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The Regulatory Landscape of the United Kingdom
The Climate Change Bill, introduced in November 2007, is the world's first legally-binding foundation for addressing the imminent threat posed by escalating climate change. The Bill has moved on to the House of Commons for consideration, having passed through the House of Lords in March 2008.
Essentially, the Bill is a formal commitment by the UK Government to address the causes and manage the impact of climate change through ambitious reduction strategies.
Potential Impacts and Costs
About 95 % of economic losses caused by catastrophic events in Europe have resulted from weather and climate-related disasters.
The 2002 flooding in Austria, the Czech Republic, Germany, Slovakia and Hungary resulted in overall losses of about EUR 16.8 billion and insured losses of about EUR 3.4 billion.
The 2003 heat wave resulted in many more deaths in north western Europe and the Mediterranean over and above the normal numbers and caused significant losses in the agricultural and energy producing sectors.
As an example, the total loss from the2003 hot summer in France (including the stress on power generation, the transport system, forests and other ecosystems, including fires, reduced wine production and decreased agricultural productivity) has been estimated at 0.1/0.2 % of GDP, equivalent to EUR 15-30 billion.
The 2003 summer was also estimated to have increased building subsidence claims in the United Kingdom by 20 %, with estimated impacts of GBP 30 to GBP 120 million and damage to transport infrastructure (rail buckling and road subsidence) of GBP 40 million.
It has been estimated that the costs of a 100-year storm event could double by the 2080s --to EUR 40 billion compared with EUR 20 billion today.
Association of British Insurers reports an estimated increase in worldwide annual losses from hurricanes, typhoons and windstorms by two thirds by the 2080s, to EUR 18 billion; in addition, they indicate that more than half of all European summers are projected to be warmer than that of 2003.
Coastal flooding can lead to important losses. By 2100, the population in the main coastal European cities exposed to sea-level rise and associated impacts on coastal systems is expected to be about 4 million and the exposed assets more than EUR 2 trillion.
Future projections of sea-level rise and associated impacts on coastal systems show potentially large increases in the risk of coastal flooding. These could have signficant economic costs (without adaptation), with recent estimates in the range of 12 to 18 billion EUR per year for Europe in 2080.
Projections indicate that the percentage of land area under high water stress in Europe is likely to increase from 19 % today to 35 % by the 2070s, and the additional number of people affected is expected to be between 16 and 44 million.
Work in the United Kingdom has estimated the economic losses to households of foregone water use due to the anticipated water deficit by 2100 in south-east England at between GBP 41 and GBP 388 million per year (depending on the scenario). However, the costs of adaptation to largely (but not entirely) eliminate these deficits would be only GBP 6 to GBP 39 million per year.
The hot summer of 2003 in Europe is estimated to have led to EUR 10 billion in economic losses to farming, livestock and forestry from the combined effects of drought, heat stress and fire.
Climate-related increases in crop yields are expected mainly in northern Europe (by about 10 %) with reductions (of 10 % or more) in the Mediterranean and the south-west Balkans.
There are likely to be changes in forest growth with climate change, and related economic consequences, though projections of future net changes in Europe are uncertain.
The droughts of 1999 caused losses of more than EUR 3 billion in Spain (EEA, 2004) and the hot summer of 2003 in Europe is estimated to have led to EUR 10 billion in economic losses to farming, livestock and forestry from the combined effects of drought, heat stress and fire.
In the summer 2003 heat wave in France, the costs of fighting forest fires for the Ministry of Interior increased from EUR 83 million in a normal year to EUR 179 million.
The changing climate in Europe is likely to lead to a decrease in demand for winter heating, but an increase in summer cooling, which can be described as either an impact or an adaptation measure that in some cases can offset mitigation efforts.
Energy demand has risen very strongly in Europe over recent years, due to technical, behavioural and socio-economic factors.
The overall changes in energy and economic costs (at a net level) are predicted to be modest in the short-medium term, due to the aggregated effects of decreased winter heating demand vs. increased summer cooling demand.
However, strong distributional patterns are expected across Europe - with rising cooling (electricity) demand in summer in southern Europe, compared with reduced heating (energy) demand in winter in northern Europe. This translates into a likely net benefit to northern Europe and net losses for southern Europe.