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Climate change and the economy in Baja California: Assessment of macroeconomic impacts of the State's Climate Action Plan

Author

Listed:
  • Wei, Dan
  • Brugués, Alejandro
  • Rose, Adam
  • de la Parra, Carlos A.
  • García, Rigoberto
  • Martínez, Federico

Abstract

Despite its developing country status, Mexico ranks 10th worldwide in total greenhouse gas (GHG) emissions. However, Mexico's vulnerability to climate change impacts is a major motivating factor behind its announced intended contributions at COP21 to cut its baseline emissions by at least 25% in 2030. We analyze the macroeconomic impacts of the Climate Action Plan (CAP) process undertaken in the Mexican border state of Baja California (BC). We adapt a state-of-the-art regional macroeconometric model to analyze the BC economy-wide impacts of 22 GHG mitigation policy options recommended in the Baja California CAP. The combined effects include an average annual increase of 1680 new jobs (or about 0.11% of the average annual employment in the baseline economic forecast) and a Gross State Product (GSP) increase of $9.85 billion pesos in NPV over the 2015–2030 planning horizon. Although the main objective of GHG mitigation is to reduce atmospheric concentrations, and hence future potential damages of these pollutants, the stimulus to the BC economy from the implementation of its CAP represents a valuable co-benefit. Moreover, it is a tangible one that will take place in the near-term, in contrast to the more long-term and more uncertain benefits associated with reducing climate change damages.

Suggested Citation

  • Wei, Dan & Brugués, Alejandro & Rose, Adam & de la Parra, Carlos A. & García, Rigoberto & Martínez, Federico, 2017. "Climate change and the economy in Baja California: Assessment of macroeconomic impacts of the State's Climate Action Plan," Ecological Economics, Elsevier, vol. 131(C), pages 373-388.
    • Handle: RePEc:eee:ecolec:v:131:y:2017:i:c:p:373-388
    DOI: 10.1016/j.ecolecon.2016.08.020
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    References listed on IDEAS

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    1. Adam Rose & Dan Wei, 2012. "Macroeconomic impacts of the Florida Energy and Climate Change Action Plan," Climate Policy, Taylor & Francis Journals, vol. 12(1), pages 50-69, January.
    2. Dan Wei and Adam Rose, 2014. "Macroeconomic Impacts of the California Global Warming Solutions Act on the Southern California Economy," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    3. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    4. Adam Rose & Dan Wei & Noah Dormady, 2011. "Regional macroeconomic assessment of the Pennsylvania Climate Action Plan," Regional Science Policy & Practice, Wiley Blackwell, vol. 3(4), pages 357-379, November.
    5. repec:aen:journl:eeep3_2_07rose is not listed on IDEAS
    6. Erik Dietzenbacher & Bart Los & Robert Stehrer & Marcel Timmer & Gaaitzen de Vries, 2013. "The Construction Of World Input-Output Tables In The Wiod Project," Economic Systems Research, Taylor & Francis Journals, vol. 25(1), pages 71-98, March.
    7. Manne, Alan & Richels, Richard, 2004. "The impact of learning-by-doing on the timing and costs of CO2 abatement," Energy Economics, Elsevier, vol. 26(4), pages 603-619, July.
    8. Grubb, Michael, 1997. "Technologies, energy systems and the timing of CO2 emissions abatement : An overview of economic issues," Energy Policy, Elsevier, vol. 25(2), pages 159-172, February.
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    Cited by:

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