Assessing the financial vulnerability to climate-related natural hazards

National governments are key actors in managing the impacts of extreme weather events, yet many highly exposed developing countries -- faced with exhausted tax bases, high levels of indebtedness, and limited donor assistance -- have been unable to raise sufficient and timely capital to replace or repair damaged infrastructure and restore livelihoods after major disasters. Such financial vulnerability hampers development and exacerbates poverty. Based on the record of the past 30 years, this paper finds many developing countries, in particular small island states, to be highly financially vulnerable, and experiencing a resource gap (net disaster losses exceed all available financing sources) for events that occur with a probability of 2 percent or higher. This has three main implications. First, efforts to reduce risk need to be ramped-up to lessen the serious human and financial burdens. Second, contrary to the well-known Arrow-Lind theorem, there is a case for country risk aversion implying that disaster risks faced by some governments cannot be absorbed without major difficulty. Risk aversion entails the ex ante financing of losses and relief expenditure through calamity funds, regional insurance pools, or contingent credit arrangements. Third, financially vulnerable (and generally poor) countries are unlikely to be able to implement pre-disaster risk financing instruments themselves, and thus require technical and financial assistance from the donor community. The cost estimates of financial vulnerability -- based on today's climate -- inform the design of"climate insurance funds"to absorb high levels of sovereign risk and are found to be in the lower billions of dollars annually, which represents a baseline for the incremental costs arising from future climate change.Hazard Risk Management,Debt Markets,Insurance&Risk Mitigation,Banks&Banking Reform,Climate Change Economics

Naturkatastrophen: Risikowahrnehmung und Vorsorgestrategien: eine empirische Untersuchung zum Hochwasser 2002 in Schwertberg

'Das Hochwasser im August 2002 verursachte in Österreich große Schäden. Die Gemeinde Schwertberg in Oberösterreich war vom Hochwasser besonders betroffen. Der Artikel untersucht die Situation in Schwertberg vor, während und nach dem Hochwasser und behandelt Themen wie Vorwarnung, Panik, Evakuierung und psychosoziale Folgen. Eine Erhebung in Form standardisierter Fragebögen sollte zusätzlich darüber Auskunft geben, ob und warum die Schwertberger Bevölkerung nach dem Hochwasser Vorsorgemaßnahmen durchgeführt hatte. Es stellte sich heraus, dass dies für jene zutraf, die durch das Hochwasser finanziellen Schaden erlitten hatten. Die Minderheit der Befragten, die keine Vorsorgemaßnahmen ergriffen, aber trotzdem geschädigt worden waren, betrachteten präventive Maßnahmen als sinnlos bzw. unmöglich. Der Artikel schließt mit Empfehlungen für bessere Vorsorgestrategien.' (Autorenreferat)'In August 2002, a flood caused great financial damage in Austria. Schwertberg, a community in Upper Austria, was seriously affected. The article examines the situation at Schwertberg before, during and after the flood. Additionally, a standardized questionnaire was used to investigate, if and why households took precautions. It turned out that mainly those people, who had suffered financial damage in 2002, took precautions after the flood, particulary because of security reasons. Finally, the article recommends better precaution strategies.' (author's abstract)

Continuum modeling of dislocation plasticity: Theory, numerical implementation, and validation by discrete dislocation simulations

Miniaturization of components and devices calls for an increased effort on physically motivated continuum theories, which can predict size-dependent plasticity by accounting for length scales associated with the dislocation microstructure. An important recent development has been the formulation of a Continuum Dislocation Dynamics theory (CDD) that provides a kinematically consistent continuum description of the dynamics of curved dislocation systems [T. Hochrainer, et al., Philos. Mag. 87, 1261 (2007)]. In this work, we present a brief overview of dislocation-based continuum plasticity models. We illustrate the implementation of CDD by a numerical example, bending of a thin film, and compare with results obtained by three-dimensional discrete dislocation dynamics (DDD) simulation

Social tipping points and adaptation limits in the context of systemic risk : Concepts, models and governance

