Chapter 1 Introduction
This study consists of 6 chapters. After the Introduction in Chapter 1, Chapter 2 defines what is meant by “economic impacts” and gives a brief explanation of how these impacts are estimated using integrated environmental-economic assessment models and macroeconomic models. Chapter 2 also provides several justifications for making very preliminary calculations of the economic value of climate change damages using existing data and methods that are available. Finally, it describes how models and methods can be useful not only to estimate the economic impacts of climate change, but also can be useful in general as planning and management tools in natural resource sectors. Chapters 3 through 5 are devoted to individual sectors or impact areas. Chapter 3 contains a country-specific assessment of the economic impacts of climate change due to climatically induced changes in space heating and cooling demands in the country’s energy sector. Chapter 4 contains an assessment of the economic impact of climate change on the hydroelectric sector through a case study of the Mavrovo Hydro Plant. The chapter describes the simulation results of how climate change will reduce power production in 2050 and 2100 from the Mavrovo hydropower plant (HPP) system. It includes quantitative values of these impacts in terms of the additional cost imposed on the system by having to meet the same level of energy demand despite reductions in hydropower generation capacity. Chapter 5 contains an assessment of the economic impact of climate change on agriculture. This chapter uses a case study of Pelagonia Valley to show how climate change might impact crop yields and net farm incomes in the long-term, defined here in terms of the last half of this century. The Pelagonia Valley case is chosen as representative of the agricultural sector in the country to illustrate the potential effects of climate change. The last chapter, Chapter 6, provides a number of conclusions focusing on the estimates of the economic impacts of climate change in the sector chapters and capacity building to improve these estimates. It ends with a number of strong recommendations drawn from the study.
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