IDEAS home Printed from https://ideas.repec.org/p/wiw/wiwrsa/ersa14p673.html

Measurement of flood damage due to climate change by dynamic spatial computable general equilibrium model

Author

Listed:
  • Kazunori Nakajima

  • Hisayoshi Morisugi
  • Masafumi Morisugi
  • Naoki Sakamoto

Abstract

To explain economic impacts of flood damage due to climate change over time in Japan, this study develops a dynamic spatial computable general equilibrium model, and measures flood damage costs through some numerical experiments. It is inferred that the frequency and the intensity of flood are on the long-term increase. In the category of flood damage in Japan, there are serious flood damages to social capitals. These observations are described in statistical research on flood by Japanese government. In this study, these damages are defined as 'the direct damage', and are different from decrease in equivalent consumption due to the direct effect. Also, the proportion of the direct damage to decrease in equivalent consumption is defined as 'the dynamic multiplier of damage cost'. This study develops a spatial CGE model based on dynamic structure of the Ramsey model. Our model has 8 regions and 20 production sectors. The flood scenario is described as increase in capital depreciation rate due to flood from 2000 to 2050. In our simulations, 5 flood damage rates are used consisting of damage rates calculating by 4 climate models and uniform damage rate throughout Japan. To consider dynamic spillover effects of flood damage, this study proposes two indices as dynamic damage costs that are comparative static and transition dynamics. The former is the long-term damage caused as the result of shifts from a steady-state equilibrium to another by increasing in the frequency and the intensity of flood due to climate change. On the other hand, the latter is the difference between flood damage costs by a baseline scenario and by a flood scenario, on the transition path to a new steady-state equilibrium. As the transition path can be described, this study shows possible dynamic spillover effects of flood damage over time. The findings in this study are shown below. 1)In 2050, the total amount of flood damage cost is estimated to be from about US$0.4 billion to about US$5.6 billion. 2)The decrease in the rate of investment return by the long-term increase in flood damage causes decrease in savings and consumption, so that the dynamic multiplier of damage cost is estimated to be from 1.2 to 1.7 times.

Suggested Citation

  • Kazunori Nakajima & Hisayoshi Morisugi & Masafumi Morisugi & Naoki Sakamoto, 2014. "Measurement of flood damage due to climate change by dynamic spatial computable general equilibrium model," ERSA conference papers ersa14p673, European Regional Science Association.
    • Handle: RePEc:wiw:wiwrsa:ersa14p673
    as

    Download full text from publisher

    File URL: https://www-sre.wu.ac.at/ersa/ersaconfs/ersa14/e140826aFinal00673.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521725200, December.
    2. de la Grandville,Olivier, 2009. "Economic Growth," Cambridge Books, Cambridge University Press, number 9780521898010, December.
    3. Alfonso Novales & Esther Fernández & Jesús Ruiz, 2022. "Numerical Solution Methods," Springer Texts in Business and Economics, in: Economic Growth, edition 3, chapter 5, pages 213-278, Springer.
    4. Lau, Morten I. & Pahlke, Andreas & Rutherford, Thomas F., 2002. "Approximating infinite-horizon models in a complementarity format: A primer in dynamic general equilibrium analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 26(4), pages 577-609, April.
    5. Alfonso Novales & Esther Fernández & Jesús Ruiz, 2022. "Economic Growth," Springer Texts in Business and Economics, Springer, edition 3, number 978-3-662-63982-5, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Grames, Johanna & Prskawetz, Alexia & Grass, Dieter & Viglione, Alberto & Blöschl, Günter, 2016. "Modeling the interaction between flooding events and economic growth," Ecological Economics, Elsevier, vol. 129(C), pages 193-209.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fabio Privileggi, 2011. "Transition Dynamics in Endogenous Recombinant Growth Models by Means of Projection Methods," Computational Economics, Springer;Society for Computational Economics, vol. 38(3), pages 367-387, October.
    2. Yazid Dissou & Lilia Karnizova & Qian Sun, 2015. "Industry-level Econometric Estimates of Energy-Capital-Labor Substitution with a Nested CES Production Function," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(1), pages 107-121, March.
    3. Biru Paul & Md. Uddin & Abdullah Noman, 2011. "Remittances and output in Bangladesh: an ARDL bounds testing approach to cointegration," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 58(2), pages 229-242, June.
    4. Balli, Faruk & Guven, Cahit & Balli, Hatice O. & Gounder, Rukmani, 2010. "The Role of Institutions, Culture, and Wellbeing in Explaining Bilateral Remittance Flows: Evidence Both Cross-Country and Individual-Level Analysis," MPRA Paper 29609, University Library of Munich, Germany.
    5. Klemens,Ben & Coppola,Andrea & Shron,Max, 2015. "Estimating local poverty measures using satellite images : a pilot application to Central America," Policy Research Working Paper Series 7329, The World Bank.
    6. Schoder, Christian, 2011. "Kaleckian vs. Marxian specifications of the investment function: Some empirical evidence for the US," MPRA Paper 29584, University Library of Munich, Germany.
    7. Mallick, Debdulal, 2012. "The role of the elasticity of substitution in economic growth: A cross-country investigation," Labour Economics, Elsevier, vol. 19(5), pages 682-694.
    8. Mallick, Debdulal, 2010. "Capital-labor substitution and balanced growth," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1131-1142, December.
    9. Ziesemer Thomas H.W., 2009. "Worker Remittances and Growth: The Physical and Human Capital Channels," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(6), pages 743-773, December.
    10. Giulia Bettin & Alberto Zazzaro, 2012. "Remittances And Financial Development: Substitutes Or Complements In Economic Growth?," Bulletin of Economic Research, Wiley Blackwell, vol. 64(4), pages 509-536, October.
    11. Maxim L. Pinkovskiy & Xavier X. Sala-i-Martin, 2014. "Lights, camera,...income! Estimating poverty using national accounts, survey means, and lights," Staff Reports 669, Federal Reserve Bank of New York.
    12. Ajit Karnik & Mala Lalvani, 2012. "Growth performance of Indian states," Empirical Economics, Springer, vol. 42(1), pages 235-259, February.
    13. Panayotis G. Michaelides & John G. Milios & Angelos Vouldis & Spyros Lapatsioras, 2010. "Heterodox influences on Schumpeter," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 37(3), pages 197-213, February.
    14. Gaetano Lisi & Maurizio Pugno, 2015. "A matching model of endogenous growth and underground firms," International Journal of Economic Theory, The International Society for Economic Theory, vol. 11(4), pages 347-369, December.
    15. Joel Slemrod & Caroline Weber, 2012. "Evidence of the invisible: toward a credibility revolution in the empirical analysis of tax evasion and the informal economy," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(1), pages 25-53, February.
    16. Valerien O. Pede, 2013. "Diversity And Regional Economic Growth: Evidence From Us Counties," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(3), pages 111-127, September.
    17. Tarishi Matsuoka, 2011. "Monetary Policy and Banking Structure," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 43(6), pages 1109-1129, September.
    18. Ebeke, Christian Hubert, 2012. "The power of remittances on the international prevalence of child labor," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 452-462.
    19. Kim, Young-Joon & Song, Joonhyuk, 2014. "Romer Meets Heterogeneous Workers In An Endogenous Growth Model," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 55(2), pages 121-146, December.
    20. Cecilia Bermúdez & Carlos D. Dabús & Germán H. González, 2015. "Reexamining the link between instability and growth in Latin America: A dynamic panel data estimation using k-median clusters," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 52(1), pages 1-23, May.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wiw:wiwrsa:ersa14p673. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Gunther Maier (email available below). General contact details of provider: http://www.ersa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.