Distributional Consequences of Climate Change Impacts on the Power Sector: Who Gains and Who Loses?

CEPS Working Paper No. 349

21 Pages Posted: 14 Jul 2011

See all articles by Dirk T. G. Rübbelke

Dirk T. G. Rübbelke

Technische Universität Bergakademie Freiberg

Stefan Vögele

IEF-STE

Date Written: May 16, 2011

Abstract

Climate change tends to negatively affect the power sector, inter alia, by causing cooling problems in power plants and impairing the water supply required for hydro-power generation. In future, when global warming is expected to increase, autonomous adaptation to climate change via international electricity markets inducing reallocations of power generation may not be sufficient to prevent supply disruptions. Furthermore, the consequent changes of supply patterns and electricity prices might cause an undesirable redistribution of wealth both between individual power suppliers and between suppliers and consumers. This study ascertains changes in European power supply patterns and electricity prices caused by ongoing global warming as well as related redistribution of wealth for different climate change scenarios. Our results confirm that autonomous adaptation in the power sector should be complemented by planned public adaptation in order to preserve energy security and to prevent undesired distributional effects.

Keywords: Clima, Climate change, energy, water supply, global warming, electricity

Suggested Citation

Rübbelke, Dirk T. G. and Vögele, Stefan, Distributional Consequences of Climate Change Impacts on the Power Sector: Who Gains and Who Loses? (May 16, 2011). CEPS Working Paper No. 349. Available at SSRN: https://ssrn.com/abstract=1884227

Dirk T. G. Rübbelke (Contact Author)

Technische Universität Bergakademie Freiberg ( email )

Freiberg, 09599
Germany

Stefan Vögele

IEF-STE ( email )

Jülich, 52425
Germany

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