EGU25-20093, updated on 15 Mar 2025
https://doi.org/10.5194/egusphere-egu25-20093
EGU General Assembly 2025
© Author(s) 2025. This work is distributed under
the Creative Commons Attribution 4.0 License.
Climate finance needs under macroeconomic and climate uncertainty:damage functions integration in IAM
Adriano Vinca, Jarmo Kikstra, Marina Andrijevic, Edward Byers, Setu Pelz, Matt Gidden, Volker Krey, and Keywan Riahi
Adriano Vinca et al.
  • International Instutute for Applied System Analysis, Energy Climate and Environment, Laxenburg, Austria (vinca@iiasa.ac.at)

The economic impacts of climate change are becoming increasingly important in thecontext of chronic physical risks, but they are often assessed in isolation from the costsof mitigation, potentially skewing perceptions of mitigation efforts. Such impacts areunevenly distributed across regions, resulting not only in immediate economic lossesbut also in reduced capacity for long-term adaptation and mitigation.This work aims to advance integrated assessments of climate impacts and mitigationcosts and explore the underlying uncertainty through climate scenarios and by linkingdifferent econometric damage functions (Burke et al., 2018, Waidelich et al. , 2024, Kotzet al. , 2024) with an integrated assessment model (IAM).Using the Rapid Impact Model Emulator to link macroeconomic impacts to temperaturelevels, the MESSAGEix-GLOBIOM IAM to assess energy-land-climate responses, and theMAGICC climate model, we assess regional and global economic risks and mitigationcosts, highlighting the feedback loops between economic damages, energy, emissions,and climate outcomes.We show how climate-related losses could constrain socio-economic development,particularly in low- and middle-income regions that are most vulnerable to climatechange impacts. We further extend the analysis by incorporating principles of equity toallocate regional mitigation costs and illustrative contributions to a Loss and Damage(L&S) Fund based on historical and projected emissions, recognising the historicalresponsibility of high-income countries. This nuanced approach provides insights intoglobal and regional financial needs for both mitigation and addressing global loss anddamage, which are critical for equitable international climate agreements.This work aims to refine the quantitative assessment of climate risk by exploringuncertainty at different levels using scenarios, multiple macroeconomic models andprobabilistic output from the MAGICC climate model, thus providing confidenceintervals for both the costs of climate change and the actions needed to mitigate it.

How to cite: Vinca, A., Kikstra, J., Andrijevic, M., Byers, E., Pelz, S., Gidden, M., Krey, V., and Riahi, K.: Climate finance needs under macroeconomic and climate uncertainty:damage functions integration in IAM, EGU General Assembly 2025, Vienna, Austria, 27 Apr–2 May 2025, EGU25-20093, https://doi.org/10.5194/egusphere-egu25-20093, 2025.