Workshop "Economic impacts and distributional effects of extreme events on the global level", May 2021

On 27 May 2021, the second CHIPS expert workshop brought together physical and socioeconomic impact modelers. Since CHIPS aims to advance the representation of economic impacts in integrated assessment models in two ways, the workshop consisted of two sessions (follow this link for the workshop agenda): In the first session, the focus was on global impacts of extreme events, including physical as well as economic and well-being impacts. The second session was concerned with distributional effects in event-based impact models as well as in Integrated Assessment Models (IAMs).

Beyond the presentations given by the CHIPS partners Thomas Vogt, Hazem Krichene, and Bjoern Soergel (all from PIK), we were particularly happy that four external experts followed our invitations to present their research:
* Paul Bates and Niall Quinn are experts in flood hazard modeling. Paul Bates is Professor of Hydrology and Associate Director of the Cabot Institute for the Environment at the University of Bristol (UK). Furthermore, Paul Bates is Chairman of the flood risk analytics firm Fathom, where Niall Quinn is a Senior Developer.
* Michael Berlemann is Professor of Economy, especially political economics and empirical economic research, at the Helmut Schmidt University Hamburg. His research centers around the consequences of climate change on economic outcomes.
* Shouro Dasgupta is an environmental economist at the Euro-Mediterranean Center on Climate Change (CMCC) and a lecturer at the Ca' Foscari University of Venice, Italy. His research investigates the impacts of climate change using micro and spatial econometrics.


Thomas Vogt started the first session by presenting the ongoing work in CHIPS on the topic of tropical cyclone storm surge hazard modeling. The technical limitations of the fluid dynamics model as well as the ongoing validation using satellite imagery of historic coastal flooding were discussed.
Paul Bates and Niall Quinn presented the results of their recent study about flood risk in the USA that included fluvial, pluvial, and coastal sources in a complete high-resolution analysis. In addition to technical insights into the model setup, the workshop participants learned about plans to improve the automatic inclusion of adaptation structures as well as to apply the model pipeline to other world regions.
Hazem Krichene talked about how economic growth effects of extreme events, especially tropical cyclones, are implemented as part of CHIPS. The impact-specific temperature damage functions can eventually be used to compute impact-specific social costs of carbon.
The first session of the workshop concluded with Michael Berlemann's account of his research on the well-being effects of extreme events, in particular, how the life satisfaction of residents is affected by the local hurricane risk, with a review of the related literature.

The discussion of distributional effects from extreme events in the second half of the workshop was initiated by Thomas Vogt's talk on the refinement of existing regional tropical cyclone wind damage functions to respect income-specific differences, given that damage reporting usually doesn't account for these differences.
Shouro Dasgupta presented empirical evidence how changes in income inequality are driven by the local temperature level, followed by a discussion of the implications for integrated assessment modeling.
In the final talk of the workshop, Bjoern Soergel reported about the impressive efforts to derive from and integrate into IAMs the individual channels defined in the UN sustainable development goals (SDGs), especially poverty. The challenges posed by the approach as well as optimal policy design were subject of the following discussions.

In the final open discussion round, the participants took the opportunity to go beyond the usual horizon of their own research to reflect upon methodological hurdles when it comes to making use of impact-specific research output in complex integrated assessment models.

We thank all of the presenters, discussants, and participants for a very fruitful seminar.