Land Transport Systems under Climate Change: A Macroeconomic Assessment of Adaptation Measures for the Case of Austria

In the light of climate change, transport systems become increasingly stressed by extreme weather and gradual climatic changes, resulting in direct costs which arise in the affected sector as well as indirect costs due to economic spill-over effects. To attenuate these costs, sector specific adaptation measures are needed, raising the question of the net-benefits of adaptation at a macroeconomic level. However, despite their importance such assessments of impacts and adaptation at the macro-level are scarce and coarse in their implementation. This paper contributes to fill this research gap by analyzing specific adaptation measures for the land transport sectors. To reveal both direct and indirect effects of impacts and adaptation a computable general equilibrium model is deployed. Results confirm the importance of a macroeconomic framework since the indirect effects are found to be larger than the direct ones due to strong economic interlinkages with the transport system. Adaptation measures are able to reduce climate change induced GDP and welfare losses as well as unemployment; even though adaptation does not always seem economically reasonable at the business level.