Economic Analysis of Climate Change in Korea · Effects of adaptation and mitigation ... (decreased...

Economic Analysis of Climate Change in Korea

Chae, Yeora

Korea Environment Institute

Table of Contents

Introduction

Impacts on the different sectors

Effects of adaptation and mitigation policies by sector

Integrated Analysis Results

Conclusions and implications

Ⅰ

Ⅲ

Ⅳ

Ⅴ

Ⅵ

Scenarios Ⅱ

Ⅰ. Introduction

• A rise in average temperature of 1.8℃ (global temp. rise: 0.8℃) for past 100

years and increase in precipitation intensity

- Frequent occurrence of extreme weather(Heat wave, heavy rain, heavy snow)

- Lesser # of Typhoon but the impact became exacerbated

- Rate of sea-level rise in Jeju island is approximately 3 times the global rate

1. Climate Change in Korea

3

Ⅰ. Introduction

Temperature 18℃ ↑ for past 100 years(1912-2010): more than double compare to the globally risen

temp * Faster rate of rise in temperature for last 30 years(1982-2010)

Precipitation 19% ↑ for past 100 years(1912-2010)

Sea-level rise Nationwide: about 8cm ↑ (akin to global average), Jeju Island: 22cm ↑

for 43 years(1964-2006)

Extreme

Weather

Heat wave/tropical nights ↑, # of severe rain storm ↑ (more than doubled in 2011) # of tropical nights: (1920’s) 2.6 nights → (2000’s) 9.8 nights

Annual average cost of damage by extreme weather(heavy rain ,heavy snow) tripled

compared to 90s

Typhoon

Damage caused by typhoon ↑ (with #of typhoon ↓) Max. amount of precipitation: typhoon RUSA (870.5mm on 31 Aug. 2002, Gangneung region)

Max. rate of strong wind: typhoon MAEMI(60m/s on 12 Sept. 2003, Jeju Island)

Max. amount of damage on properties: typhoon RUSA (about 5.1 trillion won in 2002)

Ⅰ. Introduction

• Conducting a comprehensive assessment on physical impacts, economic costs

and GHG mitigation costs of climate change on the main sectors

⇒ Presenting national level counter strategies based on the integrated

economic analysis of climate change impacts

2. Objectives of the study

• Spatial Range : South Korea

• Time Range : 2008~ 2100

• Study Area

- Climate change and social economic scenarios of Korea

- Climate change vulnerabilities and economic analysis of 5 Main sectors

(Water recourse, Forestry & Ecosystem, Food resource, Human health, Costal Area)

- Cost and ripple effect of GHG mitigation

- Integrated cost-benefit analysis of climate change policy

4

Ⅰ. Introduction

Sectors Impacts of climate change

Resea

rch

scope

note Sectors Impacts of climate change Researc

h scope note

Wate

r

Reso

urc

e

- Changes in precipitation and runoff O

※M

ajo

r W

ate

rsh

ed

(H

an

riv

er,

Ge

um

R

ive

r,

Yo

un

gsa

n R

iver, N

akd

on

g R

ive

r) as th

e b

ase p

oin

t

of th

e a

na

lysis

Fo

od

res

ou

rce

- Changes in crop yields O

※A

na

lysis

ch

an

ge

s in

the

pro

du

ctio

n o

f rice

an

d b

are

ly

- Changes in possible capacity of water resource O - Changes in agricultural profit due to changes in crop yield O

- Loss of life due to lack of water - Degradation of crop quality

- Damage by flood and drought - Changes in pest and weed

- Cost of maintenance and repairs related changing water supply - Changes in crop growing regions

- Cost of alternatives for changing water supply - Changes in food crop yields including forest trees

- Changes in surface water and runoff water - Changes in industrial crops and bio-fuel crops

-Changes in groundwater - Changes in capture fisheries and aquaculture

- Water quality deterioration - Changes in livestock production

- Damage of Erosion and sediment transport - Changes in livestock mortality

Fo

res

t & E

co

sys

tem

- Changes and vulnerability of forest distribution O

※ fo

rest fire

an

d la

nd

slid

es w

ere

an

aly

zed

for th

e c

ase

of fo

rest d

isa

ste

r

- Increased costs of livestock maintenance (rel. to extreme heat)

- Changes and vulnerability of forest function O - Reduced costs of facilities crop maintenance (less heating days)

- Changes and vulnerability of possible forest disaster O - Changes in demand for secondary agricultural water

- Changes in the distribution of biomes - Reduced productivity of cow due to heat stress

- Changes in regional biodiversity

Hu

ma

n H

ea

lth

- Excessive death due to abnormally high temperature in summer O

- Migration of forest vegetation - Damage caused by abnormally high temperature (increasing number of

hospitalization days, etc.)

