@article{KuhlaWillnerOttoetal.2021, author = {Kuhla, Kilian and Willner, Sven N. and Otto, Christian and Geiger, Tobias and Levermann, Anders}, title = {Ripple resonance amplifies economic welfare loss from weather extremes}, series = {Environmental research letters : ERL / Institute of Physics}, volume = {16}, journal = {Environmental research letters : ERL / Institute of Physics}, number = {11}, publisher = {IOP Publ. Ltd.}, address = {Bristol}, issn = {1748-9326}, doi = {10.1088/1748-9326/ac2932}, pages = {8}, year = {2021}, abstract = {The most complex but potentially most severe impacts of climate change are caused by extreme weather events. In a globally connected economy, damages can cause remote perturbations and cascading consequences-a ripple effect along supply chains. Here we show an economic ripple resonance that amplifies losses when consecutive or overlapping weather extremes and their repercussions interact. This amounts to an average amplification of 21\% for climate-induced heat stress, river floods, and tropical cyclones. Modeling the temporal evolution of 1.8 million trade relations between >7000 regional economic sectors, we find that the regional responses to future extremes are strongly heterogeneous also in their resonance behavior. The induced effect on welfare varies between gains due to increased demand in some regions and losses due to demand or supply shortages in others. Within the current global supply network, the ripple resonance effect of extreme weather is strongest in high-income economies-an important effect to consider when evaluating past and future economic climate impacts.}, language = {en} } @article{WillnerGlanemannLevermann2021, author = {Willner, Sven N. and Glanemann, Nicole and Levermann, Anders}, title = {Investment incentive reduced by climate damages can be restored by optimal policy}, series = {Nature Communications}, volume = {12}, journal = {Nature Communications}, number = {1}, publisher = {Nature Publishing Group UK}, address = {London}, issn = {2041-1723}, doi = {10.1038/s41467-021-23547-5}, pages = {9}, year = {2021}, abstract = {Increasing greenhouse gas emissions are likely to impact not only natural systems but economies worldwide. If these impacts alter future economic development, the financial losses will be significantly higher than the mere direct damages. So far, potentially aggravating investment responses were considered negligible. Here we consistently incorporate an empirically derived temperature-growth relation into the simple integrated assessment model DICE. In this framework we show that, if in the next eight decades varying temperatures impact economic growth as has been observed in the past three decades, income is reduced by similar to 20\% compared to an economy unaffected by climate change. Hereof similar to 40\% are losses due to growth effects of which similar to 50\% result from reduced incentive to invest. This additional income loss arises from a reduced incentive for future investment in anticipation of a reduced return and not from an explicit climate protection policy. Under economically optimal climate-change mitigation, however, optimal investment would only be reduced marginally as mitigation efforts keep returns high.}, language = {en} } @article{MiddelanisWillnerOttoetal.2021, author = {Middelanis, Robin and Willner, Sven N. and Otto, Christian and Kuhla, Kilian and Quante, Lennart and Levermann, Anders}, title = {Wave-like global economic ripple response to Hurricane Sandy}, series = {Environmental research letters : ERL / Institute of Physics}, volume = {16}, journal = {Environmental research letters : ERL / Institute of Physics}, number = {12}, publisher = {IOP Publ. Ltd.}, address = {Bristol}, issn = {1748-9326}, doi = {10.1088/1748-9326/ac39c0}, pages = {11}, year = {2021}, abstract = {Tropical cyclones range among the costliest disasters on Earth. Their economic repercussions along the supply and trade network also affect remote economies that are not directly affected. We here simulate possible global repercussions on consumption for the example case of Hurricane Sandy in the US (2012) using the shock-propagation model Acclimate. The modeled shock yields a global three-phase ripple: an initial production demand reduction and associated consumption price decrease, followed by a supply shortage with increasing prices, and finally a recovery phase. Regions with strong trade relations to the US experience strong magnitudes of the ripple. A dominating demand reduction or supply shortage leads to overall consumption gains or losses of a region, respectively. While finding these repercussions in historic data is challenging due to strong volatility of economic interactions, numerical models like ours can help to identify them by approaching the problem from an exploratory angle, isolating the effect of interest. For this, our model simulates the economic interactions of over 7000 regional economic sectors, interlinked through about 1.8 million trade relations. Under global warming, the wave-like structures of the economic response to major hurricanes like the one simulated here are likely to intensify and potentially overlap with other weather extremes.