Economy-wide effects of climate change induced health impacts and adaptation strategies based on general equilibrium models

• Applicant: Professor Dr. Harald Grethe
• Subject Area: Public Health, Healthcare Research, Social and Occupational Medicine ; Agricultural Economics, Agricultural Policy, Agricultural Sociology
• Term: since 2019
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 409670289

Climate change impacts on health through a wide variety of mechanisms: In Sub-Sharan Africa (SSA), typical pathways are through lower crop yields (with effects on undernutrition) and changes in the incidence of malaria and heat stress. Such biophysical and health effects, in turn, affect economic systems through changes in equilibria on agricultural markets, effects on morbidity and mortality within the labor force, and effects on population size. The overarching goal of this project is to assess the impacts of human health mediated economy-wide effects of climate change and adaptation strategies based on a dynamic CGE framework with a high resolution regarding regional, labor and household disaggregation. This is based on two observations from the analysis of the state of the art and the preliminary findings from the first phase of the project: i) the time dimension matters strongly: adaptation strategies often require investments now and create benefits later (see our work on malaria), ii) the effects on changes in malaria incidence and heat stress as well as changes in crop yield differ regionally and among households, with strong distributional consequences. A dynamic model specification depicting the time path of any impact instead of just final results offers rich options for analysis. E.g., strong public investments may be favourable in the long run, but need to be funded in the short run, hampering the chances for implementation. Considering this problem explicitly may allow for identifying policy mixes, ensuring sufficient short-term benefits to be politically feasible. In addition, climate change effects on human health may affect mortality and thus the demographic structure of countries. Such demographic changes evolve over time and can be depicted well in a dynamic model formulation, where the stocks of capital, labor and land as well as the size of household groups are updated annually. The specific objectives derived from this objective are: 1: Further develop the model framework build in the first phase to become recursive dynamic, as health effects of climate change and adaptation strategies have effects that are not necessarily linear. 2: Enhance the explicit depiction of adaptation strategies in CGE models. The work program for the proposed research is divided into four project phases, as depicted in the following Gantt chart. Phase 1 (development of dynamic CGE and baseline) and Phase 2 (analysis of adaptation strategies in comparative static model) are in parallel during the first project year. Phase 3 extends over 1,5 years and comprises the analysis for adaptation strategies in the dynamic model. Phase 4 focusses on the development and analysis of integrated climate change and adaptation scenarios comprising all impact pathways.

• DFG Programme: Research Units
• Subproject of: FOR 2936: Climate Change and Health in Sub-Saharan Africa