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CR 14:175-183 (2000)  -  doi:10.3354/cr014175

Simulating the economic impacts of climate change in the Mid-Atlantic Region

Adam Rose*, Yiqing Cao, Gbadebo Oladosu

Department of Energy, Environmental, and Mineral Economics and Center for Integrated Assessment, The Pennsylvania State University, University Park, Pennsylvania 16802, USA
1All 5 sectors of focus in the US National Assessment have either formal designations in widely used economic databases and models or can be mapped into them. Agriculture and Forestry appear in the US Department of Commerce Standard Industrial Classification (SIC). Coastal areas can be mapped into Real Estate and various tourism-related sectors (e.g., Hotels, Restaurants), human health can be mapped into Household Welfare and the Healthcare sector, and even ecosystems can be mapped into Recreation and imputed values for aesthetic benefits and wildlife preservation. However, other sectors are important in analyzing adaptation and mitigation, such as construction (dredging for beach nourishment), pump and pipe manufacturing (irrigation and flood control)

ABSTRACT: This paper provides an overview of the Mid-Atlantic Region (MAR) economy and of models that can be used to analyze how climate change will affect it. A regional input-output (I-O) table, downscaled from its national counterpart, provides insight into the extent of the MAR¹s internal interdependence, as well as its dependence on trade with the rest of the US and the rest of the world. The table indicates that climate-sensitive sectors play a relatively small direct role in the MAR, but multiplier and other types of general equilibrium effects could result in some small, but not insignificant, impacts on other sectors and other regions. An application of the I-O model to climate variability impacts on forest-related sectors illustrates this point. Although I-O analysis is a useful tool for setting the stage for an impact analysis, limitations of the methodology are identified. A general equilibrium approach is presented as an alternative that captures the best features of I-O, yet is able to incorporate non-linearities, input substitution, behavioral considerations, and the workings of prices and markets.

KEY WORDS: Climate change · Mid-Atlantic Region economy · Economic impacts · Economic down- scaling · Input-output analysis · Computable general equilibrium analysis

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