94 research outputs found
Drivers and dimensions of flood risk perceptions: Revealing an implicit selection bias and lessons for communication policies
Full text linkFlood damages have increased in many regions around the world, and they are expected to continue to rise in the future due to climate change. To reverse this trend, awareness of flood risk among the population is required to support flood risk management policies and improve flood preparedness. However, empirical studies on the drivers of flood risk perceptions conducted thus far have reported mixed and contradictory results. The aim of this study is to provide insights into the factors that influence perceptions of various dimensions of flood risk to draw lessons to guide flood risk communication strategies. We test a variety of hypotheses of possible factors of influence on flood risk perceptions that are motivated by theoretical concepts and previous empirical studies, whilst also controlling for socio-demographic variables. A representative sample of 2,976 residents answered our survey assessing the role that past flood experiences and risk communication play in shaping flood risk perceptions. Besides exploring flood risk perceptions more robustly, this large sample also facilitates the systematic study of ‘don't know’ answers, which are often dismissed as missing data in many studies. Rather in this study we analyze what ‘don't know’ answers reflect in terms of knowledge about particular dimensions of flood risk. The study finds that older people, as well as those who have higher levels of income and education, are significantly more likely to express their flood risk perceptions, respondents who are unable to answer the questions on flood risk perceptions face a lower flood risk, report to have been living in their neighbourhood for a shorter period of time and have less first-hand flood experience. Previous studies might thus be biased by an implicit selection effect. Finally, we show that findings are highly dependent on other explicit choices made by researchers, including the apparently self-fulfilling impact of selecting one explanatory framework over another. New insights emerge from the role that information campaigns and social vulnerability play in the ability to answer the questions. Based on our findings, we offer recommendations for improving flood risk communication policies, specifically increasing the frequency of communication, ensuring that campaigns are focused in terms of the content they provide and the subgroups of the population they target.</p
Setting descriptive norm nudges to promote demand for insurance against increasing climate change risk
No full textNatural disaster losses are projected to increase worldwide, in part due to climate change. As well as offering financial protection against the impacts of climate change, insurers can promote behavioural change by stimulating individuals’ preparedness choices. Norm nudges aim to improve preparedness for risks through information provision that appeals to social norms. Based on data collected in an online experiment among homeowners, we tested for the influence on flood insurance demand of providing individuals with a norm nudge about the flood insurance purchase decisions of their neighbours. Potential moderators of the effectiveness of this norm nudge were examined, such as whether the norm is consistent with homeowners’ prior beliefs as well as whether homeowners trust insurance agents, who are used as the messenger of the norm. Based on this investigation, we suggest recommendations for policies that aim to improve preparedness against increasing losses related to climate change.</p
Social vulnerability in cost-benefit analysis for flood risk management
Full text linkTraditional cost-benefit analyses (CBAs) of flood risk reduction measures usually ignore distributions of damages over populations, which disadvantages the poor. Instead, a CBA based on social welfare includes individual social vulnerability through relative impacts on consumption. If vulnerabilities are high, floods are catastrophic and cause poverty, migration or indirect deaths, and risk reductions have high social welfare values. For non-catastrophic risks, social welfare values of risks are relatively higher for vulnerable low-income households. We present a framework to integrate social vulnerability into CBAs, and show how financial protection reduces social flood vulnerability and provides welfare benefits. A case study illustrates that traditional CBAs underestimate the social welfare value of flood risk reduction measures, up to a factor of 30. Data on financial protection is however scarce, which hampers estimation of the social welfare value in practice. A solution is to increase financial protection of individuals, in addition to offering physical flood protection.</p
Time of emergence of economic impacts of climate change
Full text linkWe introduce the concept of time of emergence of economic impacts (ToEI), which identifies the initial moment when the climate change impact signal exceeds a previously defined threshold of past economic output shocks in a given geographic area. We compute the ToEI using probabilistic climate change projections and impact functions from three integrated assessment models of climate change: DICE, RICE and CLIMRISK. Our results demonstrate that, in terms of the business-as-usual carbon emissions scenario, the global economy could reach its ToEI by 2095. Regional results highlight areas that are likely to reach the ToEI sooner, namely Western Europe by 2075, India by 2083, and Africa by 2085. We also explore local-scale variations in the ToEI demonstrating that, for example, Paris already reached the ToEI around 2020, while Shanghai will reach it around 2080. We conclude that the ToEI methodology can be applied to impact models of varying scales when sufficient historical impact data are available. Moreover, unprecedented impacts of climate change in the 21st century may be experienced even in economically developed regions in the US and Europe. Finally, moderate to stringent climate change mitigation policies could delay the extreme economic impacts of climate change by three decades in Latin America, the Middle East, and Japan, by two decades in India, Western Europe, and the US, and by one decade in Africa. Our results can be used by policymakers interested in implementing timely climate policies to prevent potentially large economic shocks due to climate change
The Assessment of Impacts and Risks of Climate Change on Agriculture (AIRCCA) model:a tool for the rapid global risk assessment for crop yields at a spatially explicit scale
Full text linkA main channel through which climate change is expected to affect the economy is the agricultural sector. Large spatial variability in these impacts and high levels of uncertainty in climate change projections create methodological challenges for assessing the consequences this sector could face. Crop emulators based on econometric fixed-effects models that can closely reproduce biophysical models are estimated. With these reduced form crop emulators, we develop AIRCCA, a user-friendly software for the assessment of impacts and risks of climate change on agriculture, that allows stakeholders to make a rapid global assessment of the effects of climate change on maize, wheat and rice yields. AIRCCA produces spatially explicit probabilistic impact scenarios and user-defined risk metrics for the main four Intergovernmental Panel on Climate Change’s (IPCC) emissions scenarios.</p
