Showing papers on "Damages published in 2019"

Evidence for sharp increase in the economic damages of extreme natural disasters.

Abstract: Climate change has increased the frequency and intensity of natural disasters. Does this translate into increased economic damages? To date, empirical assessments of damage trends have been inconclusive. Our study demonstrates a temporal increase in extreme damages, after controlling for a number of factors. We analyze event-level data using quantile regressions to capture patterns in the damage distribution (not just its mean) and find strong evidence of progressive rightward skewing and tail-fattening over time. While the effect of time on averages is hard to detect, effects on extreme damages are large, statistically significant, and growing with increasing percentiles. Our results are consistent with an upwardly curved, convex damage function, which is commonly assumed in climate-economics models. They are also robust to different specifications of control variables and time range considered and indicate that the risk of extreme damages has increased more in temperate areas than in tropical ones. We use simulations to show that underreporting bias in the data does not weaken our inferences; in fact, it may make them overly conservative.

Damages Done: The Longitudinal Impacts of Natural Hazards on Wealth Inequality in the United States

Abstract: This study investigates a largely ignored contributor to wealth inequality in the United States: damages from natural hazards, which are expected to increase substantially in coming years. Instead of targeting a specific large-scale disaster and assessing how different subpopulations recover, we begin with a nationally representative sample of respondents from the restricted, geocoded Panel Study of Income Dynamics. We follow them through time (1999–2013) as hazard damages of varying scales accrue in the counties where they live. This design synthesizes the longitudinal, population-centered approach common in stratification research with a broad hazard-centered focus that extends beyond disasters to integrate ongoing environmental dynamics more centrally into the production of social inequality. Results indicate that as local hazard damages increase, so does wealth inequality, especially along lines of race, education, and homeownership. At any given level of local damage, the more aid an area receives from the Federal Emergency Management Agency, the more this inequality grows. These findings suggest that two defining social problems of our day – wealth inequality and rising natural hazard damages – are dynamically linked, requiring new lines of research and policy making in the future.

Climate damages and adaptation potential across diverse sectors of the United States

Abstract: There is a growing capability to project the impacts and economic effects of climate change across multiple sectors. This information is needed to inform decisions regarding the diversity and magnitude of future climate impacts and explore how mitigation and adaptation actions might affect these risks. Here, we summarize results from sectoral impact models applied within a consistent modelling framework to project how climate change will affect 22 impact sectors of the United States, including effects on human health, infrastructure and agriculture. The results show complex patterns of projected changes across the country, with damages in some sectors (for example, labour, extreme temperature mortality and coastal property) estimated to range in the hundreds of billions of US dollars annually by the end of the century under high emissions. Inclusion of a large number of sectors shows that there are no regions that escape some mix of adverse impacts. Lower emissions, and adaptation in relevant sectors, would result in substantial economic benefits. In this Article, modelling results from a consistent set of sectoral climate change impact models, covering 22 impact sectors of the United States, are summarized. Findings are complex, but largely negative and expensive.

Atmospheric Rivers Drive Flood Damages in the Western United States

Abstract: Atmospheric rivers (ARs) are extratropical storms that produce extreme precipitation on the west coasts of the world’s major landmasses. In the United States, ARs cause significant flooding, yet their economic impacts have not been quantified. Here, using 40 years of data from the National Flood Insurance Program, we show that ARs are the primary drivers of flood damages in the western United States. Using a recently developed AR scale, which varies from category 1 to 5, we find that flood damages increase exponentially with AR intensity and duration: Each increase in category corresponds to a roughly 10-fold increase in damages. Category 4 and 5 ARs cause median damages in the tens and hundreds of millions of dollars, respectively. Rising population, increased development, and climate change are expected to worsen the risk of AR-driven flood damage in future decades.

The Distribution of Environmental Damages

Abstract: Most regulations designed to reduce environmental externalities impose costs on individuals and firms. A large and growing literature examines whether these costs are disproportionately bor...

Fine particulate matter damages and value added in the US economy.