}, language = {en} } @article{QuanteWillnerMiddelanisetal.2021, author = {Quante, Lennart and Willner, Sven N. and Middelanis, Robin and Levermann, Anders}, title = {Regions of intensification of extreme snowfall under future warming}, series = {Scientific reports}, volume = {11}, journal = {Scientific reports}, number = {1}, publisher = {Macmillan Publishers Limited, part of Springer Nature}, address = {Berlin}, issn = {2045-2322}, doi = {10.1038/s41598-021-95979-4}, pages = {9}, year = {2021}, abstract = {Due to climate change the frequency and character of precipitation are changing as the hydrological cycle intensifies. With regards to snowfall, global warming has two opposing influences; increasing humidity enables intense snowfall, whereas higher temperatures decrease the likelihood of snowfall. Here we show an intensification of extreme snowfall across large areas of the Northern Hemisphere under future warming. This is robust across an ensemble of global climate models when they are bias-corrected with observational data. While mean daily snowfall decreases, both the 99th and the 99.9th percentiles of daily snowfall increase in many regions in the next decades, especially for Northern America and Asia. Additionally, the average intensity of snowfall events exceeding these percentiles as experienced historically increases in many regions. This is likely to pose a challenge to municipalities in mid to high latitudes. Overall, extreme snowfall events are likely to become an increasingly important impact of climate change in the next decades, even if they will become rarer, but not necessarily less intense, in the second half of the century.}, language = {en} } @article{GlanemannWillnerLevermann2020, author = {Glanemann, Nicole and Willner, Sven N. and Levermann, Anders}, title = {Paris Climate Agreement passes the cost-benefit test}, series = {Nature Communications}, volume = {11}, journal = {Nature Communications}, number = {1}, publisher = {Nature Publishing Group}, address = {London}, issn = {2041-1723}, doi = {10.1038/s41467-019-13961-1}, pages = {11}, year = {2020}, abstract = {The Paris Climate Agreement aims to keep temperature rise well below 2 degrees C. This implies mitigation costs as well as avoided climate damages. Here we show that independent of the normative assumptions of inequality aversion and time preferences, the agreement constitutes the economically optimal policy pathway for the century. To this end we consistently incorporate a damage-cost curve reproducing the observed relation between temperature and economic growth into the integrated assessment model DICE. We thus provide an intertemporally optimizing cost-benefit analysis of this century's climate problem. We account for uncertainties regarding the damage curve, climate sensitivity, socioeconomic future, and mitigation costs. The resulting optimal temperature is robust as can be understood from the generic temperature-dependence of the mitigation costs and the level of damages inferred from the observed temperature-growth relationship. Our results show that the politically motivated Paris Climate Agreement also represents the economically favourable pathway, if carried out properly.}, language = {en} } @article{WillnerLevermannZhaoetal.2018, author = {Willner, Sven N. and Levermann, Anders and Zhao, Fang and Frieler, Katja}, title = {Adaptation required to preserve future high-end river flood risk at present levels}, series = {Science Advances}, volume = {4}, journal = {Science Advances}, number = {1}, publisher = {American Assoc. for the Advancement of Science}, address = {Washington}, issn = {2375-2548}, doi = {10.1126/sciadv.aao1914}, pages = {8}, year = {2018}, abstract = {Earth's surface temperature will continue to rise for another 20 to 30 years even with the strongest carbon emission reduction currently considered. The associated changes in rainfall patterns can result in an increased flood risk worldwide. We compute the required increase in flood protection to keep high-end fluvial flood risk at present levels. The analysis is carried out worldwide for subnational administrative units. Most of the United States, Central Europe, and Northeast and West Africa, as well as large parts of India and Indonesia, require the strongest adaptation effort. More than half of the United States needs to at least double their protection within the next two decades. Thus, the need for adaptation to increased river flood is a global problem affecting industrialized regions as much as developing countries.