Assessing direct and indirect economic impacts of a flood event through the integration of spatial and computable general equilibrium modelling

Carrera, Lorenzo; Standardi, Gabriele; Bosello, Francesco; Myšiak, Jaroslav

doi:10.1016/j.envsoft.2014.09.016

Cited by 148 publications

(57 citation statements)

References 49 publications

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“…In addition to relaxing simplifying assumptions, our framework could in principle be enriched by modeling a range of additional features: (1)Noneconomic aspects: Previous work has integrated modeling of health and physical impacts of disasters with IO or CGE modeling (Carrera, Standardi, Bosello, & Mysiak, ; Jonkman et al., ; Koks et al., ). This is not only “doable” but would provide more breadth and empirical grounding. (2)Behavioral impacts: As we have discussed qualitatively, behavioral effects can range from self‐protection to relocation on the part of residents or businesses and avoidance of previously flooded areas by tourists and other travelers.…”

Section: Resultsmentioning

confidence: 99%

A CGE Framework for Modeling the Economics of Flooding and Recovery in a Major Urban Area

2019

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Coastal cities around the world have experienced large costs from major flooding events in recent years. Climate change is predicted to bring an increased likelihood of flooding due to sea level rise and more frequent severe storms. In order to plan future development and adaptation, cities must know the magnitude of losses associated with these events, and how they can be reduced. Often losses are calculated from insurance claims or surveying flood victims. However, this largely neglects the loss due to the disruption of economic activity. We use a forward‐looking dynamic computable general equilibrium model to study how a local economy responds to a flood, focusing on the subsequent recovery/reconstruction. Initial damage is modeled as a shock to the capital stock and recovery requires rebuilding that stock. We apply the model to Vancouver, British Columbia by considering a flood scenario causing total capital damage of $14.6 billion spread across five municipalities. GDP loss relative to a no‐flood scenario is relatively long‐lasting. It is 2.0% ($2.2 billion) in the first year after the flood, 1.7% ($1.9 billion) in the second year, and 1.2% ($1.4 billion) in the fifth year.

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Section: Resultsmentioning

confidence: 99%

A CGE Framework for Modeling the Economics of Flooding and Recovery in a Major Urban Area

2019

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“…The PESETA and PESETA II projects, for example, applied a comparativestatic CGE analysis by introducing biophysical impacts as inputs to the General Equilibrium Model for Economy -Energy-Environment (GEM-E3) for Europe (Ciscar et al 2011(Ciscar et al , 2012(Ciscar et al , 2014. Other CGE studies have focused on SLR impacts explicitly (Bosello et al 2007, 2012, Carrera et al 2015, Pycroft et al 2016. Bosello and De Cian (2014) present a thorough literature review covering the different applications and methodologies followed by CGE models for the assessment of SLR impacts, indicating the strengths and caveats of the approaches.…”

Section: Introductionmentioning

confidence: 99%

Economy-wide effects of coastal flooding due to sea level rise: a multi-model simultaneous treatment of mitigation, adaptation, and residual impacts

Schinko

Drouet

Vrontisi

et al. 2020

Environ. Res. Commun.

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This article presents a multi-model assessment of the macroeconomic impacts of coastal flooding due to sea level rise and the respective economy-wide implications of adaptation measures for two greenhouse gas (GHG) concentration targets, namely the Representative Concentration Pathways (RCP)2.6 and RCP4.5, and subsequent temperature increases. We combine our analysis, focusing on the global level, as well as on individual G20 countries, with the corresponding stylized RCP mitigation efforts in order to understand the implications of interactions across mitigation, adaptation and sea level rise on a macroeconomic level. Our global results indicate that until the middle of this century, differences in macroeconomic impacts between the two climatic scenarios are small, but increase substantially towards the end of the century. Moreover, direct economic impacts can be partially absorbed by substitution effects in production processes and via international trade effects until 2050. By 2100 however, we find that this dynamic no longer holds and economy-wide effects become even larger than direct impacts. The disturbances of mitigation efforts to the overall economy may in some regions and for some scenarios lead to a counterintuitive result, namely to GDP losses that are higher in RCP26 than in RCP45, despite higher direct coastal damages in the latter scenario. Within the G20, our results indicate that China, India and Canada will experience the highest macroeconomic impacts, in line with the respective direct climatic impacts, with the two first large economies undertaking the highest mitigation efforts in a cost-efficient global climate action. A sensitivity analysis of varying socioeconomic assumptions highlights the role of climate-resilient development as a crucial complement to mitigation and adaptation efforts.

