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Theodoros Zachariadis Dept. of Environmental Science & Technology Cyprus University of Technology

Economic Aspects of Climate Change Impacts and Adaptation Measures in the Mediterranean Some Case Studies from Cyprus. Theodoros Zachariadis Dept. of Environmental Science & Technology Cyprus University of Technology E-mail: t.zachariadis@c ut .ac.cy

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Theodoros Zachariadis Dept. of Environmental Science & Technology Cyprus University of Technology

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  1. Economic Aspects of Climate Change Impacts and Adaptation Measures in the MediterraneanSome Case Studies from Cyprus Theodoros Zachariadis Dept. of Environmental Science & TechnologyCyprus University of Technology E-mail: t.zachariadis@cut.ac.cy Brokerage Event of the "ENV-NCP-TOGETHER" Project, Malta, August 2012

  2. Overview of climate change impacts in Europe Source: Future Impacts of Climate Change across Europe. Center for European Policy Studies (CEPS) Working Document No. 324/February 2010. www.ceps.eu/ceps/download/2972

  3. Climate Change and Its Impacts in Cyprus Recent region-specific projections: (Hadjinicolaou, P.C. et al., Regional Environmental Change (2011) 11: 441–457) • Temperature increase of 2C in summer, 1C in winter by mid-21st century • Slightly reduced rainfall levels (27%) + sea level rise Effects: • Increased shortage of water resources • Vulnerability to desertification • Damages to coastline, ecosystems & biodiversity • Higher energy needs for cooling (lower for heating) • Risk of decreasing tourist flows • Adverse impacts on public health

  4. Analysis of Climate Effects on Energy Use(Zachariadis T., Energy Policy 38 (2010) 744–750) • Econometric time series analysis of energy use in Cyprus by sector and fuel, 1960-2007 • Energy consumption = f (income/economic activity, energy prices, time trends, climate) • Climate effects captured by the variables of heating & cooling degree days (they express intensity + duration of cool & hot days respectively) • Effect of climate statistically significant only for electricity consumption in households & tertiary sector

  5. Forecast of electricity consumptionup to 2030– with climate change • Assumption: uniform temperature increase by 1C in 2030, during the whole year • Electricity use in 2030 higher by 2.9% (compared to ‘no climate change’ scenario) • Present value of total cost in period 2008-2030: > 200 MEuros (at constant prices of year 2007) • Average cost per household: ~30 Euros/year in 2020, ~80 Euros/year in 2030 (at constant prices of year 2007) • Further econometric analysis + forecast of peak electricity load in summer with climate change: additional 65–75 MW in 2020, 85–95 MW in 2030 • Update of forecasts up to 2050 in preparation

  6. Effects of climate change in Cyprus on agricultural yields & production Assess variability and changes in irrigation water demand in Cyprus over the past 30 years (1981-2008) Assess variability and changes in agricultural yields, total production the past 30 years (1981-2008) Assess potential irrigation water demand and crop production for the coming 10 years (2011-2020). (Bruggemann A. et al., Effect of climate variability and climate change on crop production and water resources in Cyprus. Final Report, July 2011, http://works.bepress.com/theodoros_zachariadis/21)

  7. Methodology • Evapotranspiration was computed using the FAO Penman-Monteith method. • Blue water demand andgreen wateruse was computed for all crops based on: • location (431communities) • climatic conditions • crop coefficients (Kc) • soil water holding capacity • efficiency of irrigation method • irrigation fraction (area)

  8. Climate Data (1980-2010)

  9. Results Two climate scenarios up to 2020, using data of recent years with a) average and b) highest aridity ratios Average annual national crop production lower by 4143%, relative to 1980/81-2008/09(including sustainable water management policies) Assuming constant agricultural product prices, loss of agricultural production equal to €574€602 million for 20132020 High variability in water use for different crops, locations and years various options for climate change adaptation

  10. Willingness to pay for water p (€/c.m.) Water demand curve Price q' q0 Methodology to assess costs of water shortages in non-agricultural sectors Welfare losses of consumers due to reduced availability of water Water quantity q

  11. Estimating Residential Water Demand in Cyprus(Zachariadis T., WaterVol. 2, pp. 788–814 (2010)) Data from the three Water Boards of Cyprus serving the main cities (Nicosia, Limassol, Larnaca): Billed water consumption per consumer type No. of consumers by type Water tariffs (fixed prices & prices per consumption block) Fraction of consumers in each consumption block Revenues and expenditures (from Board financial accounts) Period: 1980-2009 (annual data), 2000-2009 (data available per billing period – 2/3/4 months) Other data: Monthly temperature and rainfall (from Met. Service) Quarterly GDP & population (from Statistical Service) Household income by district of Cyprus (Family Expenditure Surveys conducted by Statistical Service)

  12. Cyprus:Costs of Water Shortages up to 2030 New desalination plants cost 400 MEuros! 1520% higher costs due to climate changed induced water scarcity

  13. Potential adaptation measures for Cyprus • Water: Proper pricing to a) encourage conservation and b) increase funds available for technical measures • Agriculture: Shift to production patterns with high value and high water efficiency • Tourism: Focus on non-summer visitors • Energy: Improve energy efficiency of buildings • Infrastructure: Invest in measures to protect roads & buildings along the coastline • Forests, biodiversity & public health: Monitor vulnerable sites/species and take precautionary measures

  14. An adaptation measure: ‘Efficient’ household water prices to account for scarcity Climate change increases water shortages modestly, requires 8-13 €cents/c.m. higher water prices to induce conservation in order to address this additional scarcity

  15. An adaptation measure: Effects of ‘efficient’ household water pricing

  16. Benefits of long-term planning: What if we had ‘efficient’ prices already in 2000?

  17. Conclusions and policy implications • South Europe to be adversely affected by climate change, more than any other European region • Monitoring of vulnerable sites / species necessary • Long-term planning has tangible benefits – both environmental and economic • Proper pricing of scarce natural resources is necessary to: • Encourage long-term resource conservation.People respond to incentives! • Provide funds that can be used for financing climate change mitigation & adaptation measures

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