}, language = {en} } @article{WillnerOttoLevermann2018, author = {Willner, Sven N. and Otto, Christian and Levermann, Anders}, title = {Global economic response to river floods}, series = {Nature climate change}, volume = {8}, journal = {Nature climate change}, number = {7}, publisher = {Nature Publ. Group}, address = {London}, issn = {1758-678X}, doi = {10.1038/s41558-018-0173-2}, pages = {594 -- 598}, year = {2018}, abstract = {Increasing Earth's surface air temperature yields an intensification of its hydrological cycle. As a consequence, the risk of river floods will increase regionally within the next two decades due to the atmospheric warming caused by past anthropogenic greenhouse gas emissions. The direct economic losses caused by these floods can yield regionally heterogeneous losses and gains by propagation within the global trade and supply network. Here we show that, in the absence of large-scale structural adaptation, the total economic losses due to fluvial floods will increase in the next 20 years globally by 17\% despite partial compensation through market adjustment within the global trade network. China will suffer the strongest direct losses, with an increase of 82\%. The United States is mostly affected indirectly through its trade relations. By contrast to the United States, recent intensification of the trade relations with China leaves the European Union better prepared for the import of production losses in the future.}, language = {en} } @article{WenzLevermannWillneretal.2020, author = {Wenz, Leonie and Levermann, Anders and Willner, Sven N. and Otto, Christian and Kuhla, Kilian}, title = {Post-Brexit no-trade-deal scenario: short-term consumer benefit at the expense of long-term economic development}, series = {PLoS ONE}, volume = {15}, journal = {PLoS ONE}, number = {9}, publisher = {PLOS}, address = {San Francisco}, pages = {14}, year = {2020}, abstract = {After the United Kingdom has left the European Union it remains unclear whether the two parties can successfully negotiate and sign a trade agreement within the transition period. Ongoing negotiations, practical obstacles and resulting uncertainties make it highly unlikely that economic actors would be fully prepared to a "no-trade-deal" situation. Here we provide an economic shock simulation of the immediate aftermath of such a post-Brexit no-trade-deal scenario by computing the time evolution of more than 1.8 million interactions between more than 6,600 economic actors in the global trade network. We find an abrupt decline in the number of goods produced in the UK and the EU. This sudden output reduction is caused by drops in demand as customers on the respective other side of the Channel incorporate the new trade restriction into their decision-making. As a response, producers reduce prices in order to stimulate demand elsewhere. In the short term consumers benefit from lower prices but production value decreases with potentially severe socio-economic consequences in the longer term.}, language = {en} } @misc{WenzLevermannWillneretal.2020, author = {Wenz, Leonie and Levermann, Anders and Willner, Sven N. and Otto, Christian and Kuhla, Kilian}, title = {Post-Brexit no-trade-deal scenario: short-term consumer benefit at the expense of long-term economic development}, series = {Postprints der Universit{\"a}t Potsdam : Mathematisch-Naturwissenschaftliche Reihe}, journal = {Postprints der Universit{\"a}t Potsdam : Mathematisch-Naturwissenschaftliche Reihe}, number = {9}, issn = {1866-8372}, doi = {10.25932/publishup-52581}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-525819}, pages = {16}, year = {2020}, abstract = {After the United Kingdom has left the European Union it remains unclear whether the two parties can successfully negotiate and sign a trade agreement within the transition period. Ongoing negotiations, practical obstacles and resulting uncertainties make it highly unlikely that economic actors would be fully prepared to a "no-trade-deal" situation. Here we provide an economic shock simulation of the immediate aftermath of such a post-Brexit no-trade-deal scenario by computing the time evolution of more than 1.8 million interactions between more than 6,600 economic actors in the global trade network. We find an abrupt decline in the number of goods produced in the UK and the EU. This sudden output reduction is caused by drops in demand as customers on the respective other side of the Channel incorporate the new trade restriction into their decision-making. As a response, producers reduce prices in order to stimulate demand elsewhere. In the short term consumers benefit from lower prices but production value decreases with potentially severe socio-economic consequences in the longer term.}, language = {en} } @phdthesis{Willner2018, author = {Willner, Sven N.