28 February 2017 Assessing the impacts of climate change for Switzerland Final report Commissioned by: Federal Office for the Environment (FOEN) Climate Division CH‑3003 Bern The FOEN is an agency of the Federal Department of the Environment, Transport, Energy and Communications (DETEC). Contractor: École Polytechnique Fédérale de Lausanne Laboratory of Environmental and Urban Economics (LEURE) Station 16 CH-1015 Lausanne http://leure.epfl.ch Authors: Frank Vöhringer, Marc Vielle, Boris Thurm, Wolfgang Knoke, Dario Stocker, Anita Frehner, Sophie Maire, Philippe Thalmann FOEN support: Roland Hohmann Note: This report was prepared under contract to the Federal Office for the Environment (FOEN). The contractor bears sole responsibility for its contents. 2 TABLE OF CONTENTS 1. INTRODUCTION 8 1.1 Aim of the research program 8 1.2 Background 8 1.3 State of the art 9 1.4 Structure of the report 10 2. METHODOLOGY 11 2.1 A sector-based top-down approach 11 2.2 Scenarios 12 2.3 Modeling approach 15 3. CLIMATE-SENSITIVE AREAS 20 3.1 Health 20 3.2 Buildings and infrastructure 33 3.3 Energy 42 3.4 Water management 53 3.5 Agriculture, forestry, biodiversity 60 3.6 Tourism 73 4. CONCLUSIONS 92 REFERENCES 97 APPENDIX: LITERATURE OVERVIEW BY CLIMATE-CHANGE SENSITIVE AREA 107 Health 107 Buildings and infrastructure 112 Energy demand 115 Energy Supply 118 Water management 122 Agriculture 126 Forestry 129 Biodiversity 130 Tourism 132 3 TABLES Table 1: Swiss population 12 Table 2: Annual GDP growth rate 13 Table 3: Fossil fuel import prices 13 Table 4: Operating life of Swiss nuclear power plants 14 Table 5: Sector classification in GEMINI-E3 16 Table 6: International literature that incorporates health impacts into CGE models for impact assessment 23 Table 7: Exposure-response functions for temperature related mortality 27 Table 8: Exposure-response function for temperature-related hospital admissions 28 Table 9: CC impacts in terms of premature deaths due to cardiovascular and respiratory diseases 29 Table 10: Climate change welfare impacts due to productivity loss 30 Table 11: Worker productivity at different work intensities 31 Table 12: Productivity loss due to heat stress in Switzerland 2003 31 Table 13: Damages from storm ‘Lothar’ (1999) if it had occurred in the base year 2008 37 Table 14: Cost allocation of an exemplary storm event in GEMINI-E3 classification 38 Table 15: Damages caused by the flood of 21st/22nd of August 2005 in Switzerland 39 Table 16: Cost allocation of an exemplary flood event in GEMINI-E3 classification 40 Table 17: Impacts of an assumed change of the return period of an exemplary storm or flood event 41 Table 18: Climate change impact on European electricity prices in 2050 49 Table 19: Climate change impact on European electricity prices 50 Table 20: Impact of climate change on heating 50 Table 21: Impact of climate change on cooling demand 51 Table 22: CC impacts on heating and cooling demand 52 Table 23: Impacts of foreign electricity price changes on Switzerland 52 Table 24: CC impacts on energy consumption 53 Table 25: Critical changes of the irrigation water resource 58 Table 26: Impacts of changes in the irrigation water resource 59 Table 27: Agricultural sectors in GTAP database 68 Table 28: Agricultural sectors in GEMINI-E3 68 Table 29: Price deviations for grains and oil seeds 69 Table 30: Monthly weights in the winter tourism sector 77 4 Table 31: Changes in tourism flows 84 Table 32: Impacts of climate change for the Swiss winter tourism sector and welfare 86 Table 33: Impacts of climate change for the Swiss tourism sectors and welfare 91 Table 34: Overview of economically relevant influences of climate change in Switzerland 93 5 FIGURES Figure 1: Pathways of past and future anthropogenic greenhouse gas emissions and projected annual mean warming for Switzerland for the 30-year average centered at 2085 14 Figure 2: HDD with th = 12°C (left) and CDD with bp = 18.3°C (right) in ˚C 47 Figure 3: Changes of HDD with th = 12°C (left) and CDD with bp = 18.3°C (right) 47 Figure 4: Distribution of the regional share of demand (Bedarf) vs. supply (Dargebot) for river runoff in the months June to August for 1981-2010 57 Figure 5: Cluster analysis for hydro-climatological change signals 58 Figure 6: Production of grains and oilseeds under the three scenarios 70 Figure 7: Regional welfare changes due to impacts on agriculture under the three scenarios 71 Figure 8: Production of grains and oilseeds under the three scenarios (combined effects) 72 Figure 9: Regional welfare changes due to impacts on agriculture under the three scenarios (combined effects) 72 Figure 10: Nested CES tourism consumption function and elasticities of substitution in GEMINI-E3 75 Figure 11: Nested CES winter tourism production