Natural Disaster Risk and the Distributional Dynamics of Damages

Coronese, Matteo; Lamperti, Francesco; Chiaromonte, Francesca; Roventini, Andrea

doi:10.2139/ssrn.3220503

Cited by 7 publications

(4 citation statements)

References 51 publications

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“…Negative socio-economic impacts of climate change are expected to increase the more global temperature exceeds an increase of 1.5C above pre-industrial times (Burke et al 2018) and will leave nobody untouched. Coronese et al (2018) find a rightward shift and a progressive right-tail fattening process of the global distribution of climate-led economic damages, both on yearly and decade aggregated data. Overall, poor and vulnerable households will be hit the most because they live in areas that are highly exposed to climate-related hazards (e.g.…”

Section: Introductionmentioning

confidence: 89%

Uncertainty of climate policies and implications for economics and finance: An evolutionary economics approach

Monasterolo

Roventini

Foxon

2019

Ecological Economics

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The assessment of the socioeconomic and financial impacts of climate change represents a main source of uncertainty for policy makers and investors. However, traditional climate economics and financial risk models are not properly equipped to consider the characteristics of climate risks and the opportunities from climate-alignment, being constrained by equilibrium conditions and linearity of impacts, as well as by representative agents and intertemporal optimization. Given the closing window of opportunity to achieve the 2C target, there is an urgent need for a new wave of models able to embrace uncertainty and complexity deriving not only from climate impacts on socioeconomic systems, but also from their reaction. In this regard, approaches rooted on evolutionary economics and complexity science could provide complementary insights to traditional climate economics models. This special issue contributes to fill in this knowledge gap by collecting nine papers applying evolutionary and complex systems approaches, and agent-based and network models to climate change economics, presented at the Special Session of the Research Area "Environment-Economics Interactions" of the European Association of Evolutionary Political Economy (EAEPE)'s conference 2016. By introducing conceptual and methodological innovations in climate economics and finance, the nine articles analyse the conditions for effective climate policies and financial instruments to align countries to the global climate targets, compared to the costs of inaction. This information is crucial to support decisionmakers in the analysis of climate-finance policies and instruments to foster the transition to a sustainable and inclusive low-carbon economy.

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Section: Introductionmentioning

confidence: 89%

Uncertainty of climate policies and implications for economics and finance: An evolutionary economics approach

Monasterolo

Roventini

Foxon

2019

Ecological Economics

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“…3 The database provides observations on different kinds of natural and technological disasters. Following Coronese et al (2018) we identify six types of natural disasters which are associated with extreme weather effects due to climate change: floods, droughts, landslides, wildfires, storms, and extreme temperature.…”

Section: Empirics Of Disaster Frequencymentioning

confidence: 99%

Climate Disaster Risks—Empirics and a Multi-Phase Dynamic Model

2020

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Recent research in financial economics has shown that rare large disasters have the potential to disrupt financial sectors via the destruction of capital stocks and jumps in risk premia. These disruptions often entail negative feedback effects on the macroeconomy. Research on disaster risks has also actively been pursued in the macroeconomic models of climate change. Our paper uses insights from the former work to study disaster risks in the macroeconomics of climate change and to spell out policy needs. Empirically, the link between carbon dioxide emission and the frequency of climate related disaster is investigated using a panel data approach. The modeling part then uses a multi-phase dynamic macro model to explore the effects of rare large disasters resulting in capital losses and rising risk premia. Our proposed multi-phase dynamic model, incorporating climate-related disaster shocks and their aftermath as a distressed phase, is suitable for studying mitigation and adaptation policies as well as recovery policies.

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“…The frequency and impact of disaster events are increasing on a global scale (Coronese et al 2018 ). Based on data released by the International Disaster Database (EM-DAT) in 2018, there were 315 disaster events worldwide, with the death toll reaching 11 804 people, and more than 68 million people were affected in various parts of the world (CRED 2018 ).…”

Section: Introductionmentioning

confidence: 99%