Contextualizing cross national patterns in household climate change adaptation

Distribution of economic damages due to climate-driven sea-level rise across European regions and sectors

Economic costs of climate change are conventionally assessed at the aggregated global and national levels, while adaptation is local. When present, regionalised assessments are confined to direct damages, hindered by both data and models' limitations. This article goes beyond the aggregated analysis to explore direct and indirect economic consequences of sea level rise (SLR) at regional and sectoral levels in Europe. Using a dynamic computable general equilibrium model and novel datasets, we estimate the distribution of losses and gains across regions and sectors. A comparison of a high-end scenario against a no-climate-impact baseline suggests a GDP loss of 1.26% (€871.8 billion) for the whole EU&UK. Conversely our refined assessments show that some coastal regions lose 9.56-20.84% of GDP, revealing striking regional disparities. Inland regions grow due to the displaced demand from coastal areas, but the GDP gains are small (0-1.13%). While recovery benefits the construction sector, public services and industry face significant downturns. We show that prioritising recovery of critical sectors locally reduces massive regional GDP losses, at negligible costs to the overall European economy. Our analysis traces regional economic restructuring triggered by SLR, underscoring the necessity of region-specific adaptation policies that embrace uneven geographic impacts and unique sectoral profiles to inform resilient strategy design.

Economic implications of autonomous adaptation of firms and households in a resource-rich coastal city

Climate change intensifies the likelihood of extreme flood events worldwide, amplifying the potential for compound flooding. This evolving scenario represents an escalating risk, emphasizing the urgent need for comprehensive climate change adaptation strategies across society. Vital to effective response are models that evaluate damages, costs, and benefits of adaptation strategies, encompassing non-linearities and feedback between anthropogenic and natural systems. While flood risk modeling has progressed, limitations endure, including inadequate stakeholder representation and indirect risks such as business interruption and diminished tax revenues. To address these gaps, we propose an innovative version of the Climate-economy Regional Agent-Based model that integrates a dynamic, rapidly expanding agglomeration economy populated by interacting households and firms with extreme flood events. Through this approach, feedback loops and cascading effects generated by flood shocks are delineated within a socio-economic system of boundedly-rational agents. By leveraging extensive behavioral data, our model incorporates a risk layering strategy encompassing bottom-up and top-down adaptation, spanning individual risk reduction to insurance. Calibrated to resemble a research-rich coastal megacity in China, our model demonstrates how synergistic adaptation actions at all levels effectively combat the mounting climate threat. Crucially, the integration of localized risk management with top-down approaches offers explicit avenues to address both direct and indirect risks, providing significant insights for constructing climate-resilient societies.

Uncertainty in boundedly rational household adaptation to environmental shocks

Despite the growing calls to integrate realistic human behavior in sustainability science models, the representative rational agent prevails. This is especially problematic for climate change adaptation that relies on actions at various scales: from governments to individuals. Empirical evidence on individual adaptation to climate-induced hazards reveals diverse behavioral and social factors affecting economic considerations. Yet, implications of replacing the rational optimizer by realistic human behavior in nature-society systems models are poorly understood. Using an innovative evolutionary economic agent-based model we explore different framings regarding household adaptation behavior to floods, leveraging on behavioral data from a household survey in Miami, USA. We find that a representative rational agent significantly overestimates household adaptation diffusion and underestimates damages compared to boundedly rational behavior revealed from our survey. This "adaptation deficit" exhibited by a population of empirically informed agents is explained primarily by diverse "soft" adaptation constraints-awareness, social influences-rather than heterogeneity in financial constraints. Besides initial inequality disproportionally impacting low/medium adaptive capacity households post-flood, our findings suggest that even under a nearly complete adaptation diffusion, adaptation benefits are uneven, with late or less-efficient actions locking households to a path of higher damages, further exacerbating inequalities. Our exploratory modeling reveals that behavioral assumptions shape the uncertainty of physical factors, like exposure and objective effectiveness of flood-proofing measures, traditionally considered crucial in risk assessments. This unique combination of methods facilitates the assessment of cumulative and distributional effects of boundedly rational behavior essential for designing tailored climate adaptation policies, and for equitable sustainability transitions in general.

How climate policy commitments influence energy systems and the economies of US states

In the United States, state governments have been the locus of action for addressing climate change. However, the lack of a holistic measure of state climate policy has prevented a comprehensive assessment of state policies' effectiveness. Here, we assemble information from 25 individual policies to develop an aggregate index of state climate policies from 2000-2020. The climate policy index highlights variation between states which is difficult to assess in single policy studies. Next, we examine the environmental and economic consequences of state climate policy. A standard-deviation increase in climate policy is associated with a 5% reduction in per-capita electricity-sector CO2 emissions and a 2% reduction in economy-wide CO2 emissions per capita. We do not find evidence that more stringent climate policy harms states' economies. Our results make clear the benefits of state climate policy, while showing that current state efforts are unlikelyto meet the US goal under the Paris Climate Accord.

One and done? Exploring linkages between households' intended adaptations to climate-induced floods

As climate change increases the probability and severity of natural hazards, the need for coordinated adaptation at all levels of society intensifies. Governmental-level adaptation measures are essential, but insufficient in the face of growing risks, necessitating complementary action from households. Apprehending the drivers of household adaptation is critical if governments are to stimulate protective behavior effectively. While past work has focused on the behavioral drivers of household adaptation, little attention has been paid to understanding the relationships between adaptation measures themselves-both previously undergone and additionally (planned) intended adaptation(s). Using survey data (N = 4,688) from four countries-the United States, China, Indonesia, and the Netherlands-we utilize protection motivation theory to account for the behavioral drivers of household adaptation to the most devastating climate-driven hazard: flooding. We analyze how past and additionally intended adaptations involving structural modification to one's home affect household behavior. We find that both prior adaptations and additionally intended adaptation have a positive effect on intending a specific adaptation. Further, we note that once links between adaptations are accounted for, the effect that worry has on motivating specific actions, substantially lessens. This suggests that while threat appraisal is important in initially determining if households intend to adapt, it is households' adaptive capacity that determines how. Our analysis reveals that household structural modifications may be nonmarginal. This could indicate that past action and intention to pursue one action trigger intentions for other adaptations, a finding with implications for estimating the speed and scope of household adaptation diffusion.