Flood insurance demand and probability weighting: The influences of regret, worry, locus of control and the threshold of concern heuristic
Full text linkLow-lying densely populated areas can be susceptible to flooding due to extreme river discharges. Insurance may be used to spread flood risk and reduce potential material damages. However, homeowners often purchase insufficient amounts of insurance against natural hazard risks like flooding, which may be due to the way they process probabilities. A common finding from (Cumulative) Prospect Theory is that individuals over-weight low probabilities and under-weight moderate to high probabilities in making decisions under risk. However, very low probabilities typical of flood risks are either significantly over-weighted or neglected altogether. This study aims to examine factors related to flood insurance demand regarding emotions specific to risk, like immediate and anticipated emotions, the threshold level of concern as well as personality traits, like locus of control. In addition, we compare results under real experiment incentives to hypothetical ones with high loss outcomes. Based on data collected from 1041 homeowners in the Netherlands, we find that: an internal locus of control and anticipated regret about potentially uninsured flood losses is related to higher flood insurance demand. The use of the threshold of concern model is related to more probability under-weighting/less probability over-weighting when probabilities of flooding are low. Several policies are suggested to overcome psychological factors related to low demand for flood insurance to improve future flood preparations
Protecting against disaster risks: Why insurance and prevention may be complements
No full textWe examine mechanisms as to why insurance and individual risk reduction activities are complements instead of substitutes. We use data on flood risk reduction activities and flood insurance purchases by surveying more than 1000 homeowners in New York City after they experienced Hurricane Sandy. Insurance is a complement to loss reduction measures undertaken well before the threat of suffering a loss, which is the opposite of a moral hazard effect of insurance coverage. In contrast, insurance acts as a substitute for emergency preparedness measures that can be taken when a loss is imminent, which implies that financial incentives or regulations are needed to encourage insured people to take these measures. We find that mechanisms leading to preferred risk selection are related to past flood damage and a crowding out effect of federal disaster assistance as well as behavioral motivations to reduce risk
A default nudge in waste management: Assessing the impact of explicit consent for unaddressed mail
Full text linkOn 1 January 2018, the municipality of Amsterdam changed the system for the reception of unaddressed mail from presumed consent to explicit consent to reduce paper waste. This policy can be defined as a default nudge. The no-choice population received unaddressed mail in the presumed consent system but not in the new explicit consent system. Residents receive unaddressed mail only when they actively decide to put an opt-in sticker on their mailbox. This study assesses the effectiveness and social benefits of this nudge. The effect on paper waste is estimated using a difference-in-differences approach in which several other Dutch municipalities function as the control group. Our main finding is that the default nudge results in a reduction of paper waste between 5.3% and 11%. Social benefits of this reduction include, for example, lower carbon emissions for collection and transport for paper waste, which are equivalent to yearly benefits between approximately €135,000 and €285,000 in Amsterdam. If all Dutch municipalities implement the system of explicit consent for unaddressed mail, the yearly benefits are approximately between €14 million and €30 million. The default nudge is a low-cost policy to implement and, therefore, offers municipal policymakers a cost-effective way to reduce waste
The safe development paradox: An agent-based model for flood risk under climate change in the European Union
Full text linkWith increasing flood risk due to climate change and socioeconomic trends, governments are under pressure to continue implementing flood protection measures, such as dikes, to reduce flood risk. However, research suggests that a sole focus on government-funded flood protection leads to an adverse increase in exposure as people and economic activities tend to concentrate in protected areas. Moreover, governmental flood protection can reduce the incentive for autonomous adaptation by local households, which paradoxically results in more severe consequences if an extreme flood event occurs. This phenomenon is often referred to as the ‘safe development paradox’ or ‘levee effect’ and is generally not accounted for in existing flood risk models used to assess developments in future flood risk under climate change. In this study we assess the impact of extreme flood events for the European Union using a large-scale agent-based model (ABM). We quantify how the safe development paradox affects (1) population growth and the increase in exposed property values, (2) the reduction in investments to flood-proof buildings as public protection increases, and (3) the increase in potential damage should a flood occur. For this analysis, we apply an ABM that integrates the dynamic behaviour of governments and residents into a large-scale flood risk assessment framework, in which we include estimates of changing population growth. We find that the impact of extreme flood events increases considerably when governments provide high protection levels, especially in large metropolitan areas. Moreover, we demonstrate how policy that stimulates the flood-proofing of buildings can largely counteract the effects of the safe development paradox
An experimental study of charity hazard: The effect of risky and ambiguous government compensation on flood insurance demand
Full text linkThis paper examines the problem of “charity hazard,” which is the crowding out of private insurance demand by government compensation. In the context of flood insurance and disaster financing, charity hazard is particularly worrisome given current trends of increasing flood risks as a result of climate change and more people choosing to locate in high-risk areas. We conduct an experimental analysis of the influence on flood insurance demand of risk and ambiguity preferences and the availability of different forms of government compensation for disaster damage. Certain and risky government compensation crowd out demand, confirming charity hazard, but this is not observed for ambiguous compensation. Ambiguity averse subjects have higher insurance demand when government compensation is ambiguous relative to risky. Policy recommendations are discussed to overcome charity hazard.</p
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