- The extinction of alpine and sub-alpine vegetation - Damage caused by cold

- Changes in capacity of carbon dioxide absorption - Increased in infectious diseases due to flooding

- Changes in rehabilitation and leaf developing period (became faster in

period) - Death caused by drought, malnutrition, respiratory diseases

- Changes in biogeochemical cycles and biotic feedback - Rise in temperature due to increase in food poisoning

- Damages in desert (decreased productivity of desert animals, loss in

biodiversity and increased wildfire caused by droughts)

- Rise in number of death, disease and injury due to sudden meteorological

phenomena

- Reduced carbon sequestration in grasslands and savannas - Changes in the range of infectious agents

- Changes in the tundra and the Arctic and Antarctic ecosystem - Increased water-borne epidemics

- Changes in mountainous regions (abbreviated meting rate) - Excess mortality, cardiac and respiratory disease due to changes in air quality

Co

as

tal A

rea

- Flood damage cause by rising sea levels O - Increase in infectious diseases due to increased medium( rodents)

- Erosion damage caused by rising sea levels O - Damage caused by disease (salmonella, gastroenteritis, etc.)

- Changes in water quality and ecosystem due to increasing sea temperature

and co2

Ind

us

try,

Se

ttlem

en

t,

So

cie

ty

- Damage of industrial facilities located in sensitive areas

(Not included in the

study)

- Strom and Tsunami - Damages of the industries using sensitive materials

- Hurricane - Impacts on service sector (trade, retail, commercial service, ,etc.)

- Cyclone - Impact on public services and infrastructure

3. Climate Change Impact and Project Scope

5

Ⅰ. Introduction

4. Current Research on the Economic Analysis of Climate Change I

6

Ⅰ. Introduction

Sector Stern (2007) IPCC (2007)

EEA

(2007)

Garnaut

(2008)

NRDC

(2008)

ADB

(2009) WHO (2009) KEI

Global Global EU Australia U.S.A S.E Asia Global S.Korea

Water Resource V V V V V V V

Water

Resource

Water resource cost V V

Population affected by ch. in water resource V

Damage due to ch. in precipitation and runoff V(2yr)

Water

shortage

& supply

Loss of HH due to water shortage V

Damage on number of population due to water shortage V V

Alternative operating cost for water supply

maintenance/repairs V

Use of electricity by water suppliers V

Others Total cost due to floods V

Possible rate of fish haul V V

Food resource V V V V V V

General

Products

(Rate of

Supply)

Grains V

Agricultural irrigation V

Crops V V

Particular

Products

(Rate of

Supply

Rice V V(1,2yr)

Barley V(1,2yr)

Beans V

Corn V

Arid regions V

Dry land grain V

Livestock V

Human Health V V V V V

Disease

Damages caused by Salmonella V

Damage caused by gastroenteritis V

Damage caused by Malaria/break borne fever V V V V

Heat

damage

# of hospitalization V

Expenditure on health V

# of death and economic damage cost V V V(1,2yr)

7

Ⅰ. Introduction

Sectors

Stern

(2007)

IPCC

(2007)

EEA

(2007)

Garnaut

(2008)

NRDC

(2008)

ADB

(2009)

WHO

(2009) KEI

Global Global EU Australia U.S.A S.E Asia Global S.Korea

Forestry/Ecosystem V V V V V

Changes in the distribution of forest V V(1st,2nd)

Changes in forest function V(2nd)

Changes in the possibility of forest disaster (eg. Forest fire) V V(2nd)

