Conference Agenda

Climate is projected to increase the frequency and intensity of extreme-weather events, including river floods. Firms across Europe are already investing in climate change adaptation (CCA) measures to protect themselves against physical risks, with uncertain consequences for regional economies. Given the local nature of CCA and sector-specific investments, macroeconomic assessments of CCA necessitate regional and sectoral resolution to inform policymakers and the private sector. This article introduces an adaptation investment modelling framework within a multi-regional, multi-sectoral computational general equilibrium model, which we apply to the EU27 and the UK. Herein, we formulate a theoretical foundation for the analysis, combining regional data on direct economic damages from river floods with unique national adaptation investment data, differentiated by economic sector. Our analysis reveals that current levels of adaptation have a modest yet positive effect on the European economy by 2100, with more significant GDP gains materialising in Central and Eastern European regions. Additionally, some critical economic sectors, such as Utilities, are particularly sensitive to adaptation investments, showing consistent regional output gains in highly affected regions. Our analysis underscores the need for regionally tailored adaptation strategies for the private sector, which account for differences in the sectoral composition of European regions and their varying exposure to climate impacts.

Climate change poses substantial fiscal challenges for governments, driven by increasing damages and adaptation costs. While the benefits of timely, public adaptation are well established, the question of financing these measures remains underexplored. This paper addresses this gap for flood adaptation in the United Kingdom. Using a multi-sectoral CGE model, we analyse how different public financing mechanisms affect fiscal sustainability and economic welfare. Analysed financing mechanisms include (i) shifts in public expenditures maintaining budget neutrality, and (ii) deficit financing via domestic green bonds or (iii) via international bonds. We find that adaptation moderates economic losses and fiscal consequences from flooding, despite considerable upfront investment costs. However, the extent of positive effects depends on the financing mechanism and time horizon, as well as future lending conditions, captured by different interest rates. Domestic bond financing comes at the cost of suppressing private investments, while budget-neutral financing requires cuts in public consumption. Debt financing allows for higher public consumption, but in the long run, this effect is counteracted by interest payments on accumulating public debt. The results demonstrate that, while adaptation improves long-term welfare, fiscal outcomes depend on the chosen financing mechanism and time frame. Improving expectations on future lending conditions can lead to better financing decisions.

Climate change poses growing risks to Europe’s economy, yet the magnitude and spatial distribution of these impacts remain insufficiently understood. This study quantifies the macroeconomic consequences of climate change for the European Union at both national and NUTS2 levels by linking CMIP6 climate projections with biophysical impact models and integrating these outputs into the GEM-E3-R computable general equilibrium framework. Sectoral climate impacts covering agriculture, fisheries, flooding, labour productivity and tourism are introduced through calibrated shifts in productivity, capital efficiency and demand. The analysis evaluates outcomes under two contrasting climate futures, RCP2.6 and RCP8.5, to capture a range of possible impact pathways. Regional outcomes are generated through the model’s Attractiveness Index, which provides a consistent mechanism for downscaling national-level impacts.

The results indicate that modest gains in agriculture and tourism are outweighed by losses from flooding and heat-related labour productivity declines, leading to moderate but persistent reductions in GDP and employment by mid-century. The magnitude of impacts increases markedly under the high-emissions pathway, highlighting the sensitivity of economic outcomes to future climate trajectories. Impacts vary widely across Member States and regions, with southern and coastal areas generally more exposed, while some northern and inland regions experience relative gains as economic activity shifts spatially.

These findings underscore the importance of climate mitigation in limiting long-term macroeconomic losses and the need for targeted adaptation strategies, including strengthened flood protection, measures to safeguard workers in heat-exposed sectors and more forward-looking regional planning. The study offers a harmonised, spatially detailed assessment that supports EU climate resilience efforts and informs policy design under alternative climate futures.

This study investigates the economic impacts of the shift in tourism toward the Alps under anticipated climate change (CC) scenarios. An interview-based contingent visitation survey was conducted with 505 tourists of the Veneto Alps (Northeastern Italy) to estimate the effects of CC on visitation. Based on two Representative Concentration Pathway (RCP) - based scenarios (S1) RCP 4.5 and (S2) RCP 8.5 using a combination of direct and indirect site characteristics in two peak seasons (summer and winter), the results indicate substantial differences in projected tourism behaviour. Under S2, an overall decline in overnight trips (–24.8%, p < 0.001), length of stay (–13.7%, p < 0.001), and day trips (–11.4%, p < 0.05) were observed. In contrast, S1 leads to increases of 13.8% (p < 0.001) in overnight trips and 18.5% (p < 0.05) in day trips, suggesting that certain climatic changes under S1, such as reduced rainfall or lower congestion, may be perceived as favourable, whereas the higher risk of extreme events under S2 is viewed negatively. Results also point to distinct behavioural patterns between the different types of tourism, with differing implications for the study area. As a back-of-the-envelope exercise, by using the estimated percentage changes in tourism demand together with secondary data on the number of overnight trips and total nights spent in the study area, we projected tourism demand in absolute terms for each scenario which were then used as inputs to estimate the expected changes in house prices and hotel revenues based on the new tourism levels. Results indicate an average increase in house prices of approximately 2.7% per m2 under S1 and an average decrease of 3.3% under S2. Regarding hotel revenues, an increase ranging from 11.2% in winter to 22.1% in summer was observed under S1 and a decrease of -34.4% (summer) to -36.6% (winter) under S2. Overall, the study highlights that CC is likely to reshape tourism dynamics in the Alps, highlighting the importance of developing effective adaptation strategies and early preparedness actions to sustain the nature-based tourism industry under changing climatic conditions.