Economic consequences of global climate change and mitigation on future hydropower generation

Hydropower generation plays a key role in mitigating GHG emissions from the overall power supply. Although the maximum achievable hydropower generation (MAHG) will be affected by climate change, it is seldom incorporated in integrated assessment models. In this study, we first used the H08 global hydrological model to project MAHG under two physical climate change scenarios. Then, we used the Asia-Pacific Integrated Model/Computable General Equilibrium integrated assessment model to quantify the economic consequences of the presence or absence of mitigation policy on hydropower generation. This approach enabled us to quantify the physical impacts of climate change and the effect of mitigation policy—together and in isolation—on hydropower generation and the economy, both globally and regionally. Although there was little overall global change, we observed substantial differences among regions in the MAHG average change (from − 71% in Middle East to 14% in Former Soviet Union in RCP8.5). We found that the magnitude of changes in regional gross domestic product (GDP) was small negative (positive) in Brazil (Canada) by 2100, for the no mitigation policy scenario. These consequences were intensified with the implementation of mitigation policies that enhanced the price competitiveness of hydropower against fossil fuel-powered technologies. Overall, our results suggested that there would be no notable globally aggregated impacts on GDP by 2100 because the positive effects in some regions were canceled out by negative effects in other regions.