The distribution of biomes V V

Regional biodiversity V

Costal Area V V V V V

General damages due to sea level rise V 1st: Flood

2nd:Erosion Damage due to loss of coast (eg. Life, property) V V

Other economic impacts

Infrastructure V

Industry, settlement and society V

Energy V V V V

Extreme climate events V V V V

Home, Real estate V

Labor V

Integrated analysis V V V V V V

5. Current Research on the Economic Analysis of Climate Change II

경제적 영향

Integrated Analysis PAGE09 Model

Non-Economic Impact

6. Methodologies

Water Agri-

culture Costal

Area

Indus-

try

Infrastr-

ucture

Disaster

Human

Health

Eco

system

Quality

of Life

Leisure Time Social Stability

Ⅰ. Introduction

8

…

…

GHG Mitigation Cost

Economic Impact Scenarios

- Climate

-Energy consumption

-GHG emission

-Economic growth

(Domestic)

-Industrial structure

-Population size and

structure (Domestic)

-Land use

Bottom-up

Top-down

Ⅱ. Scenario

• Primary Index until 2100(inaction)

- Temp : 4℃↑ around in 2100

- GHG emission : Persistently increase until

2030-2050. Decreases after the period

- Energy : Persistently increase in rate of usage

until 2030-2050. Decreases after the

period(Changes in supply and demand of

energy and domestic industrial structure)

- GDP : Increase continuously until 2100(tend to

have decreased growth rate)

- Population : Decrease continuously

⇒ Reflecting above scenarios to impact

assessment on sectors

9

Ⅱ. Scenario

63,443

67,559

51,788

40,000

45,000

50,000

55,000

60,000

65,000

70,000

2020 2050 2100

GHG Emission*만CO2t

년도Year*Rate of Emission Fossil Fuel

1,372

2,402

3,268

1,000

1,500

2,000

2,500

3,000

3,500

2020 2050 2100

GDPTrillion Won

Year

4,932

4,234 4,053

3,000

3,500

4,000

4,500

5,000

5,500

2020 2050 2100

Polulationmillion

Year

55

50

45

40

35

30

million CO2t

700

650

600

550

500

450

400

49.32

• Physical impacts : Rainfall and runoff in main drainage areas

- (Rainfall) Annual overall average is expected to increase until (compared to 2008)

- (Runoff) Seasonal distribution is expected to vary as summer season runoff is also expected

to decrease

1. Water Resources

• Economical Impact : Variation of usable water resource

Damage cost

( billion won)

Corresponding year

2020 2050 2100

Damage cost in each yr 55.4 357.4 107.6

Ⅲ. Impacts on the different sectors

10


※ the impact of 4 River project is not taken into account

Annual Ave. Rainfall : mm

Basic Yr

Han River Nakdong River Geum River Yeongsan River

Ave. Runoff : mm Han river Drainage area Nakdong river Drainage area

Gum river Drainage area Yeongsan river Drainage area

2. Forestry & Ecosystem

• Physical Impact : Distribution, Function, Disaster (Forest fire, Landslide)

- Distribution : Compared to the past(1972-2000), far into the future(2070-2100) the

subalpine zone and cool temp. zone will decrease to 25%, the warm temp. zone and

subtropical forestry will increase to 65%

- Function : Primary production, Potential soil carbon stock will decrease

- Disaster : (Forest fire) the vulnerabilities of major metropolitan areas were seen to be high

(Landslide) the vulnerable areas are distributed in the northern regions and southern coastal areas. * northern regions : relatively higher in vulnerabilities

11


• Economic Impact:

- Distribution: Warm and tropical temp vegetation area- Increasing with rising temperature,

Cold and cool temp vegetation area- Decreasing with rising temperature

∙ Cost: Near future(181.5493 trillion won), Distant future(522.6297 trillion won)

- Function: forest tree growth was seen to be decreasing (unit price : 49,418 won/m3)

∙ Cost : Near future(34.5 billion won ), Distant future(11.8 billion won)

- Disaster : (forest fire) Differences b/t cost of near future and distant future are not too large- 1.448 billion won/yr (damage cost ), 87.965 billion won (value of loss)

