The objective of the project is twofold: on the one hand, obtain quantitative measures of the economic impact of droughts and test for the existence of adapting behaviour and, on the other hand, respond the demands of the IPCC that urge for progress in the integration and modelling of adaptation into climate-economy models.

CMCC role

WATER DROP is a Marie Skłodowska-Curie Individual Fellowships. CMCC co-hosts the project together with Ca’Foscari University and offers scientific supervision to the Fellow, Dr. David Garcia-Leon.

Activities

In WP1 “Economic impacts of Droughts” the research reviews the available data, construct the dataset and apply linear and panel data econometric techniques to the data to estimate direct impacts and possible adapting behaviour. In the last stage, the results obtained will be compared with those estimated by the ICES model. In WP2 “Adaptation to Droughts”, the research applies the ICES model, contribute to its regionalisation and feed it with new features geared towards modelling adaptation. In WP3 “Integrated Assessment Modelling” the project sets up the GCAM model, adapting it to the needs of the research and improves its damage function with adapting behaviour under uncertainty.

Expected results

First, the project applied the econometric techniques envisaged by the new climate-economy literature to regional, European-wide data to obtain estimates of the economic consequences of droughts and unveil potential adapting behaviour.

Second, the project resorted to sophisticated climate-economy models, like CGE and IAM models, to shed light into the modelling of adapting behaviour under deterministic and stochastic scenarios.

Partner

Fondazione CMCC – Centro euro-Mediterraneo sui Cambiamenti Climatici