Short- and Long-Term Impacts of Climate Extremes (SLICE)

Tasks

In the SLICE project, we aim to gain a deep understanding of the channels through which climate extremes such as fluvial floods, tropical cyclones and droughts impact socioeconomic development in the short- and long-term. Socioeconomic impacts are assessed on the household as well as on the macroeconomic level in the present climate as well as for different climate and socioeconomic futures. This allows us to estimate climate impacts that may be avoided by stringent emission reductions. These analyses aim at identifying high-risk countries with high adaptive pressures and vulnerable groups within countries in order to support decision-makers in implementing the Paris Agreement.
The ifo team analyzes in particular how households in low-income countries such as Nigeria are impacted by climate-related shocks and extreme events. For that, we combine multiple rounds of large household surveys to identify which shocks households report as problematic, and combine this information with spatial information on key risk indicators. In selecting the case study countries, we take care to analyze a diverse set of climate related shocks such as droughts and floods, heat or cold extremes and cyclones. Controlling for household characteristics such as wealth, education, gender and health, we analyze the impact of these shocks on household wellbeing and coping capabilities across different population groups. Combining multiple rounds of household-level data for a particular country allows us to better capture trends and dynamics over time, also social and non-economic ones (e.g., education and health effects). Using the results from our project partners on future climate risks, we plan to also provide estimates of future impacts on household well-being for differing policy scenarios for each of the selected countries. Ultimately, in comparing results across case study countries, we hope to gain key insights into common climate impact patterns for households.

Methods

Econometric Methods

Data and other sources

World Bank Living Standards Measurement Study (LSMS)

Results

On the household level, we are conducting empirical analyses on socioeconomic impacts of climate extremes for Malawi (droughts), Nigeria (floods) and the Philippines (tropical cyclones). We find that i) more frequent moderate droughts can negatively impact child health in agricultural households in Malawi, ii) education has the potential to increase the resilience of households against flood extremes in Nigeria and iii) intense winds and precipitation from tropical cyclones affect household expenditures in the Philippines. The main climate risks and implications for these countries have been summarized in stakeholder-friendly climate risk profiles.

On the macroeconomic level, we find that fluvial floods and tropical cyclones can deteriorate economic growth in the affected countries for more than a decade. However, growth losses can be efficiently mitigated by policy measures fostering household consumption and government expenditure in the disaster aftermath and disaster insurance.