Modeling the Impacts of Climate Change on the Energy Sector: a Swiss perspective
When speaking of energy production and consumption in the context of climate change, the interest usually lies in mitigation policies and measures, i.e. the energy system is seen as an emitter of greenhouse gases. This paper takes a different approach and analyzes the impacts of climate change on the Swiss energy system. We study the impacts of a changing climate on both the energy demand and supply. For the former impacts, it is predicted that higher temperatures will modify future heating and cooling demands in opposite directions. As for the supply side, changes in precipitation will affect hydro generation whereas higher temperature will impact cooling facilities and energy efficiency of thermal power plants. To undertake the analysis, we use a Computable General Equilibrium model, the GEMINI-E3 which is a standard CGE model based on the GTAP database. In the first, methodological part of the paper, we present how to integrate within the GEMINI-E3 information related to temperature and precipitation. Future changes in these climate variables are obtained from four couplings of global and regional climate models realized in the framework of the European project ENSEMBLES. This project has produced regional climate scenarios at European level for impacts assessments using the high resolution RCM ensemble system and downscaling methods. This information is generally available for the period 1961-2100 at a grid resolution of 25 x 25 km. Based on these simulation data, we show how to derive impacts via econometrically estimated functions and how to construct aggregated indicators, such as cooling and heating degree-days, that are then used as exogenous variables within the GEMINI-E3 model. After the methodological part, we present different scenarios without and with climate change and compare their outcomes for the energy demand and supply at the 2050 time horizon. Whereas detrimental impacts on the supply side seem to remain limited in 2050, partly because of adaptation, we clearly find strong macroeconomic impacts through changes in energy demand for cooling and heating purposes. Furthermore, we show that the reduced energy demand for heating has positive impacts for the Swiss economy that largely outweigh the negative ones created by the increased energy demand for cooling. These results are intimately linked to the Swiss context, where the need for heating is much higher than the need for cooling. The net impact is all the more positive that fossil fuels, which are the main energy source for heating, are entirely imported.