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“…They compare the regional and national disaster impacts of two flooding scenarios for the Italian Po River delta, as estimated with, respectively, the adaptive regional input-output (ARIO) model developed by Hallegate (2008), a regionalized version of the CGE model developed by Standardi, Bosello, and Eboli (2014), as applied by Carrera, Standardi, Bosello, and Mysiak (2015), and the multiregional impact assessment (MRIA) model of Koks and Thissen (2016). The latter model resembles our own approach most.…”

Section: Testing the Impact Of Assuming Fixed Ratiosmentioning

confidence: 99%

Wider economic impacts of heavy flooding in Germany: a non-linear programming approach

Oosterhaven

Többen

2017

Spatial Economic Analysis

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Wider economic impacts of heavy flooding in Germany: a non-linear programming approach. Spatial Economic Analysis. This paper further develops a new methodology to estimate the wider, indirect impacts of major disasters, and applies it to the 2013 heavy flooding of southern and eastern Germany. We model the attempts of economic actors to continue their usual activities, as closely as possible, by minimizing the information gain between the pre-and post-disaster pattern of economic transactions of the economy at hand. Findings show that government support of local final demand substantially reduces the indirect losses of the floods, while having a disaster at the top of the business cycle increases them. Moreover, we find that assuming fixed trade origin shares and fixed industry market shares, as in all multiregional inputoutput models, leads to implausibly large estimates of the indirect losses. aux graves inondations survenues en Allemagne méridionale et orientale, en 2013. Nous modélisons les tentatives, par des acteurs économiques, de poursuivre, le plus possible, leurs activités normales en minimisant les gains d'informations du modèle de transactions économiques de l'économie présente entre la période précédent la catastrophe et celle qui lui fait suite. Les résultats montrent que l'assistance du gouvernement à la demande finale locale réduit dans une grande mesure les pertes indirectes dues aux inondations, alors qu'en plaçant une catastrophe en haut du cycle des affaires, on les augmente. Nous notons également que l'hypothèse de parts fixes de l'origine des échanges et de parts fixes du secteur industriel, comme dans tous les modèles d'entrée / sortie plurirégionaux, donne lieu à des estimations anormalement élevées des pertes indirectes. KEYWORDS MOTS CLÉSanalyse des désastres; commerce inter-régional; tableau offre -utilisation plurirégional; gains d'informations RESUMEN Repercusiones económicas más amplias por las fuertes inundaciones en Alemania: un enfoque de programación no lineal. Spatial Economic Analysis. En este artículo seguimos desarrollando una nueva metodología para calcular las repercusiones amplias e indirectas de desastres importantes que ponemos en práctica con la fuerte inundación de 2013 del sur y el este de Alemania. Modelamos, lo más cerca posible, los intentos de los actores económicos de continuar sus actividades habituales, por lo que minimizamos la ganancia de información entre el patrón antes y después de la catástrofe de las transacciones económicas de la economía a mano. Los resultados muestran que el apoyo gubernamental a la demanda final de ámbito local reduce considerablemente las pérdidas indirectas causadas por las inundaciones, mientras que sufrir una catástrofe en la cima del ciclo comercial las aumenta. Además, observamos que si suponemos cuotas fijas de origen comercial y cuotas fijas de mercado de la industria, al igual que en todos los modelos de entradas y salidas multirregionales, llegamos a estimaciones absurdamente grandes de las pérdidas indirectas. PA...

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Assessing direct and indirect economic impacts of a flood event through the integration of spatial and computable general equilibrium modelling

Cited by 148 publications

References 49 publications

A CGE Framework for Modeling the Economics of Flooding and Recovery in a Major Urban Area

A CGE Framework for Modeling the Economics of Flooding and Recovery in a Major Urban Area

Economy-wide effects of coastal flooding due to sea level rise: a multi-model simultaneous treatment of mitigation, adaptation, and residual impacts

Wider economic impacts of heavy flooding in Germany: a non-linear programming approach

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