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Abstract:
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"Global climate change has been widely discussed in the academic literature and the popular press. Yet beyond sweeping generalizations or lists of possible effects, this discussion has not addressed what global climate change will mean for individuals in specific terms of job losses or gains, wage and income effects, unemployment impacts, or population change. A report prepared by the Committee on Earth and Environmental Sciences as a supplement to the President's Fiscal Year 1992 budget highlights this problem by stating that current global climate analyses 'have been hampered by a lack of fundamental economic research on resource-economy-environmental interactions'. The lack of research identifying such economic impacts is compounded by the geographic level of most analyses. Climate change research has been conducted primarily at the global level. However, neither the impacts of climate change nor climate change itself will be geographically uniform-both will be region-specific-implying that economic impacts must be addressed from a regional perspective. This regional approach is even more critical to identifying and evaluating various strategies for prevention or mitigation of the effects of climate change. Given the spatial dimensions of climatological effects and ecological systems, prevention and adaptation strategies will have considerable regional variation, so that a regional perspective is necessary to provide an accurate assessment of the economic consequences of specific strategies. Only by assessing the combined ecologic, economic, and human effects of global climate change in a framework that incorporates the ability of ecological and economic systems to adapt, can various prevention and mitigation alternatives be examined and compared effectively. In the Great Lakes region, global climate change would primarily impact nine economic sectors. These are agriculture and forestry, energy, construction, shipping, fisheries, recreation, manufacturing, retail/commercial trade, and the public sector. Determining the impacts of global climate change on these sectors in terms of income, employment, and wage effects, and developing prevention/mitigation strategies for the Great Lakes, demands an interdisciplinary research effort to address interactions between environmental effects and their resulting economic impacts. While some interdisciplinary research of this type has been undertaken, much more is required to identify these interactions. The need for additional research to establish regional environmental-economic linkages is severe. The most promising approach to delineating the full spectrum of economic impacts of global climate change on the Great Lakes Basin is a multi-equation, econometric economic-environmental model focused primarily on the seven-state U.S region and the Canadian province of Ontario. Such a model could translate climate-change effects on temperature, precipitation, lake level, biological productivity, and ecosystem health into economic impacts. Research hypotheses concerning the interaction of climate-induced environmental and economic effects could be tested as part of the modeling framework. Moreover, the validity of the econometric modeling methodology in this context has clearly been demonstrated by the utilization of a similar modeling framework by the author to identify the economic impacts of global climate change for the Pere Marquette Basin in west central Michigan."
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