Think Again: Higher Elasticity of Substitution Increases Economic Resilience

This paper shows that, counter-intuitively, a higher elasticity of substitution in model production function can lead to reduced economic resilience and larger vulnerability to shocks in production factor prices. This result is due to the fact that assuming a higher elasticity of substitution requires a recalibration of the production function parameters to keep the model initial state unchanged. This result has consequences for economic analysis, e.g., on the economic vulnerability to climate change.Substitution, Calibration, Constant Elasticity of Substitution, Shock

Firm-Network Characteristics and Economic Robustness to Natural Disasters

This article proposes a theoretical framework to investigate economic robustness to exogenous shocks such as natural disasters. It is based on a dynamic model that represents a regional economy as a network of production units through the disaggregation of sectorscale Input-Output tables. Results suggest that disaster-related output losses depend on direct losses heterogeneity and on the economic network structure. Two aggregate indexes, concentration and clustering, appear as important drivers of economic robustness, offering opportunities for robustness-enhancing strategies. Modern industrial organization seems to reduce short-term robustness in a trade-off against higher efficiency in normal times.Natural disasters, Economic impacts, Economic Network.

Using maps of city analogues to display climate change scenarios and their uncertainty

Communication : http://minh.haduong.com/files/Kopf.ea-2008-UsingMapsOfCityAnalogues-Presentation.pd

On the nature and determinants of poor households’ resilience in fragility contexts

Several global policy frameworks focus on managing (risks of) disasters affecting broad populations. In those frameworks resilience is a conceptualisation that possibly has important ideological implications. It is often opposed to fragility, and used to validate the notion of recurring insecurity, promote individual adaptability almost in the form of an obligation, and push the idea that crises/catastrophes are opportunities for profound changes. While effects from the COVID-19 pandemic have brought the protective role of the state to the fore, applying the word resilience to poor people requires clarification, especially in contexts of weak state public services and because assessment of complex poverty situations too often remains oversimplified and error-prone. We argue that to build capacity for resilience poor households need policies that protect and help them out of poverty, and that policy-making processes require engagement with people. Individuals must be asked about their perceptions and management of risks and threats, both in daily life and under exceptional circumstances, especially if the resulting stress factors accumulate and interact. This socially informed, place-specific, and multi-level approach could contribute substantially to identifying interventions, reducing poverty and poverty related risks, enhancing well-being and promoting development and cooperation programmes that meet people’s expectations.info:eu-repo/semantics/publishedVersio

Chapter 17 - Economics of adaptation

This chapter assesses the literature on the economics of climate change adaptation, building on the Fourth Assessment Report (AR4) and the increasing role that economic considerations are playing in adaptation decisionmaking and policy. AR4 provided a limited assessment of the costs and benefits of adaptation, based on narrow and fragmented sectoral and regional literature (Adger et al, 2007). Substantial advances have been made in the economics of climate change adaptation after AR4

Ranking Port Cities with High Exposure and Vulnerability to Climate Extremes

DOI:10.1787/011766488208This global screening study makes a first estimate of the exposure of the world's large port cities to coastal flooding due to storm surge and damage due to high winds. This assessment also investigates how climate change is likely to impact each port city's exposure to coastal flooding by the 2070s, alongside subsidence and population growth and urbanisation. The study provides a much more comprehensive analysis than earlier assessments, focusing on the 136 port cities around the world that have more than one million inhabitants in 2005. The analysis demonstrates that a large number of people are already exposed to coastal flooding in large port cities. Across all cities, about 40 million people (0.6% of the global population or roughly 1 in 10 of the total port city population in the cities considered here) are exposed to a 1 in 100 year coastal flood event. For present-day conditions (2005), the top ten cities in terms of exposed population are estimated to be Mumbai, Guangzhou, Shanghai, Miami, Ho Chi Minh City, Kolkata, Greater New York, Osaka-Kobe, Alexandria and New Orleans; almost equally split between developed and developing countries. When assets are considered, the current distribution becomes more heavily weighted towards developed countries, as the wealth of the cities becomes important. The top 10 cities in terms of assets exposed are Miami, Greater New York, New Orleans, Osaka-Kobe, Tokyo, Amsterdam, Rotterdam, Nagoya, Tampa-St Petersburg and Virginia Beach. These cities contain 60% of the total exposure, but are from only three (wealthy) countries: USA, Japan and the Netherlands. The total value of assets exposed in 2005 is across all cities considered here is estimated to be US3,000 billion; corresponding to around 5% of global GDP in 2005 (both measured in international USD)... Available at : http://www.oecd-ilibrary.org/environment/ranking-port-cities-with-high-exposure-and-vulnerability-to-climate-extremes_01176648820

From Poverty to Disaster and Back: a Review of the Literature

Poor people are disproportionally affected by natural hazards and disasters. This paper provides a review of the multiple factors that explain why this is the case. It explores the role of exposure (often, but not always, poor people are more likely to be affected by hazards), vulnerability (when they are affected, poor people tend to lose a larger fraction of their wealth), and socio-economic resilience (poor people have a lower ability to cope with and recover from disaster impacts). Finally, the paper highlights the vicious circle between poverty and disaster losses: poverty is a major driver of people’s vulnerability to natural disasters, which in turn increase poverty in a measurable and significant way. The main policy implication is that poverty reduction can be considered as disaster risk management, and disaster risk management can be considered as poverty reduction

The influence of local development on the impact of natural disasters in Northeast Brazil: The case of droughts and floods in the state of Ceará

Using data from the Damage Assessment Reports from the Civil Defence, the current study investigates the relationship between the damage caused by natural disasters and local development at the municipality level in Ceará state, Brazil. The results show that a better urban and water supply infrastructure, a lower population density, and a higher proportion of own revenues relative to total revenues are associated with smaller disaster damage. However, economic development in terms of GDP per capita exhibits a convex relationship with the impact of natural disasters across municipalities, reflecting the potential decreasing returns of preventive investments due to the highly hazardous environment that involves municipalities

Boolean delay equations on networks: An application to economic damage propagation

We introduce economic models based on Boolean Delay Equations: this formalism makes easier to take into account the complexity of the interactions between firms and is particularly appropriate for studying the propagation of an initial damage due to a catastrophe. Here we concentrate on simple cases, which allow to understand the effects of multiple concurrent production paths as well as the presence of stochasticity in the path time lengths or in the network structure. In absence of flexibility, the shortening of production of a single firm in an isolated network with multiple connections usually ends up by attaining a finite fraction of the firms or the whole economy, whereas the interactions with the outside allow a partial recovering of the activity, giving rise to periodic solutions with waves of damage which propagate across the structure. The damage propagation speed is strongly dependent upon the topology. The existence of multiple concurrent production paths does not necessarily imply a slowing down of the propagation, which can be as fast as the shortest path.Comment: Latex, 52 pages with 22 eps figure