A shapley value approach to pricing climate risks

This paper prices the risk of climate change by calculating a lower bound for the price of a virtual insurance policy against climate risks associated with the business as usual (BAU) emissions path. In analogy with ordinary insurance pricing, this price depends on the current risk to which society is exposed on the BAU emissions path and on a second emissions path reflecting risks that society is willing to take. The difference in expected damages on these two paths is the price which a risk neutral insurer would charge for the risk swap excluding transaction costs and profits, and it is also a lower bound on society's willingness to pay for this swap. The price is computed by (1) identifying a probabilistic risk constraint that society accepts, (2) computing an optimal emissions path satisfying that constraint using an abatement cost function, (3) computing the extra expected damages from the business as usual path, above those of the risk constrained path, and (4) apportioning those excess damages over the emissions per ton in the various time periods. The calculations follow the 2010 US government social cost of carbon analysis, and are done with DICE2009

Enhanced amplitude modulations contribute to the Lombard intelligibility benefit: Evidence from the Nijmegen Corpus of Lombard Speech

Speakers adjust their voice when talking in noise, which is known as Lombard speech. These acoustic adjustments facilitate speech comprehension in noise relative to plain speech (i.e., speech produced in quiet). However, exactly which characteristics of Lombard speech drive this intelligibility benefit in noise remains unclear. This study assessed the contribution of enhanced amplitude modulations to the Lombard speech intelligibility benefit by demonstrating that (1) native speakers of Dutch in the Nijmegen Corpus of Lombard Speech (NiCLS) produce more pronounced amplitude modulations in noise vs. in quiet; (2) more enhanced amplitude modulations correlate positively with intelligibility in a speech-in-noise perception experiment; (3) transplanting the amplitude modulations from Lombard speech onto plain speech leads to an intelligibility improvement, suggesting that enhanced amplitude modulations in Lombard speech contribute towards intelligibility in noise. Results are discussed in light of recent neurobiological models of speech perception with reference to neural oscillators phase-locking to the amplitude modulations in speech, guiding the processing of speech

An Elastic Analysis of a Plated Bone to Determine Fracture Gap Motion

An elastic analysis to determine fracture gap motions occurring in the osteotomized and plated canine femur was performed using the finite element program NASTRAN. The femur was idealized as a hollow right cylinder, and transverse anisotropy was assumed for the elastic properties of the bone. A 3-D 360 degree model consisting of 224 isoparametric quadrilateral hexahedral and 11 beam elements was created. A range of plate stiffnesses was tested by varying the modulus of elasticity of the plate from 207 GPa to 1 GPA. Moments were applied in the plane of the plate, about the axis of the plate, and in the plane of the screws. Results showed that, for plates of typical geometry and elastic modulus under 10 GPa, the contribution to fracture gap motion occurring due to deformation in the bone was negligible compared to that contribution from deformation in the plate

Characterization of the Noise in Secondary Ion Mass Spectrometry Depth Profiles

The noise in the depth profiles of secondary ion mass spectrometry (SIMS) is studied using different samples under various experimental conditions. Despite the noise contributions from various parts of the dynamic SIMS process, its overall character agrees very well with the Poissonian rather than the Gaussian distribution in all circumstances. The Poissonian relation between the measured mean-square error (MSE) and mean can be used to describe our data in the range of four orders. The departure from this relation at high counts is analyzed and found to be due to the saturation of the channeltron used. Once saturated, the detector was found to exhibit hysteresis between rising and falling input flux and output counts.Comment: 14 pages, 4 postscript figures, to appear on J. Appl. Phy

Climate Change Uncertainty Quantification: Lessons Learned from the Joint EU-USNRC Project on Uncertainty Analysis of Probabilistic Accident Consequence Codes

Between 1990 and 2000 the U.S. Nuclear Regulatory Commission and the Commission of the European Communities conducted a joint uncertainty analysis of accident consequences for nuclear power plants. This study remains a benchmark for uncertainty analysis of large models involving high risks with high public visibility, and where substantial uncertainty exists. The study set standards with regard to structured expert judgment, performance assessment, dependence elicitation and modeling and uncertainty propagation of high dimensional distributions with complex dependence. The integrated assessment models for the economic effects of climate change also involve high risks and large uncertainties, and interest in conducting a proper uncertainty analysis is growing. This article reviews the EU-USNRC effort and extracts lessons learned, with a view toward informing a comparable effort for the economic effects of climate change.uncertainty analysis, expert judgment, expert elicitation, probabilistic inversion, dependence modeling, nuclear safety

The Unholy Trinity: Fat Tails, Tail Dependence, and Micro-Correlations

Recent events in the financial and insurance markets, as well as the looming challenges of a globally changing climate point to the need to re-think the ways in which we measure and manage catastrophic and dependent risks. Management can only be as good as our measurement tools. To that end, this paper outlines detection, measurement, and analysis strategies for fat-tailed risks, tail dependent risks, and risks characterized by micro-correlations. A simple model of insurance demand and supply is used to illustrate the difficulties in insuring risks characterized by these phenomena. Policy implications are discussed.risk, fat tails, tail dependence, micro-correlations, insurance, natural disasters