(Land slide) Difference in costs of past and distant future : 20.066 billion won/y( recovery cost)

Damage cost

(billion won)

Corresponding year

2020 2050 2100

Damage cost in each yr 88.7 165.3 293.7

Changes in area of ecology of eating, wood production, Forest disaster (Forest fire)

3. Food Resource

• Physical Impact : Potential production of rice and barely - (Rice) decrease in production continues until 2100 ( production will increase with adaptation

measure) - (Barely) increase in production continues until 2100 ( production will even more increase with adaptation measure)

12


• Economic Impact:

(Without Adaptation efforts)

- continuous increase of annual loss by climate change impact

∙ 2010-2040: moderate increase in loss

∙ 2040-2070: sharp increase in loss

∙ 2070-2100: slow down in the rate of increase in loss

(With Adaptation efforts)

- increase of annual profit in agricultural sector due to climate change impact (vs. no climate

change impact)

∙ increases in moderate rate during the period

- Approximately 613.4 billion won loss is predicted

in 2100 (6.4% of total profit in agriculture sector in

2100)

- With the adaptation measure, approximately 4.6%

increase will take in place (Adaptation effect App. 11%)

Total benefit of Agriculture sector: %

w Adaptation Policy w/o Adaptation Policy

4. Human Health

• Physical Impact

- The outlook of nationwide excess death will be about 8,715 in 2100 (with adaptation measure, number

of excess death will decrease in 1,251: # of death 8,715 → 7,464)

• Economical Impact

- With excess number of death, the cost of approximately 1.4377 trillion won will occur in

2100 (with implementation of heat wave alert measure, cost will have decrease about 206.4 billion

won : 1.4377 trillion won → 1.2313 trillion won)

13

※ Adaptation cost : Developing system for heat wave provision in 2010~2013 will cost the total of 0.058 billion won, 0.58 billion won will cost every year after 2014 (By applying discount rate in 2020, 2050, 2100, each year will cost about 0.42 billion, 0.24 billion and 0.180 billion respectively)

※ # of excess death in 2020, 2050, 2100 will be the average death rate of 2011-2020, 2041-2050, 2091-2100 respectively


2020 2050 2100

피 해 비용 (억원 )

0

6000

12000

18000

24000

30000초 과사망자 수 (명)

0

2000

4000

6000

8000

10000

피 해 비용 (적 응 대책 미 추 진 시 )

피 해 비용 (적 응 대책 추 진 시 )

초 과사망자 수 (적 응 대책 미 추 진 시 )

초 과사망자 수 (적 응 대책 추 진 시 )

Damage Cost : 100million won Excess # of death: people

Damage cost(w/o Adaptation measure) Damage cost(w Adaptation measure) Excess # of death(w/o Adaptation measure) Excess # of death(w Adaptation measure)

5. Coastal Area • Physical Impact : Sea level rise (35cm) in 2100

- Flood : the area of flooded wet surface will be about 2,368km2, dry area will be about 240km2 and about

150 thousand people will be flooded

- Erosion : Ave. rate of erosion :40.5%(Ave. in the West cost 49.8%, the South cost 48.5%, the East cost

27.2%)

Damage cost

(billion won)

Corresponding year

2020 2050 2100

Flood 2,531.4 3,982.8 6,305.3

Erosion 730.2 1,318.6 1,223.4

Total damage cost 3,261.6 5.01.4 7,528.7

14

• Economical Impact - Flood and erosion by app. 35cm sea level rise will cause about 7.5287 trillion won of damage cost

※ Erosion: the damage cost is calculated by the sampling of the visitors of the major beaches (gyeongpodae, daecheon, haewoondae) in

East, West, South cost into 111 beaches in the country


※ 111 Sabin coast areas in Korea were analyzed

온 도상승 (해 수 면상승 )

1℃(7.3cm) 2℃(17.6cm) 3℃(25.7cm) 4℃(34.8cm)

평 균 침 식 률 (%)

0

10

20

30

40

50

60

동 해 평 균

남해 평 균

서해 평 균

전 체 평 균

습 지 0.2 m 0.4 m 0.6 m 0.8 m 1 m

침 수 면적 (km2)

0

500

1000

1500

2000

2500침 수 인구 (만명 )

0

10

20

30

40

50

60

건조 지 역 침 수 면적

침 수 인구

습 지 침 수 면적

해 수 면 상승

Flooded area: km2 Flooded People: 10 Thousand

Area of Flooded Arid region Flooded People Area of Flooded Wet land

Ave. of East sea Ave. of South sea Ave. of West sea Total Ave.