function and elasticities of substitution in GEMINI-E3 76 Figure 12: Regional weights used in the winter overnight tourism sector 77 Figure 13: Regional weights used in the one-day winter tourism sector 77 Figure 14: Snow cover variation of the Swiss winter overnight tourism sector with respect to 2010 under the A1B scenario 78 Figure 15: Snow cover variation of the Swiss winter overnight tourism sector compared to 2010 under the RCP3PD Scenario 79 Figure 16: Snow cover variation of the Swiss one-day winter tourism sector with respect to 2010 under the A1B scenario 79 Figure 17: Snow cover variation of the Swiss one-day winter tourism sector with respect to 2010 under the RCP3PD scenario 80 Figure 18: Snow cover variation in Europe with respect to 2010 under the A1B scenario 80 Figure 19: Snow cover variation in Europe with respect to 2010 under the RCP3PD scenario 81 Figure 20: Simulations with the Hamburg Tourism Model 83 Figure 21: International touristic arrivals in 2060 88 Figure 22: International touristic departures in 2060 89 Figure 23: Scenario impacts on summer tourism, regional welfare in 2060 90 6 ABBREVIATIONS A1B intermediate greenhouse gas emissions scenario of SRES A2 high greenhouse gas emissions growth scenario of SRES BRIC Brazil, Russia, India and China CC climate change CDD cooling degree days CH2011 Swiss climate change scenarios published in 2011 CHF Swiss francs CGE computable general equilibrium CO2 carbon dioxyde EU European Union FSO Federal Statistical Office GDP gross domestic product GCM general circulation model FOEN Federal Office for the Environment HDD heating degree days HTM Hamburg Tourism Model IAM integrated assessment model IEA International Energy Agency IPCC Intergovernmental Panel on Climate Change ODT one-day winter tourism OECD Organisation for Economic Co-operation and Development RCM regional climate model RCP representative concentration pathways RCP3PD emissions scenario that reduces them by 50% by 2050 relative to 1990 ROW rest of the world SECO State Secretariat for Economic Affairs SRES IPCC’s Special Report on Emissions Scenarios of 2000 SSP shared socioeconomic pathways toe tonne of oil equivalent TWh terawatt-hour US United States WEO World Energy Outlook WBGT Wet Bulb Globe Temperature WOT winter overnight tourism WSL Swiss Federal Institute for Forest, Snow and Landscape Research 7 1. INTRODUCTION 1.1 Aim of the research program This report summarizes the results of a research program that seeks to estimate the possible costs of climate change for Switzerland at the horizon of 2060. The main goal of this research program is to bundle, update and complete earlier assessments with a view to producing a full picture of the economic conse- quences of climate change impacts in Switzerland by 2060. Secondary goals are developments of the methodology, improvements of the simulations models, and updating of the SWIDCHI-Database, which provides a public inventory of literature on climate change impacts in Switzerland. Particular emphasis is put on examining uncertainties and the role and nature of adaptation, as well as identifying cross-sectoral and international effects that are transmitted via trade. The results should also be useful for the Federal Office for the Environment (FOEN) in developing the federal adaptation strategy and in preparing the con- sultation documents for the next revision of the CO2 Act. 1.2 Background For Switzerland as for other continental regions, climatologists expect a temperature increase much higher than the global average (Swiss Academies of Arts and Sciences 2016). Even up to 2011, Switzerland has experienced an increase by 1.7°C since the beginning of institutionalized temperature measurements in 1864, while the average on-land warming in the northern hemisphere amounted to 1.1°C (Perroud & Bader 2013). Under these circumstances, it is necessary to inquire about climatic effects in Switzerland and their economic magnitude. Understanding these effects is a prerequisite for developing adequate adaptation strategies, with the objective to reduce damages and to reap opportunities of climate change. Despite this, there has been little research that would include attempts for monetization over a long period of time. One of the reasons is the complexity and heterogeneity of the subject: Many sectors are involved in very different ways, requiring different types of analyses. This includes e.g. areas as diverse as the assessment of hydrological changes and their effects on various sectors including electricity genera- tion and agriculture, projections regarding the spread of vector-borne diseases, investigations on how high temperatures affect the human body, crops and other plants, and even bio- diversity, the economic valuation of changes