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A General Equilibrium Analysis of Climate Change Impacts on Tourism

Author

Listed:
  • Andrea Bigano

    (Abdus Salam International Centre for Theoretical Physics, Fondazione Eni Enrico Mattei and Centre for Economic Studies, Katholieke Universiteit Leuven)

  • Maria Berrittella

    (Abdus Salam International Centre for Theoretical Physics, "La Sapienza" University and University of York)

  • Roberto Roson

    (Fondazione Eni Enrico Mattei and Università Ca’ Foscari di Venezia)

  • Richard S.J. Tol

    (Centre for Marine and Climate Research, Hamburg University, Institute for Environmental Studies, Vrije Universiteit, and Center for Integrated Study of the Human Dimensions of Global Change, Carnegie Mellon University)

Abstract

This paper studies the economic implications of climate-change-induced variations in tourism demand, using a world CGE model. The model is first re-calibrated at some future years, obtaining hypothetical benchmark equilibria, which are subsequently perturbed by shocks, simulating the effects of climate change. We portray the impact of climate change on tourism by means of two sets of shocks, occurring simultaneously. The first shocks translate predicted variations in tourist flows into changes of consumption preferences for domestically produced goods. The second shocks reallocate income across world regions, simulating the effect of higher or lower tourists’ expenditure. Our analysis highlights that variations in tourist flows will affect regional economies in a way that is directly related to the sign and magnitude of flow variations. At a global scale, climate change will ultimately lead to a welfare loss, unevenly spread across regions.

Suggested Citation

  • Andrea Bigano & Maria Berrittella & Roberto Roson & Richard S.J. Tol, 2004. "A General Equilibrium Analysis of Climate Change Impacts on Tourism," Working Papers 2004.127, Fondazione Eni Enrico Mattei.
    • Handle: RePEc:fem:femwpa:2004.127
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    References listed on IDEAS

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    More about this item

    Keywords

    Climate change; Computable general equilibrium models; Tourism;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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