Ave. rate of Flood %

Sea – level rise

Wet Lands

Temp. Increase(Sea – level rise)

15

Sectors 2020 2050 2100

Scenario

GDP 1,079 trillion won* 2,663 trillion won 3,599 trillion won

Population 49.32 million people 42.34 million people 40.53 million people

Use of energy 634.43 million TOE* 664.66 million TOE 532.27 million TOE

GHG emission 634.43 million CO2 t 675.59 million CO2t 517.88 million CO2t

Ave. Temperature 12.67℃(approx 1℃↑ ) 13.84℃(approx 2℃↑) 15.71℃(approx 4℃↑)

Precipitation

(rate of increase) 1,256.91mm(approx 4%) 1,399.87mm(approx 16%) 1,465.00mm(approx 21%)

Water

resource

Phys.

Impact

Precipitation** •Hanr: 4% ↑ •Nakdong: 11% ↑

•Keum: 7% ↑ •Yeongsan: 15% ↑

•Han: 7% ↑ • Nakdong : 6% ↑

• Keum : 5% ↑ • Yeongsan : 10% ↑

•Han: 12% ↑ • Nakdong : 13% ↑

•Keum: 10% ↑ • Yeongsan : 1.5times ↑

Run-off** •Han: 5% ↑ • Nakdong : 10% ↑

•Keum: 3% ↓ •Yeongsan : 3% ↓

•Han: 5% ↑ • Nakdong : 2% ↓

•Keum: 13% ↓ • Yeongsan : 11% ↓

•Han: 14% ↑ • Nakdong : 11% ↑

•Keum: 4% ↓ • Yeongsan : 18% ↑

Econ. Impact 55.4 billion won 357.4 billion won 107.6 billion won

Forestry &

Ecosystem

Phys.

Impact

Distribution **

•Potential subalpine and cool temp mixed stand

forest: approx. 24% ↓

•Potential warm temp mixed stand forest and

subtropical evergreen forest: approx. 21times

↑



• Potential warm temp mixed stand forest and

subtropical evergreen forest: approx. 28

times↑



•Potential warm temp mixed stand forest and

subtropical evergreen forest:

approx. 339 times ↑

Function** •Potential soil carbon stocks: 7% ↓ • Potential soil carbon stocks : 7% ↓ • Potential soil carbon stocks : 19% ↓


Food

resource

Physical Impact Potential

Yield**

•Rice: -7%

•Barely: 13%

•Rice: -12%

•Barely: 22%

•Rice: -15%

•Barely: 20%


Human

Health

Phys.

Impact

Excess death due to

extremely high temp.

in summer

264ppl 3,181ppl 8,715ppl

Econ. Impact 103.9 billion won 714.8 billion won 1.4377 trillion won

Sea-level Rise 7.3cm 17.6cm 34.8cm

Coastal

Area

Physic.

Impact

Flood •Area: approx. 65km2***

•Population: approx. 40,000 ppl***

•Area: approx. 65km2

•Population: approx. 40,000ppl

•Area: approx. 240km2

•Population: approx. 150.000 ppl

Erosion Ave. rate of erosion approx. 10% Ave. rate of erosion approx. 23% Ave. rate of erosion approx. 41%

Econ.

