@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} } @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} } @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} } @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} } @phdthesis{Kuhla2022, author = {Kuhla, Kilian}, title = {Impact, distribution, and adaptation}, doi = {10.25932/publishup-55266}, url = {http://nbn-resolving.de/urn:nbn:de:kobv:517-opus4-552668}, school = {Universit{\"a}t Potsdam}, pages = {vii, 309}, year = {2022}, abstract = {Weather extremes pose a persistent threat to society on multiple layers. Besides an average of ~37,000 deaths per year, climate-related disasters cause destroyed properties and impaired economic activities, eroding people's livelihoods and prosperity. While global temperature rises - caused by anthropogenic greenhouse gas emissions - the direct impacts of climatic extreme events increase and will further intensify without proper adaptation measures. Additionally, weather extremes do not only have local direct effects. Resulting economic repercussions can propagate either upstream or downstream along trade chains causing indirect effects. One approach to analyze these indirect effects within the complex global supply network is the agent-based model Acclimate. Using and extending this loss-propagation model, I focus in this thesis on three aspects of the relation between weather extremes and economic repercussions. First, extreme weather events cause direct impacts on local economic performance. I compute daily local direct output loss time series of heat stress, river floods, tropical cyclones, and their consecutive occurrence using (near-future) climate projection ensembles. These regional impacts are estimated based on physical drivers and local productivity distribution. Direct effects of the aforementioned disaster categories are widely heterogeneous concerning regional and temporal distribution. As well, their intensity changes differently under future warming. Focusing on the hurricane-impacted capital, I find that long-term growth losses increase with higher heterogeneity of a shock ensemble. Second, repercussions are sectorally and regionally distributed via economic ripples within the trading network, causing higher-order effects. I use Acclimate to identify three phases of those economic ripples. Furthermore, I compute indirect impacts and analyze overall regional and global production and consumption changes. Regarding heat stress, global consumer losses double while direct output losses increase by a factor 1.5 between 2000 - 2039. In my research I identify the effect of economic ripple resonance and introduce it to climate impact research. This effect occurs if economic ripples of consecutive disasters overlap, which increases economic responses such as an enhancement of consumption losses. These loss enhancements can even be more amplified with increasing direct output losses, e.g. caused by climate crises. Transport disruptions can cause economic repercussions as well. For this, I extend the model Acclimate with a geographical transportation route and expand the decision horizon of economic agents. Using this, I show that policy-induced sudden trade restrictions (e.g. a no-deal Brexit) can significantly reduce the longer-term economic prosperity of affected regions. Analyses of transportation disruptions in typhoon seasons indicate that severely affected regions must reduce production as demand falls during a storm. Substituting suppliers may compensate for fluctuations at the beginning of the storm, which fails for prolonged disruptions. Third, possible coping mechanisms and adaptation strategies arise from direct and indirect economic responses to weather extremes. Analyzing annual trade changes due to typhoon-induced transport disruptions depict that overall exports rise. This trade resilience increases with higher network node diversification. Further, my research shows that a basic insurance scheme may diminish hurricane-induced long-term growth losses due to faster reconstruction in disasters aftermaths. I find that insurance coverage could be an economically reasonable coping scheme towards higher losses caused by the climate crisis. Indirect effects within the global economic network from weather extremes indicate further adaptation possibilities. For one, diversifying linkages reduce the hazard of sharp price increases. Next to this, close economic interconnections with regions that do not share the same extreme weather season can be economically beneficial in the medium run. Furthermore, economic ripple resonance effects should be considered while computing costs. Overall, an increase in local adaptation measures reduces economic ripples within the trade network and possible losses elsewhere. In conclusion, adaptation measures are necessary and potential present, but it seems rather not possible to avoid all direct or indirect losses. As I show in this thesis, dynamical modeling gives valuable insights into how direct and indirect economic impacts arise from different categories of weather extremes. Further, it highlights the importance of resolving individual extremes and reflecting amplifying effects caused by incomplete recovery or consecutive disasters.}, language = {en} }