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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent. Policy Research Working Paper 9943Turkey is vulnerable to natural disasters that can generate substantial damages to public and private sector infrastructure capital. Earthquakes and floods are the most frequent hazards today, and flood risks are expected to increase with climate change. To ensure stability and growth and minimize the welfare impact of these disasters, these shocks need to be managed and accounted for in macro-fiscal and monetary policy. To support this process, the World Bank Macrostructural Model is adapted to assess the macroeconomic effects of natural (geophysical or climate-related) disasters. The macroeconomic model is extended on several fronts: (1) a distinction is made between infrastructure and non-infrastructure capital, with complementary or substitutability between the two categories; (2) the production function is adjusted to account for short-term complementarity across capital assets; (3) the reconstruction process is modeled in a way that accounts for post-disaster constraints, with distinct processes for the reconstruction of public and private assets. The results show that destroyed infrastructure capital makes the remaining non-infrastructure capital less productive, which means that disasters reduce the total stock of capital, but also its productivity. The welfare impact of a disaster-proxied by the discounted consumption loss-is found to increase non-linearly with direct asset losses. Macroeconomic responses reduce the welfare impact of minor disasters but magnify it when direct asset losses exceed the economy's absorption capacity. The welfare impact also depends on the pre-existing economic situation, the ability of the economy to reallocate resources toward reconstruction, and the response of the monetary policy. Appropriate macro-fiscal and monetary policies offer cost-effective opportunities to mitigate the welfare impact of major disasters. This paper is a product of the Macroeconomics, Trade and Investment Global Practicea and the Climage Change Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world.

Using the gross world product (GWP) as the only exogenous input variable, we design a model able to accurately reproduce the global population dynamics over the period 1950-2015. For any future increasing GWP scenarios, our model yields very similar population trajectories. The major implication of this result is that both the United Nations and the Intergovernmental Panel on Climate Change assume future decoupling possibilities between economic development and fertility that have never been witnessed during the last sixty-five years. In case of an abrupt collapse of the economic production, our model responds with higher death rates that are more than offset by increasing birth rates, leading to a relatively larger and younger population. Finally, we add to our model an excess mortality function associated with climate change. Estimates of additional climate-related deaths for 2095-2100 range from 1 million in a +2 • C scenario to 6 million in a +4 • C scenario.

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This paper surveys integrated assessment models applied to Brazil. We show that these models belong to the environmental economics literature that fails to consider some of the most important aspects of the modern macroeconomic dynamics in Brazil. These features include monetary and financial balances, income distribution, and physical limits to growth. We argue that the most suitable framework for modeling a low-carbon Brazilian economy would incorporate both Post-Keynesian and ecological economics principles. This new modeling method would strengthen our understanding of environmental mitigation action consequences and would allow us to explore new climate-policy packages.