Impact

Flood 2. 5314 trillion won 3.9828 trillion won 6.3053 trillion won

Erosion 730.2 billion won 1.3186 trillion won 1.2234 trillion won

Total 3.2617 trillion won 5.3014 trillion won 7.5287 trillion won

* Base yr : 2010/ ** Compared % to base yr (‘71~‘00) /*** condition of 2℃↑

6. Annual impacts of climate change Ⅲ. Impacts on the different sectors

Damage costs of climate change

in each year 2020 2050 2100

Water

resource Major basin

55.4 (0.005)

357.4 (0.03)

107.6 (0.01)

Forestry

& Ecosystem

Forestry 88.7

(0.008)

1,65.3 (0.014)

293.7 (0.025)

Food Loss in

agriculture profit 82.4 (0.01)

2,96.4 (0.03)

613.5 (0.05)

Human

health Excess death

103.9 (0.009)

714.8 (0.06)

1,437.7 (0.12)

Coastal

area

Flood: sea level

rise (flood) 2,531.5

(0.22)

3,982.8 (0.34)

6,305.3 (0.54)

Erosion:

sea level rise

(beaches)

730.2 (0.06)

1,318.6 (0.11)

1,223.4 (0.11)

Total damage cost

Flood + Erosion 3,619.5

(0.31)

6,873.6 (0.59)

1,017.6 (0.86)

unit: billion won (%GDP)

7. Damage costs in the sectors

- Damage impact of climate change in the sectors (GDP%)

: Costal area(0.65%) > Human health(0.12%) > Food(0.05%) > forestry & Ecosystem(0.03%) >

Water resource(0.01%)

16


Human Health Food Coast(Flood) Coast(Erosion) Water resource Forest & Ecosystem

F &E Water Erosion Flood Food Health

Ⅳ. Effects of adaptation and mitigation policies

※ Annual effects of adaptation policies in Human health and food resources in 2020, 2050, 2100

- Adaptation policy decreases the damage cost cause by climate change

- about 14% decrease in human health sector (in 2100), Not only the decrease but also the increase in profit is observed in food resource sector

▣ Human health and Food

▣ Water resource, Forestry & Ecosystem, Costal area

- Decrease in the costs (further quantitative analysis is needed)

1. Adaptation

17

Ⅳ. Effect of adaptation and mitigation policies in the sectors

Human Health Food

Total Damage Cost: billion won

W/O Adaptation Measure : Damage cost by Heat-wave

Cost of implementing Heat-wave preparation: during 2010-13(Total-5.8 billion), After 2013(Annual cost-0.58 billion)

W Adaptation Measure : Damage cost + Cost of the measure

Total Benefit of Agricultural Sector: %

W/O Adaptation Measure

W Adaptation Measure Adaptation Cost

is not Included

1,600

1,400

1,200

1,000

800

600

400

200

0

1,438

1,232

612

715

104

89.4

2. Mitigation

• Cost of GHG reduction of 30% in 2011-2020

(compared to the case of inaction) : 0.28-1.17% of GDP

- If the global society, to fulfill the Copenhagen agreement, implement International Emission

Trading and reduction of labor tax promoted by returns from the auction of emission trading :

→ will result alleviation in damage about 75% and 45% of GDP respectively

• Cost of mitigation will be increased gradually by reinforcement in mitigation targets

Ⅳ. Effect of adaptation and mitigation policies in the sectors

18

Decrease in GDP by GHG Mitigation: % (Unit: decrease in GDP(%))

Decrease in GHG Emission(%)

1. Integrated Analysis model: PAGE

Policy Analysis of Greenhouse Effect Model

• Developed to establish the decision

making in climate change strategies

of Commissions of European

Communities, Directorate General

Environment

• Applied by various researches

including Stern(2007),

NRDC(2008), ADB(2009)

• Probabilistic sampling of the input

parameters in order to build up an

approximate probability distribution

for each model output

• Estimate non-linear damage caused

by climate change

19

Ⅴ. Integrated Analysis Results


2. GHG Emission Scenario

- Analyze GHG emission scenarios on 3 different BAU in order to outlook future society conditions under various social, economical, technological assumptions including GDP and effect of alternative fuels (Graph A)

- To be in a part of the global effort to 2°C stabilization, analyze mitigation cost by assuming 2 different scenarios (Both scenarios assume 30% reduction compared to BAU in 2020)

- If aggressive efforts to reduce GHG emission is taken by all the countries, the reduction in cost of damage in Korea would be;

-S1 Scenario: Benefit >Cost under LBAU scenario

-S2 Scenario: Benefit > Cost under all the BAU scenario (TableA)

