Analysis of Sector-Specific Socio-Economic Damage Costs of Climate Change

The Institute of Watershed Management (IWMI) contributed to a study for the Ministry of Environment on sector-specific socio-economic damage costs arising from climate change. The Korea Environment Institute led the work with the Seoul National University and University of Seoul research foundations and the Korea Rural Economic Institute. The work plan was submitted in August 2021 and the interim report in March 2022.

The usual obstacle in climate policy is that damage is hard to express as a number. Scenarios can say how much warmer it will be, but only a cost figure for health, energy, water resources and agriculture allows budgets and priorities to be set. The study quantified sector risks and estimated their socio-economic costs, at a point when Korea’s second national climate adaptation plan had concluded and a third was being prepared.

IWMI was responsible for the climate scenarios feeding the analysis. CMIP6 data under the SSP scenarios used in the IPCC Sixth Assessment Report were taken as the basis, with preference given to datasets certified as national standard climate change scenarios by the Korea Meteorological Administration. Downscaled records for 60 weather stations and a 1 km gridded dataset covering the Korean peninsula, newly certified by the Rural Development Administration in 2022, were applied according to the unit of analysis. Multiple model results were used together to reduce the uncertainty of relying on a single model.

The resulting projections supported risk quantification for health, energy, water resources and agriculture under changing extreme climate characteristics. By placing climate and socio-economic scenarios side by side and carrying the analysis through to sector damage costs, the study provides an evidence base for national adaptation planning and for allocating budgets between sectors.