Abstract: Emissions of most pollutants that result in fine particulate matter (PM2.5) formation have been decreasing in the United States. However, this trend has not been uniform across all sectors or regions of the economy. We use integrated assessment models (IAMs) to compute marginal damages for PM2.5-related emissions for each county in the contiguous United States and match location-specific emissions with these marginal damages to compute economy-wide gross external damage (GED) due to premature mortality. We note 4 key findings: First, economy-wide, GED has decreased by more than 20% from 2008 to 2014. Second, while much of the air pollution policies have focused to date on the electricity sector, damages from farms are now larger than those from utilities. Indeed, farms have become the largest contributor to air pollution damages from PM2.5-related emissions. Third, 4 sectors, comprising less than 20% of the national gross domestic product (GDP), are responsible for ∼75% of GED attributable to economic activities. Fourth, uncertainty in GED estimates tends to be high for sectors with predominantly ground-level emissions because these emissions are usually estimated and not measured. These findings suggest that policymakers should target further emissions reductions from such sectors, particularly in transportation and agriculture.

Air-quality-related health damages of maize

Abstract: Agriculture is essential for feeding the large and growing world population, but it can also generate pollution that harms ecosystems and human health. Here, we explore the human health effects of air pollution caused by the production of maize—a key agricultural crop that is used for animal feed, ethanol biofuel and human consumption. We use county-level data on agricultural practices and productivity to develop a spatially explicit life-cycle-emissions inventory for maize. From this inventory, we estimate health damages, accounting for atmospheric pollution transport and chemistry, and human exposure to pollution at high spatial resolution. We show that reduced air quality resulting from maize production is associated with 4,300 premature deaths annually in the United States, with estimated damages in monetary terms of US$39 billion (range: US$14–64 billion). Increased concentrations of fine particulate matter (PM2.5) are driven by emissions of ammonia—a PM2.5 precursor—that result from nitrogen fertilizer use. Average health damages from reduced air quality are equivalent to US$121 t−1 of harvested maize grain, which is 62% of the US$195 t−1 decadal average maize grain market price. We also estimate life-cycle greenhouse gas emissions of maize production, finding total climate change damages of US$4.9 billion (range: US$1.5–7.5 billion), or US$15 t−1 of maize. Our results suggest potential benefits from strategic interventions in maize production, including changing the fertilizer type and application method, improving nitrogen use efficiency, switching to crops requiring less fertilizer, and geographically reallocating production. Agriculture sustains a large and growing human population, but generates widespread impacts. This study assesses the health effects of air pollution caused by maize production. Reduced air quality leads to 4,300 premature deaths annually in the United States, akin to US$39 billion in damages, and climate change damages of US$4.9 billion.

The Sectoral and Regional Economic Consequences of Climate Change to 2060

Abstract: This paper presents a new detailed global quantitative assessment of the economic consequences of climate change (i.e. climate damages) to 2060. The analysis is based on an assessment of a wide range of impacts: changes in crop yields, loss of land and capital due to sea level rise, changes in fisheries catches, capital damages from hurricanes, labour productivity changes and changes in health care expenditures from diseases and heat stress, changes in tourism flows, and changes in energy demand for cooling and heating. A multi-region, multi-sector dynamic computable general equilibrium model is used to link different impacts until 2060 directly to specific drivers of economic growth, including labour productivity, capital stocks and land supply, as well as assess the indirect effects these impacts have on the rest of the economy, and on the economies of other countries. It uses a novel production function approach to identify which aspects of economic activity are directly affected by climate change. The model results show that damages are projected to rise twice as fast as global economic activity; global annual Gross Domestic Product losses are projected to be 1.0–3.3% by 2060. Of the impacts that are modelled, impacts on labour productivity and agriculture are projected to have the largest negative economic consequences. Damages from sea level rise grow most rapidly after the middle of the century. Damages to energy and tourism are very small from a global perspective, as benefits in some regions balance damages in others. Climate-induced damages from hurricanes may have significant effects on local communities, but the macroeconomic consequences are projected to be very small. Net economic consequences are projected to be especially large in Africa and Asia, where the regional economies are vulnerable to a range of different climate impacts. For some countries in higher latitudes, economic benefits can arise from gains in tourism, energy and health. The global assessment also shows that countries that are relatively less affected by climate change may reap trade gains.