20

<Table A> Mitigation cost of GHG Emission

and Damage cost by climate change by

scenarios (Unit: Trillion Won)

Classification LBAU BAU HBAU

Damage cost 2,642

(2,326)

2,807

(2,521)

3,569

(3,146)

2℃ Stabilization scenario

Damage Cost

584

(622)

587

(632)

766

(792)

Differences in Damage Cost

(Benefit of GHG mitigation by the

globe)

2,058

(1,703)

2,220

(1,889)

2,803

(2,354)

, ( ) standard deviation


<Graph A> GHG Emission by Scenarios

2010 2020 2030 2040 2050 2075 2100

0

200

400

600

800

BAU

LBAU

HBAU

S1

S2

십 억 탄소 톤Billion CO2t

3. Damage Cost by Climate Change

<Graph A : Annual Damage cost (inaction vs. 2℃ stabilization)>

(price in 2008, GDP%)

<Graph B : Cumulative Damage cost (inaction vs. 2℃ stabilization)>

(price in 2008, Unit : 1000 trillion won)

<Graph A>

- In the condition under Inaction, Damage cost increase gradually from 2009 to 2050

- Damage cost increases dramatically after 2050

- Distinct reduction in damage cost if worldwide effort for 2℃ stabilization takes place

<Graph B>

- In the condition under inaction, high probability of having high damage cost is observed

- Low probability of high damage cost is observed under 2℃ stabilization

21


20102020

20302040

20502075

2100

조 원

0

5

10

15

20

25

30

35

No action

2oC

(0.34%)

(0.12%)

(0.60%)

(0.16%)

(0.59%)

(GDP comparison: 2.85%)

Trillion won

4. Mitigation cost and benefit

- To join in an effort to 2°C stabilization, Korea’s GHG emission mitigation presumed , in compare to inaction

scenarios, as : 2020( 30%), 2050( 50%), 2100( 99%) (Graph A)

- By global efforts to reduce GHG emission, climate change damage reduction effects (reduction benefit)

will increase gradually toward distant future and if uncertainties are considered, the benefit exceeds the cost

(Graph B)

- 1 tone of CO2 reduction will create reduction of 5Kg of NOX 57kg, PM10 emission

* In 2020, reduction of 256Mt of CO2 will create reduced emission of NOX (14.6 Mt), PM10(1.2Mt)

(= 96,397 thousand toe of energy conservation and 235trillion won of gasoline conservation)


<Graph A : CO2 mitigation in Inaction vs. 2°C

stabilization scenarios > <Graph B : Differences between CO2 mitigation cost for 2℃

stabilization and Damage cost of inaction (reduction

benefit) in Korea>

22

* Each surface ; 20%~80% reliability surface

2010 2020 2030 2040 2050 2075 2100

조 원

0

20

40

60

80

S2 감축 비용

감축 편 익

감축 비용 감축 편익

Trillion won

Cost of Mitigation Cost-Benefit of Mitigation

Unit: Mt

5. Costs and benefits of Adaptation Policy

- Adaptation Policy under inaction Scenarios : the cumulative damage cost reduction of more than

800 trillion won (Graph A)

* Cost of adaptation policy estimates approximately 300 trillion won

- Earlier the execution of adaptation policy is greater in damage cost reduction

- Regardless of period of adaptation policy, benefit exceeds cost in all times (Graph B)


<Graph A : Damage cost and cumulative

adaptation cost in 2100 by the scenarios>

23

20102020

20302040

20502075

2100

조 원

0

2

4

6

8

10

12

적 응 편 익

적 응 비용

2.5

4.8

11.0

2.63.5

0.8

<Graph B : Benefit and cost of adaptation

measure by the year>

Trillion won Trillion won

No Adaptation

A1 (2010) Adaptation



Damage cost Adaptation cost

Cost/Benefit of Adaptation measure Cost of Adaptation measure

Ⅵ. Conclusions and Implications

The cumulative damage cost for Korea under the condition of inaction by the

globe : approx. 2800 trillion won (226 trillion won ~27791 trillion won) in 2100

Damage cost will be reduced globally(specially lowering the chance of having high

damage cost)if the globally aggressive GHG emission mitigation takes in place for

