Climate impacts occurring outside Spain can affect the Spanish economy because the global economy is closely interconnected. Imports, exports, sectoral production, employment, and prices can be altered. The impacts in Europe due to the climate damages in the rest of the world are called transboundary, usually measured as a GDP (Gross Domestic Product) change.
The aim of this project is to assess the transboundary effects in Spain associated with climate change. Two climate impact categories are considered: agriculture and direct investment.
To this end, Metroeconomica is carrying out the estimation of the transboundary effects with an economic multi-country model (a computable general equilibrium model). This takes into account the import and export flows between all countries. The model also considers that the economy is divided into a set of sectors. The general equilibrium model quantifies how the initial equilibrium in all the markets of the economy (e.g., goods, services, labour, capital) will be adjusted to accommodate the climate shock. The model is able to simulate how the various climate shocks will affect the rest of the world countries and also allows for estimation of the economic effects in the region of impact (i.e., Spain). The model also evaluates private consumption and the relevant welfare implications.
SolutionClimate change and energy
Dates03/2022 – ongoing
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