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Global Warming Induced Water-Cycle Changes and Industrial Production – A Scenario Analysis for the Upper Danube River Basin

  • Christoph Jeßberger
  • Maximilian Sindram
  • Markus Zimmer

    ()

Using the environmental decision support system DANUBIA, we analyze the effects ofclimate change on industry and compare the effectiveness of different adaptation strategies.The observed area covers Germany and Austria up to 2025. Since the main effects ofclimate change in this region are expected to be caused through changes in the watercycle,we place a special focus on the exemplary region of the upper Danube catchmentarea. Industry is the main regional user of water resources. Water is an essential productionfactor and is used in almost every production process of a manufactured good. We applyestimates of regional production functions, based on AFiD-panel micro-data for Germany,to calibrate regional industrial production and water usage within DANUBIA. Thus, weare able to simulate region-specific effects of climate change and the impact of socialscenarios using an unprecedented model of reciprocal influences of a huge network ofinterdisciplinary research areas. Simulation results show wide regional differences inproduction site reactions as well as between differing scenarios. Comparing scenarios ofmoderate and serious climate change, we are able to illustrate the severe environmentaleffects in some regions and to determine considerable economic effects on regionaleconomic growth.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-Ifo_Working_Papers/wp-ifo-2005-2010/IfoWorkingPaper-94.pdf
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Paper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper Nr. 94.

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Date of creation: 2010
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Handle: RePEc:ces:ifowps:_94
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  1. Dachraoui, Kais & Harchaoui, Tarek, 2004. "Water Use, Shadow Prices and the Canadian Business Sector Productivity Performance," Economic Analysis (EA) Research Paper Series 2004026e, Statistics Canada, Analytical Studies Branch.
  2. Hans-Friedrich-Eckey & Reinhold Kosfeld & Matthias Türck, 2005. "Regionale Produktionsfunktionen mit Spillover-Effekten für Deutschland – Empirischer Befund und wirtschaftspolitische Implikationen," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 125(2), pages 239-267.
  3. Cristina de Gispert, 2004. "The economic analysis of industrial water demand: a review," Environment and Planning C: Government and Policy, Pion Ltd, London, vol. 22(1), pages 15-30, February.
  4. Kim, H Youn, 1992. "The Translog Production Function and Variable Returns to Scale," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 546-52, August.
  5. Arnaud Reynaud, 2003. "An Econometric Estimation of Industrial Water Demand in France," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(2), pages 213-232, June.
  6. Diane Dupont & Steven Renzetti, 2001. "The Role of Water in Manufacturing," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 18(4), pages 411-432, April.
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