Climate change, droughts and economic impacts: an analysis for the São Paulo Metropolitan Area

Author(s)

Karina Simone Sass

• Document type: Doctoral Thesis
• Press: São Paulo.
• Institution: Universidade de São Paulo (USP). Faculdade de Economia, Administração e Contabilidade (FEA/SBD)
• Defense date: 2021-11-22

Examining board members

Eduardo Amaral Haddad; Carlos Roberto Azzoni; Vinicius de Almeida Vale

• Advisor: Eduardo Amaral Haddad; Eduardo Mario Mendiondo

Abstract

Droughts, climate change, and local economic impacts are the themes addressed in this thesis. Having the Metropolitan Area of São Paulo (SPMA) as its focus, the aim of the study was to evaluate the occurrence of droughts in this region and to estimate the potential effects of drought on its economic activities. I divided the analysis into two parts. In the first, I carried out an analysis on the climate change and droughts that occurred in the region using historical and projected climate data. The analysis showed that the region where the RMSP locates faced droughts of different intensities over the 20th century and that the municipalities in the region are highly sensitive to droughts, which may become more intense and frequent in the future. In the second part, I evaluated the potential economic impacts that can be associated with droughts in the RMSP. I did this assessment through an integrated modeling scheme that includes an econometric model and a Spatial Computable General Equilibrium (SCGE) model. The results of the econometric model suggested that the capital and technology-intensive industries are the ones more sensitive to droughts in the SPMA. In the EEGC model, I carried out simulations to analyze how the specific impacts of droughts on some sectors affect the economy. The results from the simulations showed that the total production and disposable income of metropolitan municipalities can decrease and that several economic activities can be indirectly affected, such as land transport, construction, and personal services. With the aggregation of municipal results in their respective hydrographic sub-basins, I identified that the greatest economic losses because of droughts can occur in the sub-basins with lower water availability. In the end, there are suggestions of possible public policies to reduce vulnerability to droughts, and a discussion about issues that still need further studies in the economics of climate change. (AU)

• FAPESP's process: 18/08833-5 - Urbanization and climate change: impact evaluation in the Metropolitan Region of São Paulo
• Grantee: Karina Simone Sass
• Support Opportunities: Scholarships in Brazil - Doctorate