Kazunori Nakajima (p), Masafumi Morisugi, Naoki Sakamoto, Go Tomoda, Ryuta Mori, Eiji Ohno

Atsushi Koike

To examine damages of increase in the long-term flood due to climate change on prefectural economic activities in Japan, we develop a quasi-dynamic multi-regional computable general equilibrium (CGE) model and measure flood damage costs and adaptation benefits using some climate scenarios. The findings in this study are shown as follows.
(1) In 2031-2050, the average flood damage costs were estimated respectively as 581.2 million yen per year in RCP2.6 and as 585.0 million yen per year in RCP8.5 (MIROC5). On the other hand, the average prefectural flood damage costs were estimated respectively as -0.20 million yen per year (benefit) to 10.30 million yen per year in RCP2.6, and as -0.22 million yen per year (benefit) to 10.31 million yen per year in RCP8.5. We found that, in spite of increasing in flood damage due to climate change, some prefectures had positive impacts of flood on economic activities.
(2) In 2031-2050, decreases in the average GDP were estimated respectively as -0.805% per year in RCP2.6 and as -0.811% per year in RCP8.5 (MIROC5). On the other hand, decreases in the average prefectural GDP were estimated respectively as -0.14% per year to -2.63% per year in RCP2.6, and as -0.14% per year to -2.68% per year in RCP8.5.
(3) The primary industry, the petroleum and coal products sector, and the electronic equipment sector were affected negatively by decreases in their outputs due to flood damage. On the other hand, the machinery sector, the construction sector, and the tertiary industry had insignificant impacts on their outputs. Additionally, whereas prefectures in Kyushu region had relatively negative impacts of flood on their industries, some industrial sectors in Tokyo, Kanagawa, Osaka and Fukuoka had positive impacts.

Sandy Dall'erba (p)

Atsushi Koike

Climate change will increase the occurrence of droughts as well as their impact on agriculture. However, this paper demonstrates how domestic trade will overcome the adverse effect of drought on U.S. agricultural profit. Based on recent trade flow data of agricultural commodities and detailed drought records, our gravity model highlights that exports increase if more drought happens in the destination state and inversely if in the origin state. As a result, the general equilibrium agricultural profit depends on both local and trade partners’ weather conditions. Projections suggest that trade will act as a $14.5 billion adaptation tool in the future.

Tomoki Ishikura (p)

Atsushi Koike

see full draft paper