The Arctic is warming at more than double the global average. This
has resulted in physical impacts in the region including the melting of
perennially frozen ground (permafrost) which holds almost twice the
carbon in the atmosphere.
Permafrost thawing is not explicitly modelled in most of the latest
climate models, which informs the Intergovernmental Panel on Climate
Change Sixth Assessment Report (AR6). Hence, the temperature
projections from AR6 which are extensively used to inform policymakers
and stakeholders in the public and private sector, could underestimate
the projected physical and economic impacts.
This thesis makes three contributions. First, it introduces a framework
for assessing the global economic impacts from climate change in the
Arctic region. Second, it describes PAGE22, an integrated assessment
model which was developed to incorporate a permafrost carbon
emulator and the persistent effects of temperature on economic
production. The latter is complementary to the PAGE-ICE IAM which
only includes level effects and smaller economic damage estimates than
PAGE22. Third, it describes PAGE22-SCCO2, another version of
PAGE22 to estimate the social cost of carbon dioxide - used as a proxy
for carbon tax in policy.
The permafrost carbon feedback modelled in PAGE22 increases the
mean temperature values in 2300 by 0.17-0.38 °C and the social cost of
carbon dioxide by 2-9% under the SSPX-RCPY scenarios. The persistent
effects of temperature on economic production increase the mean global
impacts in 2200 from 1-53 USD trill. to 104-1,000 USD trill. and the social
cost of carbon dioxide in 2020 up to almost 9 times under the SSPXRCPY scenarios.
Through these contributions, this thesis expands the body of literature
on climate change economic impacts. The tools developed can be used
to assess how the physical impacts from climate change in the Arctic and
beyond can translate into regional and global economic impacts.