Overview
Policy-makers from various sectors must take climate change into account, or face the risk of the policies being ineffective in a climate change-limited world. Policy-makers must better understand the likely limits and impacts which climate change will impose on their country. At a global level, various countries, regional, and international organizations are carrying out in-depth studies using sophisticated modelling techniques which merge projections of climate data with physical impact models and then economic models to better understand the impacts of climate change. In this country, very little economic analysis has been done related to climate change impacts. Therefore, UNDP decided to carry out this study which was mostly led by national experts with some international assistance. The building of in-country capacity should assist in improving related analyses such as the yet-to-becompleted World Bank study which involves a large scale water resource assessment of the impacts of climate change on Macedonian agriculture. The goals of the process were: 1.
To identify the data and state-of-the-art models and methods needed to estimate the economic impacts of climate change and the benefits and costs of adaptation in energy, water resources, and agriculture;
2. To assess the extent of the capacity in-country to develop and apply these data, models and methods to the country’s situation; 3. To use existing data, models and methods available to make some highly preliminary estimates of the economic value of the physical impacts that were identified in the National Communications; and 4. To suggest ways to improve the existing in-country analytical and institutional capacity to estimate the economic impacts of climate change and the benefits and costs of adaptation. In this study, the economic impacts of climate change are investigated in three major areas: energy demand, water resources related to electricity production, and agriculture. Case studies are used in each sector to indicate the trend of economic impacts of climate change. The findings are used to give recommendations for developing analytical capacity which would be “no regrets” – meaning that this capacity would help the country to manage its natural resources and economic systems regardless of the severity of climate change. It is hoped that carrying out this work has helped develop analytical and institutional capacity in the country. The process of carrying out this study has provided national experts with some of the tools needed to carry out further work on evaluating impacts of climate change in order to adapt and reduce vulnerability.
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