Funding Information: SJ acknowledges the funding from the Finnish Academy, grant no 329239. TF is thankful to the support from the European Research Council (ERC) project #758014 under the European Union's Horizon 2020 Research and Innovation Program, and from the Netherlands Organization for Scientific Research (NWO) project #191.015. Publisher Copyright: Copyright © 2022 Juhola, Filatova, Hochrainer-Stigler, Mechler, Scheffran and Schweizer.Physical tipping points have gained a lot of attention in global and climate change research to understand the conditions for system transitions when it comes to the atmosphere and the biosphere. Social tipping points have been framed as mechanisms in socio-environmental systems, where a small change in the underlying elements or behavior of actors triggers a large non-linear response in the social system. With climate change becoming more acute, it is important to know whether and how societies can adapt. While social tipping points related to climate change have been associated with positive or negative outcomes, overstepping adaptation limits has been linked to adverse outcomes where actors' values and objectives are strongly compromised. Currently, the evidence base is limited, and most of the discussion on social tipping points in climate change adaptation and risk research is conceptual or anecdotal. This paper brings together three strands of literature - social tipping points, climate adaptation limits and systemic risks, which so far have been separate. Furthermore, we discuss methods and models used to illustrate the dynamics of social and adaptation tipping points in the context of cascading risks at different scales beyond adaptation limits. We end with suggesting that further evidence is needed to identify tipping points in social systems, which is crucial for developing appropriate governance approaches.Peer reviewe

The risk and consequences of multiple breadbasket failures: an integrated copula and multilayer agent-based modeling approach

Climate shocks to food systems have been thoroughly researched in terms of food security and supply chain management. However, sparse research exists on the dependent nature of climate shocks on food-producing breadbasket regions and their subsequent cascading impacts. In this paper, we propose that a copula approach, combined with a multilayer network and an agent-based model, can give important insights on how tail-dependent shocks can impact food systems. We show how such shocks can potentially cascade within a region through the behavioral interactions of various layers. Based on our suggested framework, we set up a model for India and show that risks due to drought events multiply if tail dependencies during extremes drought is explicitly taken into account. We further demonstrate that the risk is exacerbated if displacement also takes place. In order to quantify the spatial–temporal evolution of climate risks, we introduce a new measure of multilayer vulnerability that we term Vulnerability Rank or VRank. We find that with higher food production losses, the number of agents that are affected increases nonlinearly due to cascading effects in different network layers. These effects spread to the unaffected regions via large-scale displacement causing sudden changes in production, employment and consumption decisions. Thus, demand shifts also force supply-side adjustments of food networks in the months following the climate shock. We suggest that our framework can provide a more accurate picture of food security-related systemic risks caused by multiple breadbasket failures which, in turn, can better inform risk management and humanitarian aid strategies

Mapping the effects of drought on child stunting

As climate change continues, it is expected to have increasingly adverse impacts on child nutrition outcomes, and these impacts will be moderated by a variety of governmental, economic, infrastructural, and environmental factors. To date, attempts to map the vulnerability of food systems to climate change and drought have focused on mapping these factors but have not incorporated observations of historic climate shocks and nutrition outcomes. We significantly improve on these approaches by using over 580,000 observations of children from 53 countries to examine how precipitation extremes since 1990 have affected nutrition outcomes. We show that precipitation extremes and drought in particular are associated with worse child nutrition. We further show that the effects of drought on child undernutrition are mitigated or amplified by a variety of factors that affect both the adaptive capacity and sensitivity of local food systems with respect to shocks. Finally, we estimate a model drawing on historical observations of drought, geographic conditions, and nutrition outcomes to make a global map of where child stunting would be expected to increase under drought based on current conditions. As climate change makes drought more commonplace and more severe, these results will aid policy-makers by highlighting which areas are most vulnerable as well as which factors contribute the most to creating resilient food systems

The 3rd Global Summit of Research Institutes for Disaster Risk Reduction: Expanding the Platform for Bridging Science and Policy Making

