Future public sector flood risk and risk sharing arrangements
- Climate change, along with socio-economic development, will increase the economic impacts of floods. While the factors that influence flood risk to private property have been extensively studied, the risk that natural disasters pose to public infrastructure and the resulting implications on public sector budgets, have received less attention. We address this gap by developing a two-staged model framework, which first assesses the flood risk to public infrastructure in Austria. Combining exposure and vulnerability information at the building level with inundation maps, we project an increase in riverine flood damage, which progressively burdens public budgets. Second, the risk estimates are integrated into an insurance model, which analyzes three different compensation arrangements in terms of the monetary burden they place on future governments' budgets and the respective volatility of payments. Formalized insurance compensation arrangements offer incentives for risk reduction measures, which lower the burden on public budgets byClimate change, along with socio-economic development, will increase the economic impacts of floods. While the factors that influence flood risk to private property have been extensively studied, the risk that natural disasters pose to public infrastructure and the resulting implications on public sector budgets, have received less attention. We address this gap by developing a two-staged model framework, which first assesses the flood risk to public infrastructure in Austria. Combining exposure and vulnerability information at the building level with inundation maps, we project an increase in riverine flood damage, which progressively burdens public budgets. Second, the risk estimates are integrated into an insurance model, which analyzes three different compensation arrangements in terms of the monetary burden they place on future governments' budgets and the respective volatility of payments. Formalized insurance compensation arrangements offer incentives for risk reduction measures, which lower the burden on public budgets by reducing the vulnerability of buildings that are exposed to flooding. They also significantly reduce the volatility of payments and thereby improve the predictability of flood damage expenditures. These features indicate that more formalized insurance arrangements are an improvement over the purely public compensation arrangement currently in place in Austria.…
Verfasserangaben: | Christian UnterbergerORCiD, Paul HudsonORCiDGND, W. J. Wouter BotzenORCiDGND, Katharina Schroeer, Karl W. SteiningerORCiDGND |
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DOI: | https://doi.org/10.1016/j.ecolecon.2018.09.019 |
ISSN: | 0921-8009 |
ISSN: | 1873-6106 |
Titel des übergeordneten Werks (Englisch): | Ecological economics |
Untertitel (Englisch): | An Assessment for Austria |
Verlag: | Elsevier |
Verlagsort: | Amsterdam |
Publikationstyp: | Wissenschaftlicher Artikel |
Sprache: | Englisch |
Jahr der Erstveröffentlichung: | 2018 |
Erscheinungsjahr: | 2018 |
Datum der Freischaltung: | 19.04.2021 |
Freies Schlagwort / Tag: | Adaptation; Climate change; Flood risk; Insurance; Public sector; Risk reduction |
Band: | 156 |
Seitenanzahl: | 11 |
Erste Seite: | 153 |
Letzte Seite: | 163 |
Fördernde Institution: | Austrian Science Fund (FWF)Austrian Science Fund (FWF) [W 1256-G15]; (Coping Strategies); Netherlands Organisation for Scientific Research (NWO)Netherlands Organization for Scientific Research (NWO) |
Organisationseinheiten: | Mathematisch-Naturwissenschaftliche Fakultät / Institut für Umweltwissenschaften und Geographie |
DDC-Klassifikation: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Peer Review: | Referiert |
Publikationsweg: | Open Access / Hybrid Open-Access |
Lizenz (Deutsch): | CC-BY - Namensnennung 4.0 International |
Externe Anmerkung: | Zweitveröffentlichung in der Schriftenreihe Postprints der Universität Potsdam : Mathematisch-Naturwissenschaftliche Reihe; 634 |