A graph-based method for social sensing of infrastructure disruptions in disasters

Abstract: Damages in critical infrastructure occur abruptly, and disruptions evolve with time dynamically. Understanding the situation of critical infrastructure disruptions is essential to effectiv...

The social cost of lobbying over climate policy

Abstract: Domestic political processes shape climate policy. In particular, there is increasing concern about the role of political lobbying over climate policy. This paper examines how lobbying spending on the Waxman–Markey bill, the most prominent and promising United States climate regulation so far, altered its likelihood of being implemented. We combine data from comprehensive United States lobbying records with an empirical method for forecasting the policy’s effect on the value of publicly listed firms. Our statistical analysis suggests that lobbying by firms expecting losses from the policy was more effective than lobbying by firms expecting gains. Interpreting this finding through a game-theoretic model, we calculate that lobbying lowered the probability of enacting the Waxman–Markey bill by 13 percentage points, representing an expected social cost of US$60 billion (in 2018 US dollars). Our findings also suggest how future climate policy proposals can be designed to be more robust to political opposition. Political interests play a key role in the passage of climate policy. This study quantifies that political lobbying reduced the probability of enacting the Waxman–Markey bill in the United States by 13 percentage points, representing US$60 billion in expected climate damages.

The effects of private damage claims on cartel stability: Experimental evidence

Abstract: Private damage claims against cartels may have negative effects on leniency: whereas whistleblowers obtain full immunity regarding the public cartel fines, they have no or only restricted protection against private third-party damage claims. This may stabilize cartels. We run an experiment to study this issue. Firms choose whether to join a cartel, may apply for leniency afterwards, and then potentially face private damages. We find that the implementation of private damage claims reduces cartel formation but makes cartels indeed more stable. The negative effect of damages is avoided in a novel setting where the whistleblower is also protected from damages.

Assessing socio-economic drought evolution characteristics and their possible meteorological driving force

Abstract: Droughts are among the most damaging environmental disasters that may have destructive damages on societal properties and lives. Generally, socio-economic drought occurs when water resource...

The Impacts of Climate Change on Ecosystem Services and Resulting Losses and Damages to People and Society

Abstract: So far, studies of Loss and Damage from climate change have focused primarily on human systems and tended to overlook the mediating role of ecosystems and the services ecosystems provide to society. This is a significant knowledge gap because losses and damages to human systems often result from permanent or temporary disturbances to ecosystems services caused by climatic stressors. This chapter tries to advance understanding of the impacts of climatic stressors on ecosystems and implications for losses and damages to people and society. It introduces a conceptual framework for studying these complex relations and applies this framework to a case study of multi-annual drought in the West-African Sahel. The case study shows that causal links between climate change and a specific event, with subsequent losses and damages, are often complicated. Oversimplification must be avoided and the role of various factors, such as governance or management of natural resources, should be at the centre of future research.

Insurance as a Response to Loss and Damage

Abstract: This chapter asks whether insurance instruments, especially micro-insurance and regional insurance pools, can serve as a risk-reducing and equitable compensatory response to climate-attributed losses and damages from climate extremes occurring in developing countries, and consequently if insurance instruments can serve the preventative and curative targets of the Warsaw International Mechanism for Loss and Damage (WIM). The discussion emphasises the substantial benefits of both micro-insurance programs and regional insurance pools, and at the same time details their significant costs. Beyond costs and benefits, a main message is that if no significant intervention is undertaken in their design and implementation, market-based insurance mechanisms will likely fall short of fully meeting WIM aspirations of loss reduction and equitable compensation. Interventions can include subsidies and other types of support that make insurance affordable to poor clients; interventions can also enable public-private arrangements that genuinely catalyse risk reduction and adaptation. Many such interventions are already in place, and the chapter highlights two potential success stories for insurance instruments serving the most vulnerable: the African R4 micro-insurance program and the African Risk Capacity (ARC) regional insurance pool. While support to these and other insurance programs continues to be framed as humanitarian aid based on the principle of solidarity, discussions on the G7 initiative to insure vulnerable households, as well as on ARC’s initiative to link international payments to climate risks, raise the question whether the narrative will evolve from solidarity to responsibility based on the principle of developed country accountability.