The Global Alliance of Disaster Research Institutes held its 3rd Global Summit of Research Institutes for Disaster Risk Reduction at the Disaster Prevention Research Institute, Kyoto University, Japan, 19–21 March, 2017. The Global Alliance seeks to contribute to enhancing disaster risk reduction (DRR) and disaster resilience through the collaboration of research organizations around the world. The summit aim was to expand the platform for bridging science and policy making by evaluating the evidence base needed to meet the expected outcomes and actions of the Sendai Framework for Disaster Risk Reduction 2015–2030 and its Science and Technology Roadmap. The summit reflected the international nature of collaborative research and action. A pre-conference questionnaire filled out by Global Alliance members identified 323 research projects that are indicative of current research. These were categorized to support seven parallel discussion sessions related to the Sendai Framework priorities for action. Four discussion sessions focused on research that aims to deepen the understanding of disaster risks. Three cross-cutting sessions focused on research that is aimed at the priorities for action on governance, resilience, and recovery. Discussion summaries were presented in plenary sessions in support of outcomes for widely enhancing the science and policy of DRR

The Risk and Policy Space for Loss and Damage: Integrating Notions of Distributive and Compensatory Justice with Comprehensive Climate Risk Management

The Warsaw Loss and Damage Mechanism holds high appeal for complementing actions on climate change adaptation and mitigation, and for delivering needed support for tackling intolerable climate related-risks that will neither be addressed by mitigation nor by adaptation. Yet, negotiations under the UNFCCC are caught between demands for climate justice, understood as compensation, for increases in extreme and slow-onset event risk, and the reluctance of other parties to consider Loss and Damage outside of an adaptation framework. Working towards a jointly acceptable position we suggest an actionable way forward for the deliberations may be based on aligning comprehensive climate risk analytics with distributive and compensatory justice considerations. Our proposed framework involves in a short-medium term, needs-based perspective support for climate risk management beyond countries ability to absorb risk. In a medium-longer term, liability-based perspective we particularly suggest to consider liabilities attributable to anthropogenic climate change and associated impacts. We develop the framework based on principles of need and liability, and identify the policy space for Loss and Damage as composed of curative and transformative measures. Transformative measures, such as managed retreat, have already received attention in discussions on comprehensive climate risk management. Curative action is less clearly defined, and more contested. Among others, support for a climate displacement facility could qualify here. For both sets of measures, risk financing (such as ‘climate insurance’) emerges as an entry point for further policy action, as it holds potential for both risk management as well as compensation functions. To quantify the Loss and Damage space for specific countries, we suggest as one option to build on a risk layering approach that segments risk and risk interventions according to risk tolerance. An application to fiscal risks in Bangladesh and at the global scale provides an estimate of countries’ financial support needs for dealing with intolerable layers of flood risk. With many aspects of Loss and Damage being of immaterial nature, we finally suggest that our broad risk and justice approach in principle can also see application to issues such as migration and preservation of cultural heritage

Challenges in assessing and managing multi-hazard risks: a European stakeholders perspective

The latest evidence suggests that multi-hazards and their interrelationships (e.g., triggering, compound, and consecutive hazards) are becoming more frequent across Europe, underlying a need for resilience building by moving from single-hazard-focused to multi-hazard risk assessment and management. Although significant advancements were made in our understanding of these events, mainstream practice is still focused on risks due to single hazards (e.g., flooding, earthquakes, droughts), with a limited understanding of the stakeholder needs on the ground. To overcome this limitation, this paper sets out to understand the challenges for moving towards multi-hazard risk management through the perspective of European stakeholders. Based on five workshops across different European pilots (Danube Region, Veneto Region, Scandinavia, North Sea, and Canary Islands) and an expert workshop, we identify five prime challenges: i) governance, ii) knowledge of multi-hazards and multi-risks, iii) existing approaches to disaster risk management, iv) translation of science to policy and practice, and v) lack of data. These challenges are inherently linked and cannot be tackled in isolation with path dependency posing a significant hurdle in transitioning from single- to multi-hazard risk management. Going forward, we identify promising approaches for overcoming some of the challenges, including emerging approaches for multi-hazard characterisation, a common understanding of terminology, and a comprehensive framework for guiding multi-hazard risk assessment and management. We argue for a need to think beyond natural hazards and include other threats in creating a comprehensive overview of multi-hazard risks, as well as promoting thinking of multi-hazard risk reduction in the context of larger development goals