The Impacts and Costs of Climate Change
Water supply impacts depend on changes in rates of precipitation and evapo-transpiration and demand changes -
including those driven by climate change. The water demand of biological systems is affected by various
climatic factors, including temperature and humidity. Water supply systems are usually optimised to meet
(currently) extreme supply/demand conditions and the costs of shortage can be very high. Climatic variability is
therefore important in determining damages. Climate change will exacerbate water shortages in many water-
scarce areas of the world. There is the potential for water scarcity and severe socially contingent damages, which
are not quantified at present. Water supply is included in some models, though coverage is often partial.
Health impacts include both an increase in (summer) heat stress and a reduction in (winter) cold stress, though
as these are in opposite directions the net mortality impact (global) of direct temperature changes may be quite
small. Direct health impacts from temperature changes are included and valued in many studies. The area
amenable to parasitic and vector borne diseases, such as malaria, will expand and impacts could be large. The
inclusion of disease burdens has been advanced through specific studies, and some models include partial
coverage of such effects. Socially contingent damages to health (via other impacts such as food production,
water resources and sea level rise) in vulnerable communities are difficult to estimate but could be very large,
and these are not included in any of the valuation modelling frameworks. Overall, climate change is projected to
increase threats to human health, particularly in lower income populations, predominantly within
Ecosystems and biodiversity impacts are amongst the most complex and difficult to evaluate. Ecological
productivity and biodiversity will be altered by climate change and sea-level rise, with an increased risk of
extinction of some vulnerable species. Most of the major ecosystem types are likely to be affected, at least in
parts of their range. Some isolated systems are particularly at risk, including unique and valuable systems (e.g.
coral reefs). Recent evidence has also identified acidification of the oceans, which is an observable consequence
of rising CO2 levels in the atmosphere, with potentially large impacts on marine ecosystems and fluxes of
greenhouse gases between the ocean and the atmosphere. The analysis of ecosystems effects is one of the most
problematic areas, in terms of a comprehensive or reliable assessment of the impacts of climate change on
ecosystems, and on valuations of ecosystems. Most studies do not capture ecosystems effects fully - with
valuations relying on ad hoc estimates of species loss and contentious valuation studies. The value of ecosystem
function may also be important, but has received even less attention, and is not included in valuation modelling.
Extreme weather events are also likely to increase, with heat waves, drought, floods, and potentially storms,
tropical cyclones and even super-typhoons. However, the frequency and severity of extreme events may not be
linearly dependent on average climate. Climate variability will also be important and there is no consensus on
how this will change. Impacts and damages will also depend on the location and timing of the hazard and
adaptive responses. For example, cyclone damage to property will tend to rise with wealth, but mortality effects
may fall considerably. Extreme events are excluded from all but a few studies in relation to valuation.
Major Events, i.e. the risk of major effects - potentially catastrophic effects or major climate discontinuities are
the most uncertain category. They include (Schellnhuber, 2004: Pachuari 2005) such potential events as loss of
the West Antarctic ice sheet; loss of the Greenland ice sheet; methane outbursts (including runaway methane
hydrates); instability or collapse of the Amazon Forest; changes in the thermo-haline circulation (loss or reversal
of the gulf stream, changes in Atlantic deep water formation, changes in southern ocean upwelling/circumpolar
deep water formation); Indian monsoon transformation; Change in stability of Saharan vegetation; Tibetan
albedo change; ENSO triggering; reduced carbon sink capacity, and other events. Many have previously been
thought to be longer-term events (i.e. that would occur at temperature changes >2C), though recent evidence
(presented at The International Symposium on the Stabilisation of Greenhouse Gases, held in February-
Stabilisation 2005) indicates that in many cases the risks from major climate change impacts are greater than
originally thought at the time of the Third Assessment Report 2001, and may actually occur at lower temperature
thresholds. Major events are not captured in the models.
AEA Technology Environment, August 2005
Watkiss, Paul; Downing, Tom; Handley, Claire & Butterfield, Ruth. The Impacts and Costs of Climate Change. Oxford, England. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc29337/. Accessed July 10, 2014.