}, title = {Global economic response to flood damages under climate change}, school = {Universit{\"a}t Potsdam}, pages = {v, 247}, year = {2018}, abstract = {Climate change affects societies across the globe in various ways. In addition to gradual changes in temperature and other climatic variables, global warming is likely to increase intensity and frequency of extreme weather events. Beyond biophysical impacts, these also directly affect societal and economic activity. Additionally, indirect effects can occur; spatially, economic losses can spread along global supply-chains; temporally, climate impacts can change the economic development trajectory of countries. This thesis first examines how climate change alters river flood risk and its local socio-economic implications. Then, it studies the global economic response to river floods in particular, and to climate change in general. Changes in high-end river flood risk are calculated for the next three decades on a global scale with high spatial resolution. In order to account for uncertainties, this assessment makes use of an ensemble of climate and hydrological models as well as a river routing model, that is found to perform well regarding peak river discharge. The results show an increase in high-end flood risk in many parts of the world, which require profound adaptation efforts. This pressure to adapt is measured as the enhancement in protection level necessary to stay at historical high-end risk. In developing countries as well as in industrialized regions, a high pressure to adapt is observed - the former to increase low protection levels, the latter to maintain the low risk levels perceived in the past. Further in this thesis, the global agent-based dynamic supply-chain model acclimate is developed. It models the cascading of indirect losses in the global supply network. As an anomaly model its agents - firms and consumers - maximize their profit locally to respond optimally to local perturbations. Incorporating quantities as well as prices on a daily basis, it is suitable to dynamically resolve the impacts of unanticipated climate extremes. The model is further complemented by a static measure, which captures the inter-dependencies between sectors across regions that are only connected indirectly. These higher-order dependencies are shown to be important for a comprehensive assessment of loss-propagation and overall costs of local disasters. In order to study the economic response to river floods, the acclimate model is driven by flood simulations. Within the next two decades, the increase in direct losses can only partially be compensated by market adjustments, and total losses are projected to increase by 17\% without further adaptation efforts. The US and the EU are both shown to receive indirect losses from China, which is strongly affected directly. However, recent trends in the trade relations leave the EU in a better position to compensate for these losses. Finally, this thesis takes a broader perspective when determining the investment response to the climate change damages employing the integrated assessment model DICE. On an optimal economic development path, the increase in damages is anticipated as emissions and consequently temperatures increase. This leads to a significant devaluation of investment returns and the income losses from climate damages almost double. Overall, the results highlight the need to adapt to extreme weather events - local physical adaptation measures have to be combined with regional and global policy measures to prepare the global supply-chain network to climate change.}, language = {en} } @article{WenzWillnerRadebachetal.2015, author = {Wenz, Leonie and Willner, Sven N. and Radebach, Alexander and Bierkandt, Robert and Steckel, Jan Christoph and Levermann, Anders}, title = {Regional and sectoral disaggregation of multi-regional input-output tables - a flexible algorithm}, series = {Economic systems research : journal of the International Input-Output Association}, volume = {27}, journal = {Economic systems research : journal of the International Input-Output Association}, number = {2}, publisher = {Routledge, Taylor \& Francis Group}, address = {Abingdon}, issn = {0953-5314}, doi = {10.1080/09535314.2014.987731}, pages = {194 -- 212}, year = {2015}, abstract = {A common shortcoming of available multi-regional input-output (MRIO) data sets is their lack of regional and sectoral detail required for many research questions (e.g. in the field of disaster impact analysis). We present a simple algorithm to refine MRIO tables regionally and/or sectorally. By the use of proxy data, each MRIO flow in question is disaggregated into the corresponding sub-flows. This downscaling procedure is complemented by an adjustment rule ensuring that the sub-flows match the superordinate flow in sum. The approximation improves along several iteration steps. The algorithm unfolds its strength through the flexible combination of multiple, possibly incomplete proxy data sources. It is also flexible in a sense that any target sector and region resolution can be chosen. As an exemplary case we apply the algorithm to a regional and sectoral refinement of the Eora MRIO database.}, language = {en} }