2°C stabilization

Adaptation policy will have immediate result and in all times, benefit excess the

costs

- Growing impact of reduction in damage cost will be increased as to furtherer future

Continuous research is needed since there are uncertainties related to

economic analysis of climate change

24

Ⅵ. Conclusions and implications

Conclusions

▣ Economic Impacts of 'In action Scenario' & '2°C Stabilization Scenario'

① Inaction Scenario

- More than 4°C increase of temperature in 2100

- Annual economic damage in 2100 will be 3% of GDP

- the Cumulative damage cost will be 2,800 trillion won in 2100

② Implementing the Adaptation measure under Inaction Scenario in Korea

(Cumulative cost : about 300 trillion won)

- the Cumulative damage cost will be decreased by 800 trillion won in 2100 (2,800 trillion

won →2,000 trillion won)

- Investing in adaptation measure : 500 trillion won amount of pure benefit occur ※ Base

yr for the cost estimation : Currency based on yr 2008

③ 2℃ Stabilization Scenario

- the cumulative damage cost for 2100 will be reduced to 580 trillion won under aggressive

efforts to mitigate GHG emission for 2℃ stabilization

25


Limitations

Impact assessment on sectors in this study includes limited impacts of climate

change

-Sectors that are not included in this study : Natural disaster, industries,

infrastructure

- Damage by various causes such as disease, insect are not included in the

impact assessment

The benefit and cost of adaptation was analyzed in micro scope which needs

further bottom-up research with adaptation cases

If the co-benefits including reduced fuel economy and impact of air pollutant

reduction were considered, the impact of mitigation would be higher

Analyzing various scenarios are needed since condition of Korea is greatly

influenced by degree of global GHG emission reduction

26


ANNEX. Climate Change Policy in Korea

• ‘Framework Act on Low Carbon Green Growth’ enacted (Mar. 2010)

: an action-oriented paradigm which promotes a mutually supportive relationship between

growth and the environment by holistically embracing the framework of sustainable growth

“Green growth refers to sustainable growth that mitigates greenhouse gas emissions and prevents

environmental degradation. It is also a new national development paradigm that creates new growth engines

and jobs through green technology and clean energy” (President Lee Myung-bak,2008)

1. Low Carbon and Green Growth Policy in Korea

27

ANNEX

<Concept of Korea’s Green Growth> <Five-Year Plan for Green Growth>

Source : Presidential Committee on Green Growth

National mid-term GHG reduction target Set mitigation goal at a 30% reduction in greenhouse gases relative to BAU by 2020: the

highest level advised by IPCC for the non-Annex 1 countries

Korea’s aggressive target reflects its will to drive green growth policy, and to participate in the

global efforts to mitigate climate change.

2. Mitigation Policy in Korea

28

2020 2005

594

741

570

Reducing

30%

BAU

Target

(unit: MTCO2)

Target Management Scheme for GHG

Emission and energy consumption Introduced in 2010, designed to set GHG

emission and energy consumption reduction

targets for significant emitters

: About 70% of roughly 600 major GHG emitters have

been brought into the scheme, entail a systematic

management of a national GHG information system

Emission Trading Scheme Preparing to introduce the Emission Trading Scheme in 2015 : Designed to allow GHG emitters

to trade emission allowances to lower the overall national cost of emission reduction Source : Presidential Committee on Green Growth

ANNEX


• National Strategic Plan for Climate Change Adaptation(2011-2015)

: Comprehensive framework for climate change adaptation in Korea

- The 1st legal plan by the Basic Act on Low Carbon, Green Growth( ’10.4)

- Participation of 13 ministries and 70 experts in related fields

- 87 projects in 10 adaptation sectors

- The action plan and guideline for the local government’s on Climate Change Adaptation

3. Climate Change Adaptation Policy in Korea

29

Health Disaster Adaptation

Industry

Agriculture Marine

Resources Water

Monitoring

Projection Ecosystem Forest

ANNEX


Economic Analysis of Climate Change in Korea · Effects of adaptation and mitigation ... (decreased...

Documents

Transcript of Economic Analysis of Climate Change in Korea · Effects of adaptation and mitigation ... (decreased...