Attribution: How Is It Relevant for Loss and Damage Policy and Practice?

Abstract: Attribution has become a recurring issue in discussions about Loss and Damage (LD and linked to debates about liability and compensation. The aim of attribution science, however, is not to establish responsibility, but to further scientific understanding of causal links between elements of the Earth System and society. This research into causality could inform the management of climate-related risks through improved understanding of drivers of relevant hazards, or, more widely, vulnerability and exposure; with potential benefits regardless of political positions on L&D. Experience shows that it is nevertheless difficult to have open discussions about the science in the policy sphere. This is not only a missed opportunity, but also problematic in that it could inhibit understanding of scientific results and uncertainties, potentially leading to policy planning which does not have sufficient scientific evidence to support it. In this chapter, we first explore this dilemma for science-policy dialogue, summarising several years of research into stakeholder perspectives of attribution in the context of L&D. We then aim to provide clarity about the scientific research available, through an overview of research which might contribute evidence about the causal connections between anthropogenic climate change and losses and damages, including climate science, but also other fields which examine other drivers of hazard, exposure, and vulnerability. Finally, we explore potential applications of attribution research, suggesting that an integrated and nuanced approach has potential to inform planning to avert, minimise and address losses and damages. The key messages are In the political context of climate negotiations, questions about whether losses and damages can be attributed to anthropogenic climate change are often linked to issues of responsibility, blame, and liability. Attribution science does not aim to establish responsibility or blame, but rather to investigate drivers of change. Attribution science is advancing rapidly, and has potential to increase understanding of how climate variability and change is influencing slow onset and extreme weather events, and how this interacts with other drivers of risk, including socio-economic drivers, to influence losses and damages. Over time, some uncertainties in the science will be reduced, as the anthropogenic climate change signal becomes stronger, and understanding of climate variability and change develops. However, some uncertainties will not be eliminated. Uncertainty is common in science, and does not prevent useful applications in policy, but might determine which applications are appropriate. It is important to highlight that in attribution studies, the strength of evidence varies substantially between different kinds of slow onset and extreme weather events, and between regions. Policy-makers should not expect the later emergence of conclusive evidence about the influence of climate variability and change on specific incidences of losses and damages; and, in particular, should not expect the strength of evidence to be equal between events, and between countries. Rather than waiting for further confidence in attribution studies, there is potential to start working now to integrate science into policy and practice, to help understand and tackle drivers of losses and damages, informing prevention, recovery, rehabilitation, and transformation.

Market-based Emissions Regulation When Damages Vary Across Sources: What Are the Gains from Differentiation?

Abstract: For much of the air pollution currently regulated under US emissions trading programs, health and environmental damages vary significantly with the location of the source. Existing policies...

The Effect of El Niño on Flood Damages in the Western United States

Abstract: This paper quantifies insured flood losses across the western United States from 1978 to 2017, presenting a spatiotemporal analysis of National Flood Insurance Program (NFIP) daily claims a...

Decentralization and the environment: Assessing smallholder oil palm development in Indonesia

Abstract: Indonesia’s oil palm expansion during the last two decades has resulted in widespread environmental and health damages through land clearing by fire and peat conversion, but it has also contributed to rural poverty alleviation. In this paper, we examine the role that decentralization has played in the process of Indonesia’s oil palm development, particularly among independent smallholder producers. We use primary survey information, along with government documents and statistics, to analyze the institutional dynamics underpinning the sector’s impacts on economic development and the environment. Our analysis focuses on revenue-sharing agreements between district and central governments, district splitting, land title authority, and accountability at individual levels of government. We then assess the role of Indonesia’s Village Law of 2014 in promoting rural development and land clearing by fire. We conclude that both environmental conditionality and positive financial incentives are needed within the Village Law to enhance rural development while minimizing environmental damages.

Evaluating Knowledge to Support Climate Action: A Framework for Sustained Assessment. Report of an Independent Advisory Committee on Applied Climate Assessment

Abstract: As states, cities, tribes, and private interests cope with climate damages and seek to increase preparedness and resilience, they will need to navigate myriad choices and options available ...

