’s objective is to assess these different flood insurance systems that policymakers have at their disposal in terms of their distributional impacts. Potential insurance systems are assessed on whether they are able to provide financial protection for all citizens. This assessment is done by using a partial equilibrium model of the flood insurance sector and by applying spatially detailed data on household income. Results show that improvements in flood protection have short-term benefits to reduce the protection gap, but this strategy becomes less effective due to climate change. Enabling the development of a private flood insurance market is beneficial for higher income households to reduce the financial consequences of a flood, but for lower income households, high costs prove to be a substantial barrier to insurance uptake. Government involvement in the provision of flood insurance is beneficial for ensuring equality regarding the ability to insure against flooding, preventing increasing inequality in flood vulnerability. The Austrian government should maintain insurance uptake requirements and ensure a degree of risk-sharing. A limited degree of risk-reflective pricing is beneficial to stimulate adaptation.
When Supply Chains Run Dry: Spillovers Intensify the Economic Impact of Water Scarcity
by Alexander Marbler
Climate anomalies may disrupt economies not only through local exposure but alsoindirectly via global supply chains. Yet, standard empirical approaches mostlyignore these supply chain spillover effects. Combining multi-regionalinput-output data, high-resolution climate information, and subnational grossvalue added (GVA) for Europe’s NUTS-3 regions, I find that the local impact ofwater scarcity shocks more than doubles once global supply chain spillovers arefully accounted for. These shocks reduce GVA significantly in the short run andexert effects that persist for years. Overall, Europe lost an estimated €12.3trillion in GVA from 2000 to 2019 due to water scarcity shocks, accounting forglobal supply chain spillovers. The average NUTS-3 region could have producednearly 9\% more GVA in 2019 absent these shocks. These results highlight theimportance of integrating supply chain interlinkages into climate impactassessments and underscore the need for adaptation measures that enhance globalsupply chain resilience under future warming.
The adoption of air conditioning in Europe as adaptation to climate change: costs, benefits, and the role of subsidies
by Anil Markandya, Elisa Sainz de Murieta and Ane Loroño
This study assesses the potential to reduce heat-related mortality and morbidity across Europe through expanded air conditioning (AC) adoption, with a focus on fiscal incentives to support uptake among the population over 65 years. Using projections under combined climate and socioeconomic scenarios (SSP-RCP) for 2030 and 2050, we estimate avoided mortality and morbidity linked to increased AC availability. We also evaluate the cost-effectiveness of subsidies for AC adoption in Spain, comparing untargeted programs (available to all households) with targeted programs (focused on lower-income groups). Results indicate that expanded AC coverage could prevent almost 20,000 heat-related deaths and nearly 12,000 hospital admissions by 2050 under high-emission scenarios. The figures suggest AC could play a useful role in reducing health impacts, but fiscal costs are high. Other methods will be needed to reduce the health costs of extreme heat in the coming decades in Europe.