| Abstract: |
The objective of this study is to analyse the potential impact of climate
change on EU tourism demand and to provide long-term (2100) scenarios to be
used in the general equilibrium GEM-E3 to allow for potential interactions
with the rest of the economy. The analysis is based on a bottom-up approach to
derive country-wide figures making use of detailed regional data. Our study
brings three novel aspects to the existing literature on recreational demand
and climate. First, we derive region-specific estimates of the impact of
climate change based on tourists flows between European regions taking into
account regions' specific characteristics regarding the nature of (and degree
of specialisation in) tourism activities and related vulnerability to
potential climate change scenarios. Second, our long-term projections for
tourism demand are based on hedonic valuation of climatic conditions combining
hotel price information and travel cost estimations. Such an approach allows
us to consider together the climatic aspect of recreational demand and its
travel cost dimension. In doing so we are able to estimate differentiated
valuations of climate amenities depending on the distance travelled by
tourists by region of origin and destination. This in turn allows us to
further differentiate the valuation of climatic conditions depending on the
time duration of holidays. Third, based on this travel-cost/holiday duration
approach we can derive alternative scenarios for adaptation of holiday demand
to potential climate change scenarios combining two dimensions related to
adaptation: an institutional dimension, by considering alternative hypotheses
regarding the monthly distribution of total tourism demand, and a time
dimension by considering alternative scenarios regarding holiday duration. Our
main results show that the climate dimension play a significant (economically
and statistically) role in explaining hedonic valuations of tourism services
and, as a consequence, its variation in the long-term are likely to affect the
relative attractiveness of EU regions for recreational demand. In certain
cases, most notably the Southern EU Mediterranean countries climate condition
in 2100 could under current economic conditions, lower tourism revenues for up
to -0.45% of GDP. On the contrary, other areas of the EU, most notably
Northern European countries would gain from altered climate conditions,
although these gains would be relatively more modest, reaching up to 0.32% of
GDP. We also find that adaptation in the duration of holiday rather than on
the monthly pattern of holiday could potentially mitigate these losses. |