Natural disasters and spatial heterogeneity in damages: The birth, life and death of manufacturing plants

Abstract: In this paper, we use the 1995 Kobe earthquake as a natural experiment to examine the impact of a large exogenous physical shock on local economic activity. For the first time we are able to control for local spatial heterogeneity in the damage caused by a natural disaster using geo-coded plant location and unique building-level surveys. In a survival analysis of manufacturing plants, our results show that building-level damage significantly affects a plant’s likelihood of failure and this effect persists for up to 7 years. Further analysis demonstrates that the plants most likely to exit as a result of earthquake damage are the least productive which is suggestive of a cleansing effect as the average productivity rate of the remaining plants increases. We also find that continuing plants experience a temporary increase in productivity following the earthquake consistent with a ‘build back better’ effect. In terms of local regeneration our results indicate that plant births increase in areas with more severe damage consistent with redevelopment plans for Kobe.

Propagation of negative shocks across nation-wide firm networks

Abstract: This study examines how negative shocks due to, for example, natural disasters propagate through supply chains. We apply a simulation technique to actual supply chain data covering most Japanese firms. To investigate the property of the propagation in the network, we test different types of artificial negative shocks. We find that, first, network structures severely affect the speed of propagation in the short run, and the total loss in the long run. The scale-free nature of the actual supply-chain network-that is, the power-law degree distribution-leads to faster propagation. Second, more intensive damages-that is, more damages suffered by fewer firms-result in faster propagation than extensive damages of the same total size. Third, the actual supply-chain network has innate robustness that comes from substitutability of supplies. If the supply-chain network has severe substitutability, the propagation of negative shocks becomes substantially large. Fourth, direct damages in urban regions promote faster propagation than those in rural regions. Fifth, different sectoral damages show significant differences in the speed of propagation. Finally, we check the indirect damage triggered by a single firm's loss: 9.7% of all firms contribute to significant loss, and this loss accounts for more than 10% of the damage to the entire production. The simulations conspicuously show that different direct damages, even if they have the same total magnitude of damages, can generate considerably different damages because of the structure of the supply-chain network.

A Deep Dive into the Review of National Environmental Standards and Regulations Enforcement Agency (NESREA) Act

Abstract: Nigerians are poorly aware of their environment and the damages being done to it through their numerous activities either knowingly or unknowingly. Moreover, the constitution is the basic law of the land and it proclaims its supremacy over and above all other laws in the country and any law that is inconsistent with any of its provisions shall be null and void to the extent of its inconsistency. Although the National Environmental Standards and Regulations Enforcement Agency (NESREA) has good 33 National Environmental Regulations that cut across almost all sectors of human activities that can have negative effect on the environment, but their role is not felt in term of environmental management, conservation, protection and sustainability in the country due to inadequate awareness and enforcement. A literature review was done by using a variety of search engines including Research Gate, Google Scholar, Academia, Mendeley, SSRN search strategy to retrieve research publications, “grey literature” and expert working group reports. This review paper tried to do a deep dive into the review of National Environmental Standards and Regulations Enforcement Agency (NESREA) act, focusing on national environmental laws and regulations, gazette, composition, structure, mandate and enforcement power of NESREA and intermediary determinants of empowering the citizens to have legal standing and access to justice to be able to protect and enforce the protection of a clean, healthy environment cum sustainable development and others. Therefore, mending the leakages in the roof is the work of an honest, patriotic, disciplined, hardworking, visionary, accountable, sincere and need for achievement driven followership and leadership that is abreast with current environmental knowledge with a solution focused systems therapy approach to environmental problems with a view to heal the world. This paper therefore recommends that the NESREA Act of 2007 be amended to give it oversight over the entire environment including the oil and gas sector. Furthermore, the requirement of Pre-action Notice and Limitation Clause is removed from the NESREA Act. Also, effective implementation of both the NESREA Act and its regulations requires necessary capacity building of the agency in terms of human, technical, material and financial capacity. It further requires effective cooperation and collaboration of various stakeholders in the implementation and protection of environmental laws in Nigeria.